Indian Economy - News & Updates - Archive

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Exports up 16% in Dec'07; meagre 2% growth
1 Feb, 2008, 1548 hrs IST, PTI

NEW DELHI: India's exports grew by a healthy 16.04% in December 2007 in dollar terms but managed a paltry improvement of 2.54% in rupee terms, impacted by a strong domestic currency against the US dollar.

Exports went up to $12.31 billion in December 2007 amid exporters' concerns over slowdown in the US economy and appreciation in rupee against the dollar.

In rupee terms, exports were valued at Rs 48,569.64 crore, growing by just 2.54% in December 2007.

Imports during the month were valued at $17.68 billion, up 18.06%, from $14.97 billion in December 2006. In rupee terms, imports increased by 4.31% to Rs 69,731.56 crore in December.

For the April-December period of 2007-08, India's exports stood at $111.04 billion, registering an encouraging growth of 21.76% from $91.2 billion in the corresponding period of the previous fiscal.

India's trade deficit for April-December period of the current fiscal widened by about 35% to $57.82 billion from $42.85 billion in the year-ago period.

"The export figures are encouraging. The next three months - peak period for exporters - are likely to see exports in the range of $40 billion," Federation of Indian Export Organisations Director General said.

He said at the current rate, exports would be in the range of $145-150 billion for 2007-08, falling short of the $160 billion target set by the government.

Commerce Secretary Gopal Pillai maintained that India will be able to achieve exports worth $150 billion despite the US slowdown and rupee impact.

Sahai, however, said cut in the US interest rates would lead to further appreciation of the rupee which would impact exporters' margins.

The rupee has appreciated by about 15% against the dollar in the last one year impacting export growth, particularly of labour intensive sectors such as textiles, leather, marine products and handicrafts.

Imports for the April-December period of current fiscal grew 25.97% to $168.87 billion, compared to 134.05 billion in the year-ago period, according to official data released on Friday.

In rupee terms, exports grew by 7.74% in April-December 2007, while imports were up by 11.54%.

Oil imports during December 2007 were valued at $5.96 billion, up 23.78% from $4.81 billion in 2006. For the nine-month period of the current fiscal, oil imports were to the tune of $49.31 billion, 11.68% higher than $44.15 billion in the corresponding period of previous fiscal.

Non-oil imports during December 2007 were $11.71 billion, up 15.34% from $10.15 billion in December 2006. During April-December 2007, non-oil imports grew 32.99% to $119.55 billion as compared to $89.89 billion in the same period of previous fiscal.

 

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Konkan Railway: 10 years of successful journey
By Manish Desai

It was mid 90s. Ratnakar Shetty ran a successful Udipi restaurant in sub-urban Mumbai. He was a busy man for most part of the year.

But when his children’s school closed for summer vacations, Shetty yearned to visit his hometown near Mangalore and spend time with his parents. His family too looked forward for a break in the lush green surroundings of their native place. But journey wasn’t any easy. He and his family had to perform an arduous road journey via Pune, Belgaum, often in cramped buses, lasting over 30 hours.

Reason – there was no direct rail link between Mumbai and the port town of Mangalore. This was the plight of all South Canara people, who had made Mumbai their home. But all that changed on January 26, 1998, when the through line operations from Mumbai to Mangalore began.

The Republic Day, ten years ago, was a red letter day for the Indian Railways. The day marked the dream come true of the Indian Railway’s most ambitious and most difficult project after Independence. It took seven years and almost $1 billion to complete the missing rail link between Mumbai and Mangalore, winding through the tough terrain of Western Ghats and crossing the rapid flowing coastal rivers in Maharashtra, Goa and Karnataka. It also marked the successful completion of the country’s first ever BOT (build, operate, transfer) project.

The Konkan Railway Corporation (KR) was formed on July 19, 1990 with participation of four states viz : Maharashtra, Goa, Karnataka and Kerala with the Indian Railways. It’s mandate - raise your own funds and construct with speed and economy a railway connecting Mumbai with Mangalore and pay off the loans in the promised time. It was a sweeping challenge and it met its hero in Dr. E. Sreedharan, a veteran railway man known for brisk efficiency. He was persuaded out of his retirement and made the Chairman and Managing Director of the Corporation.

The largest railway project in this part of the world, threw up a whole range of difficulties - technical, financial, emotional and psychological. The rocky Sahyadris had to be bored through, 1,500 rivers had to be forded, a railway line had to be built out of nowhere. And once in a while, a poisonous snake, or a tiger, decided to take a close look at goings-on! In the face of collapsing embankments and unrelenting mountains, the engineers had to be tough. Family life took a backseat during those arduous years. Many engineers stayed away from their families during this period, not even returning home for festivals like Diwali. At the very least, working conditions were uncomfortable; in June 1994, Mahad had floods 10 to 12 feet above the road level, and when they receded, Konkan Railway jeeps had six-inch layers of silt on the seats.

Dr. Sreedharan had divided the length of 760kms into 7 sectors of approximately 100kms each. Each sector had a Chief Engineer with full freedom of decision making. And with the freedom came, a definite time target. Four concrete sleeper plants were set up to manufacture the 1.3 million sleepers required for the project. Besides this, cement, steel, explosives, rails and a hundred other things had to be delivered through harsh terrain. Depots were created for these. Wherever possible design was standardized to be built with pre-stressed parts cast elsewhere. International norms were followed in evaluating and short listing contractors. Their bids were decided upon within 72 hours of opening. Independent quality assurance inspectors were appointed.

The Government of India, recognizing Dr.E Sreedharan’s contributions in building the Konkan Railway and the Delhi Metro, has honoured him with Padma Vibhushan, the second highest civilian award in the country.

When the railway was opened to the public on Jan 26, 1998, it had scored many firsts. For the first time in India funds for the project were raised without touching the government coffers. The authorized capital of Rs.800 crore was pooled together by the railways and the four beneficiary states. This was leveraged by means of public bonds to the extent of Rs.2,250 crore. These bonds carried attractive rates of return, tax breaks and guaranteed repayment. The project also employed the least number of people in its management at its peak a mere 2400, in all.

Ten years hence, KR portrays the picture of an efficient and surging public sector enterprise. It posted an operating surplus of Rs 107.18 crore for the first nine months of the current fiscal, while the total earnings have touched Rs 326.76 crore for the same period. The total earnings for the entire year are expected to be Rs 468 crore. “We expect to achieve a financial turn around within a year “ says Anurag Mishra, Managing Director of Konkan Railways.

With two Special Economic Zones coming up near Navi Mumbai, a massive petrochemical SEZ near Mangalore and a new international airport at Navi Mumbai, the Konkan region is expected to see some hectic action on the economic front. To cater to the growing needs of people, Konkan Railway is planning to build more stations on its route. It is already served by 60 stations.

Beyond number crunching, KR is special in many other ways too. It has a worthy safety record and is credited with inventing the Anti-Collission Devise (ACD), which can prevent midsection head-on collisions, side collisions, and rear-end collisions of trains, in addition to having many other safety features. No other technology in the world offers these features for which the KR holds patent. The first pilot project of the ACD on Northeast Frontier Railway covering 1,736 kilometres was commissioned this financial year. Following this and the live demonstration of ACD to the delegates of International Railway Safety Conference held at Madgaon recently, KRCL has started receiving enquiries from various countries for implementation of ACD. Konkan Railway is also credited with the development of a full-scale proto-type of sky bus service for intra-city transport.

Konkan Railway has completed nine years of operation of RORO (Roll on Roll off) truck-on-train service on January 26. This innovative service has established that railways and roadways can exist in a symbiotic relationship. K R has earned more than Rs 90 crore from RORO service in nine years.

A journey along the Konkan Railway - through its bridges, viaducts and tunnels are a feast to the eye. It is an engineering marvel that has blended so harmoniously with the nature. The tenth anniversary is a time to celebrate and salute all those who rendered their dedicated service to complete the project in a record time of seven years. Had they executed it as a job, it could have perhaps taken 25 years. But K R was not an ordinary project. It was a mission.

 

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India's popularity as preferred edu destination growing:Hopp

Chennai, Feb 01 :US Consul General David Hopper today said India was growing in popularity as a preferred destination for Education among American students.

Inaugurating the decennial celebrations of city-based Alpha College of Arts and Science at Porur, near here, Mr Hopper said educational exchange brings international understanding and there was a pressing need to encourage American institutions to link with Indian institutions.

More than two lakh American students study abroad each year and the number has grown by about 10 per cent annually over the past decade. ''I am pleased to note that India is growing in popularity as a destination for American students,'' Mr Hopper said.

Last year, India entered the list of top ten destinations, and this year the number grew by another 20 per cent. ''While this is good, the actual number of 2,115 students is too small. We need to do more to encourage American institutions to link with Indian institutions and to inspire Americans to come here to study,'' Mr Hopper added. ''During my more than 32 years as an American diplomat, I have had the first hand chance to see the value of international education and educational exchange,'' he said.

Of the 583,000 foreign students from over 200 countries, who were studying in US colleges and universities, 83,833 were Indians, he said adding the Indians form the largest single foreign group, even larger than China.

Prof S Ramachandran, Vice-Chancellor, University of Madras said education shaped not just individuals but the entire nation.

In today's knowledge-based economy, barely nine per cent of eligible candidates go in for higher education. - Bureau Report

 

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‘Free land in Mumbai from slums in prime areas’
Saturday , February 02, 2008 at 2251 hrs IST

Mumbai has long been the hub of industrial, commercial and business activities. As the commercial capital of India, the city contr ibutes significantly by generating over 50% of the direct and indirect taxes collected by the Union. The city plays home to most of the large Indian corporate houses and international ones as well, and determines the movement of the equity market in the country. Apart from playing a significant role in the overall Economy of the country, Mumbai has also emerged as a formidable force in the Asian region as an IFC (international financial centre). Economic growth is poised to jump by 2.4% quarter on quarter, and the GDP is growing close to double digits. The impact of this on job creation, net disposable income, livelihood and lifestyle uplift is tremendous. With more than 0.5 million additional jobs being created in the recent past, the direct impact on real estate, retail, and customer aspirations is being experienced today.

Upon examining the other side of the coin, however, indiscriminate growth and unplanned explosion of commercial activities has taken its toll on the city. Rapid economic growth has put tremendous pressure on the city’s infrastructure, drastically affecting the overall quality of life. Housing, transportation, and other city infrastructure are under-provisioned and over-stressed. Drastic steps needs to be taken if the rate of economic growth and progress is to be sustained.

Many policy makers and the general public have serious reservations that this crumbling city cannot be turned around to a world-class city. However, the various initiatives undertaken by the state government as well as the private sector in the face of adversity, are commendable.

Transforming Mumbai into a world city

A lot of talk about transforming Mumbai into a Shanghai has been going on lately. We see one part of Shanghai completely transformed into a new, beautiful, well planned well-engineered, well-designed city.

But that is less likely to happen to our own Mumbai city. What Mumbai lacks is star Attractions and an identity of city for tourists, for citizens, for children, for business visitors, for all of Mumbaikars to be proud about. We have our very old beautiful heritage structures in southern Mumbai, a small hanging garden and a museum but its less likely to attract the people as well as of any interest to our own residents. Lots of land is available with the state and the central government, which is mostly under-utilised and is in bad shape but having lot of prime potential.

When we see any country all around world, they have developed a few star attractions in the city and it becomes the most pride of place to visit and creates a photogenic identity for city.

We need to create brilliant architectural masterpieces in these places, for which there is no dearth of resources nor vision nor creates in this great country. A lot can be achieved by Public Private Partnership in this. What is needed is a strong political and public fire power driving this dream to make this most vibrant city of India, as pride of India.

Infrastructure is sad and needs to be improved, for which we are seeing the government is trying to do a lot, of late now. If only we had a world-class infrastructure, even far away could be developed for this purpose, as is done by cities around the world. Because Greater Mumbai’s maximum population is settled in much smaller radius of city; there is potential to use all areas around Mumbai.

We need to create roads all over main artery road to make a free way access across city. We need to make High rises compulsory to free up the land of low clustered houses leaving no open spaces. A radically vibrant, out of box thinking is the need of hour.

A comprehensive master plan of all slum pockets need to be developed by dividing city into six zones. This will free very prime pockets of land in Mumbai city and massive infrastructure developments and star attractions for city can be created at Prime locations. All these can be at no cost to city, rather the city can earn thousands of crore from this master planning.

India is poised to be the world’s centre of admiration. Because this country has very great people. Any country can be great only with the support of its people, and we have superb assets in here. The need is to canalise this vibrant, hard working people to transform dream to reality and Mumbai can take lead to give shape to their vision....

 

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Finally, Some Helpful Passages on India
02/02/08 - 10:17 AM EST

If you're an investor, you need to know about India. Unfortunately, before Riding the Indian Tiger came out, snappy, all-in-one primers on India's past, present and future had been hard to come by.

The list of companies that do business with India includes the likes of Sony (SNE - Cramer's Take - Stockpickr), Gap (GPS - Cramer's Take - Stockpickr), Microsoft (MSFT - Cramer's Take - Stockpickr), General Electric (GE - Cramer's Take - Stockpickr) and Wal-Mart(WMT - Cramer's Take - Stockpickr).

But the list of investors with experience in India, who know its regions, tendencies and opportunities, is short. And much of what is written about the country falls into one of two unhelpful categories: political bombast declaring that India is ever-powerful and will sink America, and the business hype jobs that call India a source of evergreen profit for the average investor.

What has seemed lacking, until now, is a balanced and digestible overview that tells a bit about India's history, a bit about its regions, a bit about how it compares with China and thoughts on its future.

Riding the Indian Tiger: Understanding India -- The World's Fastest Growing Market, (Wiley) by William Nobrega and Ashish Sinha is a must-read and earns a coveted Business Press Maven "Help" label, granted with great ceremony to books that help advance investor understanding. It is not a thrilling read, but the prose isn't wooden, and it's less than 250 pages. That means no excuses.

And here's the beautiful part: Place your finger down at random at almost any point in this book, and you'll learn something important, thought-provoking or, at the very least, interesting about a country that stands as a contradiction in a myriad of ways.

Where to start? Well, anywhere. How about page 12, part of the opening section that gives an economic tour of India's different regions? Haryana, close to New Delhi, is an agrarian state with a dairy bent, a fast-growing economy and an essential long-term challenge: With an underdeveloped supply chain and little of the milk pasteurized, potential lost revenue abounds.

Or, read any of the pages between 67 and 92, where the authors compare India and China, point to any number of examples of the free press in India leading to better oversight and less corruption or the overwhelming demographic advantages enjoyed by India.

The authors also argue that fashion apparel will thrive in the near future in India because of the nation's cotton production, technological advances of its textile industry, and increasing disposable income. National fashion producers are not sufficiently up to the task; the authors smell big opportunity. For some similar reasons and others quite separate, the hotel industry also is ripe for growth, according to the authors.

Skip to page 203, in a section on understanding Indian business culture, and you'll learn about the Indian businessman's disinclination to say "no," which often causes disappointment when deadlines pass. This, the authors say, is changing. The introduction, an overview of India's history, which has lurched between colonialism, socialism and now capitalism, is a bit less subjective but probably just as important for anyone who needs a quick sense of this emerging economic behemoth. Don't skip it.

As for the authors, Nobrega is the president of the Conrad Group, an emerging market consulting firm, and Sinha is the COO of RocSearch, a research firm. Together, they haven't put together a perfect book. It's a quibble, but you will read "when I first visited the country," without an indication of which author "I" is. I have no problem with that, but to start the comparative chapter on China and India, there is an anecdote about dinner party chatter, with this line: "Recently I (William) attended ..."

No matter. The book, while not a scintillating read in terms of structure or prose, is filled with insight and factoids that will help you emerge, after less than 250 pages, far more knowledgeable about India than you'd be from reading what else is available on the topic.

 

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Look to India As the New Powerhouse
By Mark Dampier
The Independent; London (UK)
2008-02-02

Of all the emerging markets, it is China that hogs the headlines. Its massive population and huge urbanisation plans continually break new records. The capital Beijing is hosting this year's summer Olympic Games, which will attract the attention of the world.

However, there is another major country which I think deserves as much (if not more) attention: India. Jupiter Asset Management, one of my favourite investment groups, has also recognised this potential. The result is the launch of the Jupiter India Fund, which represents the group's latest foray into the world of emerging market investing.

So why India? Although its population is slightly smaller than China's, I believe it is far more dynamic. This is because more than 650 million of its citizens are under 30 years of age. Indeed, India is home to a quarter of the world's youth. This is extremely important, because economic development tends to be driven by younger people.

The demographics of China, for example, aren't nearly as good. In 2020, the average age in India will be 29, compared with 37 in China and 45 in Western Europe. It therefore looks as if India will have a far more dynamic workforce than anywhere else in the world.

India's reliance on a good monsoon season to sustain its agriculture, although still an important factor, has been reducing year by year as its economy develops. The services sector now accounts for more than 50 per cent of its GDP.

India's stock market is far more mature than many people would expect. There are 7,000 quoted companies, with arguably far higher levels of corporate governance than elsewhere in the emerging markets.

And, most interestingly, India's growth has been driven by domestic demand, with exports making up only about 18 per cent of GDP. While clearly the Indian market cannot be insulated completely from what is going on in the global economy, it seems unlikely that it will be derailed by a slowdown in the West. Once the urbanisation process has started, it is almost impossible to stop.

Infrastructure spending is extremely important; without it, the wheels of industry will not be able to turn. It is estimated that India needs to spend almost $500bn (251bn) between now and 2012 on roads, railways, ports and power. Those of you who are regular readers of this column will know that this is a recurring theme in many of the funds I have featured.

The Jupiter India Fund is managed by Avinash Vazirani. He joined Jupiter in July 2007, but has been investing in the Indian market for more than 13 years. He describes himself as a pragmatic stock- picker who searches for companies with high growth potential, but who isn't prepared to pay the earth for them.

He is also a high conviction investor, which means that he is happy to build quite large positions in individual stocks where he has strong faith in the potential of the company.

Typically, he will invest in large and medium-sized companies, because this is where he can find the best growth rates. It should be noted that many emerging markets are dominated by a small number of huge companies (for example, Gazprom in Russia). India is not as skewed in this way as many other emerging markets, although the energy sector does make up 25 per cent of the market. It is therefore not always helpful to compare the performance of a fund to the market's index.

Avinash won't generally invest in a company unless he has met the management team. He regularly visits India in order to better understand a company's vision and its ability to execute the business plan. He is a trained accountant and therefore has a keen eye for spotting potential problems in company accounts.

It is my belief that emerging markets, particularly China and India, will dominate world economic thinking for decades to come. The Indian market has had an excellent run over the past few years, but earnings growth remains strong so there could be more growth in the short term.

The long-term story remains extremely compelling; it seems speculative now, but in 10 years' time India could be considered a prime investment area, in the way that Europe, the UK and the US are today. In the meantime, its volatility should be treated as a friend - a regular savings plan is a great way to smooth out returns from these higher-risk areas.

Mark Dampier is the head of research at Hargreaves Lansdown, the asset manager, financial adviser and stockbroker. For more information about the funds included in this column, visit www.h- l.co.uk/independent

(c) 2008 Independent, The; London (UK). Provided by ProQuest Information and Learning. All rights Reserved.

 

[Bushroda]

India as an investment destination
3 Feb, 2008, 0412 hrs IST,Sukumar Rajah,

A Significant development over the last couple of years has been the renewed optimism about India as an investment destination amongst global investors. This is reflected in the strong foreign portfolio inflows ($51.2 bn between 2003-07). In addition,

India-dedicated country funds across the world manage over $42 billion in assets. Given its size and expected growth over the next few decades, an ‘India-strategy’ has become a must for companies across the world with global aspirations. At the same time, inflows from domestic investors through mutual funds, insurance (ULIPs) and direct investment have moved up sharply. All these factors pushed the major Indian indices to historic highs.

Hence, the recent fall needs to be seen in the context of the sharp run up witnessed in the last quarter of 2007 and increasing volatility in the global markets amidst concerns about future economic growth. Apart from India, other markets in the region have also moved down sharply. In recent times, investor’s have been ignoring fundamentals and focusing on momentum stocks, which was overdone. The declines in India can also be attributed to technical factors such as unwinding of positions by speculators and the triggering of margin calls, leading to a cascading effect, especially on stocks with low liquidity. While markets have bounced back after the correction, it is too early to rule out further volatility.

Outlook

Volatility is an inherent part of stock market investing and investors need to keep in mind that market gyrations tend to be more pronounced over the short term. Increased volatility over the near term could be due to a plethora of factors – liquidity, earnings expectations, speculation ...etc. However, over the long term, equity markets tend to reflect the economic and corporate fundamentals, which continue to remain healthy for India relative to most emerging markets. The flip side of the strong FII inflows is that unlike in the past, Indian markets are now more integrated with global trends and will be impacted by any contagion, at least over the near term. We expect momentum stocks to lose ground and fundamentally sound companies will attract flows.

Net exports account for a minimal portion of the economy and domestic drivers (investment & consumption) account for a majority of GDP growth. Hence, India is well positioned to withstand any sharp slowdown in the global economy, compared to other Asian and emerging market countries. Keeping in mind the expected earnings growth for the coming years, valuations at these levels appear to be attractive. Further volatility over the near term can’t be ruled out given the global situation, but the broad direction remains positive over the years to come.

What should one do ?

Typically in volatile periods such as these, often-repeated questions are – Where should I invest...Should I book profits...Should I shift my investments? While the answers vary from individual to individual, our advice continues to be – there is no ‘right time’ to invest and it is the time you give to your investments that matters. Draw up a clear asset allocation plan based on your financial situation, attitudes to risk and goals in life. Once the plan is put in place, stick to it and do not get perturbed by temporary market movements. The focus should be on products providing exposure to quality companies with strong fundamentals.

Markets go through cycles over time and a well-crafted financial plan helps you to weather this volatility over the long term. Research has shown that the probability of attaining financial goals is much higher by following this approach, rather than by trying to juggle around with investments, and time market cycles. Successful investing depends as much on the quality of the investment as on the discipline one exhibits. After all, we invest to achieve peace of mind through realisation of our financial goals and we should not allow the investments themselves to disturb that!

The writer is CIO, Equity, Franklin Templeton Investments, and India

 

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Intel lines up $1 b for India
Press Trust of India

MUMBAI, Feb. 3: Global chip maker Intel will invest more than one billion dollar in India over the next three years as it seeks to prepare light-weight personal computers in partnership with Indian and foreign hardware firms.

“We have committed to spend over a billion dollars spread over next three years plus. We are focusing on a number of new initiatives for enabling easy availability of personal computers (PCs) and broadband Internet in India,” Intel Technology India director, marketing and operations, Mr John A McClure said here.

The company is partnering with foreign and Indian computer hardware brands like ASUS Technologies, HCL, Wipro and Zenith for preparing light weight easy-to-use Internet platforms.

“From our India experience, we have learnt that mobility is particularly what even a first time PC buyer is looking for. They want lightweight products, that could run on battery for three to four hours, is easy to store and doesn't take too much space,” Mr McClure said.

The company is working on different designs for specific market segments. It is also preparing to introduce Wimax technology in India, the fastest wireless BB technology available at lower cost.

The Intel executive said that low broadband Internet penetration in India could lead towards the country lagging behind in overall development.

“Today India is seventh or eighth largest PC market, poised to become third or fourth largest by 2012. But it is well behind in Internet penetration. This has already started to become a growth limiter not only for the PC market but for the economy as a whole,” Mr McClure said.

According to him, only the BPO industry had benefited from “flattening of the world”. The rest did not benefit as they did not have access to broadband Internet.

“Once you have the infrastructure in place, new ideas and business will take shape and drive India's success as the country has great entrepreneurial skills,” he said.

Intel's biggest role in India would be to continue to develop affordable Internet platforms with latest technology, Mr McClure said.

“The industry and government have to work together. Like, we are developing Wimax technology for India. But its success depends on how much spectrum is allocated. So the government must come out with its spectrum policy fast,” Mr McClure said.

 

[solid snake]

Seems like nothing but good news for India. Or perhaps the bad news never gets posted here? At any rate, it's nice to see growth in our neighbor

 

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Indian economy to grow at 8.75% this fiscal: IMF
Press Trust of India
Monday, February 04, 2008 (Washington)

The International Monetary Fund has projected the Indian economy to grow at a rate 8.75 per cent this fiscal on the back of rising productivity and investment.

Though the country's favourable outlook attracts huge capital flows which help finance investment, it also poses a challenge to find a balance between exchange rate stability and financial openness, IMF Executive Directors said in their summary note.

The IMF estimate comes in the wake of India revising upwards its growth estimates for the last fiscal to 9.6 per cent from earlier calculation of 9.4 per cent a few days ago and Finance Minister P Chidambaram exuding the confidence that the economy will grow close to nine per cent for the current fiscal.

On the other hand, the Reserve Bank of India in its quarterly review of monetary policy has retained its estimate of at 8.5 per cent this fiscal, true to the conservative style of most central banks. The apex bank also maintained a status quo policy rates against market expectation of a reduction in key rates.

NCAER too revised its projection to 9.1%

An economic think-tank in India, NCAER too has revised its projection to 9.1 per cent against its earlier forecast of 8.9 per cent.

The IMF directors, however, differed on their view on whether India should go for temporary controls to moderate capital inflows or not.

While a number of directors supported the Reserve Bank's cautious and pragmatic approach towards managing the capital flows, including through "temporary capital controls", some others cautioned against the step.

"India's economy has been resilient in the face of heightened global uncertainties, slowing US growth, and high world oil prices, and is expected to expand by 8.75 per cent this fiscal year as a result of rising productivity and investment," the Executive Directors said.

 

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Playing our ace
Lady Blackstone on why Britain and India can work wonders together

Lady Blackstone
Guardian, UK
Tuesday February 5, 2008

India has become the focus of a great deal of attention in UK universities, even before last month's visit by the prime minister and a group of vice-chancellors.

We recognise that to build strong knowledge economies we will need to work together, across international borders, in both teaching and research. This creates new challenges to our higher education institutions: how to work abroad and deliver excellence; how to work with international partners and retain a unique identity.

Partnership is the answer - at national, institutional and individual levels. That is why our two governments have launched the £23m UK India Education and Research Initiative to become each other's partner of choice in education.

The export of knowledge, of course, is not new. Throughout human history, civilisations have learned from each other, fascinated by ideas and innovation.

In fact, India has a longer history of higher education than the UK. Scholars have looked to it for more than two millennia.

Alexander the Great sent envoys to Taxila, the centre of Vedic and Buddhist learning on the trade route between Kashmir and Central Asia, in fourth century BC. They spoke of a university greater than any they had seen in Greece. The famous Chinese diarist Xuanzang wrote in 636 AD that more than 10,000 monks lived and studied at Nalanda in Bihar, said to be the world's first residential university. Intellectuals from Korea, Japan, Tibet, Indonesia, Persia and Turkey also studied there, learning science, astronomy, medicine, logic, metaphysics, philosophy and religion.

The UK is a relative latecomer. Oxford and Cambridge, our first universities, only got going in the 12th and 13th centuries. British universities have developed rapidly in the last 150 years and, particularly since the second world war, have welcomed a growing number of students from India.

Our two countries have good reasons to choose each other as partners. Language is one reason, but English speakers have many options: the US has always been a major player, but today Australia and New Zealand are investing heavily to attract overseas students, particularly from the far east and south-east Asia. Other European countries are targeting those students too - by delivering courses in English. English language teaching is on offer in universities in Sweden, Germany and the Netherlands.

Despite this, the number of Indian students choosing the UK continues to grow. They are attracted by the country's unique combination of shared history, high academic standards and its safe, open, multicultural society. An Indian student said to me the other day: "I love being here; it is like meeting the world in one place." The UK is already home to a large Indian-British community.

Now, for the first time, students are moving from the UK to India. The numbers are still small - they measure in the hundreds - but they too are growing. As India's educational capacity develops, it will open its doors to the world.

Already, exchanges, work placements and visits are increasing. Our young people know that India will be a major force in the future, as its economy blossoms, and they want to be at the heart of this exciting development.

The huge demand for higher education in India has led to a rapid development in private provision. This can be hard to regulate to keep standards high. Partnerships with UK institutions can help. The UK has an international reputation for excellence in higher education, with long experience of developing policy and practice in teaching and research, backed by a national system of quality assurance. Our institutions can share this expertise, working in partnership with colleges and universities.

We can also work together to tackle another problem: how to equip students with the practical skills needed by employers. Despite economic growth, 30% of graduates in India are unemployed. One of the reasons that international students choose the UK is its track record of running programmes with a large practical component. Courses are developed in consultation with local employers and use a mixture of real case studies, supervised work experience and visiting lecturers and mentors from the profession or area of study.

One of the areas of collaboration supported by the UK India initiative is the development of courses with a stronger practical base.

Within the next four years, the initiative expects to fund about 40 such courses, serving 2,000 students. I am delighted that the University of Greenwich has won funding to offer masters courses in business and IT subjects in partnership with ITM Universe in Gwalior. These are designed to equip Indian graduates with the skills needed to work in the global job market. On the research side, there will also be more Indian students completing research degrees in the UK, and more UK researchers undertaking work in India, along with joint research projects.

This is international collaboration at its best: colleagues working together to develop the most relevant courses to the highest standards and the most useful research. In this way, we can avoid the potential pitfalls of very rapid university expansion: shoddy education, motivated by profit in an unregulated marketplace.

Together, Britain and India can call on the best minds, organisations and facilities, to build prosperity for both our countries. Partners of choice in higher education: that is our ace card in the game of global success.

· Lady Blackstone is vice-chancellor of the University of Greenwich

 

[Bushroda]

Golf's glamour attracts India's rich
Shilpa Kannan
Business reporter, BBC News, Mumbai

Walking hand in hand Rakesh and Anju Mehra are scouting for their dream home.

Being passionate golfers, they want to spend more time closer to the greens.

The premium golf villa they are hoping to buy has five lavish bedrooms, a private pool and a Jacuzzi with a view.

This is what the couple always wanted.

JP Greens in Greater Noida just outside Delhi is spread over 450 acres of greenery.

Located around an 18-hole Greg Norman signature course, houses here start at $1.2m (£600,000) and go up to $3m.

Indian real estate developers are eager to sell these luxury villas to cash in on the increasing interest in the sport.

Playing better

Mr Mehra says he loves the place.

"With security, excusive club and gymnasium, and a sprawling sports complex, my children will have access to the best things in life," he says.

"What better quality of life I can ever dream of giving them."

In addition, he hopes living here would mean spending more time improving his handicap.

The Mehras are not alone.

Indian people are increasingly taking to the greens, in spite of the expensive equipment and high cost of membership in clubs, which means that it is restricted only to the elite.

Designer golf courses, spread over acres of greenery with artificial lakes, waterfalls and white-sand bunkers, are emerging in all the major cities where an increasing number of young professionals can afford club memberships, costing $1,000 a year or more.

Golf has witnessed a 35-40% growth over the last four years and become a lifestyle rather than merely a sport for many.

Big spenders

In one of Delhi's jewellery houses an artisan is carefully knocking little dimples into a smooth ball made of pure gold and studded with diamonds.

The golden ball is being prepared for the forthcoming Nicholas Piramal Ambassador Cup.

With more than $200,000 being spent on the event, this corporate tournament will feature diplomats from across Asia.

Companies are increasingly using sporting events to facilitate networking with corporate customers, many of whom are avid golfers.

The Ambassador cup is sponsored by pharmaceutical company Nicholas Piramal.

Harinder Sikka, director of the company, attributes the rapid emergence of golf in India to the economy's steady growth.

Once international players start making regular visits here, it will open the door and the country could become a major player in the international circuits, he predicts.

Golf tourism

Not to be left behind the Indian Ministry of tourism also is keen to promote the country as a golfing destination.

Its Incredible India campaign aims to move the country away from generic tourism towards niche areas such as medical tourism and golf tourism.

Leena Nandan, joint secretary, Ministry of Tourism, says though it is a relatively new sport, golfing here is a unique experience.

Many tourists from countries like Korea, Japan, Australia and the USA are coming here on package holidays that revolve around golf.

"We have world class facilities and luxurious golf resorts in India, but what is special her is that little bit extra which people don't anticipate; you could be putting in the Delhi golf course and peacock could cross your path. It's unique! No country can match that," she says.

But golf is attracting more than just tourists.

Several events are planned in the days to come.

Celebrity Fijian player Vijay Singh, Ernie Els and Colin Montgomerie are expected at the upcoming tournaments.

With more and more of the country's elite taking up the sport, India is ready to tee off.

India Business Report is broadcast repeatedly every Sunday on BBC World.

 

[Bushroda]

IT cos to step in Japanese market
Mini Joseph Tejaswi,TNN
5 Feb 2008, 0044 hrs IST

BANGALORE: English sells across the world, but not in Japan. Culturally and linguistically, Japan is an extremely tough market to penetrate. This kept Indian workforce and the Indian technology industry away from the world’s second largest economy.

But things have changed in recent times. Domestic enterprises are busy preparing themselves to expand their footprint in Japan, which is seen to have an IT services outsourcing opportunity worth $100 billion a year.

The preparedness includes roping in those who speak and understand the Japanese language, induct local talent in Japan and also impart training in language, culture and other etiquette to employees.

‘‘Japan is a sensitive and demanding market. The one-size-fits-all strategy will not work here. It needs specialised attention,’’ says an industry analyst with long years of exposure to Japanese markets.

But several Indian tech providers are willing to go the extra mile to tap business here. ‘‘Indians generally pick up new languages quickly. But Japanese is not so easy. Today, a large number of technology professionals are learning Japanese. They are also trying to familiarize themselves with its culture and etiquette,’’ says Maayumi Suzuki, a Japanese language trainer-based in Chennai.

Nasscom president Som Mittal says the Japanese are culturally and linguistically risk-conscious. ‘‘That means trust and relationship are extremely critical. The sales cycles are longer here compared to other markets. Therefore, foray into this market demands huge investments in terms of training and learning for Indian enterprises.’’

Japan has a population of 124 million, of which barely three million are bilingual. And English need not be the second language they speak or understand.

 

[Bushroda]

Global financial crisis unlikely to affect India greatly: IMF
4 Feb 2008, 2306 hrs IST,PTI

WASHINGTON: A senior IMF official on Monday said India, given the structure of its economy, its exports and financial markets, is going to figure a "bit further down" in the spectrum of countries which are likely to be affected by the global financial crisis.

"India is increasingly a part of the global economy and so it cannot be de-coupled and it does move in sync with rest of the world... In our view, there are a few things going on in India that will likely insulate it from the worst of the effects that would be felt in other countries," IMF Senior Adviser and Mission Chief for India Kalpana Kochar said.

"Domestic demand in India is very very strong, where you still have investments that is growing very strongly. Consumption, especially of durables, has come off a little bit as interest rate has increased from last year and are beginning to bite, Kochar said in a teleconference.

"But we do think that overall domestic demand growth is strong and that is going to keep growth going," she added.

"India is plugged into the world trading system but Indian exports have been diversified both in terms of goods and markets... On service exports... we don't have a whole lot of strong evidence but we do believe that impact could go either way, Kochar noted.

"If in fact US companies are looking to cut costs, it could mean they outsource more. So, India could benefit from that," Kochar maintained. "Overall in the spectrum of countries that are likely to be affected by this crisis, India is probably a bit further down," she added.

That said...it's early yet. Given the structure of India's economy and its exports and financial markets at this point we don't anticipate having huge effects," she said.

 

[blain2]

Having visited Japan in connection with technology related stuff, I would say the need is for the Japanese to realize that they simply cannot do without learning English. We have had dealings where every single word, presentation etc. had to be translated or we really experienced "Lost in translation" in person.

Indians and others learning Japanese is a minor thing, the need is for the Japanese to pick up the most prominent lingua franca, I.E. Angraizi..there is no other way around it.