Indian Economy - News & Updates - Archive

[Neo]

India to ‘refine’ economic zone policy

NEW DELHI: India promised on Monday to “refine” its controversial policy to set up special economic zones, a week after 14 people trying to stop the compulsory purchase of their land were killed by police.

“The SEZ policy will be refined in consultation with the state government, the farmers who own the land and industrialists,” federal Home Minister Shivraj Patil was quoted as saying by the Press Trust of India.

Protesters in Nandigram a village 120 kilometres (75 miles) south of Kolkata in eastern India were killed on Wednesday when police opened fire in the bloodiest demonstration yet against state government plans to buy land to set up the zones.

The shooting deaths led to a one-day general strike in the communist-ruled state of West Bengal where Nandigram, the proposed site for a chemical industry hub backed by Indonesia’s Salim group, is located.

Patil told reporters that the federal government has an “open mind” on the policy of setting up SEZs. The comments suggest the policy will undergo more consultations but will not be reversed in the light of the protests.

The zones are meant to be privately run enclaves with world-class infrastructure and tax breaks to attract foreign investment. The West Bengal government last week ordered police to break a blockade by villagers at Nandigram which had been a no-go area for authorities since 11 people died in protests there against SEZs in January. The unrest in January led the federal government to suspend plans for scores of SEZs.

http://www.thenews.com.pk/daily_detail.asp?id=47549

 

[Janbaz]

South Asia aims to jump-start energy grid idea

NEW DELHI: Power-hungry South Asian nations may advance hopes to build a common energy grid this week, edging closer to overcoming the political obstacles that have left some with a power deficit and others with abundance.

Nepal and Bhutan have substantial untapped hydroelectricity potential, while Bangladesh has large gas reserves that could be used domestically or exported to India, Pakistan and Sri Lanka if only the infrastructure existed to carry it.

While the economic benefits appear clear, competing political interests and at times open hostility have stymied the effort. “Somehow politics keep getting in the way of economics as far as cross-border projects are concerned,” said Amrit Pandurangi, executive director at PricewaterHouse Coopers.

“Bangladesh at one point of time was willing to supply gas to India but now the situation has changed. It keeps changing its mind with the change in government,” he said. India accounts for nearly four-fifths of the electricity generated in South Asia, yet grapples with the problem of peak shortages at 14.2 per cent between April 2006 and February 2007.

It already has some connections with neighbouring Nepal and Bhutan, and is studying the feasibility of linking with Sri Lanka and Bangladesh, issues that energy officials from South Asia are likely to discuss at their meeting in New Delhi later this week.

“The idea is a positive step. We have a bilateral building block with Sri Lanka, we have with Bhutan we are exploring the possibility of doing that with other neighbouring countries,” said India’s Power Secretary Anil Razdan.

India’s rapid economic growth and the rising energy needs of its 1.1 billion people are boosting fuel demand, and with 70 per cent of its oil needs imported, rising energy costs have fuelled inflation to its fastest rate in two years. But crippling shortages also threaten to constrain the expansion, adding urgency to the race for new power capacity.

Merill Lynch senior director Joseph Jacobelli said the benefits of a united power system which could allow open trade, keep a lid on costs by utilising the cheapest form of generation and encourage efficiency would remain out of reach until the supply deficit could be eliminated.

India’s National Electricity Policy wants all billion-plus people to have access to power by 2012 and to raise the per capita availability of power by nearly 50 per cent, a goal that requires another 100,000 megawatts (MW) of capacity by 2012.

The capacity addition of more than 76,000 MW comprising 75 per cent thermal power, 21 per cent hydropower and the remainder nuclear has been provisionally proposed. Of this, just over 44,000 MW is under construction.

The bulk of the power in Bhutan generated from the hydroelectric projects at Tala (1020 MW), Chukka (336 MW) and Kurichhu (60 MW), which have been implemented with technical and financial assistance of India, is exported to India.

“Generally speaking it is very important for energy security and energy efficiency to transfer energy from a resources-rich area to areas with a high intensity of energy demand,” said Jacobelli. “Within a single country distance is the main challenge. Cross-border, the challenge has been political,” he said.

The News.
http://thenews.jang.com.pk/daily_detail.asp?id=47548

 

[Neo]

Wednesday, March 21, 2007

India may open markets to some S. Asian countries

By Iftikhar Gilani

NEW DELHI: India may announce opening of its markets fully for selected South Asian countries at the forthcoming SAARC summit scheduled here early next month.

A package is being worked out by the Prime Minister's Office in consultation with ministries of external affairs and commerce.

The offer, however, would be open only to the least developed countries (LDC) in the region namely Bhutan, Bangladesh, Maldives and Nepal.

Sources said the package would include advancing India's commitment to reduce duties under SAFTA. India is also working out a similar package for least developed countries under the WTO to widen its reach and horizons of trade. Since the European Union and the US would be present as observers at the meeting, sources here believe that such a gesture would also bring pressure on Pakistan. Islamabad has not yet opened up its market for India violating SAFTA, which came into effect last year. Under the SAFTA, the three non-LDC members –— India, Pakistan and Sri Lanka — are slated to bring down their tariffs to 20 per cent in the first two years that end 2007.

In the final five years, that will end 2012, the 20 per cent tariff will be gradually reduced and brought down to zero, the four least developed countries, are allowed an additional three year period to being down their tariffs to zero. "India could advance this date unilaterally," sources said.

It may also reduce its negative and sensitive lists of items. Asked if such a gesture may not affect India's economic interests, officials here stated that package comprised a small percentage of country's seven billion dollar trade with SAARC. Officials believe that unlike other members, Pakistan allows confessional imports from India of only 1,075 items. Only recently Pakistan had added 302 items in the list of commodities to be imported from India.

http://www.dailytimes.com.pk/default.asp?page=2007\03\21\story_21-3-2007_pg5_4

 

[Neo]

Friday, March 23, 2007

India acute poverty down to 22 percent from 26

NEW DELHI: The number of people living in acute poverty in India has fallen to nearly 22 percent from 26 percent in a five-year period, an economic policy-making body said.

The survey by India’s Planning Commission showed that the number of people in acute poverty in 2004-05 totalled 238.5 million out of the country’s population of 1.1 billion. The poverty estimate for 2004-05 was 21.8 percent of the population and was compiled by monitoring spending on five key “non-food” items - clothing, footwear, durable goods, education and institutional medical expenses.

The figures were “roughly” comparable with an estimate of 26.1 percent in 1999-2000, said the planning commission in a statement on its web site on Thursday. In 1993-94, the number of people living in deep poverty was 36 percent, said the commission.

India, considered Asia’s fourth largest economy, grew by an average nearly eight percent during the five-year period under study and is expected to grow by at least nine percent for the current financial year to March 31.

http://www.dailytimes.com.pk/default.asp?page=2007\03\23\story_23-3-2007_pg4_15

 

[Neo]

India inflation near two-year high at 6.4pc

NEW DELHI: India’s inflation rate remained unchanged near two-year highs of almost 6.5 percent, according to data on Friday, keeping the government under pressure to stem rising prices.

The wholesale price index, India’s most closely watched cost-of-living monitor, showed inflation was 6.46 percent for the week ending March 10, the same level as the previous week and slightly below analysts’ forecasts.

But the rate, which was just 3.80 per cent a year ago, was still sharply above the ceiling of 5.5 percent set by the Reserve Bank of India (RBI), the central bank.

Inflation hit a more than two-year high of 6.73 percent in early February.

Subduing inflation has become an urgent priority for the ruling Congress government after increasing prices were cited by analysts as a key factor in its defeat in two state elections last month.

In April, Congress faces a crucial election in politically pivotal Uttar Pradesh, India’s most populous state that is seen as a dress rehearsal for parliamentary polls that are at most two years away.

Investment bank Goldman Sachs forecast in a research note earlier this week inflation would remain above six percent in the near term due to a low year-earlier base effect but should fall below that level next month.

The latest figures came after the deputy chairman of the Planning Commission, a top economic policymaking body, warned that any “extraordinary steps” to contain inflation may prove “counter-productive” and harm growth.

http://thenews.com.pk/daily_detail.asp?id=48089

 

[Neo]

Manmohan says economic zones to stay

NEW DELHI: Indian Prime Minister Manmohan Singh said on Friday that his government would not reverse plans to create ‘Special Economic Zones’ for industrialisation despite deadly rioting by furious villagers.

“SEZ as an instrument of economic policy has come to stay,” the Press Trust of India quoted him as saying.

The special economic zones (SEZ), modeled on a similar Chinese programme, allow companies to set up large tax-free enclaves in order to spur industrialisation and the development of infrastructure.

But the controversial programme, launched in 2005, has met with massive protest from those living on land being earmarked for such zones.

“In the process of implementation, we have been exposed to certain problems which cannot be dismissed,” Singh acknowledged.

Fourteen people were killed 10 days ago when police in eastern India fired on villagers fighting against the forced sale of their land for a proposed petrochemicals project by an Indonesian group.

The bloody demonstration was followed by a statewide strike in which dozens were injured, and saw renewed protests in neighbouring states that are attempting to set up the zones.

“There have been inadequacies in compensation and in ensuring that the interests of all stakeholders who suffer in this process are taken into account,” the prime minister was quoted as saying.

Singh said that the government was looking at the issue of proper compensation for those displaced, which might lead to delays in the setting up of the zones.

There are 14 SEZs in India and proposals for hundreds more.

“These are decisions which are irreversible,” said the prime minister. “Therefore, it is very important that before we move, if there are any gaps in the performance, gaps in the design and gaps in the implementation, we should halt a little bit even though it takes time.”

The cost of delay would be much less than the social cost India could incur if the policy was “bulldozed, regardless of human, social and economic concerns,” he said.

Analysts have said India’s Maoist rebels, active in many of the states that have seen protest over the zones, could reap political mileage from the anger of those displaced by the policy.

This month’s violence over the SEZs has renewed debate over whether farmland should be used for industry in India, where some two-thirds of the billion-plus population live off agriculture.

http://thenews.com.pk/daily_detail.asp?id=48088

 

[Neo]

India raises FDI ceiling in telecom to 74 per cent
(PTI)

24 March 2007

NEW DELHI — In a move that could bolster investment in the fast growing telecom sector the government decided to raise Foreign Direct Investment up to 74 per cent, up from prevailing ceiling of 49 per cent.

Along with raising the FDI limit, the union cabinet also approved revised conditions for such direct investment, Information and Broadcasting Minister PR Dasmunsi told reporters after a meeting of the cabinet, chaired by Prime Minister Manmohan Singh.

The cabinet clearance followed after the Department of Telecom and security agencies reached a consensus on allowing remote access with certain safeguards. The changes in Press Note 5 of 2005, which would increase the FDI limit in the sector, were delayed due to stiff opposition from home ministry. However, following consultations with the industry and persuasion by Communications Minister Dayanidhi Maran, the cabinet agreed to revise the conditions for enhancement of FDI ceiling, DoT sources said.

http://www.khaleejtimes.com/Display...h/business_March647.xml&section=business&col=

 

[Neo]

ITES exports to exceed $100 billion by 2012
(IANS)

24 March 2007

NEW DELHI — Software and IT-enabled services (ITES) exports from India will surpass $100 billion by 2012, Communications and IT Minister Dayanidhi Maran said yesterday.

Addressing an international information, communication and technology (ICT) summit of the Commonwealth countries here, Maran said: "The software and ITES exports from India are expected to cross $100 billion by the year 2012."

President APJ Abdul Kalam, who inaugurated the event, said: "The telecom revolution in India has opened multiple windows of opportunities and the benefits of this revolution are in the process of percolating to the vast majority of our villages."

The president told the attending ICT ministers, dignitaries and high commissioners from around the Commonwealth that the benefits of the growth of the ICT industry can be brought through the implementation of a bandwidth, which is "a demolisher of imbalances".

http://www.khaleejtimes.com/Display...h/business_March643.xml&section=business&col=

 

[Neo]

Saturday, March 24, 2007

‘Indian sugar output to cross 25m tonnes’

NEW DELHI: India is set to produce more than 25 million tonnes of sugar in the current season ending in September, up 30 percent from the previous year and higher than earlier estimates, industry officials said on Friday.

The world’s second-largest producer after Brazil had reaped a poor harvest of 19.3 million tonnes in the previous season, after floods and bad weather in some growing regions hit the sugarcane crop.

“Sugar production should cross 25 million tonnes, considering the pace of crushing in Maharashtra and Uttar Pradesh,” Vinay Kumar, managing director of the National Federation of Cooperative Sugar Factories, told Reuters. This is higher than earlier estimates of around 24 million tonnes forecast by government and industry officials.

Kumar said the western state of Maharashtra had revised its output estimates upwards by one million tonne to eight million tonnes, while northern Uttar Pradesh had raised to 7.5 million tonnes from earlier forecast of seven million tonnes. Tamil Nadu, Karnataka, Bihar and Andhra Pradesh are among the other major sugar producing states.

“Output will be definitely 25 million tonnes plus,” said Yatin Wadhwana, a leading sugar trader. “You get to know the yield and recovery once the cane is cut.”

India annually consumes about 19 million tonnes of sugar.

The higher output could put more pressure on prices, which have fallen by 500 rupees to 1,300 rupees ($29.7) per 100 kg over the last six months, traders said.

The fall in output last year had pushed domestic prices up 20 percent, and the government slapped a ban on exports in August.

India lifted the ban in January but a drop in global prices to $300 a tonne from $400 about six months before made exports unprofitable. Kumar said crushing of sugarcane this year at the factories was expected to continue till the end of May. Crushing normally tapers off after April. “We have already crossed or about to cross last year’s output,” he said, adding that crushing in most mills was good. Industry officials said the government has so far issued permits for exports of 800,000 tonnes of sugar, out of which about 300,000 tonnes have been sold mainly to Bangladesh, Sri Lanka and Yemen.

http://www.dailytimes.com.pk/default.asp?page=2007\03\24\story_24-3-2007_pg5_15

 

[Neo]

India to Overtake U.S. in Cotton Production
2007-03-25 12:43:43

During the next decade, worldwide demand for cotton is projected to grow by about 20 million bales or 16 percent, according to a new analysis by Texas Tech University’s Cotton Economics Research Institute.

The experts forecast that in terms of production, China will remain on top while the United States falls to number three as India rises to the second spot on the heels of recent technological breakthroughs in seed and production practices. Not only will more cotton be grown in the Far East, almost all on it will be processed there.

“Mill use is projected to continue to concentrate in Asia,” said Samarendu Mohanty, an agricultural economist and associate director of the institute.

By 2016, the nations that lead the world in cotton mill use are projected to be China at 45 percent; India with 16 percent; and Pakistan at 11 percent. Cotton mill use is where the raw cotton fiber is transformed into finished yarns and fabrics.

In addition, Mohanty said, mill use is increasing in several Southeastern Asian countries where there is virtually no cotton production. Meanwhile, mill use in the United States is declining, which makes these overseas export markets all the more important for U.S. producers, he said.

The Texas Tech World Fiber Model baseline projections, which were officially released this month, are based on assumptions of normal weather patterns and current trade policies, along with stable economic fundamentals such as population and income growth, and prices for crops that would compete with cotton.

Looking ahead, the Texas Tech researchers forecast that China will remain the world’s largest cotton producer with a quarter of the market in 2016. There will be a minor shift as India moves to second place with 19 percent, and the United States slips to third at 17 percent. Currently, the United States has 19 percent share of the world cotton production.

Among the factors for the United States fall off is stagnation in acreage planted in cotton. “We’ll see some very slight growth in the Southwest, but in terms of the Delta, Southeast and western areas of Arizona and California there will be acreage declines,” said Mark Welch, a research scientist with the Cotton Economics Research Institute.

The Cotton Economics Research Institute provides cotton economic analysis for policy makers and other interested in agricultural economy. The group conducts economic research on all aspects of cotton production, marketing, trade and processing.

Texas, the nation’s leading producer of the fluffy fiber, harvested about 6 million bales in 2006. Nationally, 21.7 million bales were harvested. Cotton is grown across the nation’s Southern tier from Virginia and the Carolinas to California.

http://www.ccnmag.com/news.php?id=4954

 

[Neo]

Hinduja, Dubai World plan $1.3bln investment

26 March 2007

NEW DELHI - Indian business group Hinduja announced on Monday investment plans of $1.3 billion in India and Dubai, on projects from real estate and commercial vehicles to healthcare services.


Hinduja and Dubai World, a holding company that manages projects for the Dubai government, will form a joint venture that will invest in medicare services and related infrastructure mainly in India.

‘In the first phase, the firm will invest $1 billion primarily in India and also elsewhere,’ Hinduja India Chairman Ashok Hinduja told reporters after signing the venture.

Hinduja group will own 51 percent in the venture, and the remaining 49 percent will be held by Limitless LLC, a unit of Dubai World.

Hinduja group will also invest 12 billion rupees ($276 million) to build resort and commercial projects, he said.

It aims to develop 2 million square feet (185,800 sq metres) resort and commercial property in a waterfront project of Al Nakheel, which is part of the state-run Dubai World.

The group also intends to set up a manufacturing unit for truck maker Ashok Leyland Ltd. ASOK.BO in Dubai, Hinduja said but did not elaborate.

http://www.khaleejtimes.com/Display...h/business_March715.xml&section=business&col=

 

[Neo]

India may become Vodafone's largest market in one year
26 March 2007

NEW DELHI — British telecom giant Vodafone's multi-billion dollar bet on India through its acquisition of Hutch-Essar may soon bear fruit with analysts predicting that the country could emerge its largest market within one year.


On the back of continuing surge in the number of mobile users, India is likely to soon surpass Germany and the US as Vodafone's biggest market in terms of subscribers, although the company might fail short of its target of becoming number one mobile player in the country.

According to Macquarie Research, Vodafone's subscriber base in India is expected to rise to about 38 million by the end of 2007, from Hutch-Essar's current base of 25.3 million.

Vodafone had reached a deal last month to acquire controlling stake in Hutch-Essar, which it plans to rename as Vodafone Essar, for about $11.1 billion in cash, while it has also announced an investment of $2 billion in the next couple of years.

Currently, India is the third largest market after Germany (30.6 million) and the US (26.2 million subscribers) for Vodafone, the world's second largest mobile operator in terms of subscribers and largest in terms of revenue.

Vodafone's India-born CEO Arun Sarin said during his recent visit here he aims to make the company India's largest mobile operator with a market share of 25 per cent by 2010.

However, Macquarie Research said in a report on Indian telecom sector that Vodafone's aim to gain 25 per cent market share by 2012 was "a bit unrealistic without help from M&A" activities.

Hutch-Essar's current wireless market share in the country is 15.9 per cent, which could increase to over 16.5 per cent with the integration of Essar's BPL Mumbai circle operations, Macquarie said.

The British telecom major's growth in India operations would depend on expanding its market share, cost reduction through measures like infrastructure sharing and expansion of distribution and network coverage among other factors.

http://www.khaleejtimes.com/Display...h/business_March699.xml&section=business&col=

 

[Neo]

Mobile Penetration: Higher in Pakistan when compared to India

India is one of the fastest growing mobile markets in the world. The market adds lakhs of new users every month. This has prompted UK based Vodafone to enter the Indian market by acquiring a majority stake in Hutch.

However, this is still not enough to challenge the Pakistani market where the mobile penetration is higher when compared to India.

Market reports claim that Pakistan has much higher mobile penetration of about 30 per cent. In comparison, mobile penetration is just around 14.3 per cent.

This is however expected to get much better. Macquarie Research’s latest report on India claims that wireless penetration in the country is likely to rise to 36.7 per cent in the next three years.

One of the primary reasons behind low mobile penetration in India is of course the huge population we have around here. India is the second most populous country with more than 1 billion people. Pakistan in comparison has just around 155 million people.

http://sifybroadband.techwhack.com/675/mobile-penetration/

 

[Neo]

BlackBerry 8800 now available in India

Research in Motion has finally launched their much awaited BlackBerry 8800 device in the Indian market. This is the thinnest product from the company yet at just 14mm.

It comes loaded with a full QWERTY keyboard; multimedia features; a microSD expandable memory; and trackball navigation system.

Blackberry 8800 is also the first product from the company to include GPS features. RIM claims that the Blackberry 8800 would deliver best-in-class performance with smoothly integrated support for voice and data applications, including phone, email, text messaging, Web browser, organizer, multimedia, and more.

Norm Lo, Vice President of Asia Pacific at RIM added: “The BlackBerry 8800 is a feature-rich and finely tuned smart phone that is both functionally and visually inspiring. It is an excellent choice for mobile professionals in India, who want to stay connected and achieve more in their business and personal lives.”

The device is expected to be made available by both Hutch and Airtel and is expected to be priced at around Rs 31,990.

http://sifybroadband.techwhack.com/668/blackberry-8800/

 

[Neo]

Airtel to invest eight billion dollars by 2010 on telecom in India

Vodafone and Idea have said in separate statements that they are planning to invest as much as USD 2 billion in the Indian market in the next two years.

Market leader Airtel has responded to these claims by saying that they themselves are planning to put in eight billion dollars by 2010 in the Indian market.

The company is aiming to have a 25 per cent market share. Bharti Group Chairman Sunil Mittal said in a statement: “By 2010, estimates are that India will have a subscriber base of 400-500 million. Bharti strives to retain up to 125 million or 25 per cent of the market.”

This kind of investment would be necessary for the company to stay competitive in the sector which now has a presence of British mobile giant Vodafone.

http://sifybroadband.techwhack.com/654/airtel-to-invest/