Indian Economy - News & Updates - Archive

[Neo]

Unemployment in India will be wiped out by 2010: PM’s advisers​

By Iftikhar Gilani

NEW DELHI: Prime Minister Manmohan Singh’s economic advisors claimed on Monday that unemployment would be completely wiped out from the country by 2010.

The economic advisory panel, headed by former Reserve Bank of India (RBI) governor Dr C Rangarajan, made this bold prediction citing the current economic growth rate, which it expected to remain at around 9 percent in the current fiscal year.

In its economic outlook for 2007-08, the panel also projected that inflation would remain around 4 percent. “After factoring in future correction in petroleum-product prices, it should be possible to maintain the headline rate close to four per cent.”

Asked what the basis of his claims that unemployment would be wiped out were, Dr Rangarajan responded that with GDP growth rate of eight percent, keeping in view employment elasticity at 0.48, the work force would become equal to the labour force demand by 2010.

He did, however, add that he was only projecting figures in terms of quantity and had not taken quality employment into account.

“There appears to be a skills mismatch in the economy that needs to be urgently addressed in order to enable a smooth transfer of employment from agriculture to the secondary and tertiary sectors of the economy, which is necessary to realise the figures,” he told reporters.

The new challenge facing the Indian economy is improving productivity in the informal sector and in agriculture so that there can be a significant improvement in the quality of employment, Rangarajan said.

On the export front, the advisory council expected exports to touch $147 billion, less than the government target of $160 billion. Imports are projected to cross $223 billion. Exports growth is expected to slow down to 18 percent in dollar terms in the wake of the strengthening of the Indian currency against the greenback.

The panel projected that foreign direct investment (FDI) would increase to $15 billion in 2007-08 from $8.4 billion in the last fiscal year. Net portfolio inflows are estimated at $12.5 billion. For 2007-08, it projected an increase in net FDI inflows from the current level of $8.4 billion to $15 billion.

http://www.dailytimes.com.pk/default.asp?page=2007\07\17\story_17-7-2007_pg7_52

 

[Bushroda]

India Expects to Link Every Village to Phone Networks This Year
Bloomberg News
By Ashok Bhattacharjee

July 13 (Bloomberg) -- India expects its villages to be connected to telephone networks two years ahead of schedule as part of a $43.5-billion spending plan that seeks to create the infrastructure necessary to support economic growth.

Telephones will reach the 66,822 villages that don't already have one by November and broadband connections will be provided in every village by 2012, according to an e-mailed statement issued today by Prime Minister Manmohan Singh's office. Singh yesterday reviewed the progress of roads and telephones in the so-called ``Bharat Nirman'' or nation-building program.

The government headed by Singh, who is often described as the architect of India's economic reforms, plans to spend $43.5 billion by 2009 to build roads, schools, hospitals and other social projects. Singh wants the benefits of economic growth to spread to rural areas, where about seven in 10 Indians live.

``It was noted the performance of extending telephony to the rural areas was progressing extremely well,'' according to the statement.

South Asia's largest economy expanded 9.4 percent in the year ended March 31, the biggest gain since 1989 and more than the government's initial estimate of 9.2 percent. The growth has spawned a new set of customers for cars, mobile phones and consumer goods in India, where increasing signs of affluence are visible in the urban centers.

Middle Class

The middle class in India, people earning from $4,545 to $23,000 a year, has tripled to 300 million in the past 20 years, according to the National Council for Applied Economic Research.

The program has connected 48,125 villages to the national telephone grid, according to the statement. About 80,000 towers will be set up by May 2008 to help provide wireless services. The government plans to add 50 million rural phone subscribers this year.

Singh also assessed the implementation of the rural road project, in which all-weather roads have so far connected 13,831 of the targeted 66,802 villages.

As part of the program, 40,000 kilometers of new roads have been built and 50,000 kilometers of roads have been improved, according to the statement.

The Bharat Nirman project aims at ensuring safe drinking water supply in some 55,000 villages that are without it, providing electricity to 100,000 villages that don't have power supply, extending irrigation to an additional 10 million hectares and building 6 million houses.

 

[Bushroda]

India to dominate global KPO mkt; create 1.8L jobs
17 Jul, 2007, 1555 hrs IST, PTI

NEW DELHI: India, already known as the back office of the world, will account for two-third of the global Knowledge Process Offshoring (KPO) segment that could create up to 1.8 lakh new jobs here by 2011, a new study has said.

The worldwide KPO market is expected to grow to 16.7 billion dollar in revenues by 2010-2011 at an annual growth rate of 39 per cent. Of this, India would account for 11.2 billion dollars, according to the study by business research and analytics firm Evalueserve.

The industry would employ about 3.5 lakh professionals by March 2011 globally. This includes nearly 2.55 lakh in India, where only about 75,400 people are currently employed.

According to Evalueserve, the KPO industry in India had only 9,000 billable professionals in India, generating revenue of 260 million dollars during 2000-01. This number has grown to 75,400 by 2006-07 with 3.05 billion dollars in revenue at an annual growth rate of 51 per cent.

The anticipated success in KPO comes after the success of Business Process Outsourcing (BPO) in the country, which accounts for revenues of 15.8 billion dollar in 2006-07, a jump from just 7.7 billion dollar in 2003-04.

This huge growth in the global KPO space would be driven by the vast pool of educated and experienced professionals in countries like India, China, Russia, Poland, the Philippines, Hungary and many republics from the erstwhile Soviet Union, California-based Evalueserve's Chairman Alok Aggarwal said.

It is quite likely that companies -- both with their own captives and those using third-party vendors -- may use a "hub and spoke" model in which a provider in India may constitute the "centre" whereas other units in the world may provide appropriate "spokes", Aggarwal said.

 

[Bushroda]

Private equity investment jumps 68% in Q2
17 Jul, 2007, 1640 hrs IST, REUTERS

MUMBAI: Private equity investment in India jumped 68 per cent in the second quarter of 2007, with the financial services grabbing the lion's share, an industry tracking firm said on Tuesday.

Investment rose to $3.2 billion during April-June, data released by Venture Intelligence showed, from $1.9 billion in the year-earlier period.

There were 76 deals in the quarter, up from 67 a year earlier. The financial services sector accounted for 15 deals worth about $1.3 billion.

The largest was a $767 million investment by Carlyle Group and Citigroup in India's largest mortgage firm, Housing Development and Finance Corp. Technology and related sectors had more than 25 deals, but they were worth only $550 million.

Manufacturing did not figure in the top five, Venture Intelligence Chief Executive Arun Natarajan said. "We are all puzzled, manufacturing was number-two for a long time until the first quarter of 2007," he said, adding a third of manufacturing deals had earlier been in the auto parts sector.

Private equity investment in India is expected to touch about $10 billion in 2007. Investment had more than tripled to $7.46 billion in 2006 from $2.26 billion in 2005.

 

[Bushroda]

Sienna Miller, Bollywood star promote Indian energy conservation
Alastair Grant, USAToday

The Factory Girl's Sienna Miller has combined forces with Bollywood's biggest movie star to raise global warming awareness throughout India.

Sienna Miller teamed up with Bollywood star Amitabh Bachchan on Tuesday to urge Indians to do more to slow global warming.

The 25-year-old actress met Bachchan in Mumbai at the start of a week-long trip to India as an ambassador for Global Cool.

"If each one of us does our bit, we will be helping to keep global warming from harming our countries," Miller said.

Bachchan, India's biggest movie star, announced that the Indian International Film Academy would partner with Global Cool, an organization that spreads awareness about global warming, to increase knowledge about greenhouse gas emissions.

"Carbon emissions will be huge from countries like India and China with growing populations and economy," Bachchan said. "It will be wise to start doing whatever we can to protect our planet."

 

[Bushroda]

India: competition is powering Indian economy
FreshPlaza, Netherlands

It is competition and not population which is powering the country's economic development, Dr JJ Irani, director, Tata Sons, said on Saturday.

Delivering the MS Khan Lecture here, Dr Irani said in his opinion, the economy was being 'powered by a competitive spirit since 1991'.

"Before that we were a protected economy, and there was no competition," he said, adding that prior to 1991 Tata Steel used to exchange knowledge with SAIL and others without being competitive, and used to take pride in telling what it was doing. "This no longer exists today."

The Tata Sons director recalled the times when customers had no other choice but to bear with poor-quality products and inefficient services.

"We had captive markets and poor quality products to satisfy our customers, including in steel," said Dr Irani, adding that once competition was introduced in 1991, it started helping the Indian entrepreneurship skill to grow.

The country had to pay a big price as India's contribution to the world trade was a mere 0.5% before 1991, Dr Irani said.

Praising Jet Airways, one of the best domestic airliners in the world, Dr Irani said it is competition, which has brought it into existence.

It is also competition that has driven Indian Airlines to improve its services. So is the case with BSNL in telecommunications, where private players are constantly forcing the company to improve its services, Irani said.

According to him, what is driving 'competitiveness' today is knowledge power unlike pre-1991 period, when foreign companies possessing technology in any field were eager to sell it to their Indian counterparts as they had no direct access to the market.

 

[Bushroda]

New skill upgrade programme for Indian workers
17 Jul 2007, 2123 hrs IST,IANS

NEW DELHI: Indian workers will now have an opportunity to improve their skills before emigrating abroad for job, thanks to a countrywide skill upgrade programme the government will roll out soon.

The Ministry of Overseas Indian Affairs (MOIA) signed a memorandum of understanding (MoU) with the Ministry of Micro, Small and Medium Enterprises (MMSME) on Monday to institute a process to develop and upgrade skills of Indian workers desirous of emigrating overseas for the purpose of employment.

Both ministries will work towards developing a framework to benchmark, assess and certify Indian workers seeking employment abroad.

"The programme is likely to be launched in August across the country," an MOIA official said.

According to an MOIA press release issued on Tuesday, this initiative aims to enhance the image and perception of Indian workers abroad and equip them to be more competitive in an international working environment and promote greater job opportunities for Indian workers.

The programme will also help overseas Indian workers move up the value chain.

According to the MoU, while the MOIA will fund the training programme, the MMSME will implement it through its training centres across the country.

In fiscal 2007-08, the target will be to train approximately 2,000 emigrant workers in various trades such as electrician, machinist, computers, electronics, welding and plumbing for jobs, mostly in the Gulf countries. The focus will be on the manufacturing and construction sectors.

The duration of the various courses will vary from 15 days to three months.

The MOIA is planning to spend around Rs.90 million on the scheme in partnership with other institutions, the release stated.

The ministry had organised a similar programme in 2006-07 with the governments of five states - Tamil Nadu, Andhra Pradesh, Karnataka, Kerala and Punjab - which all are major labour suppliers.

"We gave funding for training of around 40,000 workers in last year's programme," the official said.

There are over five million Indian workers abroad with 90 percent of them based in the Gulf countries and Malaysia. In 2006 alone, over 675,000 Indian workers went abroad with emigration clearances.

They contribute significantly to Indian economy by way of remittances.

However, in recent times, competition from countries like Bangladesh, Nepal, Pakistan, Sri Lanka, Indonesia and the Philippines has resulted in low wages and exploitation of workers.

It was in this context that the government decided to intervene and help Indian workers with the skill upgrade programme.

 

[Bushroda]

India can attain 10% growth in 2008-09: FM
Business Standard
New Delhi July 18, 2007

Finance Minister P Chidambaram today expressed hope that the economy would be able to grow at 10 per cent next year if productivity in agriculture is improved.

“Our goal is to touch the magical number of 10 per cent growth. Can we do it this year? I am doubtful. Can we do it next year? I think it is possible. If we can get our act together and push agriculture growth to 4.5 per cent, then India can grow at 10 per cent in 2008-09,” Chidambaram said at the India Policy Forum, 2007, organised by economic think-tank NCAER.

Earlier during the day, talking to mediapersons after a meeting with chief commissioners of income tax, the minister expressed confidence that the revenue deficit would be eliminated by 2008-09.

This is a key deficit management target under the Fiscal Responsibility and Budgetary Management (FRBM) Act.

A report by the Prime Minister’s Economic Advisory Council had on Monday said the central government’s revenue deficit is unlikely to be eliminated by 2008-09.

It had also pointed out that there are substantial off-budget liabilities aggregating 2 per cent of GDP, and potential expenditure increase, after the Sixth Pay Commission makes its recommendations.

When asked about this, Chidambaram said the report did not say the target would not be met, but only mentioned the difficulty in achieving the target.

“There is a subtle difference between ‘difficult to meet’ and ‘would not be met’. We have been right so far (in meeting the revenue deficit target). There is no reason why we should be wrong next year.”

The revenue deficit stood at 2 per cent of GDP in 2006-07 and is to be cut to 1.5 per cent of GDP in the current fiscal year.

The FM said the government would soon issue guidelines on determining fair market value of stock options given by companies to their employees for calculating fringe benefit tax (FBT).

“Guidelines (on fair market value) would be issued shortly,” he said. Chidambaram denied there was any ambiguity about taxing employee stock options (ESOPs).

Ruling out any extension of the date for submitting income tax returns, he asked the taxpayers to file their returns by July 31.

“I suggest you file (I-T returns) today. Don’t wait until the last day. Please file today,” he said, when asked whether the government would consider extending the date for filing of returns by individual taxpayers.

Also, the government may not allow taxpayers to submit returns through post offices this year.

“Well, it may not be necessary this year. Last year was an extraordinary situation when there was threat of labour dispute. But no decision has been taken yet,” he said.

At the NCAER function, Chidambaram said it was unfair to compare India and China.

“We have to work within the boundaries of democracy and hence we have to make adjustments. We have larger concerns. It is within these rules that one has to play the game.... I think India’s 9 per cent growth is comparable to China’s 10 per cent.”

“India’s growth is now driven more by investment. Indian industries and services sectors are trying to extract more value from each rupee invested. That is driving productivity gain in the Indian economy,” Chidambaram added.

 

[Bushroda]

Tea-drinking India warms to coffee house culture
A burgeoning middle class is rapidly developing a taste for the roasted bean - and Starbucks is taking notice
SONYA FATAH
Special to The Globe and Mail
July 17, 2007

NEW DELHI -- Among hot beverages, India is synonymous with just one: tea. But a lifestyle revolution driven by a burgeoning middle class is luring young Indians to cafés where cappuccinos, lattes and mochas are the drink of choice.

South Indian-style coffee - boiled with milk and served in stainless steel tumblers - has long been sipped in India's southern states of Karnataka, Tamil Nadu, and Kerala. But a new coffee-drinking culture has emerged since India's plantation owners have crept into the café business, launching a cultural revolution that has seeped into India's urban centres.

Today, there are about 750 cafés across India, two-thirds of which are owned and operated by Café Coffee Day, a company that plans to have 1,400 cafés across India in five years' time, as well as 10 in Pakistan and 10 in Austria.

"I expect this market to grow 40 per cent annually for the next three years," says Jagdeep Kapoor, director of Samsika Marketing Consultancies. "That is going to be huge."

In the next two decades, analysts expect there will be as many as 5,000 cafés in India.

It's taken a decade for India's largest chain to create a café culture.

There were only a handful of Café Coffee Day outlets in the late 1990s, all in India's six largest cities. But the chain, which is owned by the Bangalore-based Amalgamated Bean Coffee Trading Co. Ltd., has mushroomed since 2001, now boasting 401 cafés in 72 cities and aiming to cross the 500 mark by the end of the year.

India is also attracting global attention. Starbucks Corp. is eyeing New Delhi or Mumbai for its first outlet. Italian coffee company Lavazza is already here, after acquiring Barista Coffee Co. Ltd.

Starbucks is keeping mum about its strategy in India, as it navigates strict Indian laws on foreign ownership in the retail sector.

"We are looking forward to offering the finest coffee in the world, handcrafted beverages, legendary service and the unique Starbucks Experience to customers in India, first in either Delhi or Mumbai, in the near future," T. May Kulthol, a company spokesman, said in an e-mail.

But other players in the coffee sector are watching the global giant closely, amid speculation it may buy an Indian chain to gain a quick footing.

"They are scared of us. We are not scared of them," scoffed Naresh Malhotra, director of Café Coffee Day. "Let them come in. It will make for a greater awareness for coffee."

Café Coffee Day must also worry about another giant, Tata Coffee Ltd., which sold its share in Barista to the Italians and is developing its own brand, Mr. Bean Coffee Junction. From its first test location in the southern city of Kochi - near India's famous plantation country - Tata plans to expand the concept to five stores in Bangalore, Chennai and Hyderabad.

"If these stores are a success, then we will go in for a franchise model and rapidly expand," said M.H. Ashraff, managing director of Tata Coffee.

The company is the country's largest coffee conglomerate, producing 10 million kilograms of coffee from its estates, spread over 7,000 hectares in Karnataka state. Café Coffee Day's parent company, Amalgamated Bean, sources coffee from the 5,000 acres of coffee plantations it owns in the south.

The market, analysts say, has space for all. With a forecast of a 6- to 9-per-cent annual real growth rate in gross domestic product over the next two decades, the value of the Indian consumer market is expected to triple as a result of productivity increases, growing openness of the Indian economy and demographic changes, according to a report released by McKinsey & Company.

India's big cities are expected to boom in the next three decades. Analysts forecast that the country could have as many 35 cities with a population of over one million, and 300 smaller metros, with 100,000 to one million people each.

Coffee plantations were started in Southern India around the 18th century when the East India Co. discovered it could profit from growing the plant in its eastern colonies. Some even trace coffee's heritage to a few centuries earlier.

Today, most of India's coffee - about 60 per cent of it - is grown in Karnataka, in the country's south, along the slopes of the Western Ghats range.

Analysts say the café culture change is less a reflection of a coffee drinking culture and more about a lifestyle revolution.

"On-premise consumption has increased substantially. There is a lot of young culture - a lot of college students and a lot of student kids would like to hang around and there was no such wholesome place available," Mr. Kapoor says.

Coffee in India

Popular Indian lore says that

Baba Budan, a revered Muslim holy man from India, discovered coffee on a pilgrimage to Mecca in the 16th century. He smuggled seven coffee beans out of the

Yemeni port of Mocha wrapped around his belly. On his return home, he settled on the slopes of the Chandragiri Hills in Kadur district, or what is now Karnataka. The hills of this famous coffee-producing region were later named after him.

Indian latte

Kaapi is a sweet milky coffee made from dark roasted coffee beans and chicory, popular in the southern states of Karnataka and Tamil Nadu. The most commonly used coffee beans are Peaberry, Arabica, Malabar and Robusta grown in the hills of Kerala, Karnataka and Tamil Nadu.

578,000 - Number of people employed in Indian coffee industry

201,498 - Mega-tonnes of Indian coffee exported in 2005-2006

 

[Bushroda]

Now, foreign cos scoop up India funds
18 Jul, 2007, 0140 hrs IST, TNN

NEW DELHI: Government on Monday liberalised rules for foreign companies to raise money from Indian capital market by issuing Indian Depository Receipts (IDRs).

The move is designed to facilitate greater outflow of capital from the domestic economy thereby easing the upward pressure on rupee and prepare ground for the emergence of an international financial centre in India.

Although India had created a policy regime for IDRs, the Indian equivalent of GDRs and American Depository Receipts, in 2004, no foreign company has raised any capital in India using this instrument.

The latest amendments to the Companies (Issue of Indian Depository Receipts) Rules, 2004, has extended the limit for an overseas firm to raise money from India in a financial year from 15% of its paid-up capital and free reserves to 25% of the post-issue number of equity shares.

The eligibility condition requiring the issuer to be profit making for at least five preceding years has been changed to three out of five preceding years — the condition in this regard for domestic issues. Further, the requirement of declaring a minimum dividend for last five years and a minimum 2:1 debt equity ratio have been omitted.

Such criteria cannot be applied across the board as these are specific to individual companies who follow different dividend policies in their respective jurisdictions, the ministry of corporate affairs said in a statement. However, the new rules require that a foreign company wanting to raise money in India through IDRs should have a continuous trading record on a stock exchange in the parent country for at least three preceding years. This will ensure that issuer is a known entity.

Also, net worth and market capitalisation ceilings have been provided for as eligibility conditions instead of net worth and turnover-based ceilings. The turnover criteria may not disclose the profitability or the market perception of the issuer. The new norms have made Sebi approval of IDR applications time bound.

The disclosure norms have also rationalised. The requirement of publishing quarterly audited financial results in newspapers, has been done away with. Quarterly audited results or unaudited results may be subjected to limited review by the auditors of the issuing company and disclosed after its board approval.

The manner of publication has been left to be specified in the listing conditions to be decided by the Indian stock exchange as per Sebi’s guidance. Information on listing, trading record or history of the issuer on all the stock exchanges in the world would also be required to be disclosed in the offer document.

 

[Bushroda]

India to grow at 9.4 pct in FY08 - Credit Suisse
Tue Jul 17, 2007 5:56 PM IST

MUMBAI (Reuters) - India's economy should expand by 9.4 percent this financial year, higher than official estimates, though inflation and interest rates were likely to rise too, a senior economist with Credit Suisse said.

The central bank forecasted the economy will grow by around 8.5 percent in 2007/08, and the Prime Minister's Economic Advisory Council said on Monday it saw growth at 9 percent.

Rising income levels would fuel demand for goods and services and propel growth in Asia's third largest economy, the economist said on Tuesday.

"We are probably close to the bottom of the cycle in terms of the moderation in consumer spending... We are going to get a rebound," said Sailesh Jha, senior regional economist with the Swiss bank.

Jha said the cumulative impact of a series of monetary measures by the Reserve Bank of India to cool consumer spending and credit growth had been limited largely to easing sales of vehicles and property.

"In fact firms are expanding capacity via warehousing. So, bottoms up indications are strong for growth," said Jha, who expected the economy would grow by 9.6 percent in 2008/09.

Jha said he expected inflation to start moving higher from September, and the central bank to respond by raising the repo rate by 25 basis points in October, and a further 25 basis points in January, 2008.

The cash reserve ratio (CRR), the proportion of deposits banks must park with the Reserve Bank of India, could be raised by 100 basis points by January, in a bid to drain excess cash from the banking system, he said.

Jha predicted that foreign investment inflow would remain robust this year, helping the Indian rupee appreciate to 39 per dollar by March 2008. The rupee hit a nine-year high of 40.28 in late May, and ended at 40.3525/3600 on Tuesday.

He expected the central bank to intervene less against a rising rupee in coming months.

In the January-March quarter, "they will run out of sterilization instruments, and the inflation number will start picking up and so the currency appreciates," Jha said.

 

[Bushroda]

Reliance Industries Confirms Discovery Off East Coast
By Archana Chaudhary and Manash Goswami

July 17 (Bloomberg) -- Reliance Industries Ltd., India's biggest company, confirmed a gas discovery off the country's east coast, potentially becoming the country's largest producer of the fuel.

This is the first discovery in the region by any company, P.M.S. Prasad, president of the Mumbai-based company's oil and gas business, told reporters today. The well drilled in the CY- DWN-2001/2 area of the Kaveri Basin produced 31 million cubic feet of gas and 1,200 barrels of oil a day, he said.

The find may help billionaire Chairman Mukesh Ambani overtake Oil & Natural Gas Corp., India's biggest producer of natural gas, and boost income from selling a fuel that's available in half the quantity needed by the country. Reliance made the world's biggest discovery of 2002 in the adjoining Krishna Godavari area, from where it's slated to start production next year.

``We are as excited about the discovery as we were about Krishna Godavari,'' Prasad said. ``It's a significant milestone.''

V.K. Sibal, director general of hydrocarbons, yesterday said his office had been informed of the Kaveri Basin find. Reliance shares rose 50.8 rupees, or 2.9 percent, to 1,827.35 rupees on the Bombay Stock Exchange today.

Dhirubhai Ambani

The well is at a water depth of 1,185 meters, Prasad said. The discovery has been named Dhirubhai-35, after the late founder of the company. Reliance names each discovery after Dhirubhai Ambani, who started life as a gas station attendant and built the diversified group.

``The potential seems to be very huge,'' said Karthik Ramakrishnan, analyst at Mumbai-based Sunidhi Consultancy. ``It augurs well for India's energy sector because we have a huge shortage in fuels as demand is rising.''

India's current gas supply of 85 million cubic meters a day, including imported liquefied natural gas, falls short of the potential demand of 170 million cubic meters, according to estimates by the Oil Ministry. Gas consumption may rise to 400 million cubic meters a day by 2025 if the economy grows at the projected rate of 7 percent to 8 percent a year. About 80 percent of the current supply is from Oil & Natural Gas.

Reliance, run by Dhirubhai Ambani's elder son Mukesh, plans to start producing 80 million cubic meters of gas a day from Krishna Godavari, north of the Kaveri basin, next year. Reliance is investing $5.2 billion to produce gas at the site.

Rig Shortage

Oil and gas exploration is being hampered by a shortage of manpower and increasing costs, Prasad said. Record crude oil prices have prompted companies to increase exploration, leading to a shortage of rigs and engineers, he said. Reliance has spent 90 billion rupees on exploration, three times the amount it had committed to the government.

Reliance said Nov. 1 the cost of developing the Krishna Godavari fields doubled to $5.2 billion from an earlier estimate.

The company will get eight rigs starting September to the middle of next year, Prasad said. Four rigs will be able to drill at more than 2,000 meters water depth.

``Capital costs of explorers have almost doubled with rig costs going up and this will affect their profitability,'' Nagarajan Narasimhan, head of research at Crisil Ltd., the Indian unit of Standard & Poor's, said on phone from Mumbai.

Additional supplies of natural gas may lower India's need to import the fuel. Petronet LNG Ltd., India's largest liquefied natural gas importer, said on July 3 it agreed to buy 1.25 million metric tons of liquefied natural gas from Qatar to supply the country's biggest gas-fired power plant in Dabhol.

Petronet is in talks with Chevron Corp. to import 5 million tons of LNG from the Gorgon LNG project in Australia in 2013, Managing Director P. Dasgupta said on April 26. The company, which is doubling capacity at its Dahej terminals by December 2008, plans to start importing cargoes into a second LNG import terminal in Kochi starting in 2010, Dasgupta said.

``We estimate that almost 50 percent of India's gas needs will be met through the new gas finds in the coming five years, cutting exports to one-fourth of India's needs,'' Crisil's Narasimhan said.

 

[Bushroda]

Bangalore keen to be the IT Gateway to Asia
Vicky Nanjappa in Bangalore
July 17, 2007 14:00 IST

After its image took a beating thanks to the UK terror plot, Bangalore city will now try and regain its image as the top IT city in the region by portraying itself as the IT Gateway to Asia.

Karnataka's information technology secretary M N Vidyashankar told rediff.com that the theme of the four-day Bangalore IT.in to be held between October 29 and November 1 will put the image of Bangalore on the global map once again as the leading infotech city.

The Karnataka government realises that there is a need to wash away the negative publicity it has got in the wake of the London terror plot with three persons from the city being detained.

Vidyashankar said that Bangalore IT.in is Asia's biggest IT and telecom exposition and the event will provide a platform to exchange knowledge on information and communication technologies (ICT).

Apart from this the event will also enable countries and companies in Asia to leverage Asia's ICT eco-system built in India, with Bangalore as the nerve centre of all high-tech activities.

The IT secretary said that keeping in mind the changing needs of the industry, the theme of the event will be on portraying Asia's unique ICT system.

Organised by the state government, in association with the Software Technology Parks of India (STPI) and Cyber Media, the 10th edition of the IT.in will highlight the country's large ICT talent and end-to-end capabilities across the value chain.

"India is positioned in the world of IT as the only country in Asia offering a gamut of services from low-end data entry to high-end analytics and research and development. With skilled talent pool and cost advantage, an ICT ecosystem has been built over the years to thrive on the opportunities created by the global economy in a flat world," said the IT secretary.

Vidyashankar also pointed out that India accounted for one-third of Asia Pacific's IT jobs. He said that India has become a destination of choice on parameters such as talent, maturity and business environment.

Cyber Media group chairman Pradip Gupta pointed out that Bangalore has moved up the value chain to emerge as a global destination for systems on chip design, embedded software and a centre for remote management of infrastructure services.

 

[Bushroda]

india: Organic farming provides a clue for struggling farms
Monday Morning, Lebanon

Prime Minister Singh: “Till we make farming as a whole viable at this scale, it would be virtually impossible to reduce rural poverty and distress”

As India struggles to deal with stagnation in its crucial agricultural sector, small-scale organic farming initiatives near the capital Delhi are providing clues on how to reap healthy profits from the land.

Many farmers in India, where more than 70 percent of the people depend on the land, eke out a living -- or else fall steadily into debt -- trying to grow water-, fertilizer- and pesticide-heavy crops on an acre or two of land.

Growth has clocked in at a mere two percent -- far behind the wider figure of nine percent -- leading the government to wager six billion dollars in a push for large-scale, industrial farms.

“Small and marginal farms have become an unviable proposition”, argued Indian Prime Minister Manmohan Singh last month, announcing the four-year investment in farm technology and infrastructure.

“Till we make farming as a whole viable at this scale, it would be virtually impossible to reduce rural poverty and distress”, he said.

But around Delhi, free-range and organic goods from newcomers to farming are showing that money can be made by growing specialty products that consumers are willing to pay more for.
At the French Farm in Gurgaon, a suburb of Delhi known mainly for its call centers, Roger Langbour raises thousands of free-range Peking and Muscovy ducks on feed that is free of pesticide and antibiotics.

White ducks sit placidly on the ground in a large enclosure with wire fencing. Elsewhere turkeys and even a small number of quail and pheasants strut and peck at the ground.

“People said ‘you’re are crazy; no one will buy your ducks’”, said Langbour, who started the three-acre farm 14 years ago after a career in the French air force, which sent him to India on his last post.

“But I’m the one who opened the duck market in India. In 1991, ‘92, there were no ducks on the table here”.

“Agriculture is the sector that’s going to be the next big thing. It’s an unorganized sector so there’s a lot of opportunity”, enthused Indira Khosla, a co-founder of the company.

“Recent studies have shown that if you want to achieve growth, it can be through high-value crops, not though cereals”. argued Surinder Sud, agriculture editor for the Business Standard daily.

An Indian Council for Agricultural Research study showed that the two-percent agricultural growth rate masked a six-percent growth rate in fruits and vegetables, Sud said.

Even so, India, the world’s second largest wheat producer, may be reluctant to encourage its farmers to move away from growing staples like rice and wheat.

As incomes and food consumption have gone up, wheat reserves fell last year and the country was forced to import the commodity for the first time in six years.

But Sud said that with big foreign reserves thanks to 15 years of a booming economy now growing at more than nine percent per year, food security can be managed.

Four million hectares of land are now devoted to certified organic farming for export, Dave said, including of mangoes, spices and nuts.
The council has developed standards for organic exports, and mandatory domestic standards are in the works. This will make it easier and cheaper for farmers to get the kind of accreditation that is recognized abroad.

But for now, the impetus for organic agriculture is coming not from small farmers in remote areas far from markets, but from city-based businesses.

 

[Bushroda]

Railways seeks private participation to introduce high-speed trains
S. Vydhianathan

CHENNAI: The Railways is looking for public-private partnership to in introduce ing high-speed trains in select corridors.

As such high-speed trains can be operated only on dedicated elevated corridors, costing at least Rs. 70 crore a per kmilometre, private participation has become imperative, according to Southern Railway General Manager Thomas Varghese. There are demands for bullet trains from Chennai to Ernakulam, Bangalore, Coimbatore and Madurai and from Trivandrum to Mangalore.

The Railway Board Chairman recently held detailed discussions with Chief Secretaries of Tamil Nadu and Kerala on this issue. As heavy investments are needed to realise these demands, an in-depth market survey on possible clientele who could afford to pay fares on a par with those of airlines would have to be carried out.

A bullet train between Chennai and Bangalore would be ideal in view of the increasing passenger patronage between the cities, Mr. Varghese said in an interview on Monday.

The Railway Board recently decided to have at least one high-speed corridor in each zone. Chief Minister M. Karunanidhi had written to Railway Minister Lalu Prasad, asking him to consider the possibility of operating bullet trains from Chennai to major cities in the State. Mr.Varghese, who is laying down office on Wednesday after serving in the Indian Railways for over 35 years, said during his two-year stint as General Manager there were no major accidents in the zone. in Southern Railway. However, he admitted that there were deaths in fatal accidents at unmanned railway crossings, for which the Railways could not be held responsible.

Claiming that the total revenue of the zone had been on the rise, Mr.Varghese said that it had recorded 12 per cent increase in total earnings in the first three months of the current year. Despite the uptrend in the earnings, the operating ratio was more than 100 per cent. Thanks to the various steps taken by the zone, the ratio came down from which was 115 per cent in the year before last year came down to 104.5 per cent last year. This meant that for every rupee earned, the zone was spending Rs. 104.5. To break even,

To break even, the freight traffic had to be improved substantially. The General Manager said the Board had been sanctioning funds generously for undertaking various ongoing projects, passenger amenities and for improving safety. With the sanctioned funds, the zone would be able to complete the ongoing projects at the earliest.