Indian Economy - News & Updates - Archive

[Bushroda]

Robust Indian economy brightens prospect for transportation
2007-05-31 15:52:18 Source : Moneycontrol.com

India’s increasing role in the global economy and supply chains is opening vast avenues of growth for the Indian transportation market in all modes. Despite smaller volumes of transport in India, on comparison with developed nations, prospects for future growth are high.

New analysis from Frost & Sullivan (www.transportation.frost.com), Strategic Analysis of Indian Transportation Market, reveals that the total transportation market in India reached $344.7 million in 2006 and it is estimated to reach $699.1 million in 2013.

“Strong economic growth in India backed by rising imports and exports is an important driving factor for the growth of cargo transportation,” says Frost & Sullivan Research Analyst Aarthi Nandakumar. “The increase in containerized cargo is also expected to drive the demand for cargo transportation services in India.”

India’s current share of 8.0 percent in containerized sea cargo is expected to increase to 20.0 percent over the next five years and the Government aims at nearly 100 million tones of containerized cargo by 2011-2012.

This growth is largely attributed to the proliferation of manufacturing centers in India, which is fast emerging as a manufacturing hub, next only to China. The production of automobiles and their components are also likely to drive the container cargo market.

Despite the rising containerization trend driving the transportation market, the poor infrastructure in India is a cause of concern for all modes of transportation as it directly affects cost efficiency and productivity, thus hindering the growth of the overall transportation market.

While air transportation suffers from poorly developed airports and inadequate ground handling equipment and access to cargo terminals, the ports lack the ability to accommodate 1,000 twenty-foot equivalent unit (TEU) container vessels. Meanwhile only 50.0 percent of the roads are paved, making access to rural areas difficult, resulting in longer delivery times and costs and the railways being controlled by a single government body, has an outdated infrastructure.

The joint efforts of the Government and service providers can tackle the issues of infrastructure. Governmental initiatives to promote private participation and attract foreign investment can go a long way in overcoming this challenge. Service providers can employ the advancements in information technology to provide better service and achieve customer satisfaction.

“By channeling more funds into infrastructural projects such as the golden quadrilateral, dedicated rail freight corridors, and privatization of airports, the Indian transportation market can take off on an exceptional growth phase,” opines Nandakumar.

As globalization and the emergence of global supply chains define a greater role for India in the world economy, there is distinctly more movement of goods. This calls for an exemplary transport system to achieve high levels of efficiency and service. With improvements in infrastructure that would promote future trade, India can consolidate its position in global trade.

 

[Bushroda]

Chidambaram confident of sustaining over 9% growth rate
2007-06-01 09:08:36 Source : Moneycontrol.com
New Delhi May 31

The Union Finance Minister, Mr P. Chidambaram, on Thursday said that it was time to shed lingering doubts about the sustainability and scepticism about the high growth in the Indian economy and its shift to a higher growth trajectory.

Addressing a press conference here after the official GDP figures were released, Mr Chidambaram, said, "I would argue the high growth we have witnessed in the three years of the UPA Government needs to be sustained with utmost care — because that is the way forward to eradicate poverty, generate quality jobs and improve human development indicators."

He added that economy was capable of sustaining over 9 per cent growth during 2007-08 too.

Citing examples on how East Asia and China had demonstrated that high growth was possible over long periods, Mr Chidambaram said, "China was growing at double digit rate for the last four years. It is in the larger interest of India that we maintain a high growth rate for 10-15 years. Beyond that, another generation will address the issue," he said.

The Finance Minister brushed aside apprehensions of a possible slowdown. He, however, cautioned that the high growth could put pressure on prices, especially essential commodities, in case supply fails to match demand.

'I have always maintained that however unpalatable it may be, high growth leads to high demand. And high demand does put pressure on prices. Unless supply catches up with demand, there will be some pressure on prices,' he said.

Concern over rupee

Mr Chidambaram admitted that rupee appreciating to a nine-year high was affecting certain sectors such as textile exports, though the market largely determined it. 'I have taken note of the concern about one or two sectors being affected by strengthening of the rupee. Those concerns will be addressed. The RBI is monitoring the movement of rupee. I suppose it is taking or will take whatever steps have to be taken,' he said.

Softening rates

Speaking about the possibility of softening of interest rates, Mr Chidambaram said, 'Softening of interest rates, especially in the housing sector, would depend on the inflation. The wholesale price index-based inflation has been moving downward in the last three weeks but then three weeks is too short a period to reach a definite conclusion. So, we will watch the situation carefully.'

Admitting that there was excessive flow of around $25 billion of foreign exchange through the external commercial borrowing (ECB) route, he said it could pose a challenge as far as managing money supply was concerned. 'The figure shows the ability of the Indian industry to attract capital at competitive rate which is good. But unfortunately, the other side is that it increases money supply and then puts pressure on managing the money supply,' he added.

'I think RBI and the government have been fairly successful in balancing the need for capital and to maintain price stability,' he said.

The Finance Minister, however, declined to give any specific answer when asked whether high growth could lead to overheating of economy as well.

 

[Bushroda]

Overheating or just getting warmed up?
UMESH PANDEY
BANGKOK POST, Thailand

Despite recent warnings by ratings agencies that India's robust economy could be overheating, the Indian government remains optimistic and expects its surging growth to continue.

"People can say whatever [they want], but from our side we do not see this momentum slowing for the years ahead," Kamal Nath, Minister of Commerce and Industry for Republic of India, said in an interview with the Bangkok Post.

"The 9% plus growth that we see in India will continue for the next five to 10 years as India's fundamentals are very strong and they can sustain that kind of growth," he said. Even in the worst-case scenario of a global downturn, he added, India would continue to show growth as most of the country's economy is domestic-oriented.

India's economy grew 9.2% last year and passed the $1-trillion mark earlier this year, prompting Moody's Investors Service to issue a warning that the country's economy was showing signs of overheating. The ratings agency said it saw signs that output was unable to keep pace with demand.

Kristin Lindow, a vice-president with Moody's Investors Service, wrote that the pursuit of macroeconomic stability by India's monetary authorities had reached a critical phase. Managing this effectively is important not only from a business, policy and political perspective, but also for ensuring the long-term sustainability of public finances.

Mr Nath begs to differ, claiming the country's fundamentals are sound. Industrial output grew 12% last year, and policies that promote sound investments have all been put in place.

All this, he said, has helped attract investments into the country. Foreign direct investment last year stood at $19 billion, an increase of 700% over the past three years. The country's foreign exchange reserves stood at $200 billion, a much improved position from 1991, when a balance of payments crisis triggered a host of economic reforms.

Today the country boasts the highest concentration of billionaires in Asia. Forbes magazine recently said India was home to 23 billionaires with a combined net worth of more than $99 billion, surpassing Japan's 27 worth $67 billion.

India accounts for nearly a sixth of the world's population with just over one billion people. The country adds 25 million members to its middle class each year, nearly half of Thailand's total population.

Mr Nath said those figures give him confidence that India's economic growth is not merely a blip on the radar screen.

"We see the momentum continue and there are no signs of any bubble for the time being," he added.

With such growth, Mr Nath said his country was already on the path to remarkable achievements. From the 700% growth in FDI over a three-year span, Mr Nath said India had doubled its share of world trade to account for 1% of global trade during the same period.

"Our overall global engagement with the world is at around $450 billion, or just about 1% of global trade," he said. "We have doubled this over the past three years. Our target is to reach $1.5 trillion over the next few years."

"The target is for 2% of the global trade over the next five to six years, but the first target is to achieve 1.5% in the next three years."

India, which touts itself as the world's largest democratic country, at times has been blamed for lagging behind other emerging giants such as China due to its massive bureaucracy. But Mr Nath said democracy would pay off for investors in the long run.

"A lot of people talk about India being a democracy and that's why it has not moved forward," he said. "But that is what makes India a far more credible country. It is the credibility of India that's very important: the judiciary, the strength of the various independent institutions and others."

He added that although bureaucracy might mean that the entire process is slightly slow, it ensures that everything is done in a transparent and orderly manner.

"Today our stock market's regulatory framework is as good as any in the world, and these are things that are necessary for sustainable growth in any country. All this is very positive for the long run."

Mr Nath said people who feared democracy meant new governments and policy U-turns should note that in the past 16 years India had seen six governments and five prime ministers, but "only one direction of change and that is to move upwards and towards liberalisation".

"Of course, this [economic reform policy] will continue this way as there is a political consensus that open-market policies are beneficial for the country," he said.

Since India has such a large economy, it needs to ensure that the benefits of economic reform reach all segments of society, he added.

"The challenge is to have an inclusive growth, and the government is now focusing on this. We want all to benefit, the poor and the rich. This is very important as you cannot have sectoral growth," he said.

 

[Bushroda]

India manufacturing continues robust growth; PMI at 53.4
Author: NTC Economics

The seasonally adjusted ABN AMRO India Purchasing Managers’ Index (PMI) – a comprehensive and early indicator of trends in the Indian manufacturing sector – eased slightly from 53.8 to 53.4 in May, but still signaled an improvement of manufacturing operating conditions.

Output levels in the Indian manufacturing economy continued to rise robustly in May, although the rate of output growth eased since the previous month. Firms indicated that they had expanded production at their plants in response to rising sales.

Volumes of total incoming new business increased at a strong rate, with the domestic market remaining the principal source of sales. Higher volumes of new orders contributed to a second consecutive monthly increase in levels of unfinished work in the Indian manufacturing economy. Panelists added to their workforces in the latest survey period, albeit at a weak rate.

Firms in the Indian manufacturing sector stepped up their input buying in May, in response to higher production requirements. Pre-production inventories also rose, partly as a result of higher quantities of purchases. Stocks of finished goods, however, declined for a third successive month.

Despite increased purchasing activity, panel members reported no change in average lead-times in the latest survey period.

Indian manufacturers retained only limited pricing power in May, with average charges rising only marginally. There were some reports of panel members increasing their output prices in response to favorable market conditions.

Average costs rose at a solid rate in May, although input price inflation eased to its slowest in the 26-month survey history.

 

[Bushroda]

LEADER ARTICLE: Bharat Unplugged
1 Jun, 2007 l 0041 hrs ISTlARUN FIRODIA

India's economy has grown rapidly over the past few years, thanks to reforms, globalisation, demographic dividend and consumerism.

The economy is expected to keep up this momentum. However, dark clouds of inflation still loom over the horizon. Ruling political parties are worried that price rise may turn the voters against them.

Their knee-jerk response has been to increase interest rates, reduce demand and slow down the economy. This is their approach to power shortages, traffic congestion and manpower shortfalls.

A slowdown will have a serious effect on Bharat's economy, which is already in deep freeze. Farmers, neck deep in debt, may turn into violent Naxalites instead of committing harmless suicides.

Hence, we have no choice but to keep the growth story going, while ensuring that inflation is kept in check. The common man spends 50 per cent of his income on food.

Therefore, food prices would have to top our long-term approach to combating inflation. These prices have risen as a result of rising population and falling productivity.

Despite rising food prices, farmers starve while middlemen thrive. This is hardly surprising in a situation where the Agriculture Produce Marketing Committee (APMC) Act prohibits farmers from selling their produce directly to consumers.

Or, where the Cotton Monopoly Procurement Scheme of the Maharashtra government forces farmers to sell their produce to the government at unremunerative prices.

Many states prohibit 'export' of foodgrains to neighbouring states. Such laws must be scrapped. We should encourage direct marketing by farmers to consumers.

This will also act as a check on organised retail and deter the sector from overcharging consumers. It is ironic that most states charge value-added tax on food articles.

That too must be stopped. The government spends an annual sum of Rs 30,000 crore to run a corruption-ridden, ineffective public distribution system, when it should be switching over to food stamps, to be issued to the poor under food-for-work programmes.

Clothes stamps could also be issued against work, enabling the poor to buy a dhoti or sari at a discount. Such a scheme should cost about Rs 4,500 crore, which is a mere 0.1 per cent of India's GDP. These steps will insulate the common man from inflation.

The long-term solution lies in increasing supply. To this end, improved seeds, comprehensive crop insurance and support prices for all crops are important.

Watershed development should become a priority. Food banks and roads have to be constructed. India should experiment with contract farming, after putting in safeguards. The cost of housing for the common man needs to be brought under control.

This can be achieved by increasing the supply of affordable housing, by creating new townships and offering fiscal incentives to specialised housing finance companies which offer finance for small dwellings.

The Reserve Bank has jacked up interest rates with a view to containing 'demand-pull' inflation. However, high interest rates may fuel 'cost-push' inflation.

The government, which is the biggest borrower, should reduce its borrowing by curtailing avoidable government expenditure. That would moderate interest rates.

There is scope for banks to become more efficient. Their spread — the difference between their lending and borrowing rates — is very high, at 5-6 per cent as against 2-3 per cent in the West.

To address the crisis in infrastructure, we should tap the parallel economy. Infrastructure companies should be allowed to float bonds, with no questions asked to subscribers on source of funds invested.

The move will create infrastructure and convert the parallel economy into regular economy, in the process reducing the velocity of circulation of money and inflation.

India needs to build power projects quickly to deal with shortages. However, the potential of hydel plants or wind energy farms should be fully exploited, before going in for plants based on fossil fuels.

By doing so, India can insulate itself from inflation induced by oil shocks. Promotion of biofuels and solar energy would work wonders for rural India.

These sectors should be exempt from all taxes and duties. Over the years, the US dollar has been depreciating against major currencies.

Apart from the loss involved in the transaction, this policy contributes to inflation through higher money supply. In a welcome move, RBI has discontinued this practice.

A stronger rupee will make imported goods available at a lower cost and dampen inflation. As for those who argue that a stronger rupee would reduce export competitiveness, so would inflation.

Better a strong rupee and weak inflation than vice versa. Job losses due to reduced exports can be taken care of. Crores of people can be absorbed in food processing and biofuel sectors.

These should be exempt from taxes, duties and regulations. Once alternative sources of livelihood become available, farmers' resistance to orga-nised retail, or that of vegetable vendors to supermarkets, will vanish.

The present growth model is defective; 'malls in place of mills' does not imply progress. Creation of mega cities would merely devour resources and create mega slums.

India gets 95 per cent of total investment and Bharat a mere 5 per cent, although 65 per cent of the population lives in the latter. This cannot go on. We need a new growth model based on sustainable development.

If Bharat progresses, so would India, which would get an ever-increasing market. Bharat's progress will consume less resources and prevent massive migration to cities. Work should migrate to rural areas.

 

[Bushroda]

India trade policy review lauds growth but calls for further reforms
Genetic News(BioValley Portal)

India's robust economic growth since 2001 is largely attributable to unilateral trade and structural reforms, especially in services, according to a new WTO Secretariat report on the country's trade policies.

The economic expansion has been associated with reduced poverty and infant mortality. However, for this performance to be sustained, the report said that deeper reforms will be necessary, particularly to address infrastructure bottlenecks in transport and power as well as to improve productivity in agriculture.

During discussions of the report at the WTO Trade Policy Review for India on 23 and 25 May, Members noted India's impressive economic growth between 2001 and 2007, averaging over 7 percent. Chair Ambassador Vesa Himanen (Finland) said that the meeting gave them an improved understanding of India's trade policies, as well as the challenges it faces. Members also commended India's active role in the multilateral trading system and encouraged it to continue to show leadership in bringing the Doha Round to a successful conclusion.

According to the report, continued structural reforms combined with additional investment in physical and human capital would generate productive employment for the millions of new entrants to India's labour market. Such spending would have to be backed by sound public finances and a monetary policy that keeps inflationary pressures under control, it adds. India's fiscal deficit, though declining, remained significant and expenditure on infrastructure and human capital was constrained by subsidy spending and a relatively low level of taxation relative to GDP. Loss-making state-owned enterprises remain a considerable budgetary burden, and the report said that their privatisation would have to continue. Labour market rigidities were described as another constraint on further growth.

At the meeting, Indian Commerce Secretary G. K. Pillai emphasised that the openness of India's economy was demonstrated not just by its lower tariffs, but also by the fact that import growth and volumes exceeded those for exports during the last four years. He pointed to developed countries' continuing barriers to imports from poor countries, and called upon the industrialised world to demonstrate the political will necessary to allow the Doha Round to partially right the trade imbalance between the developing and the developed world.

Services: engine of Indian growth

The report noted that services were the main engine of economic growth with an annual average growth rate of 9.8 percent. Competitive sectors such as telecommunications demonstrated clear benefits such as a reduction in consumer prices.

Several transport-related bottlenecks to trade and growth persisted, the Secretariat found. Although road infrastructure had improved, and the airline sector had seen increased choice and lower prices through competition, inefficient maritime transport and port services continued to constitute a major impediment to trade.

Energy supply constraints also acted as a brake on economic activity, with little progress in tackling financial losses of state electricity boards as well as losses in transmission and distribution.

Tariffs decreasing but complex

Tariffs remain India's main trade instrument, and account for around 16 percent of the central government's revenues. Recent years have seen a substantial reduction in overall applied tariffs, with the average falling from 32.3 percent in 2001-02 to 15.8 percent in 2006-07 (17.1 percent if all tariffs are expressed in ad valorem terms). The 12.1 percent average applied tariff for industrial goods (14.1 percent including ad valorem equivalents) was significantly lower than the average applied farm tariff rate of 40.8 percent.

With some exceptions, the applied tariffs are significantly higher than India's bound ceiling rates at the WTO, which fell to an average of 48.6 percent in 2006-07. The bound rate for agricultural products averages 117.2 percent, with the highest rates on commodities including beverages and spirits, oil seeds, fats and oils and their products, grains, coffee, tea, cocoa, and sugar. Tariff rate quotas exist for products including milk powder, maize, and some edible oils. This compares to a 34.7 percent average bound tariff for non-agricultural products.

In spite of the downward trend in applied duties, the report describes India's tariff structure as 'complex', with unpredictability resulting from schemes to offest import duties on inputs for export products as well as tariff changes announced throughout the year. It also pointed to relatively high tariffs on textiles and automobiles.

At the review meeting, India stated that farm tariffs were fixed with farmers' livelihoods in mind, and that applied rates would decrease as reforms progress.

Some RTAs, tariff preferences

The report noted that India had signed a number of free trade agreements (FTAs), mainly with other developing countries. Since the previous review in 2002, New Delhi had signed an FTA with Singapore, an 'early harvest' tariff-cutting accord with Thailand and an agreement with Afghanistan granting tariff preferences. India and the EU are expected to initiate FTA negotiations soon.

India also offered tariff preferences under regional trade agreements, most significantly to Sri Lanka and least-developed country (LDC) members of the South Asian Free Trade Agreement (SAFTA). However, these tariff concessions were lower in sensitive sectors such as agriculture, and in textiles and clothing, although Sri Lanka benefited from greater market access.

During discussions of the report, some Members encouraged India to adopt an ambitious preferential trade regime, offering LDCs better access to its market. During the meeting India stated that it plans to phase in a duty- and quota- free market access scheme for LDCs in 2007.

Anti-dumping: India still a major user

The report states that India continued to be a major user of anti-dumping (AD) measures despite a fall in the number of investigations as well as additional duties actually imposed. The majority of AD initiations involved chemicals, plastics and rubber products, base metals and textiles and clothing and were aimed at China, the EU, Taiwan and Korea.

Many trade measures environmentally motivated

The report pointed to a range of environmental standards and regulations that guide trade and investment measures. These include pre-shipment inspection certificates stating that textiles do not contain prohibited hazardous dyes, various sector-specific standards for pollution, and eco-labels. The Indian government also places comprehensive labeling requirements on all genetically-modified foods, including proof of origin and clearance for sale in the exporting country. India applies mandatory licensing on environmental grounds for industries such as hazardous chemicals.

A new environmental impact assessment process started in 2006 seeks to make it faster and more transparent.

During the review, sources say that Members commended India for taking steps to streamline sanitary procedures and align its national standards with international norms, although they expressed concerns about trade barriers arising from sanitary and phytosanitary measures.

Effectiveness of SEZs questioned

A number of duty-remission and other schemes exist to facilitate exports in India, including special economic zones (SEZs) offering tax holidays, basic infrastructure, simplified customs and other administrative procedures, and relaxed labour and environmental requirements.

These SEZs cost New Delhi 21 billion rupees in foregone tax revenue during 2006-07, leading the report to question whether they were effective at generating investment and employment, since a large share of approved companies seemed to be in the information technology sector. SEZs have no minimum export requirements, although they are required to be net earners of foreign exchange. The report notes an observation by the Reserve Bank of India that the revenue losses may be justified only if the SEZs ensure forward and backward linkages with the domestic economy.

Despite eased rules on foreign investment, the report said that FDI, at 1 percent of GDP, was far below its potential, indicating that policy and infrastructural constraints needed to be addressed.

India said the critic of SEZs was 'premature', since employment in them was projected to rise from 31,000 to 100,000 by the end of the year and 4 million by 2010, adding jobs in sectors such as textiles, gems and leather. It also noted that if reinvested earnings are included in calculations, inward FDI was USD 19 billion in 2006-07, or 2.3 percent of GDP, compared to barely 0.5 percent three years ago.

Most central government subsidies for food

The Secretariat notes that although India had undertaken some important tax reforms, less progress had been made to the various types of direct and indirect assistance to different sectors.

Direct subsidies alone accounting for 4.2 percent of India's GDP. Subsidies to areas such as education, health care, and research and development constitute about 42 percent of the total. Several central government subsidies are for food, while other key programmes support the purchase of petroleum and fertilisers. Additional expenditures went towards maintaining price controls for 25 major crops, fertilizers and 74 bulk drugs.

The report noted that food security was a major concern, and served to justify government intervention in agriculture including through high import tariffs. Agriculture continued to employ 60 percent of the population even though its contribution to GDP had declined from 23 percent in 2001 to 18 percent in 2005-06, implying labour productivity about one-sixth that in the rest of the economy.

The India Trade Policy Review (WT/TPR/S/182) is available at http://www.wto.org/.

© 2001 ICTSD

 

[Bushroda]

Indians learn to rock to the beat of the economic boom

A growing economy has put high-priced live entertainment within the reach of the country’s middle class

Bangalore: A generation of Indians now earning more than their parents ever did are ready to rock to the likes of Aerosmith, underlining the country’s increasing emergence as a magnet for top names.

India’s economic growth has ended a period of austerity when entertainment not long ago meant a trip to the cinema for most.

Aerosmith, the latest 1970s band to arrive here, performs in the high-tech hub of Bangalore on Saturday as part of a world tour. More than 25,000 fans are expected to pack the Palace Grounds to hear them belt out their classic hits.

Recent months have seen the Rolling Stones, Iron Maiden, Scorpions and Shakira all perform to sell-out crowds. Tickets priced up to Rs1,800, or 10 times the price of a multiplex movie show, are not putting people off, said Venkat Vardhan, head of DNA Networks, organizers of the Aerosmith concert.

“We have sold 8,000 tickets to fans who will be flying to Bangalore from other parts of India,” he said.

“Not a single hotel room in the city will be going empty at the weekend. Fans know a live experience can’t be replicated. Indians have become very aspirational,” Vardhan added.

A booming economy, which grew at a record pace of 9.4% in the year ended 31 March, and rising salaries have put high-priced live entertainment within reach of India’s 300- million-strong middle class. For international artists, India is no longer a backwater they would rather avoid and they earn as much money from performing here as anywhere else, said Vardhan.

India’s media and entertainment industry revenues are forecast to more than double to $22.7 billion (Rs93,070 crore) a year by 2011 as rising incomes drive demand for recreation.

Consumer spending in the 1.1 billion population is set to quadruple by 2025 to more than $1.5 trillion—overtaking Germany—as people earn more and save less, the McKinsey Global Institute said in a May report.

That prosperity is reflected in sell-out crowds at live concerts. Vivek Mahan, 35, a former Internet company executive, will fly from Dhanbad, Jharkhand, to watch Aerosmith.

“It will be the memory of a lifetime,” said Mahan, who now works in the construction business. “Such bands connect people who are in their 30s and 40s to their youth years. The expense won’t matter to them,” he added.

The Aerosmith concert and others also underline the emergence of Bangalore, already at the economic forefront, as an entertainment and music hub, too.

Vardhan of DNA Networks said the increasing popularity of expensive live entertainment is a “lifestyle extension” in Bangalore, where conspicuous consumption is becoming the norm.

Middle-class Indians are splurging on everything from designer clothes to luxury cars and overseas vacations, finally reaping the benefits of an economy that began liberalizing in the 1990s after decades of insularity.

 

[Bushroda]

India's April Exports Rise 23 Percent
FORBES 06.01.07, 10:34 AM ET

India's merchandise exports rose 23.1 percent in April from a year ago, despite a sharp appreciation in the Indian currency, the commerce ministry said Friday.

Exports totaled US$10.6 billion (euro7.9 billion) in April compared with US$8.6 billion (euro6.4 billion) in the same month a year earlier, according to provisional data released by the ministry.

The provisional numbers often undergo significant revisions, however.

The numbers were surprising as analysts had expected exports growth to slow because of the rising rupee, which dents price competitiveness of Indian products in the world market.

The rupee has appreciated more than 10 percent against the U.S. dollar over the past two months and touched a nine-year high of 40.51 per dollar earlier this week.

The rupee's appreciation, which make imports expensive, also failed to discourage Indians from buying more foreign goods.

Imports grew 41 percent to US$17.6 billion (euro13.1 billion) in April despite a softening of global oil prices and a moderate 11.4 percent growth in oil imports.

As a result, the country's trade gap widened sharply to US$7.1 billion (euro5.3 billion) in April, up 79 percent from US$3.9 billion in the same month a year ago.

The figures do not include export of services, including outsourcing jobs done by India's information technology companies.

India's fiscal year runs April to March.

Exports grew 25 percent to US$125 billion last fiscal year. For the current year ending March 2008, the government has set a target of US$160 billion, which would require exports to grow 28 percent from a year ago.

 

[Bushroda]

Fears for 1500 jobs as finance work goes to India
WILLIAM TINNING May 31 2007
The Herald

The long-term future of more than 1500 financial sector jobs in Scotland was at risk last night after a major employer announced plans to transfer staff to another company as part of a deal which will see work outsourced to India.

Politicians and a union leader expressed disquiet after Resolution, which last year acquired several insurers with the Abbey group, announced that up to 500 jobs will be lost under a deal which involves transferring 2000 workers to the Capita group.

Capita has come in for criticism in the past for its roles in various government contracts, including the Student Loans Company, the Criminal Records Bureau checking service, and the London Congestion Charging Scheme, which were all beset by technical issues.

It is the market leader in life and pensions outsourcing, with a growing number of its staff in India.

advertisementResolution, one of the biggest employers in Glasgow's growing financial sector, yesterday said 1550 of its 1800 staff at the former Britoil offices in St Vincent Street, along with 450 in Birmingham, would transfer to Capita under Tupe regulations on August 1. The remaining 250 posts are specialist roles which are not affected.

Resolution Asset Management, which employs 350 in the city's Bothwell Street, is not involved.

Capita already has several operations in Glasgow including the BBC information call centre, the Capita Hartshead occupational pension processing centre, and a property design service, which employ a total of about 600.

Resolution, which bought Scottish Mutual Assurance, Scottish Provident and Abbey National Life from Abbey last year, said a number of jobs would be moved to India over the next three years under the deal with Capita.

A statement said staff turnover and redeployment would mean that potential redundancies will be fewer than 500. It said it would not be appropriate to switch customer facing roles, voice contact or customer data but a number of other customer service and IT roles will be moved in the next three years. Over the same period, Capita intends to concentrate Resolution's operations in Glasgow.

Resolution's group chief executive Mike Biggs said: "We are working very closely with Capita to ensure that any redundancy impact on our staff is minimised."

It was unclear last night how many of the 1550 jobs at Resolution's St Vincent Street headquarters would be under threat.

Daryl Williams, of the trade union Unite, said he was "deeply disappointed" by Resolution's decision to outsource a significant number of jobs to India.

He added: "We welcome that serious attempts will be made to redeploy staff and we see no need for compulsory redundancies. The union has recently signed a recognition agreement with Capita which includes an agreement on offshoring which should help the process of avoiding compulsory redundancies."

Pauline McNeill, Labour MSP for Glasgow Kelvin, which covers Glasgow city centre, said:"It is not by itself going to dent the Glasgow economy but I think there is a real need for Scottish Enterprise to be vigilant about job losses."

Sandra White, SNP list MSP for Glasgow, said: "I have great concerns about jobs being transferred to Capita because it does not have the best of reputations."

Bill Aitken, Tory list MSP for Glasgow, said: "This is bad news. I have today written to the managing director of Capita asking that everything be done to minimise job losses."

Glasgow Chamber of Commerce chief executive Dr Lesley Sawers said Glasgow had become "a world player" in the financial services sector in recent years. She added: "The evidence is that this success will continue. We wait with interest to see what the outcome of Resolution's move will be."

 

[Neo]

Mallya’s airline stake purchase to spur consolidation

BANGALORE: Billionaire Vijay Mallya’s purchase of a stake in India’s largest discount airline is set to drive the consolidation of a crowded aviation industry beset by soaring costs and competition.

The flamboyant 51-year-old baron bought 26 per cent of Air Deccan Thursday for 5.5 billion rupees (135 million dollars) in a deal that will lead to a strategic alliance between his Kingfisher Airlines and the budget carrier.

The agreement, which enables both airlines to trim costs and share resources, triggered an open offer by Mallya’s Bangalore-based UB Group to Air Deccan shareholders for a further 20 per cent stake in the airline.

That leaves open the possibility of an outright acquisition of the four-year-old airline by the two-billion-dollar UB Group.

“There will be more strategic alliances and cooperation agreements to reduce costs and share resources,” said Kapil Kaul, who heads the India office of the Centre for Asia Pacific Aviation, in a telephone interview on Friday.

“That will help rationalise capacity and make airlines more viable,” Kaul added.

On Friday, shares of of Deccan Aviation fell 1.05 rupees or 0.72 per cent to 145.15

The benchmark 30-share Sensex index closed up 26.29 points or 0.18 per cent to 14,570.75.

It’s the latest move in the consolidation of an industry whose balance sheets are awash in red ink after a combined loss estimated by the Centre for Asia Pacific at 500 million dollars for the year ended March.

India’s largest carrier, Jet Airways, acquired rival Air Sahara in April for $340 million, and state-run Air India and Indian Airlines are being merged by the government to create a stronger airline.

From just three in 2003, the number of airlines in India has jumped to 10 as entrepreneurs like Gopinath and Mallya joined the fray to profit from a travel boom expected to more than double market size to 60 million passengers by 2010.

Jet Airways, Indian Airlines and Air Sahara have been joined by Deccan, Kingfisher, SpiceJet, Paramount Airways, Go Air, IndiGo and Indus Airways, with more such as Easy Air, Trans India and Air Dravida seeking approval to take to the skies.

Competition has caused the cost of air travel to fall as airlines cut fares to lure passengers. That has fuelled market growth while squeezing profitability.

Their problems have been aggravated by deficient airport infrastructure and shortage of qualified staff including pilots that forced up salary bills.

Air Deccan lost 2.13 billion rupees in the quarter ended March and desperately needed an infusion of cash to stay in the skies and fund ambitious expansion plans.

Gopinath, who had rejected Mallya’s initial overtures with scorn, said the alliance with Kingfisher would enable cost savings through better inventory management and sharing of flights and ground-handling staff.

Together, the two airlines would have 71 aircraft dominated by the Airbus, cover 70 destinations and command a market share of 33 per cent, overtaking the Jet Airways-Air Sahara Combine’s 31.5 per cent.

“With commonality of fleet, we foresee sharing of infrastructure, resources and best practices,” Gopinath told reporters Thursday.

“This would definitely lead to decreased costs, maximising shareholder value, increased efficiencies and improved profitability.”

India’s aviation industry is set to consolidate through closures and mergers to around two-to-three full service carriers, three-to-four large national low-cost carriers with more than 70 aircraft each and three-to-four small regional operators, according to the Centre for Asia Pacific Aviation.

http://www.thenews.com.pk/daily_detail.asp?id=58719

 

[Bushroda]

India's main index poised to break record
By Geetha Bhaskaran, Special to Gulf News
Gulf News

Mumbai: Indian shares could surge to a record this week but there will be resistance and they may fall back because retail investors need the cash to bid for large stock sales coming up in the next few weeks.

There was some evidence of this last week when the benchmark Sensex came almost within sight of an all-time high, but back-tracked as investors dumped shares to book profits in a market that had climbed nearly a fifth since early April.

"The DLF public issue is on the radar of many retail investors," said equity strategist V. Venugopal.

"There should be an outflow of funds from the stock market to pay for the offering."

Developer DLF, which built parts of the outsourcing and shopping hub of Gurgaon just outside New Delhi, is selling 175 million shares in a price band of Rs500-Rs550 a share. The sale opens June 11-14.

Media reports said last week that large institutions, both foreign and Indian, have lined up to subscribe to the initial public offering that aims to raise up to $2.4 billion in the country's largest IPO.

Robust growth

The sale will be followed by a follow-on offering by ICICI Bank to raise up to $5 billion and a secondary sale by HDFC Bank for $1 billion.

"The offerings in the pipeline will soak up a lot of cash," trader Hemant Shah said. "This should keep the market on tenterhooks."

"We should see a record-breaking start this week after Wall Street's rally on Friday," Shah said. "But it will be difficult to hold on."

Foreign portfolio inflows into share issues and the stock market are expected at $4-$5 billion in June, or more than double the investment between January and May this year, he said.

Demand for Indian shares is set to rise on the back of robust growth in Asia's third-largest economy. Government data released last week showed the economy expanded 9.4 per cent in 2006-07 - the fastest pace of growth in 18 years, and only behind China among the world's major economies.

This is unlikely to trigger another monetary tightening by the Reserve Bank of India (RBI), because economic growth is expected to slow down in 2007-08 to 8.5 per cent.

The central bank had raised interest rates five times between June 2006 and March this year to rein in prices and cool the economy.

The economic growth this year will still be respectable and among the fastest growing. India's middle class, earning between $4,545 and $23,000 a year, has trebled to 300 million in two decades, the New Delhi-based National Council for Applied Economic Research says.

"How many countries are there in the world that can boast of 8 per cent growth," asked Shah. "Foreign funds are eager to partake of the action."

The RBI will be soothed as annual inflation eased to a 10-month low of 5.06 per cent in the week ended May 12, and it will increasingly use market stabilisation bonds to suck out excess funds caused by its intervention in the foreign exchange market to keep a lid on the rupee's relentless rise.

Strong rupee

The rupee ended last week at 40.52/53 per dollar, up more than nine per cent in 2007, after scaling on Monday 40.28 - its strongest in nine years.

This has boosted imports, which are growing at nearly double the pace of exports.

The trade deficit in April jumped to $7.06 billion, the government said on Friday, up from $3.9 billion a year earlier.

Imports leapt nearly 41 per cent to $17.64 billion in the first month of the current fiscal year from April a year earlier, while exports grew 23 per cent to $10.6 billion.

Tata Consultancy Services, which gets over 60 per cent of its revenue from the United States, said last week it had increased hedging to $1.5 billion to protect against currency swings.

While the firmer rupee is squeezing margins of export-focused companies, high interest rates have put the brakes on sales of cars, trucks and motorcycles.

Maruti, which accounts for more than half of all cars sold in India, said its sales in May grew just 11.2 per cent to 59,400 vehicles. It was the slowest growth in 10 months.

Rival Tata Motors, which also makes buses and trucks, fared poorly posting a four per cent decline in sales to 42,558 units.

However, this could change with incomes on the rise. Already people have begun to buy cars on full cash payment, without availing loans and saving on interest costs.

 

[Bushroda]

Watch India’s transformation
By Dr. Sid Gautam
Fayetteville, FayObserver.com

In April, I attended an international conference of Entrepreneurs in San Jose, Calif. More than 4,000 entrepreneurs came to attend this conference called “The New Face of Entrepreneurship.” One noticeable feature was the overwhelming attendance from Asian countries.

Go East

During the 19th and 20th centuries, the main slogan was “Go West, Young Man.” Now, in the 21st century, the trend is toward the East. More and more established businesses are flocking to China, India and many other Asian countries. So far this year, a number of state governors have led delegations to India. The delegation from Virginia, our neighboring state to the north, recently returned after completing a successful visit. More than 100 Virginia business and government leaders, including several Indian-American entrepreneurs, went to India. According to newspaper reports, Gov. Tim Kaine was elated over the success of the delegation in generating jobs and investment in Virginia. Similarly, governors from Minnesota, California and Utah are lining up gubernatorial visits to India.

The Center for Entrepreneurship at Methodist University is teaming up with the U.S. India Business Alliance in Washington, D.C., and the Carolina Chapter of a famous international entrepreneurial organization called The Indus Entrepreneurs (known as TiE) to organize a business delegation to India in late September 2007.

The goal of this trip is to expose participants to the growth and vibrancy in the Indian economic landscape, and to provide valuable insights regarding the corresponding cross-border opportunities being created for American companies, entrepreneurs and investors. It will feature:

Unique opportunities to get a first-hand look at leading companies.

Interactive discussions with political and industry leaders responsible for these transformations.

Exciting activities in four cities — including Delhi and Mumbai, plus some combination of any two cities of the following cities — Ahmedabad, Bangalore, Chennai, Hyderabad.

A memorable excursion to the Taj Mahal in Agra.

Tap India market

It is a well-known fact that Fortune 500 companies have already established prominent operations in India. Many companies, like IBM, employ more research and development people in India than anywhere else. Other technical companies, as well as pharmaceuticals, financial, real estate, leading manufacturing, telecommunications, auto and media companies, have significantly expanded their operations in India.

The Wall Street Journal recently reported that Viacom Inc. is forming a joint-venture entertainment company in India with local player TV18 Group, in an effort to boost its presence in one of the world’s fastest-growing media markets. “India is one of our priority markets for expansion, and we see long-term growth opportunities across virtually every area of our business,” said Viacom’s chief executive and president, Phillippe Dauman, in Mumbai.

With over 120 million TVs at home and growing faster every day, India’s pay TV market is over $4.2 billion and growing. No wonder media companies from all over the world are exploring opportunities. Last year, for example, Walt Disney Co. acquired children’s cable-TV channel Hungama and nearly 15 percent equity stake in Indian media conglomerate UTV Software Communications.

Indian business in U.S.

We all see India-born doctors serving in our hospitals. Some rural hospitals have as many as 30 percent to 35 percent of the total numbers of doctors from India. Similarly, India-born engineers, teachers and other professionals and a great number of businessmen are running successful operations in India. However, in the last decade, more and more established businesses from India are coming to the United States, either buying existing businesses or starting new businesses.

Most of the billionaires in India have serious interest in establishing business in the United States. Last year, Forbes magazine found that “the collective wealth of India’s 40 richest business people, as ranked in our third annual survey, shot up to $170 billion from $106 billion last year.” Top 10 billionaires listed by Forbes accounted for $112 million and have successful operations in the United States.

Tulsi Tanti, founder of Suzlon Energy, runs an $8 billion company heralded as the world’s most valuable wind company. This company has an order backlog of over $1.5 billion, mainly from customers in the United States, Europe and China.

Wepro, a prominent outsourcing company with a market cap of $25 billion, employs 61,000 people in the United States. Lately, Indian companies are hiring U.S. college graduates and taking them to India to orient with Indian business processes and return to the United States to run their operation. Most of the successful Indian companies are already listed on the American stock exchanges. But many more companies are looking forward to coming to the United States.

The booming stock market and robust real estate developments have created a spectacular increase in the rank of Indian millionaires. According to newspaper reports based on the Asia-Pacific wealth report, “the number of individuals with financial assets in excess of $1 million grew from 73,000 in 2004 to 83,000 in 2005 — a growth of 19.3 percent.” This is a remarkable growth in one year, and the booming Indian economy will keep on growing the ranks of these millionaires.

The middle class of India is growing by leaps and bounds, and it creates tremendous opportunity for American businesses. It is no surprise that each year more than 600 new malls are opened in India, and each mall has more foreign chain stores than Indian stores. All leading fashion designer stores are a big hit with the youth of India. Similarly, in the field of cars, cosmetics, electronics, telecom, more and more foreign companies are entering Indian markets.

It is our sincere hope that more American businessmen and entrepreneurs can join our delegation and take a firsthand look at the vast opportunity for expanding their operation in India. (For more information, contact the center at 630-7642.) For many more businesses, which are having hard times finding highly trained professionals in any advanced field, it will be an excellent opportunity to connect in the “Flat World” and procure the talent at a reasonable price. Everyone should come out and experience this exploration of new India.

Indian civilization is ancient, but modern India is vibrantly moving toward a new India — an open economy based on market system. Economic growth and the overall success of India will have a profound impact on the global economy, and India will significantly contribute to the creation of a world full of economic, social and political advancements for the teeming millions all across the globe.

Dr. Sid Gautam is founder and director of the Center for Entrepreneurship at Methodist University.

 

[Bushroda]

Emaar to invest billions in India
Gulf Daily News, Bahrain

MUMBAI: A joint venture of Dubai's Emaar Properties and India's MGF Developments plans to invest in India more than $12 billion over the next four to five years.

Of the total sum, $3bn-4bn would come in as foreign direct investment, the Indian daily Financial Express said quoting Shravan Gupta, executive vice-chairman and managing director at Emaar-MGF Land Pvt Ltd.

The paper said Emaar-MGF planned to invest in residential, hospitality, commercial and retail properties as well as make investments in education, healthcare, information technology parks and special economic zones across the country.

"Both JV partners would create synergies to bring real estate to global standards," the paper quoted Gupta as saying.

On Wednesday the Indian government said that it aimed to attract $30bn in foreign direct investment in the 2007/08 financial year and expected the property sector to draw more than $3bn reached last year.

India's property prices doubled in the last two years as the economy, growing at more than 9pc a year, boosted demand for shopping malls, houses and offices.

 

[Bushroda]

In a New India, an Old Industry Buoys Peasants
New York Times

http://imageshack.us
A husband and his wife make bricks using mud and wooden molds in Morbi, India. Many Indians can no longer sustain themselves by farming

MORBI, India — Meet the men and women building the new India.

Chakubhai Khabhu, old and lean, smoking a thin, hand-rolled cigarette, stands on top of a pile of bricks his children have made with their hands. His daughter, Vanita, 20, tosses bricks to her brothers, two by two, in a seamless human chain. One of his sons’ wives takes a break to breastfeed her 2-year-old near a pile of black clay.

For every thousand bricks, they earn a bit less than $5.50. The family, with five adult laborers, pockets on average a little more than $2 a day.

This is the life behind the great Indian construction boom, propelled by an economy still growing at 9 percent a year.

The lure of steady work is drawing more and more migrants like the Khabhus, who come to brickyards like this one around the country because they can no longer sustain themselves by farming.

The success of the brick business, in other words, is as much a portrait of a growing industry as it is a testament to the dismal state of the Indian peasantry.

Construction and its ancillary trades, most of them involving unorganized and unregulated jobs, employ 30 million people, according to the Planning Commission of India. That compares with roughly two million in, say, the software business.

With construction expanding, so, too, apparently is the demand for bricks. Chandu Bhalsod, president of an association of brick makers in Morbi, said his production had doubled in the last year alone, and would probably double again next year. The demand has grown so fast, Mr. Bhalsod said, that he is now facing a labor shortage. He said he planned to scout for workers this year in a hungry forest belt hundreds of miles away.

Much of that work is done by migrant labor families like the Khabhus, who trek from their home villages near and far to brickyards for eight months of the year, except during the monsoon season, when rains halt production.

The Khabhus said they gave up when seawater from the nearby Gulf of Kutch crept in and killed their fields. Since Vanita was a child, the family has roamed the country in search of work — in construction and road-building, and finally, here to this brickyard.

The Khabhus’ home, in a village about 30 miles west of here called Manomara, is locked up for the season. A thorny bundle of dead brush blocks their front door. It is a billboard announcing that they will be back only when the rains come and the brickyards close. Nearly half of the homes in Manomara’s low-caste Dalit quarter are locked.

Of all the backbreaking work available to the poorest Indian peasant, making bricks offers some of the best earnings. It pays better than making salt, or working in the roof-tile factories. It can allow families to build a proper house, pay for a wedding or buy a goat or a television.

But the work is hazardous, especially at kilns like this one. Smoke spills out everywhere. Within minutes it chokes a novice hovering nearby. It is so laden with heavy soot that it blackens nearby mango blossoms, to say nothing of the lungs of the people like the Khabhus, who live and breathe bricks. Home is a small room made of bricks, on the edge of the kiln. They sleep on cots outside.

On most days, they work 14 hours, breaking for meals and sleep during the hottest part of the afternoon, when temperatures climb to more than 110 degrees Fahrenheit, and that is not counting the heat that rises from the kilns day and night.

At night, when the air is cool, work goes on under the glow of thin, white tube lights. Music screeches from cheap home stereos to keep the workers awake. They mix clay and water by hand, mold the bricks by hand, stack them high between layers of coal, and when they are cooked, after a couple of weeks, load them onto trucks that ferry them to construction sites.

Brick-making work not much different from this has dominated construction in India since antiquity. Today it dominates the countryside. It is impossible to drive through any stretch of rural highway here without seeing — and smelling — brick kilns burning.

There are no reliable estimates on the number of brick makers in India. But the Energy and Resources Institute, a research organization in New Delhi, estimated that there were 100,000 brick kilns nationwide in 2000. That number has most certainly grown, considering what Ernst & Young estimates to be a 30 percent expansion in Indian real estate.

Children join adults to make a brick kiln in Morbi, India. Most such kilns burn coal and spew choking smoke.

Brick making in India is also responsible for heavy amounts of pollution. The chimneyless kilns like the ones here are the least energy-efficient, consuming 200 tons of coal for every million bricks they produce. Small pilot projects are under way to develop bricks that require no baking, or that can be made with simple technologies to reduce emissions. But for now the ancient, inefficient kilns persist and proliferate.

Because it is piecework — workers are paid by the number of bricks they make — brick making attracts entire families. An extra pair of hands always helps, even if they belong to a child. At the brickyard in which the Khabhus work, the children’s specialty is a task best suited for small, nimble hands. It is called “finishing” and it involves squatting by the raw bricks and dusting off extra lumps of clay with a straightedge.

Attempts have been made to wean children away from work. The American India Foundation, whose donors include many Indians in the United States, finances schools in brickyards, as well as dormitories to encourage parents to allow their children to stay behind.

At this brickyard, school is a patch of ground in the shade of a tree, with a chalkboard and children sitting in two neat rows. Classes are held for three hours each morning. The children are back at work later.

Vanita Khabhu had once imagined a life beyond these kilns. She attended a three-week beautician training program. She learned how to wax arms and thread eyebrows, but that was hardly enough to enable her to find a job, and besides, her family needed her hands at the kilns.

She left school after the second grade and cannot read or write.

Her future, she knows, will be decided by the man she marries. If he and his family work in the kilns, she will join them. “For our people, this is the kind of work we do,” she said.

 

[Bushroda]

By global standards, India more equal than others
3 Jun, 2007 l 0034 hrs ISTlSubodh Varma/TIMES NEWS NETWORK

For a long time, we've heard about how India is a land of contrasts; how extreme wealth exists cheek-by-jowl with shocking poverty. We see these contrasts every day. And yet, benchmarked to global standards, India is actually one of the more economically equal societies.

Don't believe us? Let's take the income earned by the country's wealthiest 10% as a ratio to that earned by the poorest 10%. By this yardstick, the world's most equal economy would be Azerbaijan, where the wealthiest 10% of the population earns 3.3 times the income of the poorest 10%. Japan (4.5 times) and the Czech Republic (5.2) are the next two most equal societies.

In India, the ratio is 7.3 times, according to the Human Development Report, 2006. That doesn't exactly put India among the world's most equal societies, but it's a lot better than Bolivia's ratio of 168, or even Brazil's 58.

As a matter of fact, the world is full of economic peaks and valleys. According to a study by the UN-backed World Institute of Development Economics Research (WIDER), Helsinki, the richest 1% own 40% of global assets, while the richest 10% account for 85% of total assets. In contrast, the bottom half of the world population owns barely 1% of global wealth. The study covers all countries and all major components of household wealth, including financial assets, land, buildings and other tangible property.

Unsurprisingly, most of the wealth is concentrated in Western Europe, North America and high-income Asia-Pacific countries, which between them own 90% of the world's wealth. There is wide variation in wealth per person from $1,81,000 in Japan and $1,44,000 in the US to $1,100 in India, and $1,400 in Indonesia. The concentration of wealth within countries too varies significantly. The richest 10% owns around 40% wealth in China and 70% in the US.

Another measure of inequality is the Gini coefficient - zero for complete equality and 100% for complete inequality. For income inequality, Gini values range from 35-45% in most countries. In contrast, Gini values for wealth inequality are between 65-75%, and sometimes exceed 80%. Two high wealth economies, Japan and the US, show very different patterns of wealth inequality, with Japan having a wealth Gini of 55% and the US of around 80%.

Wealth inequality for the world as a whole is higher still. The WIDER study estimates that global wealth Gini is 89%. This means that in a group of 10, one person takes 99% of the pie and the other nine share the remaining 1%.

A country's representation in the super-rich club depends on three factors: size of population, average wealth, and wealth inequality. The US and Japan are wealthy because they have large populations and high average wealth. China fails to feature strongly because average wealth is modest and evenly spread by international standards.

In India, the Gini measure of income inequality is 32.5. According to the 61st round survey of the National Sample Survey Organisation, over 70% of the population has a monthly per capita expenditure below the national average of Rs 555. This indicates the low levels of income prevalent in the country even when aggregate economic growth is speeding along at about 8%.

The larger body of expert opinion is veering around to introducing inclusiveness and equality concerns in macro-economic planning. Otherwise, it is feared that high rates of growth would become unsustainable and politically unviable. However, one lesson is clear: in the present trajectory, prosperity means unequal distribution of wealth and incomes.