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Monk
30 Sep 05,, 17:00
http://www.bloomberg.com/apps/news?pid=10000080&sid=aJKQ3iKDyaZc&refer=asia
Indian GDP Growth Accelerates to 8.1%, Tops Forecasts (Update5)
Sept. 30 (Bloomberg) -- India's economy expanded at the fastest pace in more than a year in the first quarter, as companies increased production to feed a consumer boom and meet rising overseas demand.

Gross domestic product in Asia's fourth-largest economy expanded 8.1 percent in the three months ended June 30 from a year earlier, the Central Statistical Organisation said in New Delhi today. The expansion, led by an 11.3 percent gain in manufacturing, was the fastest in five quarters and beat the estimates of all nine economists surveyed by Bloomberg.

Borrowing costs close to three-decade lows and higher wages encouraged more consumers to buy cars, houses and goods in the world's second-fastest-growing major economy behind China. Rising sales of products such as Mahindra & Mahindra Ltd.'s Scorpio and Bolero sport-utility vehicles helped lift the benchmark Sensitive stock index about 30 percent this year.

``A lot of companies are expanding capacity to meet rising demand,'' said Shuchita Mehta, an economist at Standard Chartered Bank in Mumbai. ``We see the current growth momentum'' continuing for the rest of the financial year ending March 31.

India is on track this year to overtake Asia's third-biggest economy, South Korea, which posted a 3.3 percent expansion in the three months ended June 30. Japan's economy, the world's second biggest, expanded 2.1 percent in the same period, while China's gained 9.5 percent.

The Indian government is targeting more than 7 percent annual growth for the next decade.

Monsoon, Farmers

The government on Sept. 16 said output of food grains sown in the monsoon season may rise 2 percent because normal rains allowed farmers to cultivate more land. Agricultural production rose 2 percent in the first quarter.

Farm production needs to be boosted through investment, the finance minister said today.

``We see rising demand in the coming years,' said Gautam Thapar, vice chairman and managing director at Ballarpur Industries Ltd., India's biggest maker of writing and printing paper, which on Sept. 28 said it plans to double its capacity to 1.2 million metric tons by 2010.

Exports, which account for about a 10th of the economy, rose 23 percent from a year ago in the five months ended August following a 24 percent gain in the year ended March 31. Mahindra & Mahindra shipped more vehicles to Europe, while companies including Tata Steel Ltd. increased sales to China.

``Trade is rising and is holding very strong,'' said S. Hajara, chairman and managing director of Shipping Corp. of India Ltd., the nation's biggest shipping company, which yesterday got government approval to buy two very large crude oil carriers for $258 million.

Inflation Threat

``The only threat to India's economic growth comes from higher inflation,'' said D. H. Pai Panandiker, director general at RPG Foundation, an economic policy group in New Delhi. ``Inflation will likely accelerate and the central bank may be forced to raise interest rates by a quarter point next month.''

Prime Minister Manmohan Singh's government partially passed on higher global crude oil costs to consumers by approving a 7 percent increase in automobile fuel prices on Sept. 6, the first since June. Crude costs have risen 34 percent in the past year.

The Reserve Bank of India in its July 26 monetary policy statement left its overnight borrowing rate unchanged at 5 percent, saying inflation probably won't exceed its target of 5.5 percent in the year to March 31. Since last October, the overnight reverse repurchase rate has been the central bank's main policy tool because commercial lenders have surplus cash.

For quite sometime as suggested by other members in the forum as well, I had wanted to commence an Indian Economy thread. I have done so now, with the following objectives,
A) To understand the future prospects of the Indian Economy
B) Its strength and Weaknesses
C) Specific focus on the agricultural sector and how its going to raise the standard of living of 500Million people and alleviate 220Million People out of poverty.
D) Overall review and role of the manufacturing and Service Sectors.
E) India's Monetary policy - Capital account convertibility etc.
F) India's fiscal discipline and its impact on the economy.

So no piss fights. And post away with whatever data you can source to promote better understanding of the Indian Economy. I have started this off with Q1 GDP data.

Sameer
30 Sep 05,, 17:16
For one thing you could test for statistical break from the post 1991 time trend trend rate of growth by employing a simple Lucas like model.

ie

The natural logs of

lngdp= alpha + beta1 (time trend 1980-2002)+beta(2)lngdp(-1)

Then you could calculate the time trend based on statistical significance via OLS.

You could then rerun this same regression by adding another time trend from 2002 onwards (until 06 by using the IMF predicted growth rate)
ie
the above equation + beta3(time 03-06) while I fear that your results will probably have to wait an extra year to test for the break.

That would confirm if India has broken the 6.2% Neo hindu rate of growth.

See example
http://lnweb18.worldbank.org/sar/sa.nsf/Attachments/annexch8/$File/annexch8.pdf

Sameer
30 Sep 05,, 17:22
Data on the Indian economy can be found here, make sure you would use CONSTANT PRICES for all variables and not current prices.

http://www.rbi.org.in/scripts/AnnualPublications.aspx?head=Handbook%20of%20Stati stics%20on%20Indian%20Economy

Sameer
30 Sep 05,, 19:05
India has climbed the competitiveness index

http://www.economist.com/markets/displayStory.cfm?story_id=4462765

See the graph

Sameer
30 Sep 05,, 19:07
http://in.news.yahoo.com/050930/137/60dd2.html

Friday September 30, 06:19 PM
India's external debt dips $1.3 bln in Apr-June



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MUMBAI (Reuters) - India's external debt fell by $1.31 billion to $122.15 billion in April-June from the previous quarter, mainly due to the dollar's appreciation against other major currencies, the Reserve Bank of India said on Friday.

Short-term debt in the quarter stood at $7.28 billion, 6.0 percent of the total debt and down from $7.52 billion at the end of March.

The RBI said, however, external commercial borrowings (ECBs) rose during April-June, with companies' syndicated loans and overseas bond issues pushing up the ECB total to $27.2 billion.

Corporates have made a beeline to raise foreign currency loans at rates lower than domestic ones to fund capital expenditure plans.

The Indian central bank said foreign exchange reserves exceeded external debt by $16.2 billion at the end of June, providing 113.3 percent cover to the total debt stock.

Asia's third-largest economy had $144.22 billion in foreign exchange reserves on September 16, the fifth largest accumulation of reserves in the region.

The central bank said addition to foreign exchange reserves during the April-June quarter from the current and capital accounts was $1.2 billion.

Valuation losses due to the dollar's rebound against other major currencies accounted for a decrease of $4.3 billion in total reserves compared to $1.0 billion in a year earlier, resulting in a net decline of $3.1 billion in the quarter.

India's central bank states foreign currency assets in U.S. dollar terms and includes the effect of the appreciation or depreciation of other currencies held in its reserves such as the euro, pound sterling and yen.

Sameer
30 Sep 05,, 19:10
India to open up financial sector, slowly

India on Saturday said it would open up its financial sector further, but this would happen gradually after putting in place appropriate laws and appointing regulators.

"It is our intention to move forward, but at every step the watchword will be caution and placing suitable instruments to prevent financial shocks," Finance Minister P Chidambaram said in his lecture at Yale University.

"We have taken measured steps in banking, insurance, capital markets, securities markets and the debt markets," he said, adding that American banks, insurance companies and other financial intermediaries seem to have realised the opportunities that lie ahead and accepted the wisdom of India's policy to 'hasten slowly.'

There has been considerable interest on the part of American corporations in the Indian financial sector, as this is the sector where Washington's comparative advantage seemed to lie in the present day, Chidambaram said in his lecture to the Yale University.

Turning to the Indian economy, Chidambaram said India was now coming to a point where its contribution to world economic growth would be significant with a GDP of nearly $800 billion and each 10 per cent rise in India's GDP would contribute $80 billion to world output.

Chidambaram said India's greatest achievement lies in the political arena. "Every tenet of political science argues that poor countries succumb to violence, fanaticism, civil wars and dictatorship. India is the exception."

India is the best functioning multi-cultural, multi-ethnic, multi-religious country in the world, he said, adding that "looking forward, individuals and firms, both domestic and foreign, can feel confident about India, including its political and social stability over the next 50 years."

Showcasing India as major foreign investment destination, particularly in infrastructure, Chidambaram said there was an 'obvious fit' between India's values and those of the mature industrial economies.

Observing that economic interdependence between India and the United States was growing at an astonishing rate, he said there had been a heightened interest in portfolio investment in Indian equities from US institutional investors.

He regretted that outsourcing had been wrongly interpreted as 'exporting of jobs' and making it controversial, which is unfortunate for all sides.

"Producing goods and services in India makes goods and services cheaper in the US," he said, adding that in a highly competitive world, with intense competition among companies to cut costs, any hesitation to outsource spares, intermediate inputs and some processing requirements or services from the most cost competitive corners of the world may result in a total loss of business for the company and an even greater loss of jobs.

Furthermore, Chidambaram said that if one looked ahead in time, the ageing profile of many developed economies meant they would have the choice of either importing people or outsourcing work.

Though little noticed, the finance minister said there was growing inter-dependence between India and the US based on financial markets. Net capital flows into India have been at a level of $12 billion in each of the last two quarters.

US institutional investors were increasingly investing in India and all kinds of investors were participating in this, ranging from pension funds to university endowment funds to mutual funds to insurance companies, he said.

"They are entering into every aspect of India's economy, through venture capital, listed equity, corporate bonds and government bonds, he said, adding that foreign investors are trading on India-related instruments, both spot and derivatives in India and on offshore markets.

"Conversely, Indian multinational corporations are increasingly buying companies in the US and setting up operations in the US," Chidambaram said, adding that "two-way financial flows is thus an important aspect of our interdependence."

Referring to the problems faced by the global community, the minister said there were four major issues -- delays in completing the Doha round, terrorism, international financial architecture and global warming.

"In my view, the three large countries -- the US, China and India -- would do well to collaborate in solving these problems," he said, adding that persistence of these problems point to failure of global public goods and to the deficiencies of multilateral institutions.

The World has changed enormously since 1945 when United Nations, World Bank and IMF were set up, Chidambaram said, emphasising that there was need for a far-reaching examination of the mandate, governance, management and behaviour of these organisations to make them relevant in 2005.

The mandate of these organisations were outdated in the context of the present problems, he said citing the example of the United Nations, which was "conceived at a time when no state actively pursued a policy of support to cross-border terrorism."

"The governance of these organisation is not aligned with present realities," he said, adding that the UN, World Bank and IMF disempowers four of the five biggest economies, China, Japan, India and Germany in various ways.

The management of these organisations was dominated by the US and to a lesser extent by Europe. "This contaminates the behaviour of the organisations, and the extent to which other countries see the UN, the International Monetary Fund and the World Bank as neutral bodies."

In a TV interview on the Charlie Rose show, he said: "The emergence of India and China along with Brazil and South Africa, on the path of reform, progress and prosperity is good for the world."

However, both India and China would not rise to the level of the US in per-capita income even if the size of their economies rise because of the large population, he said.

http://inhome.rediff.com/money/2005/sep/24india.htm

Sameer
30 Sep 05,, 19:19
The land ceiling act is being abolished this fall btw. :)

Enough of Shamghai
By: Satish Purohit
May 31, 2005

The time for tall tales is over, says Chief Minster Vilasrao Deshmukh. As a first concrete step towards turning Mumbai into Shanghai, Deshmukh has agreed to vigorously support the construction of skyscrapers in the city.

“Mumbai cannot expand horizontally, so we have to work towards growing vertically,” Deshmukh told Mid Day yesterday. “But we will of course have to carefully study the pitfalls before doing so,” he added.

The chief minister said the government will have to formulate new policies to facilitate the building of skyscrapers, after consulting with experts.


Support

The good news is Deshmukh has the support of rival parties on the issue. Vinod Shelar, a BJP general secretary, said: “I am for skyscrapers, but parallel development of infrastructure is important. Development has meaning only if it benefits everybody.”


Cumballa controversy

Deskmukh said, “The recommendations of the old committee set up to study the Cumballa twin tower issue are yet to be looked at, but we are prepared to do so.”

The committee he was referring to was set up a couple of years ago after residents protested against the construction of the Cumballa Hill twin towers. It was headed by former chief secretary Ajit Nimbalkar.

Nimbalkar, who submitted a report on the issue in 2004, said, “When you are planning to go vertical, you have to ensure that you have the required infrastructure to support high-rises.”


‘Only solution’

Builders believe skyscrapers are the only way to solve overcrowded Mumbai’s massive housing problem.

According to the Mumbai Metropolitan Region Development Authority, the city needs 85,000 housing units urgently, and is already running a 45,000-unit deficit.

“The potential benefits are tremendous,” said Niranjan Hiranandani of Hirananadani Constructions, “but sadly, we lack the vision and the political will to make things happen. My tallest building, Marina, is in Dubai. You can’t create something that grand without the government’s support.”

Architect Hafeez Contractor, who is busy planning the 160-floor Noida Tower, which will be the world’s tallest building at 710 metres, agrees. “Mumbai has so many reasons to go vertical but there are people who will come up with 20 reasons to oppose it.”


Hurdles

Mumbai’s space problem, caused by the Urban Land Ceiling Act of 1977 and the BMC’s development control regulations, is aggravated by widespread slum encroachment.

Sanjay Chaturvedi of Accommodation Times said, “The city has the finances, some of the best architects in the world, and the demand. The government should seriously rethink its policy on skyscrapers.”

However, there are first some serious hurdles to overcome. Being an old city, much of Mumbai’s infrastructure, such as water pipes and sewage lines, are over a century old.

Anuj Puri, CEO of Chesterton Meghraj, said, “Mumbai’s infrastructure as it stands today cannot take the burden of skyscrapers. Plus, we don’t have enough energy. Having said that, the existing infrastructure can be revamped to accommodate high-rises.”

http://web.mid-day.com/news/city/2005/may/110523.htm

Sameer
30 Sep 05,, 19:21
100% investment in construction possible by foreign bodies FINALY.

PC boost for Mumbai realtors

Nandu R Kulkarni in Mumbai
May 29. — Union finance minister Mr P Chidambaram’s Budget announcement permitting 100 per cent foreign investment in the construction sector has increased land prices in central Mumbai where vacant textile mill premises are up for sale and deals worth more than Rs 10,000 crore are believed to be in the offing.
The Supreme Court has also given clearance to the development of land belonging to 16 mills under the National Textile Corporation. The NTC controlled by minister Mr Shankar Sinh Vaghela’s textile ministry is thrilled by the prospects of huge earnings from the defunct textile mills. The NTC owns about 90 to 100 acres of prime land. Some corporate houses and private owners have also decided to sell sprawling plots for development and construction since the prices in central Mumbai in the past three months have increased 30 per cent on an average.
One of the reasons for the sudden spurt in prices is that local builders think that they can resell these properties to foreigners at more attractive prices and earn significant profits. The central areas of Mumbai such as Lalbaug, Lower Parel and Elphinstone Road, once dominated by textile mill workers, have suddenly assumed an up-market look. Several corporates, newspapers and advertisement and PR agencies have shifted their offices to the heart of the city.
Bids for six textile mills’ land under NTC have already been opened. Stocks and financial entity India Bulls, with the backing of Farallon of USA, has already bought Jupiter Mill’s 11-acre land for Rs 276 crore, industry sources say. A part of it would be sold to builders and developers. Oberoi Builders have bought about 17 acres of Apollo Mills’ land for about Rs 104 crore in Lower Parel. Phoenix Mill land too is under negotiation. Most of the tallest city buildings have been planned in central Mumbai.
Glaxo SmithKline have also been named as prospective sellers of a part of their properties. The Wadias own about 60 acres near Dadar that may also be made available for development and construction. The government has also decided to spruce up these areas of the city by rehabilitating the residents of BDD and BIT chawls, which are known as the labour colonies of Mumbai.
The transformation is expected in the next three to four years. The Bombay Chamber of Commerce and Industry has prepared a plan to transform Mumbai into an international city. The plan is called Bombay First.
http://www.skyscrapercity.com/showthread.php?t=195591&page=5

Sorry if I post too much about Mumbai BUT I LOVE THIS CITY.

Sameer
30 Sep 05,, 19:31
But India has challenges that law ahead, ie the corrupt Govt. :(
http://timesofindia.indiatimes.com/articleshow/1248594.cms

Leak takes sting out of CBI raids

TIMES NEWS NETWORK[ FRIDAY, SEPTEMBER 30, 2005 11:37:39 PM ]

Citibank NRI Offer

NEW DELHI: The CBI’s plans to conduct countrywide raids, covering 198 premises in 54 cities, were leaked, triggering suspicions about the role of insiders wanting to alert some of the 70 government officials who were on the list.

The top-secret plan for the raids, the latest in a series of exercises undertaken by the agency against allegedly corrupt public servants, found its way into the media before CBI sleuths visited their 'targets', in what is seen as a major embarrassment for the premier investigating agency.

CBI chief US Mishra acknowledged that the media had come to know of the raids. "It is a matter of serious concern and we will look into it and take action against the official concerned," he said.

He, however, suggested that leaks could have also taken place because the CBI, under the rules, was required to get government sanction before proceeding against officials of the rank of joint secretary and above, four of whom featured in Friday's raids. CBI has been campaigning for doing away with the provision.

The embarrassment was palpable at the media briefing. The CBI chief announced that raids had helped uncover property worth over Rs 14.28 crore and a rather unimpressive haul of Rs 88 lakh in cash.

Suspicions lingered that leaks about the raid might have alerted some targets into spiriting away possessions acquired through illegal wealth. Doubts stemmed from the not-so-huge quantity of cash recovered.

Monk
01 Oct 05,, 17:35
For one thing you could test for statistical break from the post 1991 time trend trend rate of growth by employing a simple Lucas like model.

ie

The natural logs of

lngdp= alpha + beta1 (time trend 1980-2002)+beta(2)lngdp(-1)

Then you could calculate the time trend based on statistical significance via OLS.

You could then rerun this same regression by adding another time trend from 2002 onwards (until 06 by using the IMF predicted growth rate)
ie
the above equation + beta3(time 03-06) while I fear that your results will probably have to wait an extra year to test for the break.

That would confirm if India has broken the 6.2% Neo hindu rate of growth.

See example
http://lnweb18.worldbank.org/sar/sa.nsf/Attachments/annexch8/$File/annexch8.pdf

Too much econometrics. We should stick to macro-economic fundamentals and economic structure and important issues in this regard.
Sameer, you are frightening everyone. :biggrin: :tongue:

Sameer
02 Oct 05,, 00:29
Too much econometrics. We should stick to macro-economic fundamentals and economic structure and important issues in this regard.
Sameer, you are frightening everyone. :biggrin: :tongue:


Well all those nice and simple macro economic equations rely on econometrics, this was how the relationship can be checked and maintained.


For example Klein has developed a 300 simultaneous equation system for the Indian economy, his growth rate forecast extended to 2005 (started 1998), he was right on the money minus 2003 when bad monsoons hit.

Sameer
02 Oct 05,, 00:38
In any event I have my eye on testing for the relationshop between trade entropy and growth as an update to Marwah and Klein (1998) work extending some of the work i did not productivity recently.

I wish to have a better measure of the elasticity of capital for India.

Monk
02 Oct 05,, 15:48
What do you think is going to be the impact of agriculture on the 2nd quarter GDP growth rate. manufacturing is certainly slowing down, I think IIP of July was 6.7% and August 8.3%, so we are not going to see double-digit growth this quarter. So unless agriculture kicks in, growth rate for 2nd quarter can't be maintained above 8%. I am working on the assumption that services growth rate will be consistent.

Sameer
02 Oct 05,, 17:37
Growth rate of agriculture should in theory pick up but there are two more months of monsoon possibilities left, manufacturing will have to slow down but again it will depend on consumption during Diwali time and December.

For every one percent increase in rain from mean, overall GDP growth will increase by 0.27%.

Eventually the Indian economy will grow at 7-7.3% for the year.

Sameer
03 Oct 05,, 03:57
Let us wait for investment as % of GDP data to be released, then we can use last year's ICOR and forecast growth.

I stick to the official 7%. :0

As for the impact of oil prices if anyone is curious
The effect of oil prices is being partly offset by exports of processed petroleum products. For example, during 2003-04, crude oil imports were ~$20billion and refined exports were at $3.5billion. In 2004-05, the corresponding figures were $29billion and $6.5billion .

In the next 2-3 years, Indian oil refining capacity will at least double due to massive investments by Reliance (doubling of Jamnagar refinery capacity), Essar (Vadinar refinery) and state owned oil companies. These will translate to offsetting increasing fractions of the crude import bill.

It is a strategy similar to importing ore and exporting finished goods. While there will always be a progressively increasing domestic oil demand, judicious investments in refining capacity can ensure that the net import bill can be handled comfortably.

Sameer
03 Oct 05,, 04:04
Indian crude oil demand stands at 133 million tonnes (2003-2004)

It is growting quite fast

look here (addpruduction +imports of crude)

http://rbidocs.rbi.org.in/rdocs/Publications/PDFs/65893.pdf

Asim Aquil
03 Oct 05,, 07:30
India's forex reserves drop $1.2 bn: http://economictimes.indiatimes.com/articleshow/1248971.cms

indianguy4u
03 Oct 05,, 10:31
India's forex reserves drop $1.2 bn: http://economictimes.indiatimes.com/articleshow/1248971.cms
Rejoice then!

Sameer
03 Oct 05,, 14:10
India's forex reserves drop $1.2 bn: http://economictimes.indiatimes.com/articleshow/1248971.cms


You know its not the first time Indian FOREX dropped, they did that 2 weeks ago and two weeks before that, in fact so does China's, Japan's

Do you know why?
Derivatives are being renegotiated this week.

hint: portfolio weights are changed, forward contracts are renegotiated, currencies in the basket change too.....

FOREX RESERVES OF ALLL COUNTRIES GO UP AND DOWN.

:biggrin:

I mean if one wants to post something negative, please do but at least try to understand basic economics and understand that you posted nothing of importance.

Sameer
03 Oct 05,, 14:15
The BSE went up by 64 ponts today and stands at 8714 points.

In the last 6 months the BSE has added 90 billion dollars, ie a Pakistan to itself.

It is now paying around over valuation territory.

Does anyone have the latest P/E ratios?

indianguy4u
03 Oct 05,, 14:18
It something 20 times.

Monk
03 Oct 05,, 15:32
The BSE went up by 64 ponts today and stands at 8714 points.

In the last 6 months the BSE has added 90 billion dollars, ie a Pakistan to itself.

It is now paying around over valuation territory.

Does anyone have the latest P/E ratios?

The latest P/E for the Sensex is around 16. But it is still cheaper than the other Asian markets and definitely cheaper than the western markets. But a cool down of the Indian markets is a must. We are entering overheated territory. Too much is happening too fast. :eek:

Ideally, the Indian markets should be buoyant as long as the current global boom economical cycle continues. This cycle is a lot similar to the massive boom of the 1970's global economy where we structurally went up a notch in terms of global economics. We are again undergoing a structural shift in global economics led by this massive boom. I anticipate this to last another 3 years barring any major "incidents".

I would honestly like India to become an oil refining super-power. Because most of the global oil problem has very little to do with availability and more due to refining under-capacity. The US hasn't built a new oil refinery in 27yrs. We have to concentrate on this since there are massive gains to be made particularly with the proximity of the middle east.

Sameer
03 Oct 05,, 15:49
How sure are we that companies are reporting true earnings when even in the US they have been shown not to. The Regulatory authority and SEBI are a work in progress in India.

Monk
03 Oct 05,, 16:53
How sure are we that companies are reporting true earnings when even in the US they have been shown not to. The Regulatory authority and SEBI are a work in progress in India.

I am a chartered Accountant by profession, I can assure you that the major companies are reporting with a fair degree of accuracy.

Prior to Enron, Indian laws were a lot stronger to the US laws from the Companies Act point of view. Subsequently the US tightened up by hastily pushing through the Sarbannes-Oxley Act.

Sameer
03 Oct 05,, 18:03
I am a chartered Accountant by profession, I can assure you that the major companies are reporting with a fair degree of accuracy.

Prior to Enron, Indian laws were a lot stronger to the US laws from the Companies Act point of view. Subsequently the US tightened up by hastily pushing through the Sarbannes-Oxley Act.


How about the penny stock companies though?

I dont doubt the health of the major players.

Sameer
03 Oct 05,, 19:15
Anyone have the rest of the article from the Economist?

India's electricity reforms
Sep 22nd 2005
From The Economist print edition


ITS organisers are calling it a victory for people power. They even invoke the name of Mahatma Gandhi, icon of India's independence struggle. For economic reformers, however, it is a depressing defeat: by making a huge fuss and refusing to pay their bills in full, Delhi's middle class last month persuaded the local government to withdraw an increase—of about 10%—in the residential electricity tariff.…



Electricity reform is a major stumbling block to maintaining strong growth, the Govt needs t be more severe rather than play around with vote banking :(

Sameer
03 Oct 05,, 19:48
If we want to compete with China we will need to reform labor laws and archaic power to the poor rules.


Take the recent incident where the CBI raide the officers of top bureaucrats and found bribe money everywhere. That too take into account that there was a leak from some corrupt CBI member that prevented more.


I say make sure that the proposed SEZs have the reformed labor laws, people can choose to work in the SEZs where laws follow a more liberal and sensical approach or work outside them, that way when the people, even the poor see the wage differential, they will push for reform themselves.

The biggest stumbling block for reform in India is a lack od education in thepoor community, hence they vote for commies.


We must also make sure that our economic relationship with the US is strengthened, i could care less if they plan to invade Iran tomorrow, we are no yet strong enough to preach. We will benefit greatly from the US and we are closer to them than to any other Muslim country afterall.

bharadsm
03 Oct 05,, 19:57
The BSE went up by 64 ponts today and stands at 8714 points.

In the last 6 months the BSE has added 90 billion dollars, ie a Pakistan to itself.

It is now paying around over valuation territory.

Does anyone have the latest P/E ratios?
Hi,
I am new to this site and the thread. People like me feel there is something wrong somewhere... with this sudden spurt in the Sensex. One which goes up so fast may come down even faster. What can be the cause for this sudden rise? :eek:
Rgds
SMB

Sameer
03 Oct 05,, 20:14
Economic growth is behind the rise in the Sensex and it is certainly not sudden, it has been growing at an outstanding pace since 2003 and has been the best performer compared to any other major index.

The BSE will grow in the long run because Indian companies are starving for capital and interest rates and inflation are low.

There may be some penny stocks out there in the bSE that in my opinion will eventually be sold off and there will certainly be a correction500-900pts) in the market but make no mistake in the long run the trend is up up up. The BSE belongs in the 8000+ index.

Sameer
03 Oct 05,, 20:16
In 2003 the BSE stood at 3500, it reached 5000 then crashed when the commies scared all of us and then got back to trend and made it to 8000 and now it is edging closer to 9000 than ever.

On average the BSE has added a Pakistan to its wealth over the last 6 months.

Sameer
03 Oct 05,, 20:24
SEBI IS doing a good job at looking into the BSE as well lookie here.

How did you manipulate share prices?
ASHWIN J PUNNEN

TIMES NEWS NETWORK[ TUESDAY, OCTOBER 04, 2005 01:51:34 AM]
NRI Special Offer!
MUMBAI: The modus operandi adopted by promoters to manipulate the prices of penny stocks is similar. The Securities and Exchange Board of India (Sebi), which recently strengthened its surveillance department and cracked down on price manipulation, has unearthed a common tactic used by promoters to ramp up shares and sell them to public or institutional players.

In the first stage, the promoters demat their holding as they hold a large chunk of the company’s equity. And then they transfer a part of these holding to individuals and entities close to them through off-market deals. A case in point is Mumbai-based IFSL where promoters transferred about 12% to a set of individuals linked to them.

These individuals then trade heavily and create liquidity in the counter and attract retail investors.

During this period, the company makes a flurry of announcements about new plans. In some cases, a stock split is also announced to increase volume and also to make it appear that shares are still ruling lower. The companies, which were making losses, suddenly show a huge jump in sales and profits.

For instance, Mumbai-based Prime Properties whose promoters were banned from trading in the company’s stocks by Sebi on Friday, showed a 1888% jump in profits from Rs 10.12 lakh in the quarter ended June ‘04 to Rs 2.01 crore during June ‘05.


Some times handsome dividends are also announced after many years to dupe the investors. “These events are of great importance, not to be dismissed as fortuitous, signifying careful planning and execution, with a view to encouraging and inveigling investors to trade in these shares,” says Sebi in its order promoters of one such company.

Konkan Tyres, another firm where Sebi has taken action, was in dire straits for many years. After eight years, unaudited results for the quarter ended June 30, ‘05 showed a sudden turnaround in performance.

The company which was loss making till the financial year ended March ‘05, showed a net profit of Rs 64 lakh during the quarter ended June 30, ‘05, as compared to a net loss of Rs 25 lakh in June 30, ‘04 quarter. In fact, the operation of the company was suspended during the second half of the year ended March 31, ‘04 and the bank had taken possession of all the moveable and immovable properties of the company.

The company also announced a set of future expansion plans and bagging some foreign orders. Following the news, the stock of the company surged by over 200% in two months.

In the final stage, these individuals offload stocks into the open market or to foreign funds through block deals. ET had reported that leading foreign funds such as Goldman Sachs, Citigroup, Merrill Lynch and ABN Amro had done block deals in IFSL. Most of these stocks were sold by the entities in whose favour promoters had transferred the shares.

http://economictimes.indiatimes.com/articleshow/msid-1251102,curpg-2.cms


With a P/E ratio of 16.246 the BSE remains more competitive than most markets, one should also not forget that.

Sameer
03 Oct 05,, 20:48
http://economictimes.indiatimes.com/articleshow/1234866.cms

Will the Sensex touch Mt 10K?

INDIATIMES NEWS NETWORK[ MONDAY, SEPTEMBER 19, 2005 01:27:26 AM]
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If you look at the way the Indian stock market is behaving for past couple of months, it seems the bull is in no mood to take a break. Recently, when it crossed 8,000 mark, everyone started asking: what's next?

Within a week it soared another 300 points and there is no immediate sign of a slide. Most interestingly nothing seems to bother the bull. Whether it's Mumbai flood or Katrina hurricane in the US, the Sensex simply zoomed ahead.

But, how long will it last? Sebi member Madhukar even went on record saying that he won't be surprised if the Sensex touches 16,000 mark. Though 16,000 seems to be a distant dream as of now, the Sensex may very well reach 10,000 in near future.

So, the question is: will it reach 10,000 or not? Let's examine both sides of the coin.

Sensex @ 10K! Sounds alarming? Not, if the current momentum on the bourses continues and there are more than enough catalysts to propel the markets further, at least at the current growth rate.

The Indian stock market has never seen so much interest in the recent past. The bulls are charged up and the market scaling new peaks is almost a daily routine now.

The bulls had roared loud last time with such intensity when Harshad Mehta was around. The BSE Sensitive Index (Sensex) had surged from the 2,000 level to the 4,000-point milestone in less than three months. However, that boom proved to be a damp squib once the deeds of Mehta were out in open. Thereafter, the benchmark index, which tracks 30 large-cap stocks, had taken more than seven years to cross the 5,000-point level. The obvious reason, the past rallies were driven by more of speculations rather than fundamental strength.

Here are some reasons why the bull run on the bourses will not stop.
The current bull run can be considered to be continuing for about past three years now, except for a few hiccups. A major distraction has been Black Monday, May 17, 2005. The Sensex had dropped nearly 900 points in two trading sessions following the loss of BJP-led National Democratic Alliance (NDA) in the general elections. However, the index pared its loss by nearly 600 points in just eight days with the appointment of Manmohan Singh as the country's prime minister.

The markets have developed a habit of overcoming a number of bearish trends, including terror attacks, natural calamities, anti-reform policies or even oil price hike.

Consider some of the major dates in the recent past that could have been some major roadblocks to the rally. Sensex gained more than 150 points in the week following December 26, 2004, the day when the tsunami hit south India. Then in July-end this year when heavy rains and floods stopped normal life in the country's financial capital Mumbai, Sensex was up by a whopping 120 points. Also in July 2005, when the government announced its decision to abandon any strategic stake sale in 13 PSUs, the index gained nearly 800 points.

Then, there is soaring global crude oil price, which has jumped more than 70 per cent to a new record high above the $70 per barrel mark. The rise in crude prices has been a major irritant for most of the global markets, but the current rally on Indian bourses is hardly paying heed to this roadblock either.
good factor prevails

According to an analysis by ET Online, the maximum time the Sensex can take to reach the 10,000-point mark is one year, if the P/E ratios of 30 Sensex companies remain at current levels and the companies at least maintain their profit growth at the same rate in June 2005 quarter.

Moreover, the dream run to the 10K mark can get only better, as the corporate earnings results for the current September 2005 quarter is expected to get better than the previous quarter. The analysts and the companies are all optimistic about improving earnings performances. The underlying strength in macroeconomic scenario is further boosting the growth story.

Go through the comments of various industry bigwigs on the day Sensex hit the 8,000 level and you will find that everybody was gung-ho about the ensuing rally. Ranbaxy Labs chief Malvinder Singh was bang on point when he said that Sensex was on way to 10,000 points and this was a start of a bullish India phase. HCL Technologies head Shiv Nadar said the rally was based on clearly established fundamentals of Indian economy and solidity of Indian companies. Dabur India chairman Vivek Burman said the current run was sustainable and Sensex could reach new heights.
There are many sceptics who drone about the risks associated with the Sensex scaling new heights. While, earlier a host of market analysts were advising the investors to keep away from the "overvalued" market, now mostly they are asking the investors to keep away from "overvalued" stocks. To a large extend, this change in market outlook has been driven by the current optimism in the markets.

The greatest example of a reversal in stance comes from none other than the union finance minister, P Chidambaram. In July this year, the month when Sensex was traversing beyond the 7,000 level after shrugging off London bomb blasts and rains and flood in Mumbai, the minister said that he would be concerned if the Sensex crossed the 8,000 level. Come September 8, 2005, the Sensex crossed the mark and the finance minister also joined the party. The minister said there was no reason to worry as the stock market rally seems to have a stronger fundamental basis.

The proclamation cannot be considered as coming from an ordinary politician, but a respected pro-reform economist. The views of the minister were also reiterated by M Damodaran, the chairman of the market watchdog authority Sebi, who said that the Sebi was not worried by Sensex reaching the 8K level.
Valuations still in comfort zone

While, reiterating his no-worry views, P Chidambaram added on September 15, 2005 that there are no signs of a speculative bubble in the market, as the P/E ratios remain at comfortable levels. The finance minister said that the P/E ratios are holding at comfortable levels between 16.0 and 16.5 currently, as compared to earlier peaks when the ratio had gone above 25.

The Sensex P/E ratio has come down substantially in the recent past, after peaking as much as 60 in early 1990s. While defying the prevailing misconception that the markets are overvalued, the fall in the P/E ratio also proves that investors have gone conservative and are not willing to pay higher price for stocks.

A study of P/E ratios of 30 Sensex scrips gives another reason working in favour of Sensex continuing its northward momentum. With exception of a few companies, P/Es are in sync with the average industry P/Es well within the comfortable levels.

Economic growth and corporate profits: a winning combo

Buoyant corporate earnings results have been one of major drivers of the current rally in stock markets. While, steel and refinery companies saw decline in growth rates in the June 2005 quarter, overall the companies reported their quarterly results in-line with or above expectations.
P Chidambaram reiterated the view recently that the September 2005 quarter results from business houses and banks were expected to be as good as the June quarter. The minister added that the market is being driven by high business confidence, foreign money, copious domestic liquidity, return of small investors and optimistic earnings forecasts for the current quarter.

On another positive note, India has emerged as one of the fastest growing economies in the world with a sustainable growth rate. The government's projections for 7 per cent economic growth has been ratified by a number of global entities including the Asian Development Bank (ADB) and the credit rating agency Standard and Poor's (S&P).

Willing all-round participation

Unlike the previous rallies in the past when foreign investors played a key role, the current rally is broader across the sectors and is being participated by all market sections, including foreign institutional investors (FIIs), domestic mutual funds and retail investors as well.

The global liquidity, calculated as sum of the US monetary base and foreign exchange reserves held by central banks world over, have surged by nearly 20 per cent since 2003, which represents its fastest growth in nearly 30 years. The surging global liquidity is finding way to emerging markets due to low interest rates in the US and other developed markets. India has emerged as one of the favourite destinations due to its sustainable economic growth and robust corporate profit growth performance.

The increased focus on improving corporate governance by Indian companies and limited impact of external factors on the Indian economy is adding considerably to the growing global confidence in the country. India has been the second-biggest recipient of offshore fund money in Asia so far this year, with Taiwan leading the pack.
The growing overseas confidence in Indian equities can be gauged from the fact that number of FIIs registered to do business in India increased to 764 by the end of August this fiscal, from 685 in 2004-2005 and 540 in 2003-2004. The FII inflows in Indian equities have already crossed the $8 bn mark so far this calendar year, as compared to a total of $8.5 bn in 2004.

The foreign money is finding its way into the country in form of growing FDI inflows as well. The FDI inflows are likely to exceed $5 bn this fiscal year, from $3.73 bn in 2004-2005. During the April-July 2005 period, total FDI inflows jumped 40 per cent yoy to $1.6 bn, with the month of July alone seeing 84 per cent yoy growth. A number of sectors, including auto, refineries, power and engineering sectors, are witnessing significant upsurge in FDI inflows. The surge in foreign money inflow is boosting further the confidence in the Indian growth story, from both within and outside the country.

The FIIs are finding good company in domestic mutual funds (MFs) in terms of inflows into the Indian equity market. The MFs have even outperformed the FIIs to some extend during the latest rally. In August 2005, FIIs were net buyers of Rs 5,051 crore, down from Rs 7.934 crore in July 2005. However, domestic MFs remained active buyers in August with inflow of Rs 2,293 crore, up from Rs 505 crore in the previous month. The increased MF inflows in the recent past have been supported by lot of money raised through IPOs finding its way to the market.
There are a number of large-cap players with strong fundamentals who have remained away or have played only a small role in the current rally. A number of these stocks are trading at P/E ratios of below 15 times their FY05 earnings and there is still room for growth in these stocks. During the time Sensex travelled from 6,000 points to the 8,000-point level, 12 out of 30 index stocks underperformed the overall rally.

However, recent market figures show an uptrend in most of these stocks and they are poised to contribute significantly to the overall market growth going forward.

FIIs which till now mostly focused on mid-cap growth stories so far, have started showing their interest in large-cap stocks as well. Then, a number of IT majors have not contributed any major part in the current rally, as compared to the previous rallies. An improving outlook for the sector is likely to considerably boost the performance of IT majors going forward.

The persisting warnings from regulatory authorities and market analysts alike regarding the above-average upsurge in mid-cap, small-cap and even penny stocks are likely to drive the retail investors as well towards the large-cap stocks. During the period when Sensex surged 1,000 points to cross the 8,000-point mark, the BSE Midcap index moved up 26 percent and the BSE Small-cap Index jumped nearly 40 per cent.
The growing spending appetite of consumers is one of the major catalysts behind most of the factors working in favour of the current bull run. The rise in consumer spending is directly affecting the sales and profit performances of the business houses, while contributing positively to the overall macroeconomic scenario. These factors in turn add to the positive business sentiments while attracting funds into the markets. The rising purchasing power, higher disposable incomes and improving consumer sentiments are leading the consumers to eyeing high-end products like plasma TV, luxury cars and foreign holidays among others.

The picture is set to get even rosier going forward. A number of sectors, including auto, bank, cement, construction, FMCG and technology, are poised for a robust uptrend in the near future.

Another major factor working in favour of the current bull run, which is likely to add further to the current rally, is growing interest in equities as a major investment destination. The low interest rates are resulting in lower rate of return on investments in various traditional instruments, including post-office small savings schemes and term deposits in banks or mutual funds. Consequently, the investors are moving towards perking up their funds in equity as an alternative.

All these support the fact that the 10K destination cannot be far away for the Sensex.




India is a tiger on the rise, make no mistake, it limps sometimes because of its Babus but 7% average is nothing, India can acheave 10%+ easily with the most moderate of reforms.

Sameer
03 Oct 05,, 20:58
A few dangers do lie ahead, money is comming into the BSE from FIIs because of low US interest rates and of course the boom in the US housing market which has created many a bloated mutual fund that is pumping money in higher yielding foreign markets. In my opinion the BSE belongs at the 8350 range and it belongs there for another six months in order to await the feelgood news we are all expecting.

Sameer
03 Oct 05,, 21:04
The Japanese too have been investing heavily in their Indian portfolios because of a cheaper P/E ratio than China, they have inf act sold off some in China and bought more in India BUT there is always a danger of excessive cash flooding the Indian economy across sectors. The BSE has seen such a rise than some are expecting a 10-15% correction beyound the 9000 mark back down towhere the BSE probably belongs in the low 8s.

Its about the economy stupid. :)

Let us wait for second quarter results and WATCH CONSUMER SPENDING ESPECIALLY DURING DIWALI TIME THIS WILL DICTATE THE BSE'S FUTURE FOR THE YEAR.

Sameer
03 Oct 05,, 21:06
Remember the saying when the bull is running, hide away in the hills. :)

Patience will be a virtue in the short run, in the long run the BSE is poised for more.

Karthik
04 Oct 05,, 01:47
The FII inflows need to be streamlined further.

The capital markets stand at a point where everything's been very quick and sharp. A correction is due.

The argument that the markets are reflecting the robust economy is not very assuring. This kind of heavy FII-driven bull runs are unsustainable.

indianguy4u
04 Oct 05,, 09:36
20% correction is long over due. There is some sinister story behind this unrelenting bull run.

Monk
04 Oct 05,, 17:01
I disagree with most of the things being said about the Sensex here,
The Sensex has been prone to market manipulations but things have gotten a lot better in terms of regulations. You guys should read the Securities Contracts regulations Act and the SEBI guidelines on investor protection. The legislation is tough enough and the punitive action prescribed is very severe.

Secondly, The BSE Sensex has always been an excellent economic indicator of both the boom up ahead and the bust. the reason for this is the excellent representation of companies in the BSE.

yes, i do agree that the BSE has gone up too fast and needs to cool off urgently, but thats because of the large amount of liquidity flows into the Indian Economy. Global media has done an excellent job of promoting the Indian Economy, so everyone with cash for Investment wants a share of the Indian apple pie or perhaps the Indian Rasgolla.
Secondly, India still doesnt have FDI norms as friendly as China whereas the Indian stock markets have depth and the capacity to absorb liquidity . So a lot of FDI funds are coming through the FII route. They say that in other Emerging markets like China, Vietnam, Thailand and korea , its easy to get in but almost impossible to sellout when you want to leave because of lack of market depth and liquidity. India is the exact opposite. Indian stock markets can absorb shocks, May.17,2004 showed us that.

Remember, all the FII flows you are seeing are nothing but what would otherwise come in as FDI. If the government made the FDI more attractive we would see a better balance. That would be a lot better than regulating the FIIs.

indianguy4u
04 Oct 05,, 17:08
Stock exchanges cannot be a indicator of health of any economy. SE is the place of gamblers & punters who speculate on the stocks which they think would give them more returns from other stocks & other investment instruments.

Sameer
04 Oct 05,, 19:04
Indiaforu that is not true at all.

On the contrary there is a proven statistical relationship between a stock market and the economy wherein the stock market in the LR follows the economy. There is no debate about that, the stock market is beyound speculation, much has changed since the 80s. At least thats what I learnt in Forecasting Financial markts in masters. :)

Sameer
04 Oct 05,, 19:18
And it continues but keep an eye on the gainers today, these companies have reported surges i profit or future expansion plans and their prices reflect that, these are not your speculative one off companies. :)

The markets will probably correct eventually, noone doubts that but the BSE belongs in the low 8Ks or high 7Ks for another 6 months, then we will have to reevaluate.


http://economictimes.indiatimes.com/articleshow/1252029.cms

Sensex zooms 102 points, touches new high

INDIATIMES NEWS NETWORK[ TUESDAY, OCTOBER 04, 2005 04:53:35 PM]
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Bulls continued to hold reign of market sentiments for yet another day with both Sensex and Nifty scaling new peaks on the back of broad-based buying support.

The Sensex jumped more than 100 points to reach a new all-time closing high of 8,799.96, after surging to a new all-time intraday high of 8,808.83.

Nifty closed with a gain of 33.30 points at a new closing high at 2,663.35, after scaling a new intraday peak of 2,667.05.

Sensex breached yet another milestone on Tuesday after surging past the 8,800-point mark for the first time in history. A number of index heavyweights and pivotal stocks extended their gains in afternoon trade.

Wipro, HDFC Bank, Dr Reddy’s Labs, Infosys and Tata Motors were among the major gainers on Sensex, while Cipla, Gujarat Ambuja Cements, Hindalco, HLL, ICICI Bank, TCS and Reliance Energy were the only Sensex scrips to close in the red. There were 22 stocks on the Sensex that moved higher, while one stock, tobacco major ITC, closed flat on Tuesday.

Markets opened on a firm note on Tuesday, with robust gains in a number of auto, bank, pharma, metal and energy stocks. While auto and technology stocks extended their gains in morning trade after moving higher sharply on Monday, banking scrips also bounced back after trading on a relatively subdued note in the previous trading session.

Sensex moved higher after opening 9.05 points up at 8,706.70. Nifty also advanced ahead after opening 0.05 points down at 2,630.00.

A number of small-cap and mid-cap indices also extended their gains on Tuesday, continuing with the uptrend Monday after trading on a subdued note over the past few days. The BSE Midcap Index advanced 1.07 per cent, or 45.72 points, to 4,302.99, the BSE Small-cap Index surged 1.50 per cent, or 87.61 points, to 5,912.20 and the CNX Midcap Index jumped 1.34 per cent, or 51.80 points, to 3,912.90.

Market sentiments continued to gain support from robust economic growth projections and expectations for strong 2Q corporate earnings results. However, some market observers have warned of selective profit booking at higher levels in the near term.

After closing with modest loss on Friday last week, markets bounced back on Monday and the benchmark indices jumped to new all-time highs driven by all-round buying support. Auto scrips surged ahead on the back of robust vehicle sales figures for the month of September, while IT scrips also registered smart gains driven by expectations for robust 2Q results. IT major Infosys kicks off the second-quarter earnings season on October 11, 2005.

The US markets closed on a mixed note on Monday, with blue chips closing with modest losses and the tech-heavy Nasdaq composite index moving higher. The global crude oil prices declined on Monday.

Among the Indian ADRs, Dr Reddy's Labs, Ranbaxy, HDFC Bank, Satyam Computer and Tata Motors moved higher, while ICICI Bank, Infosys, and Wipro closed in negative territory on Monday.

Banking majors began trading on a firm note on Tuesday, after trading on a relatively subdued note on Monday. However, select banking scrips lost ground as the trading session progressed on profit booking at higher levels.

Private sector banking major HDFC Bank jumped 4.67 per cent to Rs 709.95 and was among the largest gainers on the Sensex. HDFC Bank ADR had jumped 5.5 per cent on Monday.

A number of auto scrips extended their gains on Tuesday, after surging ahead sharply on Monday on the back of impressive vehicle sales figures for the month of September. Bajaj Auto jumped 2.37 per cent to Rs 1,810.05, Hero Honda advanced 2.58 per cent to Rs 768, Maruti rose 1.92 per cent to Rs 589.45 and Tata Motors surged 2.88 per cent to Rs 569.20.

Tata Motors announced on Monday that its vehicle sales jumped 13 per cent yoy to 40,095 units in September 2005. The company has reported 11 per cent yoy growth in its commercial vehicle sales and 1 per cent yoy growth for car and utility vehicle sales for the month. Other auto majors Bajaj Auto, Maruti and Hero Honda have already announced robust sales growth figures for the last month.

Maruti surged higher for the second consecutive day on the back of impressive vehicle sales figures for the month of September and the price hikes announced by the company. The car major plans to again hike its car prices before end of this year.

Two-wheeler maker TVS Motor surged for the second consecutive day on the back of robust sales figures announced by the company for the month of September 2005.

The company announced that its two-wheeler sales increased by 16 per cent yoy to a record of 121,108 units last month. The stock closed 2.69 per cent higher at Rs 103, after hitting a 52-week high at Rs 105.70.

Tractor and utility vehicles maker Mahindra & Mahindra (M&M) surged 1.13 per cent to Rs 393.20 after the company announced 13 per cent yoy growth in its vehicle sales for the month of September.

Eicher Motors jumped 2.16 per cent to Rs 286.30 after the company announced its Q2 results.

The company announced on Tuesday that its net profit in the quarter ended September 30, 2005 totalled Rs 13.81 mn on net sales of Rs 38.37 mn.

IT scrips gained support from firmness in the US dollar versus Indian rupee. Infosys, Satyam Computer and Wipro were trading with firm gains. IT stocks have registered smart gains over the past couple of trading sessions on expectations for robust 2Q earnings results.

Infosys jumped 2.96 per cent to Rs 2,629.40, Satyam Computer advanced 2.51 per cent to Rs 589.30 and Wipro surged 5.16 per cent to Rs 400.35. However, TCS slipped 0.52 per cent to Rs 1,489.20 on profit booking at higher levels.
GAIL India announced on Tuesday that it was keen on investing in exploration and production ventures and LNG liquefaction ventures in Australia. The gas major added that to meet the requirement of LNG for its projects, including Dabhol, the company is holding talks with Australian companies for sourcing the gas.

The stock closed 0.48 per cent higher at Rs 282.30 after hitting a 52-week high at Rs 287.50 earlier in trading session.

Earlier in morning trade, GAIL India surged ahead on the back of a historic pact signed by the company for equity participation in an offshore project in Myanmar.

The company announced that it has signed an agreement with Daewoo Corp and Kogas of Korea for equity participation in the A-3 block in offshore Myanmar. The A-3 block is situated adjacent to A-1 block, in which GAIL is a consortium partner and a preferred buyer for the gas produced from this block.

GAIL added that it has been also considered as the preferred buyer to buy Daewoo's share of natural gas from the A-3 block.

IFSL Ltd continued to lose ground on the back of recent regulatory actions against the company. The stock plunged 9.85 per cent to Rs 17.85.

The company informed the BSE on Tuesday that its board of directors held a meeting on October 3, 2005 to take note of recent developments. IFSL added that the board decided to cooperate with the ongoing Sebi investigations and reaffirmed its faith in the business and ongoing projects of the company.

Geometric Software Solutions plunged 8.14 per cent to Rs 99.85 after the company said that its revenue growth has remained disappointing this quarter.

The company informed the BSE on Tuesday that it expects sequential revenue growth in this quarter to remain in mid-single digits, as the ramp up of various projects has been below its expectations. Geometric Software Solutions added that it had expanded its manpower base and facilities as per expectations for double-digit revenue growth and consequently utilisation levels have been affected adversely.

Orchid Chemicals & Pharmaceuticals Ltd moved up 0.96 per cent to Rs 272.15 on the back of an exclusive marketing alliance with Mayne Pharma.

The company announced on Tuesday that it has reached an exclusive distribution alliance with Mayne Pharma, the injectable speciality pharmaceuticals division of Mayne Group, for marketing Orchid Chemicals’ select life-saving injectable antibiotic formulations in the US, Canada, European and Australian markets.

Wimco surged 2.09 per cent to Rs 53.65 on the back of acquisition of a 16.76 per cent stake in the company by Swedish Match.

Patel Engineering firmed up 3.88 per cent to Rs 239.90 driven by new contracts worth Rs 374 crore bagged by the company.

The company announced on Tuesday that it has secured two projects, the Nettampadu Lift state II irrigation project worth Rs 315 crore and a railway tunnel project worth Rs 59 crore.

Havells India firmed up 2.52 per cent to Rs 368.35 on the back of reports that the company was likely to announce an overseas acquisition this week.




Companies are doing well and expanding mainly because of consumer spending which is on a roll, one should watch for second wuarter and third quarter data on consumer spending in order to have a better picture on the BSE position

Sameer
04 Oct 05,, 19:22
India eco to match Chinese might soon
SHIVOM CHAKRAVARTI

TIMES NEWS NETWORK[ TUESDAY, OCTOBER 04, 2005 12:15:26 AM]
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The Indian economy has just inched closer to the Chinese economy. The Indian industrial sector has recorded a double-digit GDP growth of 10.3per cent, which, most importantly, is less than a per cent of the Chinese industrial sector’s GDP growth.

China has always been considered the dominant manufacturing sector and the industrial hub of the world, but the Indian manufacturing GDP sector has recently recorded a 11.4per cent growth. The manufacturing sector has been instrumental in increasing India’s industrial GDP, as well as closing the gap between GDP growth rates of India and China.

Higher global demand for Indian manufacturing goods, higher purchasing power within the country, and increasing internal demand for manufactured goods are some key reasons for the improved performance of the manufacturing sector. Of course, the Chinese manufacturing sector remains much larger in absolute terms.

Good performance by the manufacturing sector in the index of industrial production, is a clear reflection of the increase in production in the manufacturing sector. During April, May and June the Indian index of industrial production has recorded year-on-year double-digit increases. Of which the manufacturing sector has recorded year-on-year increases of 9.8per cent, 11.5per cent, and 12.6per cent respectively.

As a matter of fact the manufacturing sector has been one of the key driving forces of the index of industrial production, and the overall production levels in the country. The index of industrial production is a measure of the overall levels of production taking place in the country, and the sector wise production as well.

The key drivers of the manufacturing sector were the increase in global and internal demand for Indian manufactured goods.

Engineering goods have been the best performing manufactured export item. Engineering goods exports have recorded increases in excess of 30per cent over the last three years. It currently stands at 30per cent for the year so far.

Other manufacturing sector exports that shone during the period are, leather products, chemicals & related products, gems & jewellery, plastic & linoleum products, and computer softwares. The abolition of the WTO quotas for textile products, has also greatly appreciated India’s manufacturing exports bill.

Greater internal demand for manufactured products has also led to the strong performance of the manufacturing sector. Higher purchasing power in both rural and urban India has lead to an increase in demand for household manufactured items. As higher purchasing power shifts individual demand from basic or necessary goods to more expensive manufactured luxury goods. Goods like expensive clothing, cars, jewellery, all of which are manufactured products.

http://economictimes.indiatimes.com/articleshow/1251139.cms

Monk
05 Oct 05,, 16:59
Sameer,
For which month, quarter or year is this 10.3% growth. Is it IIP or just manufacturing. Economic Times hasn't given enough details of this. Any other source?

Sameer
05 Oct 05,, 20:32
Its this past quarter's growth, it must be and its IIP.

For the manufacturing sector

here is the quote
"Good performance by the manufacturing sector in the index of industrial production, is a clear reflection of the increase in production in the manufacturing sector. During April, May and June the Indian index of industrial production has recorded year-on-year double-digit increases. Of which the manufacturing sector has recorded year-on-year increases of 9.8per cent, 11.5per cent, and 12.6per cent respectively. "

This is due to higher consumer spending which is also fueling the BSE at the moment as corporations etc are reporting higher earnings based on consumption spending increases for the most part.

Sameer
07 Oct 05,, 01:17
I said that consumers are driving the Indian economy, here you go.

http://economictimes.indiatimes.com/articleshow/1255345.cms

It's official: India’s global market leader
VINOD MAHANTA AND BHANU PANDE

TIMES NEWS NETWORK[ FRIDAY, OCTOBER 07, 2005 01:21:42 AM]
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NEW DELHI: A promising market’ for years, India has now transcended that status. Shedding that tag, the country is being rechristened as the world’s fastest-growing market across categories and sectors. What was a promise has now turned into reality.

Look around you: India is the fastest-growing market in cell phones, automobiles, travel and tourism, DVDs, digicams and laptops, among other things. In cell phones, India is growing at a whopping 60%. It has been ranked the second-fastest growing travel and tourism economy in the world ahead of China, and right behind Montenegro, as per the latest ’04 forecasts released by WTTC.

In automobiles, India logged the fastest growth among the top 15 passenger car-producing countries last year. As per latest rankings by the International Organisation of motor vehicle manufacturers, OICA, India’s car production grew 30% in ’04 followed by Brazil at 17%.

That’s not all. Indians are spending more on luxury items than ever before and the growth in high-end consumer durables can vouch for that. AC Neilsen figures for January-August ’05 tell a fantastic story. Home theatres grew 386.8%, frost-free refrigerators 42.4%, ACs 116%, flat TVs 64% and fully automatic washing machines surged 35.2%.

While certain consumer durables categories have grown by over 50%, some like laptops have defied all rules of gravity with a whopping 123% y-o-y growth in the April to June quarter. According to a Morgan Stanley report, in June ’05, the growth rate of the consumer goods sector was at a 10-year high.

Continued...<< Previous|1|2|3|Next >>
But what has changed in the market? No doubt, the penetration levels of most of the products are pathetic.

But one of the reasons for the good growth rates has been the low base of these products. Also, the market is taking off due to fundamental changes in the economy. Analysts believe that the strong growth can even be attributed to increased borrowing.

According to Chetan Ahya, economist, Morgan Stanley, leveraging has gone up by 32% points of the GDP over the past six years — something which was last seen only in the late ’80s. “Leveraging has gone up because worldwide, there has been a dip in the cost of capital, and that has pushed consumption in the system,” Mr Ahya adds.

The borrowing has been driven by both the government and households, which have been the two major constituencies that have pushed consumption. Morgan Stanley’s estimates for aggregate borrowings, including government debt plus banks’ loan advances to corporates and households, indicate a huge spike in the past six years.

The total of these two has shot up to 119% of the GDP as of March ’05 (estimated to rise to 124% by March ’06) from 87% of the GDP in March 1999
Another major driver, according to Rajesh Chadha, chief economist, NCAER, is growth in per capita income during the 1980s and more particularly, in the 1990s. Between 1951 and 1980, average GDP grew by 3.5% per annum on a population growth of 2.2% per annum. Per capita GDP grew merely by 1.3% per annum. So India’s huge population base held a simple ‘promise’. “On the contrary, the 1980s and 1990s witnessed a GDP growth rate of 6% plus, with population rising at less than 2% per annum. This resulted in a 4% plus growth per annum in per capita GDP,” Mr Chadha adds.

Changing demographics have also played a role in growth of the Indian market. A recent McKinsey quarterly report says India’s consumer demand — increasing three to five times faster than the economy — reveals the outlines of an aspiring middle class that is vibrant, growing and young. Indeed, 70% of India’s citizens are less than 36 years old, and the country is home to 20% of the world’s population under the age of 24.

“There has been a subtle shift in the culture as well; it’s no longer taboo to be in debt. In addition to this support from borrowing, the acceleration in per capita income has also supported rise in consumption,” says Mr Ahya

Sameer
07 Oct 05,, 19:07
And some confirmation of the Noida super tower and description of the high rise trend picking up in India.

http://www.atimes.com/atimes/South_Asia/GJ01Df02.html

Priyanka Bhardwaj

NEW DELHI - It is a US$1 billion project that will put India on the top of the world, literally. Plans are afoot for the world's tallest building, with 135 stories, at Noida, a satellite township on the outskirts of the capital, New Delhi. The skyscraper is a seen as a fitting epitome of a rapidly growing and resurgent India - hub of outsourcing for multinational firms, a service-led economy that's pulling up manufacturing as well and an information technology (IT) powerhouse, all of which have translated into a hyperactive real estate sector, with the mega skyscraper to show for it.

The Indian skyscraper, to be built as part of the ambitious Noida City Center in the northern state of Uttar Pradesh, will be built on a 140-hectare plot and will be higher than the 508 meter-high Taipei 101 in the Taiwanese capital, currently the tallest building in the world. The Noida building is slated to be 710 meters (2,330feet) tall - 202 meters higher than Taipei 101. It will be designed to resemble the peaks of the Himalayas and is scheduled to be open for business by 2013. The building will contain a 50-floor five-star hotel, a 40-story glass atrium and 370,000 sq meters of shopping space.

"New York in the '30s, Malaysia in the '90s and China today - all have used tall buildings to showcase their countries' achievements to the world," said Hafeez Contractor, a famous Indian architect who has designed buildings around the world. "We want this building to show to the world what India can do." Chairman and chief executive officer of the Noida Authority, Deo Dutt Sharma, said: "Aspects like cost and related activities are yet to be worked out." The authority has set up a six-member committee to work on the project and visit Kuala Lumpur, which boasts the world's now-second-tallest building, Petronas Twin Towers.

The skyscraper, its planners hope, will be the tallest new indicator of India's economic prowess as the country jumps into the race with the likes of Taiwan, Malaysia and China, where seven of the world's 10 tallest buildings rest. These countries have a penchant for tall buildings and are known to compete with each other in outdoing heights. India, too, is looking to join this race to the top.

Noida, Gurgaon, Bangalore, Hyderabad, Chennai and Kolkata lead the business and process outsourcing (BPO) boom in the country with several highrises in their midst. Gurgaon, for instance, is sprinkled with numerous office buildings, shopping malls and residential highrises in various stages of completion to cater to the ever-rising demand of the upwardly mobile middle class. Multiple tracts of land in Noida and Gurgaon, which were lying idle just a year ago, have suddenly sprung to life, being converted into residential or commercial property.

Realty boom
Noida skyscrapers and Gurgaon malls, of course, are just the tip of the real estate boom in the country that has also resulted in a more than 40% rise in realty prices in the past year. The construction boom is at an unprecedented scale in India to meet the soaring needs of India's high-tech sector. It's a building boom where 70-80% of the demand is being driven by software services and business and process outsourcing companies. According to a report by international property consultancy firm Cushman and Wakefield, in some of the micro-markets within Bangalore, Kolkata, Chennai and Pune, cities where IT jobs abound, property prices have gone up by almost 50%, leading to a huge pressure to meet pent-up demand.

A similar growth trend is visible now in Tier II cities like Ludhiana, Chandigarh, Jaipur, Hyderabad, and Kochi, where several BPO companies have moved operations due to lower costs. Bangalore has moved from an IT back-office location to a full-fledged IT hub, with cutting-edge research combined with low value-added services. Business-led demand for commercial office space has fueled demand for residential and retail properties.

Properties with the potential of being leased out to multinationals, large corporates, banks or embassies are the most in demand. In Mumbai and Delhi, lease rentals are as high as 10-13% of the value of a residential property and 13-14% for furnished apartments and offices. Residential property prices have gone up by 30-100% in Delhi. Most predict that 2005 will also witness growth in property markets but prices will not rise as steeply as in 2004.

China attracts about 3.2% of its gross domestic product as foreign direct investment (FDI) in its real estate sector, while India draws a measly 1.1%. In order to catch up with China, the government has recently begun giving automatic permission, without requiring the usual FDI clearances, to 100% foreign-invested construction projects. Earlier, overseas firms were allowed in only after clearance from the highly bureaucratic Foreign Investment Promotion Board (FIPB). Foreign investors can now enter any construction development area, be it to build resorts, townships or commercial premises, but they will have to construct at least 50,000 square meters within a specific time-frame. Norms relating to the stipulated land area to be developed by foreign entities have also been eased, to 25 acres from 100. Several companies have announced setting up real estate funds with estimates indicating that realty funds are expected to raise in excess of $1 billion in the coming months, with expected returns of over 15% annually.

According to Chesterton Meghraj Property Consultants, much of the investments will come in IT parks and residential projects. "We see companies from West Asia and Southeast Asia eyeing India's real estate sector. Interest to the tune of $2 billion has already been expressed after the recent announcement. The country's leadership position in back-office operations could trigger a requirement of 70 million square feet capacity in the next 2-3 years,'' Chesterton Meghraj director Santhosh Kumar said.

Sameer
07 Oct 05,, 19:07
Hyderabad is not a second tier city though the journo should get updated.

Sameer
07 Oct 05,, 19:12
Businessweek:
by manjeet kripalani

India: A Quiet Shopping Spree
So far, foreign companies being bought by Indian players are small -- but that's likely to change

China raised a storm of controversy in the U.S. earlier this year when its cash-rich corporations announced their intention to acquire several American companies, including oil producer Unocal Corp. and appliance maker Maytag Corp. (MYG ). But while China was bidding for -- and losing -- overseas acquisitions, another big Asian country, India, was also investing abroad, but with a minimum of rancor.
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Indian companies, which had a very small presence in foreign locales just a few years ago, have inked 62 overseas deals worth $1.38 billion so far this year, buying up a variety of foreign outfits, from engineering design house INCAT International in Britain to Valeant Pharma in the U.S. That compares with just $202 million in deals in 2002. The Indian purchases have flown under the political radar because most of them are small -- the average price of recent Indian acquisitions is just $30 million -- and they usually don't involve big-name companies.

Still, the numbers are adding up -- and a buoyant Indian stock market is helping. "Every day, even small-cap and mid-cap companies come to us wanting to buy companies overseas," says Manisha Girotra, India country head for UBS (UBS ), which advises on such purchases. "Everyone wants access to new markets and to leverage India's low-cost production base."

Surprisingly, the biggest plays have not come from India's vibrant tech and outsourcing sector, which, analysts say, has a sound domestic business model and doesn't see the need to travel boldly abroad. The big moves are coming from more traditional industries: telecommunications, pharmaceuticals, auto parts, and other manufacturing businesses that want to secure export markets. Indeed, the biggest deal so far this year is an odd one: Bombay-based TV maker Videocon International Ltd. bought the global color-picture-tube business of France's Thomson (TMS ) for $289.8 million. Yes, picture tubes are decidedly old technology, but Videocon, one of the largest manufacturers of picture-tube glass, plans to supply its product to the Thomson operations and integrate the businesses.

Most of India's recent acquisitions involve more modern technology. Leading the charge are drugmakers such as Sun Pharmaceutical Industries, Nicholas Piramal India, and Matrix Laboratories. They employ top Indian-trained scientists and technicians and have become rich producing generic drugs, mostly for local use and other emerging markets.

Now India's new patent legislation, which adheres to international rules, has forced Indian pharma to focus on research and development of new drugs, like its Western counterparts. Swati Piramal, chief scientific officer of Nicholas Piramal, estimates that the drug industry will raise more than $3 billion in the stock market in the next year for overseas acquisitions, which will facilitate research collaborations and "cross-border brain transfers." In the biggest pharma deal this year, Matrix bought Docpharma, a Belgian maker of generic drugs, for $263.4 million. It followed up on Sept. 26 by buying 60% of Chinese bulk pharmaceutical firm Mchem for an undisclosed sum.

Ten years ago, India's overseas gold rush would have been impossible. The government in New Delhi imposed severe restrictions on the export of the country's foreign exchange -- in part because there wasn't much of it. Today, India's booming tech, auto, and pharma businesses have attracted a flood of foreign investment. The country holds reserves in excess of $140 billion, and curbs on foreign investment by Indian companies are largely gone.

Moreover, Corporate India over the last decade has aggressively restructured itself, making management more professional, and increasing efficiencies. In a long list of sectors, including telecom, auto and auto-parts manufacturing, pharma, and commodities like steel and aluminum, Indian companies are globally competitive. At the same time, they still lack the expertise they need in overseas marketing and distribution. To fill the gap they're pursuing deals in the U.S., Europe, and Asia. Given some of India's built-in advantages -- such as its enormous output of skilled engineers -- its global reach can only grow. Predicts Amit Chandra, joint managing director for DSP Merrill Lynch Ltd., "the next three to five years will see the emergence of Indian multinationals."

The country already boasts two successful multinationals: the $7.6 billion Aditya Birla Group, and the $17.6 billion Tata Group. Birla has long had overseas operations in palm oil and rubber for car tires, is the world's lowest cost producer of aluminum, and recently bought two copper mines in Australia. But more ambitious is Tata, a conglomerate that includes telecom, steel, autos, hotels, tea, and technology. In the last five years, various Tata companies have spent $1.1 billion buying Britain's Tetley, U.S. telecom network operator Tyco Global, and INCAT. And it was Tata that executed two of the past year's toniest deals: It put down $50 million for a 30-year contract to manage the Pierre Hotel on New York's Fifth Avenue, and it bought a large stake in one of Manhattan's hippest fusion restaurants, Spice Market. Tata already runs a chain of 71 mostly five-star resorts from India to the Middle East to Europe.

For smaller Indian companies, overseas acquisitions are the road to global sales. Way back in 1997, India's Sun Pharma, with 2005 sales of $305 million, bought Caraco Pharma Labs, a money-losing producer of generic drugs in Detroit. Sun imposed a ferocious cost-saving regimen on Caraco and successfully turned it around. Now it is one of Sun's gateways to the U.S. generic market. The company has done the same for two other U.S. brands it bought recently.

India's auto-parts companies are expanding, too. Pune-based Bharat Forge Ltd., the world's second-largest forging company for auto parts after Thyssen Krupp, which had 2005 sales of $460 million, on Sept. 20 bought Sweden's Imatra Kilsta and its British subsidiary, Scottish Stampings, for an estimated $57.5 million. It was the group's fourth foreign purchase in 21 months. "Each acquisition gave us something new -- access to the new passenger-car market, to the global market for aluminum components, to the U.S. pickup-truck market, to the engine business in Europe," says Amit Kalyani, Bharat Forge's executive director. "To them we offer technology, money, and a strategy to grow their business worldwide." Ditto with Mahindra & Mahindra Ltd., which plans to use acquisitions to become the world's largest tractor maker.

For now, India's overseas strategy involves small purchases and big ambitions. But as Indian companies grow larger and more confident, that's likely to change. In coming years, analysts expect big overseas acquisitions by the likes of private telecom giant Bharti Tele-Ventures Ltd. and state-controlled oil majors such as Oil & Natural Gas Corp., which is aggressively searching for petroleum reserves. It won't be long before India raises its global corporate profile and, like China, has to worry about the political impact of its urge to merge.

Sameer
07 Oct 05,, 19:16
McKinsey, the global consultancy firm, has mooted an eight-point reform plan to push India’s growth to the 8-10 per cent band from the current 7 per cent. And the prescription involves hard action in politically sensitive areas like labour reform and opening up the retail sector, besides bolder moves on privatisation.

Devoting a special edition of its quarterly journal to India, McKinsey says India has ascended the world stage and laid the groundwork for rapid growth — even if its progress on creating a world class economy is “often obscured by the achievements of neighbouring China”.

Even so, it’s time now “to unlock India’s true potential”. As McKinsey puts it: “Having picked the low-hanging fruit, India must find the resolve to deregulate politically sensitive sectors — particularly retailing, banking, the news media and defence.”

On the controversial issue of labour reforms, it makes out a case for free use of contract labour for all work and repeal of the law forcing companies with more than 100 workers to obtain state approval before cutting jobs. It argues that simplified labour laws will unleash unprecedented flows of foreign direct investment.

As for the other ticklish issue of opening the retail sector, it claims that exposing the sector to world-class scale, technology and capital will not lead to greater unemployment but will help workers to find jobs that add more value.

Dealing with privatisation, McKinsey says the government could consider creating a trust or a special purpose vehicle to act as a holding entity like Singapore’s Temasek. Once the assets of public undertakings are transferred, the holding company can go public, effectively diluting the state’s share in the companies.

On infrastructure, the consultancy firm says key areas like power, water and sewerage, railways and airports “remain troublesome, in part because intransigent state governments often block progress”. It also focuses on land reform, urban renewal, asset recovery and enforcement of measures to protect intellectual property.
http://hindustantimes.com/news/181_1511753,0002.htm

Sameer
07 Oct 05,, 19:22
A US-based infrastructure company on Thursday unveiled plans to invest $1 billion in Indian real estate in what is being billed as the largest foreign direct investment (FDI) in the newly liberalised sector.

Royal Indian Raj International Corporation (RIRIC), a Nevada-based company promoted by people of Indian origin, is firming up plans to build integrated townships and planned cities in the country.


Quote:
"We have got into a contract to acquire nearly 5,000 acres of land near Mumbai, 3,000 acres near Delhi, 5,600 acres near Bangalore and another 5,000 acres near Kolkata," Benjamin claimed.


NRI group plans biggest FDI in Indian real estate

http://www.hindustantimes.com/news/5967_1504336,001600060001.htm

Sameer
07 Oct 05,, 19:31
VIENTIANE, Sept. 30 (Xinhuanet) - Economic ministers from the 10-member Association of Southeast Asian Nations (ASEAN) and India agreed here Friday that negotiations on a free trade area (FTA) between the two sides should be sped up in the coming months, an Indian minister said.

Senior economic officials from India and ASEAN will have two more talks from now to the 11th ASEAN Summit to be held in December in Malaysia to "resolve the issues separating both sides,especially those regarding the rules of origin (ROO)," E.V.K.S Elangovan, Indian minister of commerce and industry, said after the 4th consultations between his ministry and ASEAN economic ministers.

Treasuring private sector's involvement in the ASEAN-India engagement, the ministers also appealed for closer interaction and collaboration between business communities and government officials towards the realization of the FTA.

Noting the slow process of setting up an ASEAN-India Regional Trade and Investment Area, including a free trade area, as specified in the Framework Agreement Comprehensive Economic Cooperation between ASEAN and India signed in 2003, the ministers agreed to push back the date for the FTA one year to Feb. 1, 2007,ASEAN General Secretary Ong Keng Yong said after the consultation, noting that the ROO issue seems to be the main cause.

The Indian side put forth the twin criteria of determining ROO,namely the value addition method and change in tariff heading (CTH), he noted, adding that he 40 percent domestic value addition in goods is generally applied in the world.

Rules of origin are designated to prevent third countries from taking advantage of a FTA between two other countries. If a goods does not meet the origin criteria, it is deemed as originating from a third country and cannot be traded under the FTA.

ASEAN members are reluctant to accept the CTH criteria. CTH means that a certain products entering a FTA member economy will go through sufficient value addition to become another product, which will bear a new tariff head under the International Harmonized System of Customs classification, before being exported.

Setting up the ASEAN-India FTA in goods is targeted for completion by Dec. 31, 2011 for Brunei, Indonesia, Malaysia, Singapore, Thailand and India. For the Philippines, Cambodia, Laos,Myanmar and Vietnam, the target is on Dec. 31, 2016.

ASEAN-India trade soared 48.2 percent on year to 5.5 billion USdollars in the first quarter of this year, the Indian minister said, noting that last year's respective figures were 40.8 percentand over 17.6 billion dollars. Enditem
http://news.xinhuanet.com/english/2005-09/30/content_3567158.htm

Sameer
07 Oct 05,, 19:38
http://www.business-standard.com/common/storypage.php?hpFlag=Y&chklogin=N&autono=201765&leftnm=lmnu3&lselect=0&leftindx=3
India’s trade deficit widened three-fold to $15.80 billion in the first quarter of 2005-06 from $5.17 billion a year earlier on a surge in capital goods imports and an inflated crude oil bill on account of a rise in prices globally.


The crude oil prices (Indian basket) averaged $49.2 per barrel in April-June 2005 as against $34.1 a barrel in the first quarter of the last fiscal.


Exports rose to $21.75 billion in April-June 2005 $17.84 billion in April-June 2004. The imports rose to $37.56 billion in April-June 2005 from $23.01 billion in the first quarter of 2004-05.


The non-oil imports comprising items such as capital good and industrial machinery rose by 77.9 per cent while oil import bill grew by 31 per cent in the reporting quarter.


Petroleum products imports were in the range of USD 3.1 to 3.3 billion per month in April-June 2005. The monthly oil import bill Q1 of 2004-05 was lower between USD 2.1 to 2.7 billion.


The merchandise exports grew by 22 per cent in Q1, although the rate of export growth moderated reflecting the high base in the previous fiscal. The merchandise trade deficit expanded to US 15.8 billion in Q1 of 2005-06 as against USD 5.2 billion in the April-June 2004..


The sharp expansion in the trade deficit turned the current account into a deficit of $6.2 billion in April-June 2005 compared to a surplus of $3.4 billion a year earlier, according to Reserve Bank of India’s preliminary balance of payments data.


The current account deficit was more than offset by surplus in the capital account, resulting in accretion to the foreign exchange reserves of $1.2 billion in Q1 of 2005-06. After factoring in the valuation changes, forex reserves declined by $3.1 billion to $138.4 billion by end of June 2005.


The country held the fifth largest stock of foreign exchange among the emerging market economies and the sixth largest in the world.


The dynamism of travel earning, sustained pace of software exports and other professional services and stable remittances from overseas Indians contributed to a healthy growth in gross invisible receipts.


The private transfers comprising remittances from Indian working abroad contributed about 23 per cent of gross invisible receipts, RBI said.


Gross invisible payments rose by 75 per cent in April-June 2005. The rise in outbound tourist traffic, transportation and insurance payments and demand for business services such as consultancy, engineering contributed to payment outflow.


The net capital inflows at $7.1 billion were driven mainly by foreign direct investment, portfolio investment and external commercial borrowings. (ECBs) and banking capital . The FDI increased to $1.05 billion in Q1 from $717 million a year ago. Much of FDI went into cement, sugar, plastic, synthetic and rubber industries.


The portfolio investment showed over 10-fold rise to $864 million from USD 81 million. FII inflows recorded a turnaround in June with a net inflow of $1.2 billion. Inflows through American and Global depository receipts also remained strong in the quarter.


The NRI deposits showed net small positive inflows in April-June 2005 as against net outflows of $1.77 billion. The short-term credit showed net outflow as oil companies’ stepped-up their recourse to domestic financing and accelerated repayments.



BUT NOTICE THE FOLLOWING IF YOU ARE CAREFUL

The non-oil imports comprising items such as capital good and industrial machinery rose by 77.9 per cent while oil import bill grew by 31 per cent in the reporting quarter.

Expect good growth in manufacturing and trade in coming quarters, i will say it GDP growth for the year will surely be beyound 7.3%.

Why?
1st quarter is always the slowest quarter in india but yet it went beyound 8%, it was merely 5.6% for Q1 OF 2004.
Q2 and Q3 have alwasy tended to be high because of harvest and festivals etc and Q4 is always a quarter when everyone is trying to push growth as high as possible to meet targets.

India is on the rise, make no mistake, its amazing thatwith limited reforms, we are able to do so much, now imagine an India with reformed labor laws and 51% FDI in retail.....

Sameer
07 Oct 05,, 19:41
Take out 2003 when we suffered a severe drought and 2001 when there was a border dispute with our best buds, our economy has been breaching the 7% mark regularly now, the new Neo Hindu rate of growth is impressive but we can do much more.

Speaking of growth, the population growth rate has declined to 1.4% and the Govt has started to penalize civil servants who get a third child.

We need such strong steps like the Chinese have done in certain areas.

VAT is being implemented across states now, the BJP is realizing that it works so their states are implementing.

IF WE CONTINUE TO GROW LIKE THIS, WE WILL BREACH THE 1 TRILLION DOLLAR MARK IN REAL TERMS IN THE SECOND QUARTER OF 2008.

Monk
10 Oct 05,, 14:48
Agriculture's Share in GDP down to below 20% for the first time ever. The sign of things to come. India is industrializing rapidly without doubt.



http://economictimes.indiatimes.com/articleshow/1257270.cms

NEW DELHI: Indian economy, which grew by 8.1 per cent in the first quarter, will clock a growth rate of 7 per cent for entire 2005-06 against 6.9 per cent last fiscal, economic think tank Institute of Economic Growth (IEG) forecasts in its latest report.

Meanwhile, inflationary expectations still persist in the economy given the growing money supply and high world oil prices, IEG said in its latest Monthly Monitor.

Although both industry and services sectors are expected to be growing below compared to 2004-05, it is still above the average growth, IEG said.

Agriculture, which has shown a growth of 2 per cent in the first quarter of this fiscal and whose share in the total GDP fell below 20 per cent for the first time, is expected to do better this year, particularly in the rabi season compared to last year, it said.

The institute predicted that wholesale prices-based inflation rate, which was 3.75 per cent in the middle of September, would stand at 4.15 per cent, 4.4 per cent and 4.8 per cent for October, November and December, respectively.

Industry, which grew about 9.6 per cent in Q1 will not be able to sustain the growth and end up growing at 7.2 per cent during the current fiscal, the economic think tank said.
The growth of index of industrial production (IIP) fell to 6.7 per cent in July, 2005 compared to 11.7 per cent in the previous month, it said.


Negative growth in both mining and electricity sectors by 0.4 and 1.2 per cent respectively has led to this fall in overall IIP growth, the journal said.

This fall in IIP growth could be an aberration as this was the consequence of devastating rainfall in the West of India, IEG said. But the overall growth in industrial sector for 2005-06 is dependent on the external demand, it added.

Economy grew by 6.9 per cent last fiscal with agriculture posting a 1.1 per cent growth, and industry and services registering a 7.6 per cent and 8.9 per cent growth, respectively.

On rising WPI-based inflation rate to 3.75 per cent in the middle of September compared to 3.13 per cent in the second week of August, IEG said the increase is not only due to recent hike in the domestic fuel prices, but also is fuelled by the rise in the prices of fruits and vegetables, sugar, cement and iron and steel prices, all of which have rose by above 8 per cent.

In fact, the latest WPI inflation stood at 3.97 per cent during the week ended September 24.

The economic think tank said money supply growth has started rising. Currently M3 is growing at 15.7 per cent which is mostly due to growing non-food credit to commercial sector backed by the strong business confidence.

This growth in M3 is despite the decline in the pace of forex accumulation, it said.

However, the rate of inflation, based on consumer prices index for industrial workers, has decreased from 4.06 per cent in July to 3.45 per cent in August.

In August 2004, it was 4.61 per cent, IEG said, adding the impact of rising wholesale prices would be certainly reflected in the retail prices, although with a lag.

The economic think tank predicted the CPI inflation rate to hover around 3.6 per cent in September, October and November.

Monk
10 Oct 05,, 14:54
August IIP up 7.4% as against July 6.7% however this is still lower than the Q1 IIP of almost 10%.



http://www.indiadaily.com/breaking_news/48079.asp

Mining slows down industrial growth to 7.4% in August for India

A sharp slowdown in mining sector lowered industrial growth to 7.4 per cent during August 2005 as against 8.6 per cent in the same month last fiscal.

Growth in mining sector declined to a negative 1.3 per cent during the month compared to 4.4 per cent in August last fiscal. Manufacturing growth slowed down as well to 8.2 per cent from 9.1 per cent a year ago, according to the latest data released by the government today. The overall Index of Industrial Production would have been even lower had it not been for a slight upturn in the electricity sector which grew 7.8 per cent during the month compared to 7.4 per cent in August last fiscal. This is the second successive month of slower industrial growth on yearly comparative basis. Industrial sector had grown 6.7 per cent in July 2005 after posting strong growth of 10.8 and 11.7 per cent in May and June respectively. On a cumulative basis, the Index of Industrial Production for the first five months this fiscal grew by a higher 8.8 per cent compared to 8.0 per cent in April-August 2004. During April-August this year, manufacturing sector grew by 9.8 per cent as compared to 8.4 per cent during the same period in 2004-05. The growth in electricity sector was slower at 5.9 per cent in April-August this year against 7.7 per cent in the year-ago period. The growth in the mining sector also dipped to 2.0 per cent during April-August 2005 compared to 5.2 per cent during the corresponding period last fiscal. As many as 13 of the 17 industry groups monitored under the IIP have shown positive growth during August this year. ''Other manufacturing industries'' recorded the highest growth of 24.6 per cent, followed by 21.1 per cent in ''basic metal and alloy industries'' and 14.7 per cent in ''textiles''. As per use-based classification, except basic goods growth in all the other five segments - capital goods, intermediate goods, consumer goods, consumer durables and consumer non-durables - slowed down during August this fiscal. Basic goods'' grew by 8.4 per cent in August against 5.2 per cent a year ago. It grew 7.0 per cent in April-August this year compared to 5.0 per cent in the same period in 2004-05. Capital goods recorded 8.9 per cent growth compared to 13.5 per cent a year ago. In the first five months this fiscal, the sector registered a growth of 11.8 per cent as against 13.0 per cent a year-ago. In the case of intermediate goods, growth slipped to a meagre 2.5 per cent in August against 4.9 per cent in August last year. During April-August this year, the sector grew 3.2 per cent as compared to 8.6 per cent a year ago. Growth in consumer goods stood at 10.6 per cent in August as against 14.4 per cent in August 2004. During April-August 2005-06, growth in consumer goods jumped to 15.1 per cent from 9.3 per cent in the year-ago period. Consumer durables and non-durables grew by 13.1 per cent and 9.7 per cent in August 2005 as against 20.1 per cent and 12.4 per cent respectively in August 2004. In the first five months this fiscal, the sectors grew by 13.2 and 15.8 per cent as compared to 15.4 per cent and 7.3 per cent respectively in April-August 2004-05.

Monk
10 Oct 05,, 14:57
Indian Economic outlook for 2005-06 upgraded to 7.3%



http://news.xinhuanet.com/english/2005-10/03/content_3578182.htm

India expected 7.3% GDP growth for 2005-06
NEW DELHI, Oct. 3 (Xinhuanet) -- Indian economy will clock an impressive 7.3 percent GDP growth for the fiscal 2005-06, at the back of strong prospects of Kharif production and reasonably buoyant industrial and services sector performance, the Confederation of Indian Industry (CII) has predicted.

In its latest State of the Economy Report, CII has said that the minimum support services (MSP) announced by the Indian government for the 2005 Kharif season had a positive impact, which resulted in an increase in area under sowing for major crops.

The improved South West monsoon has also aided the recovery in the progress of Kharif sowing, leading to an improved Kharif prospects for 2005-06, with an increase of 3.2 percent, a marked recovery from 1.1 percent growth recorded in 2004-05.

The report also pointed towards a better than expected performance of Index of Industrial Production (IIP) which grew 9.3 percent in April-July 2005-06. According to the report, a strong growth in non-food credit, growth in capital goods production and imports are perhaps the factors supporting sustained growth for the industrial sector.

Inflation is expected to be on the higher side of its 5-5.5 percent projections due to rising crude oil prices, said the report.

The report has brought out that the Indian power sector is faced with problems related to inadequate capacity expansion, inefficiency of existing plants, transmission and distribution losses and bad financial health of State Electricity Boards, all contributing to the rising gap between demand and supply of power.

Sameer
10 Oct 05,, 16:48
I recently figured that a 1% change in the ratio of (non agricultural sector gdp:agri gdp) leads to 0.27 increase in overall gdp growth after OLS regression on some other key variables as well.

There are still issues for me to sort out with the above as the relationship must be delinearized but in the past at least, over the last 20 years, this has been statistically true.

Sameer
10 Oct 05,, 17:16
The world's largest steelmaker, Mittal Steel, has signed an agreement to invest $9bn in a steel project in the eastern Indian state of Jharkhand.

This will be the second biggest foreign investment in India's steel sector.

The company will also study the possibility of setting up a 2,400 megawatt capacity power plant and a township for employees.

India's demand for steel is growing rapidly, with increased demand for cars, fridges and building materials.

'Good infrastructure'

The chairman of Mittal Steel, UK resident LN Mittal, said the project would be developed in two phases of six million tonnes each.

The first phase is expected to be completed within 48 months of the agreement of the detailed project report and the second within another 54 months after completion of the first phase.

"Steel consumption in India is said to experience considerable growth over the next decade and therefore it is a natural market for Mittal Steel to build a production presence," said Mr Mittal.

"Jharkhand is well known for its raw material reserve and good infrastructure and it is an excellent location for setting up this type of green field venture."

He also said there was no need to export or import iron ore since there was enough available in Jharkhand, the Press Trust of India news agency reports.

The company said a final agreement would be signed after completion of a detailed project report.

South Korean steel maker POSCO decided to invest $12bn in the eastern Indian state of Orissa earlier this year.

India has been slow to open its markets to foreign investment, and privatisations in key industries, such as oil and heavy engineering have proved politically sensitive in recent years.

India's demand for steel is growing rapidly as strong economic growth has increased demand for cars, fridges and building materials.

The market for steel is also strong elsewhere in Asia, particularly in China, contributing to high steel prices in the last two years.

Tata, one of India's top producers, earlier this year clinched a deal to invest up to $1.2bn to build three steel plants and develop iron ore mines in Iran to boost supplies to India.
http://news.bbc.co.uk/2/hi/south_asia/4322612.stm

Sameer
10 Oct 05,, 17:20
Govt nod for 17 SEZs

The government today cleared 17 proposals for setting up special economic zones (SEZs), including one each by Ranbaxy, Zydus Cadila and Biocon with investments of at least Rs 3,000 crore. Proposals for two free-trade warehousing zones, to be set up by IL&FS at Kandla and Chennai, were also approved.

Biocon’s 80-acre biotech SEZ at Bangalore envisages an initial investment of Rs 1,200 crore. Zydus Cadila’s 12-acre SEZ in Gujarat would come up with an initial investment of Rs 375 crore, which was projected to rise to Rs 1,600 crore, officials said.

Ranbaxy proposes to set up an 80-acre biotech SEZ at Mohali in Punjab, with an initial investment of Rs 675 crore.

Similarly, Cognizant Technology’s proposal to set up an SEZ, spread over 28 acres in Chennai, with an initial investment of Rs 675 crore, was approved by the government. The company has informed the government that its SEZ will create 15,000 jobs.

Real estate developer DLF’s proposal for four SEZs was also cleared. While its proposed SEZs at Gurgaon and Chennai were cleared, those in Maharashtra and West Bengal were given an in-principle approval. An information technology SEZ by the Kerala government near Kochi was also approved.

A proposal by Oriental Textiles to set up an SEZ on 400 acres near Gurgaon also got clearance today. This SEZ is expected to generate another 15,000 jobs.

An IT SEZ near Pune and another SEZ by a consortium of shoe manufacturers near Chennai were cleared.

Officials said a port-based SEZ at Vallarpadam in Kerala was also cleared. The proposal had been awaiting clearance for over a year.

The government today also decided to insist on a minimum land area of 25 acres for IT, biotech and gems and jewellery SEZs because of a large number of proposals coming in, officials told Business Standard. The government has deferred its decision on 23 SEZs as they have been found to be too small in size.

Similarly, the area restriction for multi-product SEZs had been pegged at 1,000 hectares, officials said adding that the Board of Approval overruled a suggestion by the revenue department that the area limit for all SEZs should be 1,000 hectares.

http://www.business-standard.com/co...N&autono=202514


Reuters:INTERVIEW - India's 2005 gold consumption to rise 33 pct

NEW DELHI (Reuters) - Gold consumption in India, the world's largest importer, is expected to surge nearly 33 percent in 2005 to 850 tonnes because of higher incomes and good farm output, the World Gold Council (WGC) said on Thursday.

http://in.news.yahoo.com/051006/137/60g17.html

S&P: "The states' VAT is a clear winner."

India unlikely to meet fiscal deficit target - S&P

By Annapurni Hariharan

MUMBAI (Reuters) - Credit rating agency Standard and Poor's said on Tuesday India was unlikely to meet its fiscal deficit target of 4.3 percent of gross domestic product for the fiscal year to March 2006 due to increased expenditure.

Ping Chew, S&P director of sovereign ratings, told a news conference that India remained on a stable ratings outlook. S&P raised its India rating to one notch below investment grade in February.

http://in.news.yahoo.com/051004/137/60ezl.html

Monk
10 Oct 05,, 17:22
I recently figured that a 1% change in the ratio of (non agricultural sector gdp:agri gdp) leads to 0.27 increase in overall gdp growth after OLS regression on some other key variables as well.

There are still issues for me to sort out with the above as the relationship must be delinearized but in the past at least, over the last 20 years, this has been statistically true.

Thats simply beacuse the Non-agri GDP has been growing at a much faster clip than the Agri-GDP.
The agri-GDP growth rate is very poor, hence the decline in their share of overall GDP. As the Agri-GDP gets supplanted with Non-Agri-GDP this translates into increased growth.

Sameer
10 Oct 05,, 17:31
Well ya, thats true but when you put it in terms of a ratio and perform regressions with other determinants such as rainfall, ratio of private to public investment, organized/unorganized sector gdp ratio and tradeopenness, this above reason of yours does not become that obvious, ie

Since Y= alpha * capital stock + (1- alpha) labor stock + total factor productivity (1)

You can sub in the above mentioned variables (rain etc) into equation 1 and then have a statistically meaningful relationship. Essentially I was trying to measure total factor productivity, ie growth that comes from factors other than capital and labor.

Sameer
10 Oct 05,, 17:33
oops where tradeopenness=( imports+exports)/total gdp

and all variables are in logs of course.

oneman28
10 Oct 05,, 17:36
The Indian economy has just inched closer to the Chinese economy. The Indian industrial sector has recorded a double-digit GDP growth of 10.3per cent, which, most importantly, is less than a per cent of the Chinese industrial sector’s GDP growth.

China's industry revenue has been increasing at 16+% for years.

Data for august
http://au.biz.yahoo.com/050914/33/9952.html

Sameer
11 Oct 05,, 02:28
Starting salaries in India has quadrupled in five years, says Assocham
New Delhi | October 09, 2005 5:06:21 PM IST


The starting salary for freshers passing out graduate courses like BBA/BCA from general universities across India has increased from Rs 2,500 in 2000 to Rs 10,000 in 2004, according to Associated Chambers of Commerce and Industry (ASSOCHAM) Eco Pulse (AEP) Study.

In case of BCA and BSc (Information Science) streams, salary levels have gone up to as much as Rs 10,000-15,000 in last two academic years 2003-04 and 2004-05, the study said.

Most of the firms visiting university campuses for recruitment came from the Information Technology (IT) and IT enabled sevices (ITES) sectors.

The AEP Survey also revealed that in order to synchronise with the industry requirements, many of the universities have placement cells headed by a Director who looks after the matters relating to students employment and training programmes.

"Some of the departments like Management Studies have their own placement cells. Companies from new economy sectors like IT and ITES, certain revamped Manufacturing sectors, Hospitality, Banking and Finance have started visiting for campus recruitments," it said.

It include companies like Infosys, TCS, Wipro, Cognizant, Dell Computers, iGate, ICICI Bank, CRISIL, ABN Amro Bank, IDBI Bank and Standard Chartered.

On the new trend, Assocham president Mahendra K Sanghi said, "It is a healthy sign for our industry as well as economy that the companies do not restrict themselves only to professional courses but are interested in the general streams also."

The recruits are not only the students from BBA and BCA but from other streams like B.Sc and Humanities as well.

The study found that the firms which recruits graduates also arrange for certain educational programmes for them.

Most of the Undergraduate courses offered in the universities across the country provide basic skills to the students and are in synchronization with the requirements of the industry.

"The Universities are making conscious efforts towards restructuring their undergraduate courses to cater to the industry needs and this is evident from the increase in the starting salary levels of the students", said Sanghi. (ANI)

Sameer
11 Oct 05,, 20:08
http://economictimes.indiatimes.com/articleshow/1257741.cms

BEIJING: Bilateral trade between India and China during the first eight months of this year has touched $12.2bn and is all set to cross the record of $13.6bn achieved in ‘04.

During January-August period, the total bilateral trade was worth $12.2bn, up by 40.4% over the same period last year, latest Chinese customs statistics showed. India’s exports to China grew by 28.3% to $6.7bn while the country’s imports from China witnessed a hefty 58.7% increase to touch $5.5bn.

India enjoyed a trade surplus of around $1.2bn during the first eight-month period in ‘05 compared to $1.7bn last year, it said. “If such high growth rates can be kept, the aim of increasing the bilateral trade volume to $20bn or higher by ‘08 will be realised soon if not this year,” a trade analyst said.

He also said that the upcoming “Made in India” trade exposition in Shanghai, China’s eastern metropolis and financial hub, would be a good opportunity for the Indian industry to showcase their manufacturing prowess and enhance bilateral trade volume as well as diversify the trade basket.

The third MII, scheduled from October 17 to 20, organised by the Confederation of Indian Industry in co-operation with the consulate general of India in Shanghai is expected to offer an important window for mutual synergies between Indian and Chinese businesses
Meanwhile, a report prepared by the Chinese commerce ministry said that China’s two-way foreign trade will hit $1.4 trillion. The ministry has forecast a trade surplus of $90bn to $100bn for ‘05, compared to $32bn a year ago.

The report said the surplus will be created by a predicted 30% jump in exports to $750bn, compared with an 18% rise in imports to $660bn. China recorded a trade surplus of $60.2bn in the first eight months of ‘05, far surpassing the $32bn logged in ‘04.

Exports remained buoyant in the first eight months, rising 32% year-on-year to $475.7bn, while imports grew just 15% to $415.5bn. The predicted trade surplus of $90 to $100bn will account for 5% of China’s total trade volume, compared to 2.8% in ‘04, the ministry’s report said.

In ‘04, China replaced Japan as the world’s third largest trader following the US and Germany with its trade volume hitting $1.2 trillion - $593.4bn for exports and $561.4bn for imports.

Sameer
12 Oct 05,, 20:29
SOme very important news





Join Date: Aug 2004
Location: DED, LKO, PHL
Posts: 951

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Manufacturing cuts the flab, roars back to form


Quote:
Indian manufacturing is gaining from a clear focus on key parameters like operating costs, efficiency and innovation. Fuel & power, critical & neglected inputs were amongst the first targets. Fuel & power expenses vis-à-vis sales of ten sectors within manufacturing between FY00 and FY05 show that while sales have grown at a CAGR of 11.5%, power and fuel expenses have grown at 7.3% only.

Working capital, hitherto not thought of as a cost-cutting tool, has gained prominence. For a sample of 43 companies with annual sales of over Rs 1,000 crore, the working capital/sales ratio has fallen from 12.1% in ‘95 to 5.6% in ‘05. The total sales for these companies in FY05 was Rs 6,30,000 crore. At a 10% interest rate for short-term borrowing, this corresponds to a savings of over Rs 4,000 crore a year.

“The greatest contribution of innovation to Indian manufacturing is faster product development, smart supply chain and deployment of lean manufacturing for dynamic production and supply of customised products — all these aided by the deployment of IT applications,” says RN Mukhija, president, operations EBG, L&T.

Probably the greatest transformation has been brought about by a change in workers’ mindsets and an improved work culture. While problems still exist, there is a substantial change in the attitude of a work force that wasn’t always flexible, and who are, themselves, feeling the impact of globalisation in Indian industry.

Research by ET Intelligence Group confirms that a big part of the change is also attributable to the entry of matriculates/graduates into the work force, who have a better understanding of the changes happening all around and the consequences of a rigid stand. A statistic to prove the point is the substantial decline in the number of industrial disputes. As per CMIE data source, the number of recorded disputes fell from 1,825 in 1991 to 1,166 in 1996 to 489 in ‘03, the latest available.

Sameer
12 Oct 05,, 20:29
Walmart to enter India soon.

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Delhi/Bangalore: Speculation is rife that the world’s largest retailer, the $285 billion Wal-Mart Stores Inc, is not keen to wait for the government’s green signal on foreign direct investment in the retail sector. Apparently, the retail colossus from Bentonville plans to set up its first store either in Bangalore or Gurgaon based on a cash-and-carry format—something that Indian laws currently permit.
Wal-Mart’s cash-and-carry brand, Sam’s Club, is likely to be set up within the next 10-12 months, sources said. Sam’s Club will be the second global cash-n-carry format, after German retailer’s Metro AG’s debut in Bangalore two years ago. An email to Elizabeth Keck, director, international corporate affairs, Wal-Mart in the US went unanswered.
A senior executive, approached by Wal-Mart to head this business in India, said, “They want to establish a presence in the country either way. To begin with, they plan an one-off cash-andcarry store which will strictly operate on the business-tobusiness model.’’
According to sources, Wal-Mart wants to adopt a dual strategy for India— B2B cash-n-carry formats, followed by hypermarkets in the post-FDI scenario.
Sources said: “Since Wal-Mart is not keen on entering India through the franchise route, it plans to stick only to the B2B, cash-and-carry route, till FDI clearance is given. Through the B2B route, they will supply to the unorganised sector. This will complement Wal-Mart’s existing sourcing operations out of India.’’
Sam’s Club, a division of Wal-Mart, is the largest warehouse chain in the US serving small business owners and operators. Warehouse clubs are the youngest retail concept, having started in the early 1980s. It emerged as the fastest growing segment through the 1990s in the US. Sam’s Club and Costco, two of the largest club chains, already rival sales of the leading supermarkets, drug stores and mass merchants, with the exception of Wal-Mart super stores.
These warehouse clubs cater to small businesses and retailers, who buy their products at a huge discount over the market price. Spread over an area in excess of 6500 sq mt—the size of the first Metro store in India—these clubs are able to price their products very low because of sheer economies of scale in sourcing.
For the past few months, it has been lobbying aggressively with the government to open up foreign direct investment in retail. But the government has been unable to build political consensus on this sensitive issue, particularly with the Left.
Recent reports, however, suggest that the government is exploring various options—including allowing foreign retailers restricted entry to about 10 cities and a cap of 49% on foreign holding. But sources said that the current debate over FDI in retail is likely to drag on for a few more months.
Meanwhile, Wal-Mart is stepping on the gas. It is setting up additional procurement offices in Delhi and Mumbai, expected to be operational by next year. Wal-Mart has targeted sourcing products worth $1.5 billion from India this year, against last year’s $1.2 billion.

Sameer
12 Oct 05,, 20:34
Mumbai Metro Rail
Financial bids by November 16





The three shortlisted bidders for the Mumbai Metro Rail Project have been asked to submit their financial bids by November 16, 2005. The Mumbai Metropolitan Region Development Agency hopes to finalise the preferred bidder by end-2005 and physical work is likely to begin by April 2006.
Giving details on the selection process, MMRDA officials stated that once the preferred bidder is selected, a special purpose vehicle would be formed to implement the project in which the bidder will have a stake of 74 per cent with MMRDA holding 26 per cent.
The three shortlisted bidders represent consortia led by Larsen & Toubro, Reliance Energy and IL&FS (see table).
The SPV will develop the elevated 15-km Versova-Andheri-Ghatkopar link with 14 stations en route that represents one of the three lines contained in phase-I of the project. MMRDA further added that the SPV would have to develop the project within five years from the date of finalization of agreement, failing which MMRDA is liable to invoke a penalty-cause. Likewise, the developer is also entitled to a performance bonus should the project get commissioned within five years. The project will be developed on BOT basis for 30 years.
Elaborating on the other two lines of phase-I, MMRDA officials informed that field work for the 13-km Mahim-Kurla-Mankhurd line with 11-km of elevated track was in progress while the technical report for the 36-km Colaba-Charkop line (10 km underground and 26 km elevated) was already submitted to the government. The modalities for the development of these two lines are being finalised.
The Mumbai Metro Rail Project in its entirety envisages 146 km of rail network (114 km of which would be elevated) to be developed in three phases. The project, targeted for completion by 2021, is estimated to cost Rs 19,500 crore, at current prices.

Consortium Leader
Other members

Larsen & Toubro
Gammon India, Siemens AG, Bharat Earth Movers

Reliance Energy
Connex (France), Metro Rail (Hong Kong)

IL&FS
Italian Thai Developers, Consolidated Transport Network, Unity Infra Projects, Skanska Cementation






[26 September 2005]



http://www.projectsmonitor.com/detailnews.asp?newsid=9711

Sameer
12 Oct 05,, 20:37
The director of Ikea was also present in Delhi and Mumbai last week wanting to set up a similar system to Wal Mart until the commies die and then FDI in retail is allowed.

Speaking of Mumbai there is a plan to build a luxuary mall close to Juhu beach area or brandra where only expensive designer clothes will be sold.

Versache, Prada etc will open up. While these clothes have been available in India for years now through secondary stores, these will be the first Italian designer only stores...

Harris Neutral
18 Oct 05,, 06:20
I know India is amonght the top 10 world economies.... but come on see it the other way. a country bearing a population of 1100 million will have a good overall economy but when u compare it with population, then GDP/capita is only around 500 US$. Which means it is amongst the poorest countries in the world. India is the poorer then Sri Lanka, Pakistan, Maldives, China, Bangladesh, AND OFFCOURSE REST OF THE WORLD.... Ha ha... maybe India is ahead of some Afrricans and minor nations. But dont worry u will get better by year 8000 AD :biggrin:

Jay
18 Oct 05,, 06:48
Hey @ss clown, look at this...

http://www.cia.gov/cia/publications/factbook/rankorder/2004rank.html

Vaman
18 Oct 05,, 07:44
Hes a packie pretending to be american with the sole intent of trolling.

Dont sweat it Jay.

Sameer
18 Oct 05,, 15:03
jay dont worry about him, his Pakistani per capota comment reminds be of the recfent thrad where a Pakistani comissioner claimed that Pakistan had grown by 8% for the last 3 years. :)

Such jealous people only make me proud that we are fustrating them so much that they need to sign up and post something negative. :)

Sameer
18 Oct 05,, 19:02
To the socialist nay sayers of free trade, here you go. Its only the begining.

http://economictimes.indiatimes.com/articleshow/1155066.cms

Be desi, buy phoren: India keeps the West busy

INDIATIMES NEWS NETWORK[ WEDNESDAY, JUNE 29, 2005 02:06:28 AM]
NRI Special Offer!
All those gora doomsayers can eat crow! Indians are not stealing Western jobs . In fact, because of rising Indian demand for a range of goods, jobs are being created in a number of countries across the globe, the US included. Manufacturing units in foreign countries are buzzing with activity producing aircrafts to computer hardware, all to match the growing demand amongst Indians.

Emerging as one of the biggest spenders in recent times, the Indian aviation sector has placed orders for over 350 aircrafts with a list price of about $26 bn. Currently there are 156 large carriers in service. India's booming aviation sector and the growing number of passengers has led to this huge demand.

The greatest surprise order has been by Delhi-based Interglobe Airlines for a hundred planes with a catalogue price of $6 bn. Kingfisher Airlines has ordered for five A380s ($1.4 bn) and Coimbatore-based Paramount Airline has ordered five Embrayer 170/175 aircraft.

While many aviation analysts in the country have their reservations about the success of India's private airlines, these orders promise a burst of activity and new jobs for manufacturing giants like Airbus, Boeing, ATR, Embraer, besides engine/component companies in Europe and the US. In the four days at Paris Air show, Boeing had won orders worth $2.8 bn while Airbus got orders worth $7.5 bn.

Thus, the boom in Indian aviation sector will help in keeping white and blue collar jobs in several Western economies as trade analysts observe that these orders will lead to acceleration in their production lines and hiring of people. Major carriers across the globe view India as a key market and are gearing up to tap this growth.

In an interview to a news agency, Interglobe promoter Rahul Bhatia refused to divulge details regarding their strategy to cope with the shortage of pilots in the country. However, in reply to questions, he said the airline would begin by "importing" senior pilots or commanders in a "significant proportion" in the first three years.

In the technology sector, the IT service market is around $600 bn and India gets only about 3 per cent of that. However leading global companies have realised the vast potential of this sector and are planning for a bigger share. According to Vinnie Mehta, executive director, Manufacturers Association of Information Technology, "In the PC segment almost 55-60 per cent of the products are branded while the rest come from the unorganised sector."

Among the big-name brands, Dell is a major player who supplies to Indian consumers. Dell does not manufacture in India and imports its products from Malaysia. Mehta says components are imported by-and-large from Taiwan, China, Singapore, South Korea and Malaysia. The size of the PC market in India in 2004-05 was close to 4 mn units and is expected to grow at 30 per cent in 2005-06.

Western manufacturers are also eyeing India's growing wireless telephony market. And for good reason. Some of the major global players - Nokia, LG, Samsung, Motorola and Sony Ericsson -- are present in India. The booming wireless sector, the world's fastest growing major mobile market, added 1.7 mn new users in May taking the total wireless base to 55.87 mn customers. This is just the tip of the iceberg as Indian cellphone service providers are busy expanding into rural areas.
The fast-maturing wireless market offers great promise to global handset makers as only five in 100 Indians own a mobile handset, compared with over a quarter in China, the world's largest mobile market. Keeping this increasing customer ratio in mind, it is interesting to note that most of the mobile sets sold in India are manufactured abroad. Thus these booming customer growth figures translate in to healthy revenue for the manufacturing countries.

For instance, Nokia, the world's largest mobile phone company sources its products for India from its manufacturing units spread across Finland, China, Hungary, Germany, Mexico, South Korea and the US.

By the end of its financial year in December 2004, Nokia's turnover from selling handsets and cellular networks in India stood at whooping Rs 7,502crore.
Fifth-ranked handset maker LG Electronics Inc has only recently started manufacturing in India. And that too only two out of its 12 mobile models presently sold in the country. The company imports most of its handsets from its parent unit in Korea.

Both Sony Ericsson and Motorola import their products from their manufacturing units spread across the globe.

Analysts estimate that between 30 mn and 35 mn handsets will be sold in the $3-bn handset market during 2005, compared with 17 mn last year. Back of the envelope calculations show that Nokia, with about 31 per cent share and the second leading, Motorola with about 19 per cent share in the market will sell about 9 mn and 6 mn handsets respectively.

Sudhin Mathur, general manager, Sony Ericsson, says: "The market as such is maturing, with the consumer demands moving towards more converged technology products. We are planning to launch a number of new handsets soon."
Indian lakhpatis, growing every year, are pushing the demand for expensive top of the line cars. You name it and it is sold here in India. Including the Rs 5 crore Maybach from DaimlerChrysler (only 1,000 of these are manufactured every year). And if you are slightly poorer then opt for Rs 2.5 crore Bentley's Arnage RL Limo.

The Indian automobile industry has witnessed a positive growth in recent years. The two primary factors for this rise, is the improvement in the living standards of the middle class and an increase in its disposable incomes.

Moreover, liberalisation steps, such as, relaxation of the foreign exchange and equity regulations, reduction of tariffs on imports, and refining the banking policies, initiated by the government of India, have played an important role in attracting several foreign players in this market. The institutionalisation of automobile finance has also made way for sustaining a long-term high growth for the industry

According to the Society of Indian Automobile Manufacturers (SIAM), the industry has maintained a growth of 20 per cent till May 2005, with passenger cars and utility vehicles growing around 13.32 per cent and 15.80 per cent respectively.

Giving Indian auto manufacturers a stiff competition are foreign manufacturers such as DaimlerChrysler, Fiat, Ford, General Motors, Honda, Hyundai, Skoda, Toyota and Volvo.

Hyundai imports two of its popular car brands -- Terracan and Tucson -- from its mother company in Korea. Terracan, launched in 2003, saw its import leap from 188 cars in 2003 to 392 in 2004. Till May, 2003 it has already imported 103 cars. Tucson was launched in April 2005 and already 298 cars have been imported to India by May end.

India's growing middle class, with its finger on the global pulse, has pushed the demand for foreign goods. So, the next time your foreign collaborator cribs about Indians stealing jobs, tell them about how our fancy lifestyles and appetite for consumer goodies keep Western manufacturing humming.
<< Previous



It is also obvious that an aerospace enginner working for Boeing makes a heck of a lot more money than some political science grad who works as a customer service agent. :)
Free trade works, its just a bit too complicated for the idiotic journalists and politicians to understand and itis a long term process.

Observer
18 Oct 05,, 22:06
Re:'Sameer' on 10-04-2005, 01:04 PM Post #40, here
"On the contrary there is a proven statistical relationship between a stock market and the economy wherein the stock market in the LR follows the economy. ... At least thats what I learnt in Forecasting Financial markts in masters.:)"
That was certainly a unique masters program.:)

Most other masters programs dealing with "Forecasting Financial markts", teach that the stock market is a leading indicator of the economy wherein the stock market leads the economy as stated by: 'Monk" on 10-04-2005, 11:01 AM Post #38 here.

Any comments? :)

Vaman
18 Oct 05,, 23:49
Most other masters programs dealing with "Forecasting Financial markts", teach that the stock market is a leading indicator of the economy wherein the stock market leads the economy....
Any comments? :)

Perhaps a rank generalisation as that might be taught in Univ of Timbuctoo or Swaziland (no offense to either), but in the absence of data on other economic variables and understanding of the equity market that'd be plain stupid.
Overly inflated market indices propped up by speculative trades reflect nothing of the economic fundamentals of the economy.

Observer
19 Oct 05,, 02:02
Re: 'Vaman' at 05:49 PM Post#76
"Perhaps a rank generalisation as that might be taught in Univ of Timbuctoo or Swaziland (no offense to either), but in the absence of data on other economic variables and understanding of the equity market that'd be plain stupid. Overly inflated market indices propped up by speculative trades reflect nothing of the economic fundamentals of the economy" Nevertheless, it happens to be a "rank generalisation" taught in prestigious universities all over the world in courses on Economic Forecasting or Financial Market Analysis and is backed up by peer-reviewed studies published over the decades. Since people after taking these courses rarely come out thinking otherwise due to the soundness of the rationale given to them for this phenomenon which is widely accepted by economists & financial analysts throughout the world, I must conclude that you have not had the benefit of this information before.

I can provide some internet links if they would help you.:)

Sameer
19 Oct 05,, 02:54
Thanks for catching it, I made a mistake when saying follows, I ment is followed by, BUT even then i was not wrong, both are correct actually in technical terms and it really depends how you wish to look at it, i dont have much time to type an essay so here is a simple explanation through link, sorry i am lazy...

hint: interest rates and the Central Bank and say commodity prices....

http://www.colorado.edu/Economics/courses/econ2020/section8/section8.html

some argue that the economy leads the stock market, while others maintain the stock market leads the economy. Actually, they are both correct.

First, let us begin with a brief review of some critical information from the previous section. We studied business cycles, or the fluctuation in economic growth over time. The phases of a complete business cycle could be condensed into the follow major parts:

We begin with a period of resumed economic growth after a recession. Aggregate demand (GDP) growth is suddenly increasing, and may be spurting beyond the consist year-to-year increase in our nation's productive capacity, or increase in aggregate supply. But even with rapid rates of aggregate demand growth, inflation is not a problem due to the excess capacity or slack present in the economy.


As the business cycle continues the economy enters its mature phase (although in turbulent times, this step will probably be skipped altogether). For the past several years, the U.S. economy has been at what is considered to be full-employment. In addition, growth has remained positive, but non-inflationary. The non-inflationary growth phase of the business cycle is characterized by full employment and growth of aggregate demand about equal to the expansion of aggregate supply. The steady annual increase in aggregate supply determines the maximum attainable level of non-inflationary GDP growth.


Next we move into the inflationary growth phase where the economy has reached full employment, and now aggregate demand growth picks up stream (or remains rapid if the second step was skipped) and begins to run ahead of the normal increase in aggregate supply and productive capacity. This was shown graphically as the aggregate demand curve shifts into the steep or vertical range of the aggregate supply curve.


Increasing inflation rates attracts the attention of economic policy makers, especially the Federal Reserve Board, who slam the brakes on growth (we will cover the details in a later section). Since finding just the right amount of policy to dampen growth is extremely difficult, we assume that aggregate demand growth decelerates rapidly, leading to:


A recession, where aggregate demand (GDP) actually falls. As unemployment rates rise, and excess capacity builds, inflation rates tumble and economic policy makers switch from the brakes to the accelerator and we move back to step 1 above.
In this section we turn our attention to how financial markets react to the above. Presently, the key link of financial markets to the economy is the Federal Reserve Board (Fed) and its policy towards interest rates. We will cover the details later in this course, but for now we just need to know that the Fed can, at its discretion, either raise or lower interest rates. And if the Fed feels that inflation is on the rise, it will raise interest rates to slow economic growth, and just the opposite if it feels that economic growth is too weak. A critical point to comprehending this material is to understand the difference between a reactionary policy and a policy that anticipates events.

A reactionary policy implies that the Fed will react to economic events and then take action. If inflation has risen to an undesirable level, the Fed will slow the growth in aggregate demand by raising interest rates. The idea is that the Fed will wait until the event occurs (inflation rises) before taking action (raising interest rates).

During the 1980s, the Fed developed complex computer models that help it better understand the economy. With its much improved understanding of economic conditions the Fed has been able to successfully switch from a reactionary economic policy to one that anticipates changes in the economy.

An anticipatory policy involves the use of leading indicators to forecast changes in the economy. An example of a leading indicator is the prices of different commodities. Commodities are items such as oil, copper, aluminum, steel and other materials used in the production of goods. Consider the case where inflation as measured by the CPI remains steady. As you recall, the CPI measures the prices that consumer pay for finished goods such as cars, televisions, and clothing. In contrast to the steady CPI, assume that commodity prices are increasing. Higher commodity prices increase the production costs of final consumer goods. Higher production costs leads to an inward shift of the firm's supply curve and eventually higher prices for final goods and a rise in the CPI as firms pass higher input prices on to the consumer of the final good.

The Fed now tries to anticipate future changes in the CPI and inflation rates by closely tracking leading indicators such as commodity prices and other discussed in this section. If by the judgment of the Fed, the consensus of leading indicators points to a serious potential for future rises in the inflation rate, the Fed may take action to slow economic growth and dampen inflationary pressures before inflation actually increases. The Fed's goal is to smooth out the business cycle, avoiding inflationary spikes and the more extreme reactionary policy that is necessitated when inflation rates do rise.

Now back to financial markets. The key to understanding long run movements in financial markets is to realize that financial markets respond to changes in leading indicators, since changes in leading indicators may prompt the Fed to take action. There is a direct linkage between bond prices and market interest rates. Higher interest rates lead in turn to lower bond prices. And although the linkage between stock prices and interest rates is not a direct one, in general expect stock prices to fall when interest rates rise. Even more importantly, bond and stock prices will tumble when they expect or anticipate a rise in future interest rates.
Financial analysts and the Fed are basically tracking the same data. As a result, financial analysts are trying to read the tea leaves and predict how the Fed will respond in its next policy meeting to the economic data. It is a guessing game. Financial analysts try to predict Fed behavior, and take action before the Fed actually does. For example, if the leading indicators point to higher inflation rates down the road, a financial analyst will conclude that the Fed is likely to raise interest rates in the next month. Knowing that higher interest rates will lead to a correction in bond and stock prices, the analyst goes ahead and sells part of his or her portfolio immediately. Since all financial analysts have access to the same information, and most will reach the same conclusion (the penalty for being left behind the pack can be expensive), stock and bond markets may react violently to a single bit of economic news.

This helps to explain part of the volatility of stock markets - expectations change from hour-to-hour and day-to-day as new economic information becomes available. Each piece is used to partially complete the puzzle of what the Fed is going to do at its next meeting.

"One area where individual investors have an advantage over us professionals is that we drive ourselves crazy trying to figure out what the latest 8:30 a.m. report means. We analyze it and overanalyze it."
Abby Cohen of Goldman Sachs - Fortune, June 9, 1997

There are thousands of mutual funds, pension funds, banks and other institutions where an individual may be responsible for a portfolio worth billions of





.....


It is argued that the stock market is highly corrolated to the long run growth economy through the liquidity effect and much research has shown that the stock market may granger cause economic growth while some Nobel loreates have downplayed this relationship but they are development economists soo....

Put my post in context to what Indiaforu wrote as well, econometrics, time series analysis in particular is the corner stone of forecasting but certainly things are much more complicated than your basic what leads what...

Sameer
19 Oct 05,, 02:58
The relatioship in the short run however is very tricky, certainly when forecasting financial markets in the short run, there is no general agreement on wether it SR economic growth news that affects stock market growth or the other way around.
eg: Sept 11th- Economists and the feds predicted billions and a negative effect to gdp growth and the stock market investors became quite nervours while a rally eventually resulted due to nationalism.

Long term expectations of high oil prices may affect LR stock market growth though but even this has yet to be proven.

But take Mumbai flooding, no effect on the BSE.

Sameer
19 Oct 05,, 03:08
There are certainly cases where investors hear news about gdp growth forecasts for the next quarter and this affects the stock market, ie growth expectations affect stock markets but here you would be getting into complex time series analysis and i dont want to get into that, to damn boring.


In effect, expectations of higher future growth (or even if growth was strong this quarter, i may expect the feds to be more inclind to raise interest rates next month and i may notice the stock market change) in general and higher expected consumer demand affects the stock market while the stock market granger causes LR growth.

hope i cleared myself up for the record but what Granger causes what is a tricky affair but what is more factual is that both move together while i would not underline the words "leading indicator" too strong and i may be fired, one thing i learned is always to cover yourself when presenting your analysis to the boss. :)

Sameer
19 Oct 05,, 03:23
Perhaps a rank generalisation as that might be taught in Univ of Timbuctoo or Swaziland (no offense to either), but in the absence of data on other economic variables and understanding of the equity market that'd be plain stupid.
Overly inflated market indices propped up by speculative trades reflect nothing of the economic fundamentals of the economy.


that is a valid point and you may find development economists to agree with you but what do they know......


However the BSE is beyound speculation and I have no idea why people are claiming that, what happened in the past is not happening now, the economy is quite different and it is high demand that is driving companies toget bullish or should i say expectations which i differentiate from speculation.

Sameer
19 Oct 05,, 05:14
There are different and very complicated expectations models for time series analysis where one must analyse auto regressive and moving average processes where the term rho must be estimated and white noise minimized, if anyone is interested we can spend some more time talking about it.

Critisisms of forecasting, it has to be said, however include the famous Lucas critique, serial corrolation, autocorrelation, misspecification, multicolinearity, failing the DIcky Fuller test etc etc etc :(

Vaman
19 Oct 05,, 05:20
that is a valid point and you may find development economists to agree with you but what do they know......

Huh? development economists? WTF does that have to do with it?

indianguy4u
19 Oct 05,, 05:23
Sameer quit explaining the rise in SE as related to economy etc. 99 % of SE is spculation.

Sameer
19 Oct 05,, 05:29
no it is not


Verman

Some development economists have suggested that stock markets are pure speculation and that there is no relationship btw growth and stock markets...

indianguy4u
19 Oct 05,, 05:35
Some development economists have suggested that stock markets are pure speculation and that there is no relationship btw growth and stock markets...
This is absolutely corrrect.

Sameer
19 Oct 05,, 14:37
This is absolutely corrrect.



On the contrary it is absolutely wrong and I have been working in the field for the last 3 years and people have been diversifying portfolios for at least 60 years now.

:)

guess i am off the hook

however i tell you what, present your own mathematical/statistical prrof as to why a stock market is based on speculation at 99%, even the BSE, go ahead, and I tell you what, i guarantee you a job paying you 200000 USD a year and a Nobel prize.

Well i can guarantee you the job, the Nobel prize will come.

Vaman
19 Oct 05,, 14:53
Some development economists have suggested that stock markets are pure speculation and that there is no relationship btw growth and stock markets...

Hold on to your horses sam, not only are you getting ahead of yourself.. you are getting incomprehensible for many members on the board.
First, READ.
I am not saying that theres no relationship between economic growth and stock market performance. What I did say was that I dont consider stock markets, in the absence of data on other economic variables, is a good indicator of the economy as whole.
Second, I dont think you have clue about what developmental economics is, so lets not drag it here.

Its like this :
If event A occurs and another event B occurs later on, you can draw as many regressions as you want and infer that the A leads to B. However just because they both occur is no reason to believe that B also leads to A. Its a logical fallacy. Its a common mistake but its amatuerish none the less.

The same applies at a fundamental level here as well and is logically conisistent as well. If an economy does well, stockmarkets being a small subset of the economies would also be expected to do well. Better overall economic performance leading to better stock performanc is still a valid inference to draw.
But stellar stock performance in itself leading to economic growth ? No way.!!
Couple of reasons:
* A stock market is a miniscule part of the overall economy and does not represent all participants in the economy. GDP/GDP growth is a far superior benchmark to judge a economy, coz very simply it takes into account all partcipants in the economy.
* A stock market index (the one that people normally see and jump and down about) is an even smaller representation of the economy. Typically its just 40-50 companies making up an index. How can just their performance an adequate representation of the entire market?
* A huge proportion of the economic activities are not financed by equity but by debt instruments. In India the debt markets is larger than the equity markets by many folds.
* The price of a scrip at any given time is usually not the true value of a firm. Any banker who values a firms does it on the basis of the firms future cash flows discounted by a particular rate. This rate is the risk-free rate of a government bond and not market yields(which would have been the case if the stock markets were to lead the economy).
* Free markets and the efficient market hypothesis tells us that if the stockmarkets operate truly effieciently then they would never produce returns in excess of or returns less than that of what the economy produces. In other words market returns would converge to overall economic growth.

and so on...

indianguy4u
19 Oct 05,, 14:57
On the contrary it is absolutely wrong and I have been working in the field for the last 3 years and people have been diversifying portfolios for at least 60 years now.

:)

guess i am off the hook

however i tell you what, present your own mathematical/statistical prrof as to why a stock market is based on speculation at 99%, even the BSE, go ahead, and I tell you what, i guarantee you a job paying you 200000 USD a year and a Nobel prize.

Well i can guarantee you the job, the Nobel prize will come.
Three Qs
1] Why did Black Monday happened?
2] Why has BSE has reached 8500 levels?
3] Why two big correction [165 & 175] happened recently?

Sameer
19 Oct 05,, 15:27
Hold on to your horses sam, not only are you getting ahead of yourself.. you are getting incomprehensible for many members on the board.
First, READ.
I am not saying that theres no relationship between economic growth and stock market performance. What I did say was that I dont consider stock markets, in the absence of data on other economic variables, is a good indicator of the economy as whole.
Second, I dont think you have clue about what developmental economics is, so lets not drag it here.

Its like this :
If event A occurs and another event B occurs later on, you can draw as many regressions as you want and infer that the A leads to B. However just because they both occur is no reason to believe that B also leads to A. Its a logical fallacy. Its a common mistake but its amatuerish none the less.

The same applies at a fundamental level here as well and is logically conisistent as well. If an economy does well, stockmarkets being a small subset of the economies would also be expected to do well. Better overall economic performance leading to better stock performanc is still a valid inference to draw.
But stellar stock performance in itself leading to economic growth ? No way.!!
Couple of reasons:
* A stock market is a miniscule part of the overall economy and does not represent all participants in the economy. GDP/GDP growth is a far superior benchmark to judge a economy, coz very simply it takes into account all partcipants in the economy.
* A stock market index (the one that people normally see and jump and down about) is an even smaller representation of the economy. Typically its just 40-50 companies making up an index. How can just their performance an adequate representation of the entire market?
* A huge proportion of the economic activities are not financed by equity but by debt instruments. In India the debt markets is larger than the equity markets by many folds.
* The price of a scrip at any given time is usually not the true value of a firm. Any banker who values a firms does it on the basis of the firms future cash flows discounted by a particular rate. This rate is the risk-free rate of a government bond and not market yields(which would have been the case if the stock markets were to lead the economy).
* Free markets and the efficient market hypothesis tells us that if the stockmarkets operate truly effieciently then they would never produce returns in excess of or returns less than that of what the economy produces. In other words market returns would converge to overall economic growth.

and so on...


Let me address your first part.

I have a Masters in Financial Economics, at least i understand what development Economics say and i can get as technical as you wish on the matter

"If event A occurs and another event B occurs later on, you can draw as many regressions as you want and infer that the A leads to B. However just because they both occur is no reason to believe that B also leads to A. Its a logical fallacy. Its a common mistake but its amatuerish none the less."

It would be had causality tests not been invented but I am sure you knew this.




Now about what causes what does B cause A or A cause B, you must know what Granger causality tests are all about as well I presume because that answers that question.

Vaman
19 Oct 05,, 15:28
however i tell you what, present your own mathematical/statistical prrof as to why a stock market is based on speculation at 99%, even the BSE, go ahead, and I tell you what, i guarantee you a job paying you 200000 USD a year and a Nobel prize.

Well i can guarantee you the job, the Nobel prize will come.

Bah.. USD 200,000 is peanuts for people who truly understand the markets. They'd get many times over that sum as their annual bonuses.
And its actually not all difficult to disprove what you've been saying.

Sameer
19 Oct 05,, 15:34
Three Qs
1] Why did Black Monday happened?
2] Why has BSE has reached 8500 levels?
3] Why two big correction [165 & 175] happened recently?



Black monday happened because of a speculative attack, this is not the 90s though, irrelevant.


BSE has reached 8500 levels for manyr easons from interest rate differentials to higher demand by consumers to ... wait i posted an article about that already.


3) That is not a big correction, its called derivatives contract, global markets slow down, US feds raising interest rates etc etc etc... :)

Sameer
19 Oct 05,, 15:35
Bah.. USD 200,000 is peanuts for people who truly understand the markets. They'd get many times over that sum as their annual bonuses.
And its actually not all difficult to disprove what you've been saying.


Not as a starting salary it is not and you should know that the average salary in NYC for a trader is 140000 USD a year plus bonus which can be low or as high as millions upon millions.

Sameer
19 Oct 05,, 15:40
Verman, i have not used the words "you know nothing" blablabla because this is a forum and everyone's opinion counts.

I dont have much time to argue about something i do for a living on a daily basis, however i dont mind any comments and i respect and value each one of them. I have a million academic papers to back me up on the matter and would be willing to post them one by one due to time constraints, let us keep this friendly and impersonal.

Sameer
19 Oct 05,, 15:43
Abstract

One of the most enduring debates in economics is whether financial development causes economic growth or whether it is a consequence of increased economic activity. Little research into this question, however has used a true causality framework. This paper fills this lacuna by using Granger-causality tests to provide evidence of a positive and significant causal relationship going from stock market development to economic growth, particularly for less developed countries.
Download Info

http://ideas.repec.org/p/wpa/wuwpfi/0012006.html

for starters i suggest you read this, thus ends the contention of A causing B or B causing A.

indianguy4u
19 Oct 05,, 15:46
Black monday happened because of a speculative attack, this is not the 90s though, irrelevant.


BSE has reached 8500 levels for manyr easons from interest rate differentials to higher demand by consumers to ... wait i posted an article about that already.


3) That is not a big correction, its called derivatives contract, global markets slow down, US feds raising interest rates etc etc etc... :)
Ur answer have proved that events in SE is not conected to economy most of the times.

Sameer
19 Oct 05,, 15:48
http://www.eldis.org/static/DOC3705.htm

Stock market development and long - run growth

--------------------------------------------------------------------------------

Levine, Ross; Zervos, Sara / Policy Research Working Papers, World Bank , 1996
Is there a strong empirical association between stock market development and long-term economic growth? Cross-country regressions suggest that there is a positive and robust association.

Levine and Zervos empirically evaluate the relationship between stock market development and long-term growth.

The data suggest that stock market development is positively associated with economic growth. Moreover, instrumental variables procedures indicate a strong connection between the predetermined component of stock market development and economic growth in the long run.

While cross-country regressions imply a strong link between stock market development and economic growth, the results should be viewed as suggestive partial correlations that stimulate additional research rather than as conclusive findings.


AND THE FURTHUR RESEARCH IS THE PREVIOUS ARTICLE POSTED ABOVE.

i cant believe i am doing this but oh well, this is what a forum is all about.

Sameer
19 Oct 05,, 15:49
Ur answer have proved that events in SE is not conected to economy most of the times.


Academia seems to disagree with you. :)

indianguy4u
19 Oct 05,, 15:54
The data suggest that stock market development is positively associated with economic growth. this is perfectly acceptable,

But read this quote

While cross-country regressions imply a strong link between stock market development and economic growth, the results should be viewed as suggestive partial correlations that stimulate additional research rather than as conclusive findings.

If my understanding is right, then there is room for debate & research.

Sameer
19 Oct 05,, 15:54
http://ideas.repec.org/a/aea/aecrev/v88y1998i3p537-58.html

Author Info
Levine, Ross
Zervos, Sara

Additional information is available for the following registered author(s):

Ross Levine
Abstract

Do well-functioning stock markets and banks promote long-run economic growth? This paper shows that stock market liquidity and banking development both positively predict growth, capital accumulation, and productivity improvements when entered together in regressions, even after controlling for economic and political factors. The results are consistent with the views that financial markets provide important services for growth and that stock markets provide different services from banks. The paper also finds that stock market size, volatility, and international integration are not robustly linked with growth and that none of the financial indicators is closely associated with private saving rates. Copyright 1998 by American Economic Association.

Sameer
19 Oct 05,, 15:56
this is perfectly acceptable,

But read this quote


If my understanding is right, then there is room for debate & research.


There certainly is room for debate and research which is why i psted the first article which ended the debate. :)

But no worries some developmental economists still debate it and there is nothing wrong in that and certainly if you can find their work and present your case, i would most welcome it.

Sameer
19 Oct 05,, 15:59
You must take into account that companies spend billions getting people like me to work for them so its not the case of them all being wrong as well and all academia being rubbish. :)

indianguy4u
19 Oct 05,, 15:59
I would give u an example,
In last year's budget FM proposed an additional tax[ it was transactional tax or something like that]. While rest of the budget was ok the market fell, b'coz of that additional tax on SE deals. What will u call this?

Sameer
19 Oct 05,, 16:02
I would give u an example,
In last year's budget FM proposed an additional tax[ it was transactional tax or something like that]. While rest of the budget was ok the market fell, b'coz of that additional tax on SE deals. What will u call this?



What would you call it?


I would call it expectations theory at play


Again i will say it, i have posted some heavy material for your reading pleasure while i fear that some knowledge of statistics will be required, the notion of causality has been solved Verman, econometrics is not that dumb a field you know. :)
posting it again
Abstract

One of the most enduring debates in economics is whether financial development causes economic growth or whether it is a consequence of increased economic activity. Little research into this question, however has used a true causality framework. This paper fills this lacuna by using Granger-causality tests to provide evidence of a positive and significant causal relationship going from stock market development to economic growth, particularly for less developed countries.
Download Info

http://ideas.repec.org/p/wpa/wuwpfi/0012006.html

Sameer
19 Oct 05,, 16:06
All my finance books have this for fact, granted its a finance book and they have to say it but its widely accepted minus in a few developmental econiomists' circles. There is no debate about this within Financial institutions.

indianguy4u
19 Oct 05,, 16:08
have u read the full text, its 32 pg long.

Sameer
19 Oct 05,, 16:11
have u read the full text, its 32 pg long.


You think that i posted it out of the blue, i had to read this, i nver had a choice in the matter...

you cannot graduate without some reading about empirics you know.

Sameer
19 Oct 05,, 16:12
and indiaforu one of the main reasons for BSE performance over the last 3 years has been risk contraction, not speculation, speculation does not last that long and nor does it react this way when markets are down.

Favourable P/E ratios is also another reason.


Again i posted a good article about the BSE a few pages back.

Sameer
19 Oct 05,, 16:28
Varman when you say under the absense of other economic variables, noone ever doubted that more than one variable affects the economy which is why i never talked about it, too obvious, we are talking about a multilinear dmensional regression here.

Monk
19 Oct 05,, 16:40
Hold on to your horses sam, not only are you getting ahead of yourself.. you are getting incomprehensible for many members on the board.
First, READ.
I am not saying that theres no relationship between economic growth and stock market performance. What I did say was that I dont consider stock markets, in the absence of data on other economic variables, is a good indicator of the economy as whole.
Second, I dont think you have clue about what developmental economics is, so lets not drag it here.

Its like this :
If event A occurs and another event B occurs later on, you can draw as many regressions as you want and infer that the A leads to B. However just because they both occur is no reason to believe that B also leads to A. Its a logical fallacy. Its a common mistake but its amatuerish none the less.
The same applies at a fundamental level here as well and is logically conisistent as well. If an economy does well, stockmarkets being a small subset of the economies would also be expected to do well. Better overall economic performance leading to better stock performanc is still a valid inference to draw.


I think you and sameer are on the same page here. It is not sameer's claim that stock market growth leads to economic growth, his claim is that stock market is a fair representation of the Economy. In the past with weak "soft" infrastructure of India this statement may have been false but today viewing India as a more mature market this statement is accurate. Therefore the laws of causality aren't breached and no A leads to B doesn't always mean B leads to A.


But stellar stock performance in itself leading to economic growth ? No way.!!
Couple of reasons:
* A stock market is a miniscule part of the overall economy and does not represent all participants in the economy. GDP/GDP growth is a far superior benchmark to judge a economy, coz very simply it takes into account all partcipants in the economy.
* A stock market index (the one that people normally see and jump and down about) is an even smaller representation of the economy. Typically its just 40-50 companies making up an index. How can just their performance an adequate representation of the entire market?
* A huge proportion of the economic activities are not financed by equity but by debt instruments. In India the debt markets is larger than the equity markets by many folds.
* The price of a scrip at any given time is usually not the true value of a firm. Any banker who values a firms does it on the basis of the firms future cash flows discounted by a particular rate. This rate is the risk-free rate of a government bond and not market yields(which would have been the case if the stock markets were to lead the economy).
* Free markets and the efficient market hypothesis tells us that if the stockmarkets operate truly effieciently then they would never produce returns in excess of or returns less than that of what the economy produces. In other words market returns would converge to overall economic growth.
and so on...

Your original statement(my emphasis) is delusional no one actually said that ergo all your arguments are futile.
Regarding 40-50 companies constituting an index, how do you think these companies were selected to be in the index in the first place, the basis if you will? They are leading companies in individual sectors, the term "Bellweather" ring a bell (unintended pun ;) ). These companies represent individual sectors and logic follows that the index represents the economy. Therefore the stock market fairly reflects economy in India currently. No one said Stock market drives the economy.

Sameer
19 Oct 05,, 16:44
Vaman ji

The stock market is an indicator of how wel the economy is doing and there is evidence that it contributes to long term growth. Its not the only variable and never will be, it is an indicator and must be included in your empirical work.

In terms of India, the dynamics of the Indian economy have changed drastically over the years, there is currently work going on to study the stofk market phenomenon in India, you will have your question answered in a few years time.


The sensex is a statistically significant sample of the state of Indian companies in the organized sector.

Granger causality, sims test, cointergration are used to determine what variable causes what variable in a regression, ie which one is the dependent and which one is the independent variable, this was solved since the 60s and i have already posted Granger causality test and stock markets granger causes economic growth.

cheers

Sameer
19 Oct 05,, 16:53
I found this micky mouse website to help us out. :) its funny


What is the Sensex made of?

Thirty stocks. That's right. Just 30 stocks tell you how the market is faring.

Before you throw up your hands in protest, there is something you should know about these 30 stocks.

For one, they are the most actively traded stocks in the market. In fact, they account for half the BSE's market capitalisation (To understand the term market capitalisation, read What's in a share? Money!).

Besides, they represent 13 sectors of the economy and are leaders in their respective industries. Now that sounds fair, doesn't it?

Who selects these 30 stocks?

They are selected by the Index Committee.

This committee consists of all sorts of individuals including academicians, mutual fund managers, finance journalists, independent governing board members and other participants in the financial markets.

How do they select these 30 stocks?

Well, they definitely don't do it on the basis of their individual whims and fancies. Some of the criteria they follow include:

~ The stock should have been traded on each and every trading day (the days on which the stock market works) for the past one year.

~ It should be among the top 150 companies listed by average number of trades (buying or selling of shares) and the average value of the trades (in actual rupee terms) per day over the past one year.

~ The stock must have been listed on the BSE for at least one year.

Does the Sensex have any contemporaries?

In terms of age? No.

The Sensex is the oldest index in the country. It was born in 1986.

In terms of popularity, the Nifty follows close.

The Nifty? What's that?

Well, the National Stock Exchange has an index called the Nifty (officially called S&P CNX Nifty). This name can be credited to the 50 stocks that comprise its index.

Isn't that a broader representation than the Sensex?

You're right. The Nifty has 50 stocks covering 24 sectors, as against 30 stocks and 13 sectors for the Sensex.

In case you are shaking your head about 50 also being too small a number, let me remind you these 50 stocks account for around 60 percent of the market capitalisation.
http://in.rediff.com/getahead/2004/dec/10sensex.htm

Vaman
19 Oct 05,, 17:12
Not as a starting salary it is not and you should know that the average salary in NYC for a trader is 140000 USD a year plus bonus which can be low or as high as millions upon millions.

Pfffft!!!
That must be some kind of an average offer.


I have a Masters in Financial Economics, at least i understand what development Economics say and i can get as technical as you wish on the matter.
.
.
.
I dont have much time to argue about something i do for a living on a daily basis
I dont care for what degrees you say you hold or what you claim. They might very very be legitimate, but internet being what it is anyone and everyone can claim to be whatever he/she desires.
Dont expect respect to be granted by me just because someone claims to be so-and-so in real life. It doesnt cut it for me. In the same tone, I will never claim to be so-and-so in real life and therefore my word be given more value.
I'd respect anybody on the other hand who shows an understanding of the issue and is able to offer atleast some insights. WRT to economics, some the best minds I have seen dont need to be propped up by jargon or overt dependence on mathematical desciption of an issue. They can do it in laymans terms and usually do it brilliantly.


Now about what causes what does B cause A or A cause B, you must know what Granger causality tests are all about as well I presume because that answers that question.
Hey, I was still willing to concede that concurrence of events A and B could still yield something of use like say B follows A with a certain probablity. If I were to strictly stand by fundamental notions of Hume's causality, I wouldnt even grant that. Granger is someone who you would probably devote a few lines if a book were to be written on causality. The reason being science and maths havent been be explain the true nature of causality. They have only been able to do that in a wel defined,formal, enumerated systems. If these were to be taken away, even laws of induction - based on which mathematical/statistical proofs are presented- do not work.
When today i think about stuff like Hempel's or Goodman's Paradox, it still boggles the minds. Its too bad stuff like these arent taught at places where they virtually create gradutes in a assembly line with passable quantitative skills.

IG4U,


The data suggest that stock market development is positively associated with economic growth.

this is perfectly acceptable,

Agreed.
Nobody here is disputing that there is a relationship between economic growth and stock market performance. Infact we agree that economic growth would lead to stock markets doing well..but not vice-versa.
The only thing I've said is that stock market performance on its own is not a good indicator of an economy.
And yes, in the pure form, speculation exists even at BSE. Whats wrong with saying that?

Sameer
19 Oct 05,, 17:22
If you feel mathematical deception anywhere, please do show it.


Veman for the good of this forum, do not make this into a personal attack, be it directly or indirectly when you talk about passable quant skills please, i'll ignore such things.

Your swipe at Granger and all other methods of causality tests is also quite alarming, goodness, only a few pages devoted to them. :)

Too much philosophy for you

"Infact we agree that economic growth would lead to stock markets doing well..but not vice-versa"

Indirectly so that is true when you say economic growth leads to stock market grwth in the LR, i have again already posted that link 2 pages ago.

Monk
19 Oct 05,, 17:31
If you feel mathematical deception anywhere, please do show it.


Veman for the good of this forum, do not make this into a personal attack, be it directly or indirectly when you talk about passable quant skills please, i'll ignore such things.

"Infact we agree that economic growth would lead to stock markets doing well..but not vice-versa"

Indirectly so that is true when you say economic growth leads to stock market grwth in the LR, i have again already posted that link 2 pages ago.

Sameer. Quit arguing with Vaman, he can't debate rationally without insulting you. He is also quite delusional, he is assuming statements which were never made.

Sameer
19 Oct 05,, 17:36
Since you mention paradoxes based on the concept of induction, you should know that there is such a thing as Bayes theorem and confidence intervals, again first your causality comments now induction...

Since you probably dont believe me, take it from wkpedia, if you dont believe them, no problem i can send you multiple private messages, not in this forum though, this is about the Indian economy.

"This principle is known as "Bayes' theorem". It is foundational to the mathematics of probability and statistics. When scientists publish analyses of experimental results and calculate that they are "statistically significant", they are implicitly using this principle. It could be argued that this principle is a better representation of how scientists actually reason than the original "principle of induction" described above.

Using this principle, the paradox does not arise. If you ask someone to select an apple at random and show it to you, then the probability of seeing a red apple is independent of the colors of ravens. The numerator will equal the denominator, the ratio will equal one, and the probability will remain unchanged. Seeing a red apple will not affect your belief about whether all ravens are black.

If you ask someone to select a non-black-thing at random, and they show you a red apple, then the numerator will exceed the denominator by an extremely small amount. Seeing the red apple will only slightly increase your belief that all ravens are black. You'll have to see almost every non-black-thing in the universe (and see they're all non-ravens) before your belief in "all ravens are black" increases appreciably. In both cases, the result agrees with intuition."
http://en.wikipedia.org/wiki/Hempel's_paradox


Again econometrics has evolved since the 60s and is an academically acceptable form of analysis used all around the world but you know how those "passable quant skills are" ;)

andof course if you think that these authors have passable quant skills, what can i say

Abstract

One of the most enduring debates in economics is whether financial development causes economic growth or whether it is a consequence of increased economic activity. Little research into this question, however has used a true causality framework. This paper fills this lacuna by using Granger-causality tests to provide evidence of a positive and significant causal relationship going from stock market development to economic growth, particularly for less developed countries.
Download Info

http://ideas.repec.org/p/wpa/wuwpfi/0012006.html



This thread is about the Indian economy, let us leave induction out of this and move on now, if you wish to continue the endless debate, create another thread as this one is being hijacked with other unrlated topics and indirect swipes at members about things you dont seem to be updated about.

time for me to go to bed now.
thanks

Vaman
19 Oct 05,, 20:11
Since you mention paradoxes based on the concept of induction, you should know that there is such a thing as Bayes theorem and confidence intervals, again first your causality comments now induction...


Please....

Yeah I am aware of "such a thing" as Bayes Theorem and statistical significance. Nothing new to me.
And yes, they have attempted to use probabilty to look for reasoning that would allow premise and conclusions to be independent. Bayes theorem is that attempt that doesnt succeed despite what hacks at wikipedia say. Simple reason : the set of non-black non-ravens is countably infinte. Therefore the set of ravens and non-ravens is not independent. Simple.. case closed.

While Probability is certainly useful in several contexts but not with the issues such as induction.
Why?
Because essentially it boils down to the assumption that a sample you choose is typical of the entire population. But then extending a sample characteristics (be it at 90%, 95% or 99% CI) to the population is induction itself.

.................................................. .........

The entire point of it was still this : That stock market performance in itself is not a good indicator of the economy.
Anyway..seems some of you are interested in stuff like this only when its going one-way. I'll leave you to plotting rho versus beta and calculating the regression coefficient.
Have fun!

Sameer
19 Oct 05,, 21:24
NOone ever said that the stock market by itself is a good indicator of the economy, but do go ahead after the personal insults, continue to put words in other peoples' mouths. :)


"Bayes theorem is that attempt that doesnt succeed despite what hacks at wikipedia say"

You think that only wikipedia says that :biggrin: want to bet, create another thread and I will show you. First you talk about causality, then when proven wrong, you move on to paradoxes and now Beyes is wrong, what next?
philosopher. :)


"There is an alternative to the "principle of induction" described above.

Let X represent an instance of theory T, and I represent all of our background information.

Let represent the probability of given . Then,

This principle is known as " (Click link for more info and facts about Bayes' theorem) Bayes' theorem". It is foundational to the mathematics of (A measure of how likely it is that some event will occur) probability and (A branch of applied mathematics concerned with the collection and interpretation of quantitative data and the use of probability theory to estimate population parameters) statistics. When scientists publish analyses of experimental results and calculate that they are " (Click link for more info and facts about statistically significant) statistically significant", they are implicitly using this principle.
It could be argued that this principle is a better representation of how scientists actually reason than the original "principle of induction" described above.

Using this principle, the paradox does not arise. If you ask someone to select an apple at random and show it to you, then the probability of seeing a red apple is independent of the colors of ravens. The numerator will equal the denominator, the ratio will equal one, and the probability will remain unchanged. Seeing a red apple will not affect your belief about whether all ravens are black.

If you ask someone to select a non-black-thing at random, and they show you a red apple, then the numerator will exceed the denominator by an extremely small amount.
Seeing the red apple will only slightly increase your belief that all ravens are black. You'll have to see almost every non-black-thing in the universe (and see they're all non-ravens) before your belief in "all ravens are black" increases appreciably. In both cases, the result agrees with intuition.

See also (Click link for more info and facts about Bayesian inference) Bayesian inference

References Hempel, C. G. A Purely Syntactical Definition of Confirmation. J. Symb. Logic 8, 122-143, 1943.
Hempel, C. G. Studies in Logic and Confirmation. Mind 54, 1-26, 1945.
Hempel, C. G. Studies in Logic and Confirmation. II. Mind 54, 97-121, 1945.
Hempel, C. G. Studies in the Logic of Confirmation. In Marguerite H. Foster and Michael L. Martin, eds. Probability, Confirmation, and Simplicity. New York: Odyssey Press, 1966. Pp 145-183
Falletta, Nicholas. The Paradoxicon: a Collection of Contradictory Challenges, Problematical Puzzles, and Impossible Illustrations. 1983. Pp 126-131. ISBN 0385179324
http://www.absoluteastronomy.com/encyclopedia/r/ra/raven_paradox.htm

but what d they know.
The sad part is that you seem to speak with such conviction on the matter, Beyes fails to proove the paradox? Mathematicans seem to disagree with you, i am sorry :)

What is your background anyway?again this is an Indian economics thread...., if you have problems with statistics and mathematics, you can take it up with your boss/ school institution for furthur reading.
In the meantime the rest of the world will use it.
I will leave it here.

bye bye


I would appreciate it if this thread could stick to Indian economics, if you feel a desire to debate Bayes you can create such a thread. Enough of this nonsense and personal attacks.

Sameer
19 Oct 05,, 21:57
India loses out on deteriorating terms of trade
VIDHIKA SEHGAL

TIMES NEWS NETWORK[ WEDNESDAY, OCTOBER 19, 2005 01:32:42 AM]
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MUMBAI: Rising oil prices and increasing imports of raw materials have led to deteriorating terms of trade and an overall trading loss in the international market for India and China.

On the other hand, oil exporting countries such as Iran, Kuwait and Saudi Arabia have seen significant gains from trade as the price of their main export shot through the roof. Data from the Unctad Trade and Development report ’05 shows that from ’02-04, India has lost nearly 0.7% of its GDP from its deteriorating terms of trade, while China lost around 1.1% of its GDP. At the same time, Saudi Arabia and Kuwait have added 5.2% and 6.3%, respectively, to their GDP in the same period.

Terms of trade is the ratio of a country’s export price index to its import price index. It is said to be deteriorating if the ratio shows a downward trend since this means that the price of goods that a country imports has risen faster than the price of its exports. When this ratio falls below 100, the country begins to incur an overall loss while trading in the international market.

The Unctad data shows that India’s terms of trade index fell from 100 in ’02 to around 87 in ’04 (taking the base year as ’00). However, this is in sharp contrast to the DGCI&S data, which takes 1978-79 as the base and shows the net terms of trade to be well above 100 all these years.

However, after shifting the base to a more recent year like ’00-01, this data also reveals a deteriorating terms of trade on an average and a trading loss for India.

In effect, even though India’s exports have grown by 20-25% in the past couple of years, a growing trend of rising import prices, mainly because of oil, has wiped out any gains from trade that could have resulted from higher export volumes

The report also shows that developing nations can no longer be clubbed into one category. India and China have emerged as key exporters of manufactured goods, while others continue to export primary goods. In the past, the terms of trade debate has focused on developed countries on one side and developing nations on the other.

According to the UN’s statistics division, a gain or loss from changes in terms of trade is the difference between a country’s real GDP and real gross domestic income. During ’02-04, while exporters of manufactured goods, which include China and India, saw an average loss of 0.7% of their GDP because of trading losses, oil exporting countries gained as much as 3.2% of their GDP

http://economictimes.indiatimes.com/articleshow/msid-1267315,curpg-2.cms

Sameer
19 Oct 05,, 22:03
India Inc optimism at zenith: D &B

Our Corporate Bureau / Mumbai October 20, 2005



Business confidence in India is higher than ever before if Dun & Bradstreet’s (D&B) latest Business Optimism Index (BOI) is anything to go by.

The quarterly index, which rates the optimism among Indian industries for the forthcoming quarter, stood at 187 for the fourth quarter of fiscal 2005, up 7.47 per cent from 174 the previous quarter. The index also registered a 73.4 per cent year-on-year increase from 108 per cent last year.

The index is compiled based on responses from 350 randomly selected companies from D&B’s commercial credit information file across six sectors – basic goods, capital goods, intermediate goods, consumer durables, consumer non-durables and the service sector.

Six parameters are considered when calculating the BOI – net sales, net profits, selling prices, new orders, inventories and employees.

For the upcoming quarter, the optimism index for volume of sales stood 92 per cent as against 84 per cent in the previous quarter, with 93 per cent of the respondents expecting an increase in the volume of sales. The optimism index for net profits stood at 92 per cent, up 6 per cent from the last quarter.

The optimism index for new orders stands at 91 per cent, with the service sector being most optimistic. The index for selling prices was up from 40 per cent last quarter to 42 per cent, with the basic goods segment leading.

The optimism index for inventory levels, too, was up from 47 per cent to 50 per cent this quarter and the index for employees went up from 46 per cent to 58 per cent for the upcoming quarter.
http://www.businessstandard.com/common/storypage.php?hpFlag=Y&chklogin=N&autono=203430&leftnm=lmnu1&leftindx=1&lselect=0

Vaman
19 Oct 05,, 22:19
again this is an Indian economics thread...., if you have problems with statistics and mathematics, you can take it up with your boss/ school institution for furthur reading.
In the meantime the rest of the world will use it.


errr.. I dont have problems with statistics or mathematics and its use in any way. I just have a problem with invalid inferences being drawn from them.
I am sorry that offends you.
I dont claim to be a genius in science or mathematics, but heck I dont pretend to know everything and put down "development" economists either.

And this is a thread on "Indian Economy" btw, NOT sessions on your brand of economics. Someone like IG4U's questions on the economy -or part of it - deserve as much a say in it instead of being brushed away dismissively.

Sameer
19 Oct 05,, 22:31
errr.. I dont have problems with statistics or mathematics and its use in any way. I just have a problem with invalid inferences being drawn from them.
I am sorry that offends you.
I dont claim to be a genius in science or mathematics, but heck I dont pretend to know everything and put down "development" economists either.

And this is a thread on "Indian Economy" btw, NOT sessions on your brand of economics. Someone like IG4U's questions on the economy -or part of it - deserve as much a say in it instead of being brushed away dismissively.


"Originally Posted by indianguy4u
this is perfectly acceptable,

But read this quote


If my understanding is right, then there is room for debate & research.




There certainly is room for debate and research which is why i psted the first article which ended the debate.

But no worries some developmental economists still debate it and there is nothing wrong in that and certainly if you can find their work and present your case, i would most welcome it."

"Verman, i have not used the words "you know nothing" blablabla because this is a forum and everyone's opinion counts.

I dont have much time to argue about something i do for a living on a daily basis, however i dont mind any comments and i respect and value each one of them. I have a million academic papers to back me up on the matter and would be willing to post them one by one due to time constraints, let us keep this friendly and impersonal."


but then came the passable quant skills comments from you and it became a personal thread, anyway i have no problems, there are critisisms to econometrics and there is nothing wrong with that, the paradox not being one of them however, anyway its done and let us move on.

Had you mentioned the famous Lucas critique about forecasting, i would have given you thekudos. Anyway take it easy and I hope that you continue to contribute on this thread. I am also presentin what academia believes and what the DOMINANT THEORY is out there supported by them, i did not make any of this up myself and i did not discredit development economics, i questioned their approach and had you read a recent paper, you would know what I am talking about.

take care

indianguy4u
20 Oct 05,, 05:18
Vaman, sameer & monk,
I dont question the theories put forward by sameer, but how much valid are these in third world[developing] country like ours where a substantial portion of economy is still black & direct tax collection from individuals & Co is pittance. While such theories may hold for first world countries but its difficult to co-relate wholly to such theories in country like ours.

Sameer
20 Oct 05,, 05:50
It depends on which theory you are talking about. If you can give an example then i can answer or someone else can. :)

indianguy4u
20 Oct 05,, 05:54
It depends on which theory you are talking about. If you can give an example then i can answer or someone else can. :)
Any theories. B'coz theory is made in perfect world senario. In India black eco is reputed to be 2 or 3 times the size of white economy. Tell how can u use in such senarios.

Sameer
20 Oct 05,, 05:55
The biggest critique to forecasting is the Lucas Critique, ie unless you can guarantee that all selected variables are inherently stable and you can take care of endogeneity in your regressions because you can have more than one equation, i oncehad a model with 124 and it was still too little, anyway, since you may not be able to guarantee that, how can you predict it.

In the case of India and the SENsex, there is always a 4-9% var error because of other factors you may not be able to measure easily while the CSO has done much to resolve thisissue in recent years but again you should not generalize from what I said, it depends on what you are talking about.

In the general case of the Lucas critique, it is possible to get around it via various statistical tests, some other economists reject the critique, also using simultaneous computer generated models cancels out the problem as long as your equations are correctly specified.

Again I am being general because i dont really know what you want to concentrate on.

Sameer
20 Oct 05,, 06:00
The size of the black market and the sensex?

there would be little linkage btw the two.


Also when economists talk about GDP forecasting in general, it is the organized sector they talk about, also black markets are present in other developing countries and never impeded projections, it again depends on how specific you are willing to be, a very general model may very well suffer from misspecification as you may not be able to include all vvariables.

Also finally there is such a thing as the error term, how this related to the black market, the error term has for mean zero and constant variance and this incorporates the black market and other unknowns, again this is a complicated story...

Sameer
20 Oct 05,, 06:01
To answer your question simply, only models with multiple equations minimize the error term which includes all the unknowns.

problem solved but agreed its honestly not that easy and impossible in certain cases BUT there are statistical and mathematical tests to figure out if your model is misspecified and thus more work is needed on your part. Its a complicated story but actualy it was something i always wondered as well until i learnt about it.

in simple terms

y= b1+b2*x2 real equation

y hat= bihat+ b2hat*x3+ ut is your estimable equation
Your black market would be ihncluded in that error term.

where ut has zero mean and constant variance and includes the unknowns. If it is strong you will know, again this is the simplest form and there are n possible equations with n variables and it goes crazy.


Now if you are attentive you may realize the following

hey wait a sec there what guarantee is there that the error term including all those unknowns will have expectations of zero and constant variance?

Ans: You may not know the answer to this until you run your system of equations, there are statistical tools that will let you know if you are violating your OLS assumptions. There are then corrective methods such as GLS and the reverse loop method to resolve the issue. Finaly you may have to respecify your mkodel and spend another couple of years researching what you are omitting and respecify your model and it has happned to anyone who has done some econometrics and its not a nice thing to happen to you but you know it when it happens, you may not be able to solve it but then you dont publish that.

Lagging variables and using instrumental variables will also take care of the unknown factor but i dont know how detailed you want me to answer, sorry.

hope that helps. Its a good question though

Sameer
20 Oct 05,, 06:37
Guys back to topic please, MOnk will be poed.


Premji plays down Bangalore's woes

October 19, 2005 16:13 IST

Wipro Chairman Azim Premji, who had been second to none in criticising Karnataka government over inadequate infrastructure in the past, on Wednesday said the issue could be sorted out by talking to government.
Asked whether there was a "discerning discomfort" among the IT industry, he said the issue of infrastructure "was being taken out of proportion."

"Too much is being read into lines," he said, adding that the issue instead could be solved by talking one-to-one with the government.

The IT industry had locked horns with the government on the issue of infrastructural bottlenecks in Bangalore but the government had recently promised schemes to overcome the problems.

Wipro had been in the process of using up its space in Bangalore and had sought land in Mysore and Mangalore to expand its business.

On shortage of engineers to meet the growing needs of the software industry, he said India would produce 350,000 engineers by this financial year.
http://us.rediff.com/money/2005/oct/19premji.htm?q=bp&file=.htm


Infrastructure is our biggest problem in India, the Babus are at it again, recently our FM visited Shanghai and had a headache.

India has a problem of too much bureaucracy, no govt seems willing and able to solve it.

Sameer
20 Oct 05,, 06:42
Maruti targets 1 million car capacity by 2010

Our Corporate Bureau / New Delhi October 20, 2005



India's car market is projected to expand to about 2 million in five years.

Maruti Udyog Ltd plans to expand its manufacturing capacity to a million cars by 2010. The passenger car market leader is now in the middle of a Rs 3,000-crore expansion that will increase its installed capacity from 350,000 units to 450,000 units by the end of 2006 and to 600,000 units in a couple of years.

However, on an annualised basis, its monthly production, due to higher capacity utilisation, is already touching 600,000 units. Reports from the Tokyo Motor Show today quoted Maruti’s Chairman Shinzo Nakanishi as saying that the installed capacity would be increased to a million cars at a cost of about $470 million.

The increase in capacity to a million will be crucial if Maruti is to protect its current market share of about 50 per cent. For, the country’s passenger car market is projected to expand to about 2 million units in five years, up from about a million last year.

The company’s Managing Director, Jagdish Khattar, told Business Standard, “On an annualised basis, the Gurgaon plant is already producing 6 lakh cars. We have taken up 600 acres at our new site at Manesar in Haryana for future expansion.”

Maruti has already undertaken an expansion exercise through a greenfield facility at Manesar.

The company’s board, in March this year, cleared an investment of Rs 3,272 crore to produce cars, diesel engines and transmission units at Manesar.

The new facility at Manesar will operate under Maruti Suzuki Automobiles India Ltd, in which Maruti will hold 70 per cent. The rest will be held by Suzuki.
http://www.businessstandard.com/common/storypage.php?hpFlag=Y&chklogin=N&autono=203461&leftnm=lmnu1&leftindx=1&lselect=0


On a side note, is anyone out here an engineer and can tell me about the 2007 M7 of BMW that will apparently have both hydrogen and usual gas in its engine without loss of horse power?

Sameer
20 Oct 05,, 06:45
Also can anyone compare various Maruti brands to TAta bands and the immediate competition, ie indica etc, how well are our cars faring?

Sameer
20 Oct 05,, 07:11
Monk once this thread hits page 8, you may want to consider creating a new thread.

indianguy4u
20 Oct 05,, 11:58
Tata Indica & its variants are good cars for indian enviournment. Ratan Tata promised an amby from inside & maruti from outside, which Indica fufilled fully.

Monk
20 Oct 05,, 14:51
Vaman, sameer & monk,
I dont question the theories put forward by sameer, but how much valid are these in third world[developing] country like ours where a substantial portion of economy is still black & direct tax collection from individuals & Co is pittance. While such theories may hold for first world countries but its difficult to co-relate wholly to such theories in country like ours.

IG4U, I have no issues about you asking questions, all your questions are very valid and quite right actually.
My problem is with converting this thread into an unnecessary war zone and us turning on eachother. That would be dumb.
I am all for good debates, whether between me and sameer or sameer and vaman or you and sameer. Absolutely no problems.

Now to your question about direct tax collection, India's direct tax collection is improving very rapidly, most people are extremely interested in paying their taxes. Of course people would like to pay lower taxes but they surely want to pay. The tax laws in effect currently are extremely solid whatever else people might tell you. There are issues which will eventually get sorted out as tax net widens and tax rates decline. Like vaman said I dont want to say who I am and then have others criticize me, but I can't help saying that I am a Chartered Accountant and therefore I know what I am talking about.

So all the theories will hold good as much for India as anyother country only in the case of India the "Confidence level of the distribution" might be lower. India's laws are not as weak as you think.

Sameer
21 Oct 05,, 02:08
Tata Indica & its variants are good cars for indian enviournment. Ratan Tata promised an amby from inside & maruti from outside, which Indica fufilled fully.


I watched the car review on the BBC and they talked about poor handling at high speeds

indianguy4u
21 Oct 05,, 10:04
I watched the car review on the BBC and they talked about poor handling at high speeds
Indica is not good enough for exports. Its chassis & NVH is not upto european levels. But for indians its good. U wont get a better package than indica.

Sameer
21 Oct 05,, 20:10
Speaking of cars, the big boys are setting up shop permanently, before our rich Indians had to order from Dubai or South Africa, now they wont have to.

http://economictimes.indiatimes.com/articleshow/1270008.cms

Ferraris to race into India soon

TIMES NEWS NETWORK[ FRIDAY, OCTOBER 21, 2005 10:03:42 AM]
NRI Special Offer!
TOKYO: They are the million dollar babies from across the globe, and they are revving on the passage to India. Aiming to ride the boom in demand for super-luxury cars among high-networth Indians, a host of manufacturers — from Lamborghini to Ferrari-Maserati and Bugatti to Aston Martin — are readying plans to drive into India with million dollar mean machines.

These firms are attempting to tempt the hearts of well-heeled Indians with their range of passenger cars that will join the burgeoning crorepati car club.
"We are in talks with some Indian companies for setting up a distributordealer network to roll our full range of cars," Hoberg said. The firm intends to roll out entire Lamborghini range — including Gallardo Spyder, Gallardo SE and Murcielago. The cars are expected to carry an entry-level price of around Rs 1.5-2 crore.

But the car that’s slated to set the pulses racing will be Bugatti’s Veyron. Retailed in Europe for Euro One million, the car will easily be the most expensive set of wheels on Indian roads with a price tag of slightly over Rs 10 crore. "We are seriously studying the Indian market as we feel there’s a growing demand for such super-premium cars," a Bugatti Automobiles SAS representative said.

The firm is also exploring the option of using the dealership network of its sister firm — Bentley — for cracking Da Automobile Code. The two-seater Veyron is powered by a 1001hp engine helping it attain a top speed of 407 kmph.

"India is today among the few markets across the globe witnessing a surge in demand for such super-premium cars. It’s a market that cannot be ignored any longer," Dominik H Hoberg, corporate image director for Automobili Lamborghini SpA told TOI at the ongoing 39th Tokyo Motor Show.

Sameer
21 Oct 05,, 20:15
India-Africa trade on a boom in 2005

IANS[ FRIDAY, OCTOBER 21, 2005 09:40:05 AM]
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NEW DELHI: With projects worth over $300 million executed by India Inc in Africa in 2005, companies like Kirloskars, International Tractors and Mohan Exporters are household names there, industry representatives say.
An India-Africa business conclave in March proved to be a major success and has driven its organisers, the Confederation of Indian Industry, to launch a similar initiative during Nov 6-8 with participants expected from 19 African countries.
"Indian companies have started moving in, taking Africa at face value and not as per perception," said Shipra Tripathi, the deputy director for Africa affairs at the apex industry lobby.
"Taking a cue from feedback we have been receiving from Indian industry and our African counterparts, we are steering Indian companies away from just trade to transfer of technology and value addition to their resources," she said.
All these efforts are seeing companies like Kirloskar spreading operations to Sub-Saharan Africa, while others like International Tractors, Mohan Exports and Mohan Energy Corporation are undertaking rural development projects.

Small and medium enterprises are also being assisted to set up operations in the African countries, while bigger enterprises like Essar and Ispat are firming up their specific project plans, officials said.
Though little information is available on Indian investments in Africa, trade data indicates sizable growth.
Bilateral trade has grown from $5.9 billion in 1998-99 to $9.14 billion last fiscal with 39 per cent growth in exports and 17 per cent rise in imports.
"Growth prospects for Indian firms through tie-ups are many," said Rajiv Yadav, the executive director of India Trade Promotion Organisation, who recently returned from a global exhibition in South Africa, attended by 63 Indian firms.
"In a span of four days, the Indian participants said they have received trade inquiries worth $35 million. Most of them have local agents to represent them in Africa and some are planning to set up subsidiaries there," Yadav said.
The large presence of Chinese traders and entrepreneurs also aroused interest among many Indian participants, some of whom have committed to return next year in larger strength.
"We are also expecting a reciprocal interest from African countries at the India International Trade Fair being held in New Delhi during Nov 14-27," said Yadav.
Tripathi said Indian firms, for example, were no longer just selling rice to African nations, but also helping them develop small and medium enterprises, and provide skills and technology that could create employment.
"The focus is not to just undertake construction projects but also provide wheat milling and shoe upper technologies," Tripathi said, adding that the mantra was to give appropriate, adaptable and affordable technologies, particularly in farm and related areas.
The second India-Africa conclave will strive for greater collaboration in agro-processing, health, pharmaceuticals, minerals, metals, information and communications technology, construction, and transport solutions.
http://economictimes.indiatimes.com/articleshow/msid-1269924,curpg-3.cms


India is also gaining access to the french speaking market via Africa, how?

Mauritius, many Indian it companies for example are outsourcing to Mauritius which a French speaking country where a majority of the population is of Indian origin mostly from Bihar.

and unlike Bihar their per capita income in PPP is around 10-12K a year, a nice middle income economy.

Sameer
21 Oct 05,, 20:24
Paper on FDI in retail by early '06

PTI[ FRIDAY, OCTOBER 21, 2005 06:10:40 PM]
NRI Special Offer!
NEW DELHI: The Planning Commission on Friday said the draft paper on opening up the retail sector for foreign direct investment is likely to be presented to the Prime Minister's Office early next year.

"We are looking into the pros and cons to allow FDI in retail. Internal discussions are on. I think the paper should be ready next year," Planning Commission Deputy Chairman Montek Singh Ahluwalia said on the sidelines of the 58th AGM of Assocham.

He said the Commission was studying the ICRIER study on FDI in retail, which had suggested opening up the sector in a phased manner. Ahluwalia, however, declined to give any definite time frame on when the paper would be ready.

"I do not want to give a definite time. But we want an early resolution of the matter. We have said that FDI should be allowed in retail in the MTA of the Tenth Plan," he said.

The Cabinet note on the issue would be moved by the Commerce and Industry Ministry as it is the nodal ministry, he said. On the much awaited Integrated Energy Policy, Ahluwalia said the energy coordination committee headed by the Commission's member in charge of energy, Kirit Parekh, would give its report by this year end.

"Final round of discussions are on and by this year end the final draft of the policy should be ready," he said. Regarding the SPV for infrastructure development, he said that it would take off by this year end once it is cleared by the Cabinet.

http://economictimes.indiatimes.com/articleshow/1270854.cms

Vaman
22 Oct 05,, 20:06
Vaman, sameer & monk,
I dont question the theories put forward by sameer, but how much valid are these in third world[developing] country like ours where a substantial portion of economy is still black & direct tax collection from individuals & Co is pittance. While such theories may hold for first world countries but its difficult to co-relate wholly to such theories in country like ours.

Well Monks already answered most of your q.
I can maybe elaborate a little more.
WRT to the economy there are some aspects which are unaffected by the "black" or "parallel economy". This is because how national income accounting works. It doesnt matter if its black or white, if a good or service is being produced and sold in the market. The only exception is when something is produced and consumed without ever getting to the market. This is true for a number of measures such as aggregate GDP, inflation etc. Economic theories still laregly hold in these cases.

The black economy affects things only in the sense that the govt. is able to only collect part of the taxes and therefore amount of investments and spending it can do is that much lower. But thats the theory of it. Does it mean that if the black economy didnt exist (which is estimated to be half of our economy) our growth rate would be double ?
Not really because the govt. doesnt exactly spend our tax money very efficiently. Our growth rates etc. would have been higher but not that by a lot even if the problem of tax avoidance were to be solved.

Sameer
23 Oct 05,, 02:36
RBI likely to see rupee slip as blessing

MUMBAI (Reuters) - The Reserve Bank of India (RBI) is likely to be comfortable with the rupee's fall to 11-month lows as foreign appetite for equities wanes, and any intervention it undertakes will be aimed at cushioning it rather than turning the tide.

If anything, analysts believe when it comes to the exchange rate the RBI is more concerned about export competitiveness than it is about importing inflation.

Strong capital inflows to a record-breaking stock market have pushed the rupee to unusual heights on a key trade-weighted index this year, but the central bank is mindful these flows can dry up and expose the rupee to a widening current account deficit.

India Must Defend Rupee With Credible Policy: Andy Mukherjee

http://www.bloomberg.com/apps/news?...mnist_mukherjee


Special Correspondent

Kamal Nath asks exporters to identify and tap unexplored markets





NEW DELHI: Union Minister of Commerce and Industry Kamal Nath on Tuesday exhorted exporters to meet the challenge of taking India's exports to a level of $100 billion in the current financial year by exporting $8 billion more than the official target of $92 billion set for the year.

Addressing heads of all export promotion councils (EPCs) and commodity boards at a mid-term review meeting on export performance, the Minister urged exporters to prepare plans for tapping those markets where India's exports had so far been either nil or negligible. "In fact, seeking market access for India's goods and services is one of our principal objectives in multilateral trade negotiations. Our position in the WTO is aimed at safeguarding our national interest in agriculture and other key areas, as well as to ensure that interests of domestic industry are fully protected,'' he explained.

Mr. Nath agreed that there was need for export-friendly policies. Sharing the revised and final estimates of trade data available from the Directorate General of Commercial Intelligence and Statistics (DGCI&S) for the last financial year, he said India's merchandise exports in 2004-05 were now estimated at $81 billion, indicating a record growth rate of 26 per cent, while imports were valued at $109 billion.

Thus, total engagement with the world economy was $190 billion in 2004-05, the Minister said, adding that if combined with services the engagement would be much higher. Stating that exporters must be actively involved in the process of negotiating regional trade agreements (RTAs), the Minister said the RTAs must ensure a level playing field to be a successful and must be a win-win for all. "I am confident that given a level playing field, you will not be afraid of any multilateral or regional agreements,'' he said. He also suggested to setting up of a sub-committee on RTAs, which should comprise representatives of the EPCs and the like.

Earlier, S. N. Menon, Commerce Secretary, and K. T. Chacko, Director General of Foreign Trade (DGFT), indicated that the replacement scheme for the Duty Entitlement Pass Book (DEPB) would be finalised soon and that there would be a fairly long overlap period to ensure a smooth transition.

UNI reports:

`Let market fix rupee'


Mr Kamal Nath told reporters on the sidelines of the meeting that market forces should be allowed to determine the rupee-dollar rate.

The rupee on Tuesday fell below the 45-level mark in intra-day trading to the delight of the exporting community which is opposed to any intervention by the Reserve Bank of India. They contend that the depreciation of the rupee could barely offset the high transaction costs suffered by Indian exporters.
http://www.hindu.com/2005/10/19/stories/2005101907351800.htm

Sameer
23 Oct 05,, 02:39
http://www.thehindubusinessline.com...01701381300.htm



Quote:
MUMBAI will soon have its first full-fledged convention centre of international standards. Initial work will commence by the end of the year.

Costing Rs 1,000 crore, the centre will be able to accommodate over 2,000 people. Global tender would be floated and work will commence soon.

The convention centre will be located at the Bandra-Kurla complex, said Mr R.M. Premkumar, Chief Secretary, Maharashtra. Preliminary groundwork for setting up the centre has already been completed and now requires the approval from the Chief Minister, he said.

The Mumbai Metropolitan Region Development Authority (MMRDA) would be one of the implementing authorities. Land cost for the project is Rs 480 crore while construction cost will be Rs 520 crore.

The project would be a joint venture between the MMRDA and a private player.

The convention centre would primarily consist of auditoriums conference halls, food and beverage facilities, shops, offices and support infrastructure areas needed for such centres. The location of convention centre offers connectivity with road, rail, and air network.

Along with the convention centre, there would be an exhibition centre and a hotel in the same area, the Chief Secretary said.

Sameer
23 Oct 05,, 02:50
http://economictimes.indiatimes.com/articleshow/msid-1271308,curpg-4.cms

India, the global economy's idiot savant

PTI[ SATURDAY, OCTOBER 22, 2005 02:18:38 AM]
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NEW DELHI: "Bad government and inadequate infrastructure" prevented India from matching China's economic growth although both nations started reforms in early 1990s, the 'Fortune' magazine said on Friday.

Slow disinvestment of PSUs, high tax rates and lack of labour reforms also came in the way of India attaining the same pace of growth as its Asian neighbour, the Hong Kong-based magazine said in an article to be published in October 31.

Comparing India and China, it said "China's economic miracle was achieved by getting the basics right... India, by contrast, is the global economy's idiot savant. India flubs the obvious stuff."

The observation comes close on the heels of Finance Minister P Chidambaram admission that China's growth was "furious" while India's growth remained "satisfactory."

Though India and China had the same per capita income in early 1990s and started economic reforms at the same time, Forune said "per capita income in China is more than twice what it is in India, and China takes in 12 times as much foreign investment."

The problem with India, Fortune said, is "bad government and an almost willful disregard for the fundamentals of developmental economics."

Fortune appreciated India's rising exports and GDP growth despite jump in global oil prices. Though India's vigorous economy has won the respect from US, it said "the road ahead is still bumpy."

Despite a booming technology sector, growing middle class and sizzling economy, Fortune said "India still faces enormous problems."
Red tape and corruption discourage foreign investment, as do restrictions on how firms deploy foreign workers," Fortune said.

Portraying a dismal picture of India's infrastructure, it said "the national roadway network is in shambles and the power grid even worse."

Moreover, it said one-third of India's population and more than half of women can't read or write.

"India has moved grudgingly to lower tariffs and balked at turning money-losing state-owned enterprises over to the private sector," it said referring slow tax reforms and disinvestment process
In contrast, China had build good roads, educated women and young girls, loosened labour restrictions and opened up their economy to competition and foreign trade.

Otherwise, Fortune was all praise for India's capability of producing hundreds of thousands ofbrilliant engineers a year, software houses managing complex data across thousands of miles for the world's most sophisticated clients.

"India has world-class business leaders and, unlike China, solvent banks," it said, adding "yet, India flubs the obvious stuff."




As the article clearly points out, India got the complex things right but the basics all wrong, the irony is not lost on anyone. The Lefties just came out with their 2020 India vision calling for stronger Marxist polices to be implemented and adapted to Indian standards like the first 30 some years of Nehruvian socialism weren't enough. :)

Anyone out there want to get our commies towards premature retirement by hook or by crook, count me in. :)

Sameer
23 Oct 05,, 02:53
That being said however, the economy has already breached the 6% trend growth rate of GDP and can now sustain 7% growth during normal monsoon seasons, India is adding 1% to average GDP growth every 8 years or so but it could go much faster. The 100% of FDI in infrastructure is a start, having a paper being presented in retail is actually amazing considering the lefties who would not even let the planning commission work on it a fe years ago, India must take care of bureaucracy, me thinks the Republican party of the US would do well with India, they too believe in small govt.

Monk
23 Oct 05,, 14:51
http://economictimes.indiatimes.com/articleshow/msid-1271308,curpg-4.cms

"India, the global economy's idiot savant"
As the article clearly points out, India got the complex things right but the basics all wrong, the irony is not lost on anyone. The Lefties just came out with their 2020 India vision calling for stronger Marxist polices to be implemented and adapted to Indian standards like the first 30 some years of Nehruvian socialism weren't enough. :)

Anyone out there want to get our commies towards premature retirement by hook or by crook, count me in. :)

I think we should largely ignore this article. Other than the corruption part he didn't get anything right about India. As far as the leftist idiots, I am happy to see that there are lots of like minded people on this forum. :)

Monk
23 Oct 05,, 14:58
That being said however, the economy has already breached the 6% trend growth rate of GDP and can now sustain 7% growth during normal monsoon seasons, India is adding 1% to average GDP growth every 8 years or so but it could go much faster. The 100% of FDI in infrastructure is a start, having a paper being presented in retail is actually amazing considering the lefties who would not even let the planning commission work on it a fe years ago, India must take care of bureaucracy, me thinks the Republican party of the US would do well with India, they too believe in small govt.

Sameer, I am sure you remember about our conversation regarding the decline in agri's share of GDP.
Something interesting I came up with,

As of last Quarter based on GDP figures (Constant Prices, Base=1993-94), this is the breakup of GDP,
Services - 52.6%
Industry - 27.8%
Agriculture - 19.6%

Further the correlation between the 3 seems to work as follows,
For every 1% by which Services + Industry outperforms Agriculture, Agriculture's share in GDP declines by 0.145%.
By this measure if we presume that Services + Industry outperforms Agriculture by 5% annually,
In the next 13years Agriculture's share in GDP will be down to 10% and in the next 20 years to 5%.

Its good for the economy but bad for a large part of the population who will be marginalised unless they become a part of the Industrial workforce.

Sameer
23 Oct 05,, 15:47
Monk that may be true in the short term but it is doubtful that such a relationship would be maintained due to decreasing returns to scale, ie the relationship is probably not linear and may level off in a few years time.


When I attempted to delenearize the relationship, i found that in the past for every 1% increase in the change in variance of monsoon rains, growth would be affected by 0.27. However I am quite pesimistic about long term applications to such a finding, i found that for every 1% increase in the share of the non agri sector, 0.28 would be added to GDP growth but again its application to long run growth, ie this relationship being sustained in the future is statistically doubtful.

Sameer
24 Oct 05,, 02:53
See the Lucas Critique to answer this question\

Since none of the variables can be guaranteed to be stable, you cannot assume that the relationship will not break down in the future.

Unless it passes certain econometrical tests which it probably cant, although i have not tried them due to time constraint and level of difficulty, then we cannot say that in 10 years agri will account for 4% of gdp and therefore gdp growth will be higher by x%.

Sameer
24 Oct 05,, 06:09
http://economictimes.indiatimes.com/articleshow/1272191.cms

Wealth gap between rich & poor widening, alarming
SANJAY MOOLCHANDANI

INDIATIMES NEWS NETWORK[ MONDAY, OCTOBER 24, 2005 12:32:04 AM]
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Spending lakhs of rupees on weddings isn’t a novelty in Indian metros like Delhi, Mumbai and Bangalore nowadays, while the same wedding costs just few thousands in rural families just 200 km away. The same is true for festival shopping. The difference between urban and rural spendings is huge.

Many academicians argue that a healthy economy can't be fuelled only by the rich, who spend millions on weddings and fancy cars. Widening wealth gap will threaten the country's stability and undermine the country's efforts for sustainable development.

Recent media reports suggest that the India’s wealth gap has been widening and unless effective measures are taken, the gap may drift further to the dangerous levels.

The UN report - drawn up by the UN's Economic and Social Affairs Department - found that the gap between rich and poor is now wider than it was a decade ago, and called for immediate action.

The report focuses on worldwide inequality in income and wealth, along with other areas such as health and education. The report said that although China and India had seen considerable income growth, there was a wide income gap.

According to UN statistics, per capita incomes have been rising globally over the past couple of decades on an average. Yet about half the world's population is still living on less than $2 a day, defined by many as a key poverty line, according to the Population Reference Bureau.

This year's report on the world's social situation argues that it would be impossible for the 2.8 bn people living on less than $2 a day to ever match the consumption levels of the rich.

It also argues that although living standards have improved in some places, poverty remains entrenched. The authors warned that focusing only on economic growth is an ineffective way of achieving development.

Before discussing the cause and effect of this wealth gap let’s look at the income inequalities prevalent in different countries measured by Gini index.

Income inequality refers to disparities in the distribution of income. The term typically refers to inequality among individuals and groups within a nation or inequality among nations.

Relative income inequality is often measured using the Gini coefficient. The Gini coefficient is a number between 0 and 1, where 0 corresponds with perfect equality (where everyone has the same income) and 1 corresponds with perfect inequality (where one person has all the income, and everyone else has zero income).

The Gini index is the Gini coefficient expressed in percentage form, and is equal to the Gini coefficient multiplied by 100.
Gini index of some countries are shown in the table below (as included in the United Nations Development Programme Report 2005)

Rank Country Gini Richest 10% Richest 20% Survey
index to poorest 10% to poorest 20% year
1 Denmark 24.7 8.1 4.3 1997
2 Japan 24.9 4.5 3.4 1993
3 Sweden 25.0 6.2 4 2000
14 Germany 28.3 6.9 4.3 2000
25 Russia 31.0 7.1 4.8 2002
27 Bangladesh 31.8 6.8 4.6 2000
32 India 32.5 7.3 4.9 1999
34 France 32.7 9.1 5.6 1995
35 Pakistan 33.0 7.6 4.8 1998
36 Canada 33.1 10.1 5.8 1998
37 Switzerland 33.1 9.9 5.8 1992
38 Sri Lanka 33.2 8.1 5.1 1999
46 Australia 35.2 12.5 7 1994
51 United Kingdom 36.0 13.8 7.2 1999
53 New Zealand 36.2 12.5 6.8 1997
56 Nepal 36.7 9.3 5.9 1995
74 United States 40.8 15.9 8.4 2000
78 Singapore 42.5 17.7 9.7 1998
84 Hong Kong SAR 43.4 17.8 9.7 1996
89 China 44.7 18.4 10.7 2001
99 Malaysia 49.2 22.1 12.4 1997
106 Argentina 52.2 39.1 18.1 2001
117 Brazil 59.3 68.0 26.4 2001
In the table above India is ranked 32 with the Gini index of 32.5. There have been concerns that the Gini index is rising and this will mean that the wealth gap is widening.

Last decade has witnessed a rise in income levels across India. However, the rise in income levels has been uneven when we compare rural and urban India. Actually, rapidly rising income levels in urban areas have increased degrees of economic stratification and created a larger wealth gap between the rich and the poor.

Recent poverty trends in India also reflect important disparities across regional, caste and urban-rural groups.

These inequalities have many social and economic impacts. Economists argue that extreme inequalities in opportunity and life chance have a direct bearing on what people can be and what they can do—that is, on human capabilities. Deep disparities based on wealth, region, gender and ethnicity are bad for growth, bad for democracy and bad for social cohesion.

Ideas about inequality, like ideas about fairness and social justice, are rooted in values. As Amartya Sen has argued, virtually everybody today believes in equality of something: equal rights before the law, equal civil liberties, equality of opportunity and so on.
Similarly, most people would accept that not all inequalities are unjust. Inequality in income is an inevitable product of any functioning market economy, though there are questions about the justifiable extent of income inequality.

The economic reason to the issue of inequality is widely argued among economists. It is argued that poor people remain poor partly because they cannot borrow against future earnings to invest in production, the education of their children and assets to reduce their vulnerability.

Insecure land rights and limited access to justice can create further barriers to investment.

Besides all these factors, it is also possible that inequality preserves itself in a vicious circle, through a process known as wealth condensation, by which newly created wealth tends to go to already wealthy individuals or groups (rather than being distributed evenly or going preferentially to poor individuals). This is reflected in the common saying: the rich get richer and the poor get poorer.

Economists believe that there is no single path for achieving the objective of reducing the wealth gap. For countries like India, closing gaps in educational opportunity could be a critical starting point.
Inequalities in education are among the most powerful drivers of inequalities in income, health and opportunity, including opportunities to participate in society and influence political processes. Education has the potential to act as an equalizer of opportunity, as well as a force for economic growth and efficiency.

Similarly, deep inequalities in health and the increased vulnerabilities associated with unequal access to healthcare are associated with deep differences in opportunities.

Fiscal transfer is one mechanism for raising the income of the poor above the level dictated by current growth and distribution patterns. More broadly, pro-poor growth requires a public investment focus on the markets in which poor people operate.

For India, the challenge is to shift the policy focus to the smallholder producers and to the more marginal areas that account for the bulk of poverty. Governments both at national and state level need to expressly commit themselves to targets for reducing inequality and gaps in opportunity.

Sameer
24 Oct 05,, 06:11
'FDI in retail should be allowed in phases'

PTI[ SUNDAY, OCTOBER 23, 2005 12:56:03 PM]
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MUMBAI: Foreign Direct Investment (FDI) in the retail sector should be done in phased manner and the food sector should be opened only after two to three years, an industry expert has said.

"FDI in the retail sector should be opened in a phased manner. Initially, it should be 51 per cent followed by rest in the second phase," Manchester Business School Retail Marketing and Strategy faculty Nitin Sanghavi said on the sidelines of a seminar organised by Fitch Ratings India Private Ltd.

The government should allow FDI in the high end segment like garments, apparels, textiles but in food the FDI should be held back at least for two to three years, he added.

"Some big players are planning to enter here who are having secured supply chain which can affect the local retailers thus a level playing field should be first given before opening the food sector," Sanghavi added.

Fitch Ratings earlier had come out with a report on retail industry and has mentioned the organised retail to rise from its three per cent growth in 2004 to eight to 10 per cent over the next five years.

http://economictimes.indiatimes.com/articleshow/1272068.cms

Sameer
25 Oct 05,, 15:37
http://economictimes.indiatimes.com/articleshow/1274042.cms

RBI projects 7.5% growth, keeps Bank Rate same

AGENCIES[ TUESDAY, OCTOBER 25, 2005 12:27:14 PM]
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MUMBAI: Reserve Bank of India in its mid-term review of the monetary policy for the year 2005-06 today kept the bank rate unchanged at six per cent.

However, as expected, in view of the current macroeconomic and over all monetary conditions, the reverse repo rate has been increased by 25 basis points with effect from October 26, 2005 to 5.25 per cent from the current level of five per cent.

"The repo rate will continue to be linked with the reverse repo rate," RBI said, adding the spread between the two rates has been retained at 100 basis points at present.

The cash reserve ratio (CRR) kept unchanged at five per cent. Accordingly, the fixed repo rate under Liquidity Adjustment Facility (LAF) would be 6.25 per cent with effect from October 26, 2005.

Announcing the busy season monetary and credit policy, RBI Governor Y V Reddy also hiked the repo rate by 0.25 per cent to 6.25 per cent.


RBI hikes growth rate to 7-7.5 pc
The apex bank on Tuesday hiked economic growth projections to 7-7.5 per cent but admitted that it would be difficult to contain inflation at the earlier estimate of 5-5.5 per cent by the end of March 2006.

FII up 18 per cent during April-August 2005: RBI

Foreign direct investment inflows into India during April-August 2005 were 18 per cent higher than in the corresponding period of 2004, RBI said on Tuesday.

FDI into India during April-August 2005-06 period went up to $2,573 million from $2,186 million during the same epriod last year. The central bank attributed the surge to pick-up activity and positive investment climate of the country.

The RBI said FDI inflows were concentrated in cement, software supply services, food processing, textile, construction and financial services.
Mauritius, US and UK continued to remain the dominant sources of FDI in India, it said.

Portfolio investment into the country went up spectacularly to $3,796 million during April-August 2005-06 from US dollar 98 million in the same period last year, it said.

"After remaining subdued during April-May 2005, Foreign Institutional Investors (FIIs) made large purchases in the Indian stock markets in the subsequent three months resulting in inflow under portfolio investment of $3.8 billion during April-August 2005," it said.

Number of FIIs registered with the SEBI increased from 68 at end-March 2005 to 764 by end-March 2005 with the registration from Australia, Austria, Canada, Denmark and so on, providing a diverse FII base for investment in india, it said.

Sameer
25 Oct 05,, 15:40
There is big debate btw RBI and the Finance Ministry on acount of inflation. The RBI wishes to keep interest rates low while the FM may want to let them rise a bit, a rise in interest rates for example give out higher returns thus increasing investments in the stock market for eg etc etc etc but it also gets some weary of taking out high interest loans. Hence the debate, which one will be better...


Note that one of the main reasons as per a great Indian economist Goldar that India did well this past decade was because of the falling corporate bond rate due to falling risk free rate and this caused industry to make productivity enhancing investments, hence the double digit growth in manufacturing we see today based on the investment pattern of the late nineties. :)

Monk
25 Oct 05,, 17:12
We should continue to keep interest rates low. I feel tampering with the interest rates now will upset the apple cart. We are still a little distance away from the "tipping point" where we will move from satisfactory growth to rampant growth. We should try to make adjustments with the help of repo and reverse repo rates as we are doing now and hold bank rates stable.

I am happy that growth forecast has been raised from 7% to 7.5%, looks like a reasonable estimate now.

But FDI growth rate is still not sufficient,18% growth just wont do. Btw, how will they account for the mittal and POSCO investments, in the current fiscal or as and when the money actually flows in?

ajaybhutani
26 Oct 05,, 05:47
We should continue to keep interest rates low. I feel tampering with the interest rates now will upset the apple cart. We are still a little distance away from the "tipping point" where we will move from satisfactory growth to rampant growth. We should try to make adjustments with the help of repo and reverse repo rates as we are doing now and hold bank rates stable.

I am happy that growth forecast has been raised from 7% to 7.5%, looks like a reasonable estimate now.

But FDI growth rate is still not sufficient,18% growth just wont do. Btw, how will they account for the mittal and POSCO investments, in the current fiscal or as and when the money actually flows in?
If i m right the FDI is accounted only when the money actually flows in. Furthremore for these projects the money will come in phases and we will not see a spurt in FDI for a cerrtain year.

ajaybhutani
26 Oct 05,, 06:00
There is big debate btw RBI and the Finance Ministry on acount of inflation. The RBI wishes to keep interest rates low while the FM may want to let them rise a bit, a rise in interest rates for example give out higher returns thus increasing investments in the stock market for eg etc etc etc but it also gets some weary of taking out high interest loans. Hence the debate, which one will be better...


Note that one of the main reasons as per a great Indian economist Goldar that India did well this past decade was because of the falling corporate bond rate due to falling risk free rate and this caused industry to make productivity enhancing investments, hence the double digit growth in manufacturing we see today based on the investment pattern of the late nineties. :)
we cant see long term growth till we have good investments in infrastructure. And this is the sector we are so pathetic at .. and are not doing much to inprove it. Frankly there are only a few cities(if any) where theres good electric supply. We still dont have good nough roads. ( except the ones managed by NHAI). Nothing much is being invested in the railway( to the extent that is needed . As they carry a huge chunk of india's transportation needs.).
Airports are nowhere near international standard and even the newer ones like bangalore international airport has its plans showing doubts of being capable of supporting the rising traffic.
there are large scale jams in bangalore and bombay every day. Delhi though is doing a good job.
We cannot even talk ab out the small towns and villages . The growth or investment impact hasnt even touched there. There are still hundreds of villages in bihar which are not even connected by road.
We are a dominant navy in indian ocean. But look at our part of the trade. We cant find nough money for investing in ports.

Welcome to india.. my frnd... it produced nough food but people are still hungry.. ( even though we are quite efficient at services industry. which is 50% of our GDP.).
There are roads build with full intentions of rebuilding them the next year.. :D... so the builders make sure that the road cant survive the first rain. And thats just the so called big and good part of india the metros.

Quite frankly this country is all on the right path because of the new spurt in " we can do it attitude" .. But theres still a long way before we can expect a good 10 % pa industrial growth. a long way before our infra can support it. and of course a long way before our state governments acknowledge the need for the same and sincerely work towards it.
Manmohan Singhji and PC have just taken the first few steps. Lets see how does the journey goes.

Sameer
27 Oct 05,, 20:43
ajay ji, we all share your thoughts but remember our decrepid infrastructure has still been able to chum out 6.3+% gdp growth over the last 10 years and now we have moved to the 7% range, one can only imagine how India would be doing if it were to be run by a more competent Govt. Neither the BJP NDA clownd or the corrupt Congress idiots can do that.

I pray for the day those old farts age and die so that the younger gen can replace them.


Perhaps if the middle class and up voted for a change, maybe babu masses pleasing politics would end.... we have the power, rather than complain about "karab govt", let us do something for a change, ie at least bother to vote.

Sameer
27 Oct 05,, 20:47
We should continue to keep interest rates low. I feel tampering with the interest rates now will upset the apple cart. We are still a little distance away from the "tipping point" where we will move from satisfactory growth to rampant growth. We should try to make adjustments with the help of repo and reverse repo rates as we are doing now and hold bank rates stable.

I am happy that growth forecast has been raised from 7% to 7.5%, looks like a reasonable estimate now.

But FDI growth rate is still not sufficient,18% growth just wont do. Btw, how will they account for the mittal and POSCO investments, in the current fiscal or as and when the money actually flows in?


But India is a famousundercounter of FDI, our FDI tends to be double of what we report because FIs etc are included in another table and not in the FDI logo.

I agree with you, low interest rates is probably better for India as a whole, some investors in the BSE may get upset at us for thinking that but India needs the middle class to take out loans at small interest rates and the Govt and RBI will need to start to look at a very very low western style inflation rate because interest rates on mortgages are variable.

Sameer
27 Oct 05,, 20:49
There was a nice paper i read last week, cant rmember the name of the author, i will dig it on the net again, it talks about how official RBI export figures for India dont add up. He compares figures that other countries report about India (trading wise, ie imports from India and exports to India) and he came up with a figure 10% higher or so than what the RBI reports....

Lots of measurement changes need to take place.


Our GDP figure that you get from the RBI world bank etc is still calculated based on 1993 prices, you dont have to be in economics to realize that India has changed so much since 93 that such a price basket will alays undercount....
They are working on it but have yet to publish new figures, next year i hope its done.

Sameer
28 Oct 05,, 05:46
Abbey Bank of England which was bought by a Spanish company last year (its a small bank) is to be the first British company to close its offshored call centre in Blore back to Britain. 1000 jobs will move back.

Reasons given were

- customer satisfaction and language barriers.
It makes sense considering this bank chain operated in northern Welsh areas and very conservative north England where minorities on the other lines are unwelcome and more importantly where accents are quite alien to even the most educated of Londoner.

Impact may be in long term outsourcing to any third country if the Spanish owners can show cost savings with such a move. India should not fear too much however, there are areas where outsourcing does not work, areas with heavy accents and areas where socialist European unions have used some smart racist tactics to keep jobs in their stangnant economies is not worth the while. Besides to any Pakistani jumping up and down with joy, i regret to inform you that the trend is still India's way, one unsatisfied sustomer or even a few not equal to the hundreds of companies who set up shop and praise the work done in Idia. More importantly INdia has moved to R&D work already, no need to pick up phone calls for you and also outsourcing accounts for a very very small % of GDP, MOnk ji will tell you, i think its something like 2% of GDP or less.

An interesting development and TCS and company should keep note and improve efficiency in areas where it can realistically do so not in places where the Welsh accent coupled with racism and hate for anything foreign "stealing jobs" (free trade actually created more jobs in stagnant Britain at higher levels in financial services and higher paying to for the more educated) are not prevelant. :

Monk
28 Oct 05,, 14:41
Perhaps if the middle class and up voted for a change, maybe babu masses pleasing politics would end.... we have the power, rather than complain about "karab govt", let us do something for a change, ie at least bother to vote.

I am willing to do more than that. I want to run for office, I just don't know which part of India to contest from.

Monk
28 Oct 05,, 14:45
More importantly INdia has moved to R&D work already, no need to pick up phone calls for you and also outsourcing accounts for a very very small % of GDP, MOnk ji will tell you, i think its something like 2% of GDP or less.

An interesting development and TCS and company should keep note and improve efficiency in areas where it can realistically do so not in places where the Welsh accent coupled with racism and hate for anything foreign "stealing jobs" (free trade actually created more jobs in stagnant Britain at higher levels in financial services and higher paying to for the more educated) are not prevelant. :

Less than 1%. We are doing to the Europeans what they did to us in the 19th Century. The shoe is on the other foot now.
As far as the outsourcing saga is concerned, they can take back all the outsourcing jobs and get lost. But they can't do that anymore, can they?? :biggrin: :biggrin:

Sameer
28 Oct 05,, 15:01
I am willing to do more than that. I want to run for office, I just don't know which part of India to contest from.


I have frequented the political elite of the country, well their kids, believe me, the major problem is that any half decent person who wishes to run will not be elected simply because he will not play political games with the poor with socialist promises and will probably be disgusted at the corruption that is omni present in the Kangress and/or the BJP. What needs to happen in India is a creation of a third front founded by the money of some rich business tycoon who has the funds to start a major campaign the likes of which our Kangress and BJP leaders have yet to face, only then could you join the party and run and make a difference. Until the Indian elite stop courting the Babus, change will be difficult.

Sameer
29 Oct 05,, 01:38
Times of India

Ericsson to open R&D centre in India

--------------------------------------------------------------------------------

Mumbai: Ericsson, the Swedish telecom giant, will make big investments in second R&D centre in India and in setting up a global services delivery centre (GSDC) in Gurgaon, Carl-Henrik Svanberg its CEO said on Monday. He, ruled out setting up a hand set making unit in India.
Although the company did not quantify the exact investments, Svanberg did say that Ericsson is investing in excess of $100 million per annum and would scale up its investments according to the market demand. The telecom giant already has a R&D centre at Bangalore. It will start work on their Chennai R&D facility by December.
Svanberg, said R&D centre will work on cutting edge areas to provide value added services. Indian VAS market, which includes downloadable ringtones, wallpapers, caller ring back tunes etc is expected to grow by 10% annually to touch Rs 3800 crore by 2010.
It will be in areas like telecom, IT, content and service providers working together to create and deliver non-voice services like text, images and video. Ericsson is one of the few firms providing end-to-end service layer for their operators.
The dual advantage gives it the capability to introduce, adapt and withdraw applications quickly and efficiently, while allowing operators to manage risk and keep control of operating costs. Ericsson also plans a systems integration competence centre.

Sameer
29 Oct 05,, 01:42
MUMBAI (Reuters) - India's central bank raised a key short-term interest rate on Tuesday to ward off price pressures, as expected, and increased its growth forecast for one of the world's fastest expanding economies.
The central bank lifted its reverse repo rate, used to drain liquidity from the money market, by a quarter of a percentage point to 5.25 percent. Analysts said hawkish comments on inflation pointed to more rate increases ahead, with six out of 10 in a Reuters poll expecting another quarter-point rise in January.

"Underlying growth momentum remains strong and we expect demand-driven inflationary pressures will rise," said Rajeev Malik, an economist at JP Morgan in Singapore. "We continue to expect another reverse repo hike in January." The Reserve Bank of India (RBI) said it expected Asia's third-largest economy to grow 7.0-7.5 percent in the fiscal year to the end of next March, having forecast in April that growth would be "around 7 percent".

It based its latest forecast on a pick-up in farm output, which generates a fifth of gross domestic product, and momentum in industry and services.

Tuesday's widely expected rate rise takes the reverse repo to its highest level in 2-1/2 years. It last raised the rate -- by a quarter of a percentage point -- in April.

The central bank surprised analysts by raising the repo rate, used to add liquidity to the money market, by a quarter of a percentage point to 6.25 percent, while leaving the bank rate for pricing long-term loans steady at 6.0 percent.

But the central bank suggested more inflationary pressure was in the pipeline, warning markets that higher crude oil prices had been only partially passed through into domestic prices and second-round effects were not yet "noticeably significant".

India imports about 70 percent of its oil, and international prices have risen nearly 40 percent this year.

Encouraged by the higher GDP forecast, India's main share index rose 0.9 percent on the day.

The rupee slipped slightly to 45.13 per dollar after the decision but later rebounded to 45.07, firmer on the day. The yield on the active nine-year bond initially edged up but later eased to 6.9737 percent, lower on the day.

India's Finance Minister Palaniappan Chidambaram called the rate move "a measured step towards moderate monetary tightening".

"With adequate liquidity available there will not be any adverse impact on cost of credit for investment and for productive activities," he told reporters in New Delhi.


GLOBAL VS DOMESTIC

The central bank has projected wholesale price inflation of 5.0-5.5 percent at the end of this fiscal year, but RBI governor Yaga Venugopal Reddy said on Tuesday it had an informal inflation ceiling below that level.

"The policy response that has been indicated... is exactly meant to contain inflation within 5.0-5.5 percent and to have a medium-term situation where ... I would like to treat an informal mandatory ceiling for inflation of less than 5," he told a news conference.

Wholesale inflation was 4.62 percent in early October, up from a near-three-year low of about 3 percent at the end of August.

The RBI said crude prices were still the most critical factor affecting domestic inflation, adding that inflation expectations had to be contained.

India has raised state-controlled petrol and diesel prices twice this year, both times by about 7 percent.

The RBI said rapid credit growth and the potential for bad debts needed careful monitoring. Commodity price inflation was low, but asset prices, especially house prices, had increased substantially, it said.

Domestic factors continued to prevail over global factors in determining policy, but the central bank said the $700 billion Indian economy was increasingly linked to the world economy.

Soaring oil import costs have widened the current account and trade deficits. Analysts expect the accumulated trade gap to reach a record $48 billion by March.

The RBI said the rising international competitiveness of India's invisible exports and remittances from Indians working abroad, as well as capital inflows, had ensured the current account deficit was "manageable".

(Additional reporting by Suresh Seshadri, Annapurni Hariharan and Meena Nichani in MUMBAI, and Surojit Gupta in NEW DELHI)
http://in.news.yahoo.com/051025/137/60qc9.html

Sameer
29 Oct 05,, 01:45
http://seattlepi.nwsource.com/business/245565_bizbriefs22.html

Business Digest



REGIONAL NEWS


Amazon to open second software center in India

Amazon.com said Friday that it will open a software development center in Chennai, India, its second center in India and its fourth worldwide. The Amazon Development Centre in Chennai will focus on developing and managing new features for the Amazon Web site, including idea generation, analysis and technical design, as well as front-, middle- and back-tier software development. Amazon said it will begin interviewing computer scientists and software engineers for Chennai positions Nov. 14 in both India and the United States, but it did not specify how many positions are available.

As I have been saying for weeks now, India is moving into R&D, ie the next step, say bye bye to back office work domination and welcome to higher paying technical R&D work.

Sameer
29 Oct 05,, 01:47
http://sanjose.bizjournals.com/sanjose/stories/2005/10/17/daily26.html

Cisco to invest $1.1B in India

Cisco Systems Inc. said on Wednesday it plans to invest $1.1 billion in India in the next three years, including $100 million to fund Indian start-up companies.




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Other parts of the plan announced today by Cisco CEO John Chambers on the first leg of a three-day swing through India include:

$750 million for research and development.
$150 million from Cisco Systems Capital to provide leasing and financing to Cisco customers and partners.
$100 million for customer support operations - a significant portion of which will go for technical services, spare parts depots and channel development.
Chambers discussed Cisco's investment plans in India with the Honorable Prime Minister Dr. Manmohan Singh and the Honorable Minister of Communications and Information Technology, Shri Dayanidhi Maran, while in New Delhi today.

San Jose-based Cisco (NASDAQ:CSCO) first established operations in India in 1995 and today employs over 1400 people there.

The company also said it is committed to expanding the Cisco Networking Academy Program in India. There are now 141 networking academies across 22 states and union territories in India.

Endangered
29 Oct 05,, 09:18
THE world's largest telecom player Vodafone today made its re-entry into the Indian mobile market by picking up a 10 per cent equity stake in the country's largest private sector telecom operator Bharti Tele-Ventures (BTVL) for Rs 6,700 crore (approx $1.5 billion).

This is the largest foreign investment in the telecom sector and comes within days of the Government's decision to relax the FDI limit in telecom companies to 74 per cent.

Bharti's existing foreign partner SingTel, which has 30.8 per cent stake in BTVL, said it was interested in increasing its share in the company.

Vodafone had earlier sold out its stake in the Chennai-based mobile company Aircel to exit India.

Long-term investment: Today's move is being seen as a long-term strategic investment from the UK-based company to gain a foothold in the fastest growing telecom market in the world. Though the investment will not result in any direct flow of funds into Bharti's telecom operations, the partnership with Vodafone will provide the company necessary know-how to roll out third generation services at an early date.

Bharti, currently, has 15 million subscribers across the country.

The deal: As per the deal announced today, Vodafone, through Vodafone Mauritius Ltd, has contracted to subscribe shares in Sunil Mittal-promoted Bharti Enterprises, giving it a beneficial stake of 4.4 per cent in Bharti Tele-Ventures for about Rs 3,000 crore.

In addition, Vodafone, through Vodafone International Holdings BV, has also picked up 5.65 per cent stake of Warburg Pincus' stake in BTVL for approximately Rs 3,700 crore, thereby taking the total beneficial interest in the company to around 10 per cent.

Bharti retains controlling interest: Post-acquisition, Bharti Enterprises maintains a controlling interest of 45.9 per cent in the BTVL through its subsidiary Bharti Telecom Ltd. With the final sale of its stake, Warburg Pincus, which had bought 18 per cent stake in BTVL initially for about Rs 1,300 crore, has now completely exited its position in the company.

The private investment company had earlier sold 12 per cent stake in three tranches for close to Rs 4,600 crore, making it one of its best returns on investment. Vodafone is the fifth telecom major to invest in Bharti after Vivendi, British Telecom, Telecom Italia and SingTel.

`Vodafone helped by clarity on FDI': Mr Arun Sarin, CEO, Vodafone Group Plc, said, "The Indian Government's decision to bring more clarity in the FDI norms has certainly enabled us to make a decision on making this investment. This transaction is consistent with Vodafone's strategy of developing our global footprint in growth markets. We have investments in 30 countries and we are delighted to partner the leading national mobile operator in India."

Post-acquisition, FDI in Bharti stands at 48 per cent and with indirect foreign investments, it will add up to 67 per cent.

`Bharti will move to next level': Mr Sunil Bharti Mittal, Chairman and Group Managing Director, Bharti Group said: "We are delighted that Vodafone has made a call on the Indian telecom sector and has chosen BTVL to be the vehicle to develop its continued interest in the Asian region.

"Bharti has had the privilege of tying up with `best in class' blue chip companies from around the world that have come and joined hands with Bharti, at different stages, to develop the telecom sector in India.

"Bharti has tied up with Vodafone to take the company to the next level."

Mr Mittal added that the proceeds from the sale of equity would be utilised in new business areas of the Bharti Group.

Sarin calls on PM: Earlier during the day, Mr Arun Sarin called on the Prime Minister, Dr Manmohan Singh, and apprised him of the company's plans for the Indian telecom sector.

Vodafone also announced a grant of $12 million to Bharti Foundation for the growth of primary education throughout the country.

The money will be spent on providing facilities of primary education at all the 23 circles of Bharti Televentures.

Endangered
29 Oct 05,, 09:20
Essar bought out BPL's 64 per cent stake in BPL Communications Ltd for Rs 4,400 crore.

Warburg Pincus sold 12 per cent stake in Bharti in three tranches for a total of about Rs 4,600 crore.

Tata and A.V. Birla Groups bought out Cingular Wireless' 32.91 per cent stake in IDEA Cellular for Rs 1,300 crore.

SingTel increased its stake in Bharti Telecom to 32.81 per cent from 26.96 per cent for Rs 1,100 crore.

Essar bought out MAX Telecom' 3.16 per cent stake in Hutchison Essar for Rs 657 crore.

Bharti bought out Shyam Group's 67.5 per cent stake in Hexacom India Ltd for Rs 430 crore.

Sameer
29 Oct 05,, 16:39
Once FDI in retail is deregulated by steps, you will see much more in the form of western venture capital firms entering the market. Sky will be the limit.

Endangered
01 Nov 05,, 08:21
Chowgule bags Rs 4800 cr overseas vessel orders

Mumbai November 01, 2005

The shipbuilding division of Chowgule and Company has bagged overseas orders to build 12 ocean going cargo vessels of 4,450 dead weight tonne (DWT) each with a total estimated cost of Rs 400 crore. The division is also undertaking an investment programme of Rs 40 crore to upgrade the shipyard facilities.

“Out of total 12 vessel orders worth Rs 400 crore, three each from Netherland-based company Navigia and German company Appollo Shipping, four from UK company Union Transport and two from German company Priesse. All vessels are of 4450 DWT capacity which will be delivered in next three years,” Chowgule and Company Ltd Executive Director Ashok V Chowgule said.

With this new orders, Chowgule’s shipbuilding division is marking change in its profile by building cargo ships, he said. At present, the company is focussing on iron ore barges, passenger vessels, deep sea refrigerated fishing trawlers, grab and cutter suction dredgers, tugs, twin hull catamarans and floating restaurants.

“The shipyard will not be accepting any fresh orders as the capacity is full. It is planning to upgrade its capacity to construct 8 vessels against existing capacity of three years per year,” he said.

Chowgule said the company would invest Rs 40 crore to upgrade the existing facilities by inducting advanced machines.

“It has already invested Rs 10 crore and has installed CNC Plasma cutting machine which can cut steel plates of 12 metres,” he said.

The shipyard, located at Loutulim (Goa), has a good water front, two construction bays, full fledged workshop, outfitting jetty and sufficient skid for pre-fabrication facility.

Commenting on the possibilities of acquiring minor shipbuilding facilities, Chowgule said that the company is now more focussing on organic growth and would concentrate on ensuring quality of construction and punctuality in deliveries.

Vaman
01 Nov 05,, 19:01
Once FDI in retail is deregulated by steps, you will see much more in the form of western venture capital firms entering the market. Sky will be the limit.

What does FDi in retail have to do with venture caps?
Venture caps look at new ventures/incubations. FDI in retail is more likely to attract established players particularly large western retailer with a proven track record in sourcing and supply chain management.
The two are different IMO.

Sameer
02 Nov 05,, 00:36
You are probably not aware of the new trend in the west?

The bloated retail conglomerate is facing still competition.

Try looking at the UK market for VC in retail.


There big retailers have divested on non core operations and/or outsourced them all together (this is what is significant for vcs and India), then came the chance for private investors to raise some equity and hence the VCs came in.

Relaxation of rules in retail is going to be gradual and big conglomorates will not be allowed for years to come it as they wish, they will probably have to include Indian firms in their venture.

VCs are certainly operating in the retail sector in many countries, in Japan 22% of all VC investments go into retail.

Vaman
02 Nov 05,, 04:22
You are probably not aware of the new trend in the west?
No I havent heard of it.


The bloated retail conglomerate is facing still competition.
What "still competition"? I dont understand.
And we werent talking of the west where margins are being squeezed becasue of the number of operations.
This was about India where retail margins across the supply chain are still high... which is prompting all and sundry to open up a retail chain from Tatas in Star Bazar to Pantaloons in Big Bazaar.
New investments in the form of FDI is most likely to be the large retailers like Walmart etc. Not VC firms.


VCs are certainly operating in the retail sector in many countries, in Japan 22% of all VC investments go into retail.
Another way to look at it would be to see how much of the total capital was actually funded by VCs in retail industry vis-a-vas that raised through public issues. I dont expect it to be much, just like it is in other industries.

Sameer
04 Nov 05,, 01:38
Foreign investors bet big on India
BODHISATVA GANGULI

TIMES NEWS NETWORK[ THURSDAY, NOVEMBER 03, 2005 03:07:56 AM]
NRI Special Offer!
MUMBAI: The $1.5 billion investment by British telecom giant Vodafone Plc in the Bharti Group has increased the sense of excitement surrounding what research reports call the India story.

But Bharti isn’t the only example. Over the past few months, a wide array of sectors ranging from telecom, IT/BPO, financial services and commodity manufacturing, have seen marquee foreign investors buying into Indian companies.

The nature of these investments, however, is increasingly complex and will not immediately show up in an increase in foreign direct investment (FDI) inflows.

This is because some of these represent buy-out of existing foreign investors by new investors (such as Vodafone buying out private equity fund Warburg Pincus’ stake in Bharti) and thus does not amount to fresh foreign investment in the strict sense of the term used by economists.

In other cases Indian promoters have chosen to cash out to foreign investors which means that the proceeds go to them (the promoter) rather than the company. This does count as FDI but fresh capacity may not immediately be created.

However the increasing deal size does indicate the potential of Asia’s fourth largest economy. It is also sending out a signal, analysts say, that India is a place where multi-bagger returns are possible.

Equity fund Warburg Pincus’ enormous gains from its original investment in Bharti Televentures is already the stuff of legend among foreign investors. GE and Citigroup, among others, have also recently cashed in on previous investments in India.

The most spectacular recent example of big-ticket deals is the Rs 6,700 crore ($1.5 billion) Vodafone investment in Bharti, billed as India’s largest foreign direct investment, which was announced on 28 October. Of this around Rs 3,700 crore is the payout by Vodafone to Warburg Pincus.

The remaining Rs 3,000 crore, which does count as FDI, is the payment to the Mittal family for a stake in holding company Bharti Enterprises. Earlier that week, German company Huber said that it would invest around Rs 990 crore to buy over 50% in Micro Inks, low-profile but highly regarded maker of printing inks based in Gujarat.

The financial services sector has also seen considerable interest, mostly in the form of foreign players buying into non-banking financial services, mainly to get around RBI’s restrictions on investments in the banking sector. Singapore’s DBS bank has invested Rs 230 crore to buy a 37% stake in Cholamandalam Investment and finance company, part of the Murugappa group.
Private equity fund Newbridge plans to invest $100 million (around Rs 440 crore) for a 49% stake in a holding company for three NBFCs belonging to the Shriram Group. Earlier in the year S&P paid Rs 228 crore to buy a controlling stake in Crisil, the rating agency. Significantly S&P was able to do this even though government controlled financial institutions like LIC declined to sell their stake.

In the software sector, Oracle had announced a $909 million investment in banking software company i-flex. This included a payment of $593 million to Citigroup Venture Capital for its 42% stake in i-flex and $316 million for the subsequent open offer. In the event it was able to save on the open offer money since retail investor response was extremely tepid. Had the open offer received a better response from investors, the $316 million component would have represented the ‘genuine’ FDI.

“Most recent FDI cases have had this hybrid quality. A large component of the ‘FDI’ would not in fact show up the balance-of -payment (BoP) statistics. However the second order effect, showing that India is a place where you can make a lot of money, could be potentially enormous,” said Abheek Barua, chief economist, ABN-Amro India. Latest data shows that FDI rose 18% during April-August ‘05, to $2.57 billion.

Since a lot of the recent foreign investment reflects transactions between two sets of foreign investors, it would not show up in the BoP data. FDI into India, which has struggled to cross the $5 billion mark, is dwarfed by the $60 billion which China received in 2004. Adding the FII inflows into the FDI would take the Indian figure to well above $10 billion but the gap remains.

The cement sector has also seen foreign investment from big names. Early this year Holcim pledged a $800 million investment to buy a 67% stake in a holding company, Ambuja Cement India ltd (ACIL) which owned a 13.8% stake in ACC. Of this $200 million went to private equity investors and a part of the remaining investment went into financing an open offer which increased the Holcim controlled ACIl’s stake in ACC to 34%. In late 2004 GE sold in a 60% stake in its India back-office operations for $500 million to two private equity investors

Classic’ FDI, resulting in the creation of greenfield facilities such as new factories, exists right now more at the level of memorandum of understanding (MoU) than in reality. This includes the $10 billion plus FDI proposed by Posco in Orissa and by the LN Mittal Group in Jharkhand.

The automobile, IT and consumer electronics sector however have a slew FDI aimed at building greenfield facilities which are at more advanced stages of implementation. This includes around $600 million to be spent by Maruti Udyog and Suzuki to build a new car plant as well as a $1 billion (Rs 4,400 crore) investment by Hyundai in its second car plant and $300 million proposed by Toyota in expanding capacity. Some of the Suzuki and Hyundai investments could be funded by internal accruals from their Indian operations though.

Both LG (4250 Million) and Nokia ($150 million) have announced investment plans. Cisco CEO John Chambers announced during his recent visit that the US major plans to invest upto $1billion in India. These plans are in the implementation stage. Somewhat embarrassingly though, the largest single greenfield FDI into India remains the $1 billion invested by Enron, GE and Bechtel into the now notorious Dabhol power project.
http://economictimes.indiatimes.com/articleshow/msid-1283522,curpg-4.cms

Sameer
04 Nov 05,, 01:40
"Most recent FDI cases have had this hybrid quality. A large component of the ‘FDI’ would not in fact show up the balance-of -payment (BoP) statistics. However the second order effect, showing that India is a place where you can make a lot of money, could be potentially enormous,” said Abheek Barua, chief economist, ABN-Amro India. Latest data shows that FDI rose 18% during April-August ‘05, to $2.57 billion. "

:)

Sameer
04 Nov 05,, 01:41
SEZ rush may hit govt's tax revenues

TIMES NEWS NETWORK[ FRIDAY, NOVEMBER 04, 2005 12:57:59 AM]
NRI Special Offer!
MUMBAI: India is seeing heightened activity in the setting up of special economic zones. Both local and foreign companies are focussing on setting up on SEZs with the aim of rivalling China’s Shenzhen Special Economic Zone and faster economic growth.

Steel baron LN Mittal’s upcoming 12m tonne steel project in Jharkhand and Posco’s similar project in Orissa, both estimated to cost over Rs 40,000 crore, are likely to be termed SEZs.

The rush for SEZs is largely to do with the various tax sops announced by the government and an attempt to cash in on the growing demand for land in the country caused by higher and higher levels of investment. Income-tax is exempt for 20 years, so are customs duty and excise duties.

Companies with expensive, capital intensive projects such as Reliance and ONGC are likely to benefit. Indeed, the rush for obtaining SEZ status for projects has led to fears that the Centre’s future tax revenues could be hit. The government has major spending commitments on health and education and the newly enacted rural employment guarantee bill.

Flexibility in labour laws, as demanded by the industry, hasn’t been incorporated. The government caved in to pressure from the Left parties and dropped a key clause allowing state governments to adopt flexible labour policies if necessary.

The SEZ Bill ’05 was passed in May this year. Other companies setting up SEZs include Mahindra & Mahindra, which plans to set up two projects in Chennai and Jaipur. The area covered by the Jaipur project is expected to be over 3,000 acres and is likely to cost over Rs 1,100 crore, as per information collated by the Mumbai-based tax and business consultancy firm RSM & Co.

Flextronics, the $16bn electronics manufacturing services provider, is believed to be building a large facility near Chennai, which the company officials said will be upgraded to an SEZ.

Other companies include Ranbaxy, Wipro, Zydus Cadila, Biocon, Orient Textiles, the Maharashtra Airport Development Co and the Tamil Nadu Industrial Development Corp.

http://economictimes.indiatimes.com/articleshow/1284016.cms

Sameer
04 Nov 05,, 05:14
Tax revenue up 24 pc in H1

NEW DELHI: Robust rise in corporation tax and customs duty coupled with reasonable rise in excise duty collections helped the Centre augment tax revenue by 24 per cent at Rs 96,249 crore during the first half of this fiscal as against Rs 77,860 crore dur ing the previous half

This is despite income tax again yielding less revenue in September year-on-year after reversing this trend in the preceding two months, figures released by the Controller General of Accounts revealed.

Tax revenue till September constituted 35.2 per cent of estimated Rs 2,73,466 crore for the entire 2005-06. Till the first half of the last fiscal, tax revenue had touched 33.3 per cent of the estimated figure of Rs 2,33,906 crore for the whole 2004-05.


Corporation tax collections rose substantially by 66.81 per cent at Rs 33,926 crore during April-September period over the previous year's first half, reflecting industrial growth during the period. For the month of September itself, the tax yielded 44.2 0 per cent more revenue at Rs 20,589 crore compared to Rs 14,278 crore during the same month of the last year.

Excise duty collections grew by 10.35 per cent at Rs 40,416 crore during first half of this fiscal compared to Rs 36,622 crore during the first half of the previous fiscal.

During the April-September period of this fiscal, excise duty collections contributed 41.99 per cent of the total tax revenue collections. - PTI

http://www.thehindubusinessline.com/businessline/blnus/14021702.htm

Sameer
04 Nov 05,, 05:19
The renovation of Marine Drive in Mumbai will start soon


SNEAK PEEK AT A NEW MARINE DRIVE

PROPOSED HIGHLIGHTS

Length of Marine Drive: 6 km

Cost of project: Rs 150 crore

Cost of first phase: Rs 30 crore

Executing agency: MMRDA (BMC may be roped in to finance)


Fancy fountain that will use water from the sea

Capsule lift at Air India building (at a later stage)

Paver block pavement

Sleek street furniture

Green patches along entire stretch, palm groves at Chowpatty

Memorial parks with statues


From TOI

By Yogesh Naik/TNN

Mumbai: Queen’s Necklace is now getting ready to dazzle even more with a Rs 150-crore makeover plan. The project will be financed by the Mumbai Metropolitan Region Development Authority (MMRDA) and, if things work out, the Brihanmumbai Municipal Corporation.
The first phase, likely to cost Rs 30 crore, will involve refurbishment of the pavement, building sea-walls, redesigning the underbelly of the Princess Street flyover and installation of street furnitue. Architects have also suggested that the two foot-bridges at Chowpatty be dismantled and the authorities go in for four subways along Marine Drive.
But a senior government official said the technical feasibility of constructing subways needed to be studied in view of the proximity to the sea.
Urban acitivsts also feel that the stainless steel furniture will not go well with the art-deco buildings in the background. “They should use chemically-coated furniture with the period look so that they blend with the overall ambience of the promenade,’’ one of them said.
“The physical work of reconstruction will start next week,’’ state secretary for special projects Sanjay Ubale said. A senior MMRDA official said the agency would like the BMC to share 50 per cent of the cost. “But, as usual, the BMC bosses have been claiming that they have no money,’’ he added.
The makeover plan was initiated by the Sushil Kumar Shinde government. Three leading firms submitted design proposals but the presentation made by Ratan Batliboi Architects was approved.
But the grand plans have had an unexpected fall-out; Mumbai’s city district guardian minister Ramraje Nimbalkar wants a similar refurbishment plan for the Worli seaface that has eroded walls and pavements.

Sameer
05 Nov 05,, 15:37
http://economictimes.indiatimes.com/articleshow/1285528.cms

Economists pitch for reforms to push up GDP growth to 8-10 pc

PTI[ SATURDAY, NOVEMBER 05, 2005 03:40:14 PM]
NRI Special Offer!
NEW DELHI: Adopting a "cautiously optimistic" outlook on the economy, leading economists today pitched for big-bang reforms and improvement in infrastructure to push up GDP growth to 8-10 per cent in the Eleventh Plan period.

In a mid-year review of the economy, the economists also listed risks like fiscal imbalances, high oil prices, faltering infrastructure and political risks associated with a coalition government that may hinder the growth process.

Presenting the review here, eminent economist and director of National Institute of Public Finance and Policy M Govind Rao also cautioned that if the oil prices continue to rule high, the chances of higher inflation and firming up of interest rates cannot be ruled out.

"By all accounts, Indian economy is expected to continue its buoyant performance during 2005-06," he said.

According to various agencies, India's GDP growth could range from 6.7-7.5 per cent this fiscal. While RBI has pegged it at 7-7.5 per cent, IMF forecast is 6.7-7.1 per cent, PM's Economic Advisory Council (6.9 per cent), NCAER (7.19 per cent), CMIE (6.8 per cent) and CII (7.3 per cent).

"The average annual growth rate for last three years works out to 7.5 per cent. It is therefore argued that achieving 8 per cent growth during the 11th Plan is within the realm of feasibility," Rao said.

Further reforms are imperative to sustain the high growth, he said advocating fiscal, tax, agriculture and labour reforms along with speedy disinvestment and privatisation.

Kanaiya Singh of NCAER pointed to glaring gaps in infrastructure sectors and proposed tax reforms.

Sameer
05 Nov 05,, 15:40
Anyone going to INdia within the next few days, i can lend you my gun, all you have to do is visit a comie leader and.... :)


Something has to give, coalition politics is the biggest impedement to GDP growth rates of more than 7% in India. If the Kangress Babus cannot get labor reforms, even in SEZs, then at least get a deal with the commies in another area.

NO labor reforms, fine but let us relax FDI in retail.

Monk
05 Nov 05,, 15:45
I think the congress-commie unholy alliance has reached critical mass, something has to give. This government has too many corrupt, criminal and incompetent people. I want this government to collapse. Fresh elections would be the best thing.

Sameer
05 Nov 05,, 17:09
I think the congress-commie unholy alliance has reached critical mass, something has to give. This government has too many corrupt, criminal and incompetent people. I want this government to collapse. Fresh elections would be the best thing.


But no party would ever win a clear cut election without coalition parterners in INdia, that is the problem, the NDA has no leader, no charisma and Modi deserves some good jail time. Advani should becime a Sadu and move on to a village somewhere, Vajapayee should take it easy, the Uncle is getting too old now.

The best PM is SIngh, the problem is that his party stinks.

Endangered
07 Nov 05,, 06:45
Strides eyeing share in $25 b global aid projects

November 07, 2005

Strides Arcolab, the Bangalore-based exporter of branded generic pharmaceutical products, is eyeing a portion of the $25 billion aid projects market. It has joined the institutionally-funded global aid projects to achieve this.

Global aid projects, spread over five years, plans to spend $25 billion under the aegis of PEPFAR, the WHO, the UN and UNICEF. These bodies have outlined a strategy for the prevention, treatment and management of three killer diseases — TB, HIV/AIDS and malaria.

Presently, the company is one of the largest Indian suppliers for institutionally-funded aid projects and has been the approved supplier of drugs to the World Bank, the African Development Bank and UNICEF.

The company, which has 11 plants spread across the United States, Brazil, Mexico and India, has become the natural choice as supplier of drugs. “This broad manufacturing network facilitates partnering global organisations ranging from UNICEF and WHO-Global Drug Facility to European and American pharmaceutical global firms and has helped us grow our market share,” said a senior company official.

“The company, in line with this, hopes to launched a major product development and marketing initiative. Our oral dosage forms facility at Jigani, near Bangalore, is one of only seven sites worldwide to be pre-qualified for the manufacture of anti-TB products by WHO-Global Drug Facility. On the HIV front, bio equivalence studies have been completed on seven key anti retroviral drugs. Development work has also been initiated on other anti malarial combinations,” he added.

In addition to supplying drugs to aid projects, the company also has major presence in various developing countries such as Africa, Latin America and Asia as well as in developed markets such as the US, Canada and part of Europe.

“In addition, the company undertakes contract research and the manufacturing of speciality chemicals for various multinational companies,” the official said.

Strides manufactures pharmaceuticals formulations in various dosage forms, including capsules, tablets, liquid injectables and is one of the world’s top five manufacturers of softgel capsules and has the only globally dedicated soft gel facility for hormones.

The company’s product registrations in over 37 countries around the world and employs approximately 1,300 people across the globe. Strides also has a marketing presence in over 50 countries.

The company for third quarter (Q3) of the financial year (FY) 2005 ending September 30, 2005 reported net sales of the company grew by 28.26 per cent at Rs 88.72 crore for Q3 of FY 2005 as against Rs 69.17 crore reported in the corresponding period of Q3 FY 2004.

According to company’s managing director Arun Kumar, “Growth in income both from supplies and R&D from the regulated markets continues to be the key revenue and profit driver for the company. and is backed by significant growth in Latin America and strengthening of the currency and a better product mix has contributed to increase profits.”

Endangered
07 Nov 05,, 06:46
Kerala flashes E&Y report to get waivers for proposed Air Kerala

November 07, 2005 at 0000 hours IST

THIRUVANANTHAPURAM: Kerala, peeved at being excluded from the Centre’s open skies policy, has sought amends through waivers in civil aviation norms for its proposed airlines (to be proxy-run by CIAL—Cochin International Airport Ltd).
This time the heat is on the Centre to give wings to the proposed Air Kerala, with the backing of a commercial viability report by Ernst & Young (E&Y).

Prime Minister Manmohan Singh, in a one-on-one with chief minister Oomen Chandy, had recently agreed to give higher priority to a state-owned budget airlines in the Gulf sector, if the viability report was favourable. At present, Air-India has a monopoly in the Kerala-Gulf sector.

After getting the E&Y report from CIAL, in which the Kerala government holds 33% equity, the state is in a mood to go ahead with Air Kerala within six months of getting clearances. Not coincidentally, the tenure of the Congress-led coalition government in Kerala also times out in six months.

The best way the raw deal to Kerala could be squared out, according to the government, would be by allowing its yet-to-be born airlines the license for international operations, which new private firms, like Kingfisher, Air Deccan and Spicejet, are queuing up for.

Top officials in the civil aviation ministry told FE that there is also a proposal for easing the five years experience criteria in the domestic sector. But then, Air Sahara and Jet Airways, who recently met the criteria, have indicated that this would rob them of a level playing field in international operations at a fledgling stage.

However, waiving this criteria would not be enough. The E&Y report recommends that Air Kerala could start with five aircraft. To be allowed international operations, the civil aviation ministry requires a firm to have a minimum of 20 aircraft. Subtle inquiries for aircraft orders have already started coming in from Seattle-based Boeing Co and Toulouse-based Airbus Industrie following CIAL’s recent board meeting. The original plan was to go for leased aircraft. However, the 25-65% escalation anticipated in aircraft leasing costs has made outright purchase more attractive. The bull run for CIAL’s plans is triggered by its creditworthiness — over Rs 45 crore net profit against Rs 100 crore turnover. The five-year old greenfield airport, according to the E&Y report, stands only next to Auckland airport in international airport profitability ratios.

“The Centre owes Kerala a leg-up in the state airlines plan, especially since all three Kerala airports (which together enjoy the highest air traffic in the country) were kept out of the open skies policy,” Mr Chandy, who is also CIAL chairman, said.

Endangered
09 Nov 05,, 09:31
BSNL profit crosses Rs 10,000 cr in 2004-05 — To float GSM tender for 60 million lines soon

New Delhi , Nov. 8

STATE-OWNED telecom corporation Bharat Sanchar Nigam Ltd (BSNL) on Tuesday said it registered profit of over Rs 10,000 crore in 2004-05, while revenues jumped about six per cent to cross Rs 36,000 crore.

The company said that it would invite bids for the largest-ever GSM tender of 60 million lines next month, in line with its expansion plans for mobile services.

"The 60 million GSM tender is going to come out next month. The details are being worked out. There will be a provision for local manufacturing in the tender," the BSNL Chairman and Managing Director, Mr A.K. Sinha, said after presenting a dividend cheque of Rs 975 crore to the Union Minister for Communications and IT, Mr Dayanidhi Maran.

The company had paid the Government Rs 200 crore as interim, taking the total dividend to Rs 1,175 crore.

"ITI would be given 25-30 per cent quota in the upcoming order as it is entitled for that being a PSU," he said.

On whether Chinese vendor Huawei would to be allowed to participate in the tender, he said, "We have given show-cause notice to them. HFCL was the front-end (of the contract). They (both the companies) have not kept the commitment and many of our plans are going to be upset over that. So we have given them the notice and their reply is awaited," he said.

On the issue of interconnection with private telecom operators, he said, "As and when there is demand for interconnection, BSNL complies with it immediately. As you add capacity, you tend to have congestion somewhere. So it is to be monitored and corrective action has to be taken."

Earlier, replying to a query on whether BSNL was justified in getting most of Universal Service Obligation (USO) funds for its unprofitable operations (in the rural areas) despite a profit of over Rs 10,000 crore, Mr Maran pointed out that USO existed for all players, and not for BSNL alone.

Meanwhile, the Association of Unified Telecom Service Providers of India Secretary-General, Mr S.C. Khanna, said there was no case for payment of Access Deficit Charge (ADC) to BSNL by private operators as it "disturbed the level playing field".

The consolidated revenue of Bharti Tele-Ventures, the only listed integrated player, was Rs 7,875 crore and post-tax earnings Rs 1,498 crore for 2004-05.

Endangered
09 Nov 05,, 09:33
Mobile subscribers up 2 m in Oct: COAI

New Delhi , Nov. 8

THE number of cell phone subscribers jumped by a whopping 2 million in October, which is the highest since the service was made available, the Cellular Operators Association of India (COAI) has said.

In a statement, the COAI said the cumulative GSM subscriber base grew by 4.15 per cent to 52.98 million last month from 50.87 million recorded during the previous month.

While Bharti saw an increase of 6.7-lakh subscribers, BSNL reported a rise of 6 lakh. Similarly, Hutch saw an increase of more than 4 lakh while IDEA saw an increase of 1-lakh subscribers.

The number of subscribers in the metros touched 13.06 million in October, up from 12.62 million reported during the previous month. Delhi and Mumbai continued to dominate in terms of volume and market share. Delhi continues to be the leading cellular market with 4.84-million subscribers accounting for 9.13 per cent of the total market, followed closely by Mumbai with 4.71-million subscribers.

The statement said that among all the circles, Mumbai added the maximum number of subscribers at 2,03,500.

Endangered
09 Nov 05,, 09:39
Low-cost airlines plan flights to small towns

Low-cost airlines operating in the domestic Indian aviation scene are planning to offer services connecting cities and places earlier ignored by major airlines and even by the Indian railways.

Start-up carriers including Kingfisher Airlines, Air Deccan and SpiceJet are exploring the possibilities of starting new services connecting smaller towns and cities.

While Kingfisher Airlines is planning to start a Baghdora-Guwahati service, Air Deccan is planning a service connecting Chandigarh to Jammu, eyeing the Mata Vaishnodevi temple-bound passengers.

Infact, the competition among the low-cost airlines seems to be resulting in an expansion of network offering better connectivity across India for passengers at reasonable fares.

Vijay Mallya, chairman and managing director, King Fisher Airlines, said his airline aims to tap business and holiday travel segments concentrating on smaller cities which were so far ignored by major airlines.

Apart from the service from Baghdogra to Guwahati, Kingfisher is also planning to cover routes including Bangalore-Hyderabad, Kolkata-Guwahati and Kolkata-Hyderabad-Bangalore.

Air Deccan is planning to start a direct service from Chandigarh to Jammu targeting the Vaishnodevi devotees. An Air Deccan executive said that the airline was also planning to launch services to smaller towns such as Puttapurthi, Jamshedpur, Agatthi, Bellari and Mysore.

Other no-frill airlines too are expanding their network. SpiceJet is planning a service connecting Chennai and Hyderabad. This would take its operations to 11 cities across India and the number of daily flights to 38. At present, its flights operates from Delhi, Mumbai, Ahmedabad, Goa, Pune,Bangalore, Kolkata, Jammu and Srinagar.

Madurai-based Paramount Airways is planning to double its flights to eight times a day from four times a day from November 2. It is also planning to start services to new destinations. Presently, the airlines offers four services including Coimbatore-Delhi,Delhi-Coimbatore, Delhi-Kochi and Kochi-Delhi.

The Wadia Group-promoted low cost airline Go Air has started its operations in Mumbai, Goa, Ahmedabad and Coimbatore. The airline will operate two flights a day each between Mumbai-Ahmedabad and Mumbai-Goa route and one flight a day in Mumbai-Coimbatore route.

Endangered
09 Nov 05,, 09:44
Billionaires` net worth up 71%

Premji stays in top spot; 133 new members in club.

India's billionaires have never had it so good. The collective net worth of BS Billionaires has gone up 71 per cent to Rs 3.64 trillion from Rs 2.13 trillion last year after computing current wealth on the basis of average market prices for promoters' stocks in August 2005.

As a matter of fact, the bull run in equities has meant that the BS Billionaire Club membership has swollen a huge 80 per cent, from 178 last year to 311. Owing to a broad-based market rally, even the promoters of small and medium firms have seen their net worth zoom.

That is the reason why as many as 133 new entrants, two-thirds of them entirely self-made, have been able to make their way through the portals of The Billionaire Club.

These newcomers added over Rs 200 billion to their collective net worth last year, taking their aggregate wealth to over Rs 395 billion, according to Business Standard's The Billionaire Club, which annually ranks the wealth of India's billionaires. The magazine is being distributed free with today's edition.

Mirroring the market's broad-based rally, billionaires now come from a wide variety of sectors.

India's richest moguls continue to come from software and other services sectors, while pharmaceuticals, steel, automobile and diversified businesses are other segments that have spawned a large number of billionaires.

Similarly, the new entrants are from sectors as varied as construction, retailing, sugar, media, services, engineering, information technology and pharmaceuticals.

Wipro Chairman Azim Premji remains India's wealthiest billionaire. Premji has added Rs 9,346 crore to his wealth this year, taking his net worth to Rs 41,888 crore.

He has topped the list six times in the last seven years, being briefly dismantled by the Ambani brothers in 2003.

Mukesh and Anil Ambani are in the second place, with a combined net worth of Rs 37,695 crore. Though the Reliance business empire split on June 18 this year, The Billionaire Club has taken their combined net worth into count as the formal process of splitting is still on.

Telecom magnate Sunil Mittal is ranked number three, with wealth of Rs 26,293 crore. HCL Technologies' Shiv Nadar, in the fourth slot, has ridden the technology boom with a 46 per cent rise in his net worth to Rs 12,390 crore.

Sun Pharma's Dilip Shanghvi has taken the fifth position, up from sixth last year. He has added Rs 31.8 billion to his net worth to Rs 8,245 crore. Shanghvi has been ranked just above Naresh Goyal of Jet Airways, who debuts on the list after the airline's public float.

Goyal is also the wealthiest new billionaire, with a net worth of Rs 8,100 crore. Ranbaxy promoters Malvinder and Shivinder Singh have slipped from the fifth position they held last year to the seventh position this year.

Endangered
09 Nov 05,, 09:47
Toyota may set up next plant in Bangalore

TOYOTA is likely to set up its next plant by the side of its existing factory near Bangalore.

A car plant outside Karnataka may come up only in 2015. Sources close to Toyota Kirloskar Motor told Business Line that the top brass of the company's subsidiary in India feel that it would be more beneficial to locate the second plant near the existing plant in Bidadi rather than setting it up elsewhere.

The top officials are understood to have taken the view that the current situation in North India is not conducive enough to locate the next plant there. The Toyota board is expected to meet shortly to take a decision on the new location, followed by a formal announcement, which is expected to be made either later this month or the next.

Toyota has already announced that it expects sales of around 2.5 lakh units by 2010 and 6 lakh units by 2015. Hence, to create capacity for 6 lakh and to expand further, a plant in North India would make logistical sense in the future, the sources said.

The Karnataka Government has already cleared Toyota's proposal to set up a plant worth Rs 1,147 crore near the existing plant. It will have a capacity to produce 1.5 lakh compact cars and create around 2,600 jobs.

Toyota's existing plant has used only around 100 acres on a 432-acre property. Hence, the new plant, which requires not more than 150 acres, can easily be set up in the available land.

The sources said Toyota's management has been under pressure from the governments in Haryana, Rajasthan and Tamil Nadu to set up the next plant in their States. Several incentives have also been offered to lure the auto giant to the new location. However, Toyota officials are understood to have taken into consideration several issues ranging from the political climate to the law and order situation in these States.

In the case of Karnataka, Toyota officials had feared that the recent agitation by the factory workers could escalate further and there was a possibility of the workers roping in one of the trade unions to strengthen their union. Now that the workers' agitation has been amicably settled and the Karnataka Government has assured that it will try its best to provide a good industrial climate, the company seems to have decided in favour of setting up the next plant in Karnataka itself.

Endangered
10 Nov 05,, 09:14
France to invest $ 1,000 m in West Bengal

Thursday, 10 November , 2005, 14:28

Haldia: France would invest at least $ 1,000 million in two plants in and around Kolkata very soon

This information was given by French trade commissioner in Kolkata, Robert Igier to the press here after addressing about 200 prospective investors attending the investors' meet.

The chief sponsor of 'Haldia calling and investors meet' included WBIDC, CII, Haldia Development Authority and others and was chaired by Biswadeep Gupta chairman, CII, West Bengal state council.

''The Government of France considers West Bengal as a better destination for investment in the country due to its seven per cent annual growth rate in the last five years. Cheap labour, friendly trade unions and a stable government are the main considerations.

One trade commission will be immediately set up here. Out of our choice of investment in 25 countries we consider five countries as the best, India being one of them,'' he said.

As to the location and type of plants to be set up by the French Government, Igier said this would be disclosed later for security reasons.

US Consul General in Kolkata Henry Jardine informed the investors that his government also considered India and specifically West Bengal as a very encouraging field for investment, specially in banking, insurance, atomic energy and others.

Two MoUs were signed today between the Haldia Development Authority and two private investors involving Rs 15 crore. | Read more Finance news. |

State Health Minister Surjya Kanta Mishra, IT and Environment Minister Manab Mukherjee and local MP Lakshman Seth were also present.

Sameer
11 Nov 05,, 15:45
KOLKATA: Indian finance minister Palaniappan Chidambaram said on Friday he expected the economy to grow at more than 7 per cent in the year to March 2006.

"We expect GDP growth of over 7 per cent this year. There is an investment boom in many sectors of the economy and bank credit is growing at 32 per cent," he said in a speech at a banking conference in Kolkata.
http://economictimes.indiatimes.com/articleshow/1291844.cms


We hence will have a minimum of 7.5% average GDP growth rate over the last 3 years. If we can chum 2 more years of this, we would have moved into an even greater growth plane than anyone expected.

Endangered
12 Nov 05,, 08:26
Telecom subscriber base crosses 116 m

NEW DELHI, NOV 11: India added 3.24 million telephone subscribers in October, up 2.88% over September-as the country’s total telecom subscriber base reached 116.12 million. As a result, teledensity grew to 10.66% from 10.38% at the end of September 2005, the Telecom Regulatory Authority of India (Trai) said in a report compiled on the basis of data provided by operators.
India added 2.87 million in September. Mobile phone segment grew to 67.95 million subscribers. The segment witnessed 2.9 million subscriber additions — more than total telephony additions in the last month, up 4.46% over September. Fixed line segment hit 48.17 million subscribers and grew by 0.34 million subscribers or 0.72% over the previous month. Interestingly, fixed segment grew by 0.39 million or 0.83% last month.

Trai also said that within the segment, the growth predominantly came from WLL-F (fixed wireless) phones and not from the wireline. Individual break-up of the two was, however, not available.

Within the mobile segment, GSM subscriber base grew by 2.11 million (4.15%) to 52.98 million. CDMA subscribers, on the other hand, grew by 0.79 million (5.57%) — higher rate than GSM — to take the total base to 14.97 million. Broadband growth rate in the country declined, even with the same number of additions as in the previous month. The country added 0.8 million subscribers at 13.11% in October against 0.8 million subscribers at 15.1% in September. Total broadband connections reached 6.9 lakh, still far below the policy target of 3 million by December2005.

Endangered
14 Nov 05,, 06:00
New small car from Maruti by June ’06

MUMBAI, NOV 13: Maruti Udyog Limited is planning to launch two new cars — a small car and a luxury sedan — in the next 18 months. This is apart from the sedan version of the Swift which would be launched in 2006.
The small car, which would be positioned between the Maruti 800 and the Zen, is to be launched by June 2006 while the luxury sedan will be positioned to compete with rivals like the Chevrolet Optra and the Honda City, which are priced at Rs 7.5-9 lakh. It will hit the market in early 2007. Under development right now, these cars are code-named model M and model L.

Maruti, which makes one in every two cars sold in India, aims to strengthen its position at the lower end and rake in volumes at the top end. The company is expanding its capacity from 6 lakh to 10 lakh by 2010 for the new models.

The positioning of the small car is crucial because rival Tata Motors plans to launch its “Rs 1 lakh car” by 2008. On the other hand, unit sales of Maruti 800, the cheapest car available in India at Rs 2.2 lakh, have been consistently falling after rumours of its phase-out.

Endangered
14 Nov 05,, 06:04
Australia seeks more space in Indian retail mkt

Chennai: Australia has announced the launch of a five-year initiative aimed at giving its food products more presence in the retail markets in India, its Minister for Agriculture, Fisheries and Forestry, Peter McGauran, has said

The initiative, that expects to spend about Rs 40 crore in the first two years, will seek space for Australian products in various supermarkets in India and be managed by the National Food Industry Strategy (NFIS) Ltd and Austrade, the Minister told newspersons here on Sunday.

"With approximately 300 shopping malls proposed for construction in India in the next few years, it presents a significant opportunity for Australian food producers to offer Indian retailers a range of our world-class products," McGauran said.

Australia estimates India's annual food and beverage market at $135 billion (Rs 6 lakh crore), growing at 5 per cent a year.

Australia's food and beverage exports to India last year were worth $50 million (Rs 225 crore).

These included pulses and vegetables, apples and fruit juices, canned fruits, biscuits, breakfast cereals, salad dressings, wine and honey.

McGauran said that he had met the Union Agriculture Minister, Sharad Pawar, in New Delhi and the two had agreed to accord "very high priority" to the issues of market access for Australian dairy and meat products and exports of Indian mangoes to Australia. (India has been facing constraints in exporting mangoes due to Australian quarantine regulations.)

McGauran said that these issues would be resolved on the "basis of science".

Endangered
15 Nov 05,, 06:43
British Airways plans to share code with Air Sahara

British Airways (BA) is working towards establishing a code-sharing arrangement with Indian private air carrier, Air Sahara. In addition to code-sharing, other arrangements like frequent flyer, miles programme and lounge access at Heathrow are also being mulled.

Willie Walsh, chief executive of British Airways, who is on his maiden visit to India and Bangalore, said: “British Airways plans to have an arrangement as existing with other interlines and not the Oneworld status.”

“When the agreement is finalised, Air Sahara will service BA’s domestic needs in India and in turn will utilise our facilities in the UK,” he said.

Early this year in July, BA signed a memorandum of understanding (MoU) with Air Sahara to make the airline its preferred partner and to leverage its extensive domestic network.

Commenting on BA’s direct five flights a week to Bangalore, Walsh said, “early figures are fantastic and now we realise how restricted the market was.

BA intends to concentrate on this fast growing market outside the US and UK. Witnessing this growth initially we plan to make it daily from next summer,” he added.

“For its India thrust, BA has lined up a pound 2 million marketing promotion and make efforts to build strong linkages between the two countries based on historical ties,” he also added. BA is increasing the number of flights from India to the UK from 19 flights last year to 35 this year and it hopes to touch 42 flights by next year, Walsh said.

Under the bilateral air services agreement deal between India and the United Kingdom, more flights are to be operated which will cover more destination and frequencies.

According to Martin George, commercial director, BA, the airline is exploring the idea of a second daily flight from Delhi, and targetting Hyderabad and Kochi for leisure and business travel, in addition to tapping the friends and family sector.

BA, to minimise dependence only on passenger traffic, is also seeking to build an efficient freight traffic to the US and Europe by increasing the number of flight from the current nine.

To minimise the rising cost of oil, in 2005 BA hedged about 81 per cent of its fuel requirement at $45 a barrel and has fixed 50 per cent of its requirement for 2006 at $55, said Walsh.

Endangered
15 Nov 05,, 06:46
Czech President inaugurates Skoda's expanded facility

Aurangabad November 15, 2005

Skoda Auto India, fully owned subsidiary of Skoda Auto of Czech Republic (Volkswagen Group), today announced the commissioning of its expanded assembly line at Aurangabad by Vaclav Klaus, president of the Czech Republic.

The expansion would double Skoda’s production capacity from 15,000 units to 30,000 units. Work for the expansion was started in March this year and was completed ahead of schedule.

The unit located at Shendra, Aurangabad, is the only Skoda plant outside Europe. While on a state visit to India, the Czech president came visiting emphasising the significance of the Skoda brand and the plant’s role in regard to the relationship between the two countries. The expansion of the plant was necessitated for introducing new technologies and products by the company.

Speaking on the occasion, Klaus said, “We are pleased and honoured to see part of our country functioning in a very successful manner in India. The commissioning of this new capacity is indeed a memorable moment for Skoda Auto India and the Czech Republic. It gives me great pleasure to know that Skoda Auto India has been introducing such good quality cars which have been very well accepted in the Indian market.”

The commissioning of the expanded capacity at Aurangabad also coincides with the 100th anniversary of the first car manufactured by Skoda Auto at its factory in Mlada Boleslav, Czech Republic.

Recently the five-millionth car came down the production line which consists of the whole range of Favorit, Felicia, Octavia, Fabia, Superb as well as new Octavia II, covering many of the world markets.

In his address to the gathering, Horst Muehl, chairman, Skoda Auto, said, “The market reactions to our products in the last four years have crossed all our expectations. Our plant here in Aurangabad manufactured and delivered to the customers in India its 20,000th Octavia in the middle of this year. The figure will cross 25,000 by the year-end. While this figure sounds small in the Skoda worldwide concept, if we look at the short evolution of Skoda Auto India, one can tell that the growth was rather steep. Today, by expanding our current manufacturing facility, we are preparing for the unfolding of the next stage of Skoda story in India. Hereby, securing further capacity increases upto 30,000 units per year and launching manufacturing lines for our further products.”

Imran Hassen, managing director, Skoda Auto India, said, “It is a joyous moment for us at Skoda Auto India as this expansion marks another step in our commitment of providing latest technologies and quality products to our valued customers here. As we get ready to celebrate 4 years of our presence in this country later this month, I would like to express our heartfelt gratitude to the government of Maharashtra and the authorities here in Aurangabad for their continuous support through these years. With the setup of this plant we strategically placed Aurangabad on the international map by having the only plant outside Europe and now we shall make it the manufacturing hub for the south Asian region.”

Endangered
15 Nov 05,, 06:50
Tata Motors weighs China foray

Jamshedpur November 15, 2005

Tata Motors is planning to enter the Chinese market and is looking at the option of setting up an assembling unit in the country.

Tata Motors managing director Ravi Kant said this on Monday at the launch of Tata Novus, the first rollout in India from the stable of Tata Daewoo Commercial Vehicles Company.

“We are looking at various options,” he said but refused to divulge further details.

Incidentally, Tata Motors sources raw materials from China. Kant said the company’s inorganic growth efforts like the acquisition of the Daewoo unit and Hispano in Spain would continue.

“Whenever there is opportunity, we shall look into it,” he said.

On Tata Novus, Kant said the new facility at Jamshedpur for Novus range bears a testimony to the successful integration of Tata Daewoo Commercial Vehicles with Tata Motors.

Tata Motors MD informed that the company would roll out more models in India from the Daewoo fold over the next two years. This would be part of the company’s declared strategy to invest Rs 6,000 crore in the next five years in commercial vehicles and passenger cars.

Kant said Novus, a tipper for the mining and construction industry, would revolutionalise the heavy duty vehicle mart in the country the way Tata 407 did the LCV category a decade ago.

“We are confident that the Novus range would change the rules of the game,” he said.

The main competitor of Tata Motors in this segment is Volvo. The Jamshedpur facility would have a production capacity of 6,000 vehicles per year.

Tata Motors will tap markets in China, Pakistan, Japan, the Middle East and South Africa with Novus.

On the company’s acquisition plans overseas, Kant said, “We can never say yes or no, but we are always open to good proposals.”

Speaking on the response to the newly launched light commercial vehicle, the Ace, he said the vehicle was launched in five states, and all the 3,000 units produced each month are currently being sold out.

Endangered
16 Nov 05,, 05:31
Indian cos' M&A deals may touch $17 b

New Delhi: Fuelled by banking, pharmaceutical, IT, media and telecom sectors, the mergers and acquisition (M&A) activities in India is estimated to touch the $17-billion mark during the current financial year, according to Assocham.

M&A deals worth $7 billion have already been concluded in the first half of the year, an Assocham study titled Eco Pulse said.

As per the study, boom in the financial markets, rising stock prices, persistently low interest rates and the overall economic resurgence are providing impetus to the M&A activity across these sectors. As a result, M&A deals, which were largely restricted to a few sectors such as IT earlier, have now spread across a multitude of sectors.

The value of deals announced in the first six months of 2005 stood at $6.9 billion against $2.9 billion clocked in the first half of 2004. In fact, the whole of 2004 witnessed M&A deals of about $5.2 billion, the study noted.

"Though the year 2005 did not start well for the pharma sector, which posted disappointing results mainly due to uncertainties with respect to VAT, the sector has of late realised the principle of `Survival of the Fittest'. Indian companies are now all set to take over companies in the global space," the study said citing the instance of Mumbai-based Nicholas Piramal India Ltd (NPIL) acquiring the UK's Avecia Pharmaceuticals.

Consolidation in IT and BPO sectors has largely been driven by the need to acquire scale. To provide better client interface, larger firms acquire smaller BPOs with expertise in niche areas, it said adding that such acquisitions also helped in providing access to new customers.

One of the recent examples of diversification in this sector is the Helios and Matheson Information Technology acquisition of vMoksha. While Helios and Matheson had expertise in networking and software, vMoksha had gained proficiency in the healthcare, banking and financial services segment. "The acquisition helped H&M expand its product portfolio in financial services and healthcare," it added.

On the banking sector, the merger deals of Bank of Punjab and Centurion Bank as well as the one of IDBI and IDBI Bank set the tone for the sector, the study pointed out. In the telecom sector, one of the largest deals was recently struck with Vodafone acquiring 10 per cent in Bharti Tele-venture.

Endangered
17 Nov 05,, 06:32
Export growth resumes pace in October

New Delhi , Nov. 16

AFTER some pronounced slowdown in September 2005, presumably due to the lagged effect of torrential rains that lashed the Mumbai City in August, the country's exports picked up pace as they logged 28 per cent growth in dollar terms during October 2005, with overall export growth during the first seven months of the current fiscal notching up a growth of 22.02 per cent.

Provisional trade data released by the Department of Commerce today show that while exports during October 2005 are valued at $8082.70 million ($6337.53 million in October 2004), the country's cumulative exports for the period April to October 2005-06 are estimated at $51516.87 million which is 22.08 per cent higher than the level of $42200.62 million during Apr-Oct 2004.

Imports during October 2005 are valued at $11367 million representing an increase of 31.69 per cent over the level of imports valued at $8632.05 million in October 2004.

Imports during April-October 2005-06 are valued at $75032.08 million, representing an increase of 33.08 per cent over the level of imports valued at $56381.09 million in April-October 2004-05.

Oil imports during the first seven months of the current fiscal are valued at $24915.06 million which is 44.51 per cent higher than oil imports valued at $17241.58 million in the corresponding months of previous fiscal, reflecting the galloping increase in global crude oil prices.

Non-oil imports during April-October 2005-06 at $50117.02 million is 28.05 per cent higher than the levels of such imports valued at $39139.59 million in the corresponding months of the previous fiscal. The higher non-oil import growth is reflected by the steady rise in industrial production during the first seven months of the current fiscal too.

As imports keep rising relentlessly even as export growth is also on the ascendant, the country's trade deficit during the first seven months of the current fiscal amounted to $23515.21 million, which is higher than the deficit of $14180.47 million during April-October 2004-05.

In rupee terms too, the export growth cumulatively during the first seven months of the current fiscal was 17.37 per cent higher than the value of exports during April-October 2004-05, while imports increased by a hefty 27.89 per cent.

Endangered
17 Nov 05,, 06:33
Motorola to start off with assembling handsets

New Delhi , Nov 16

THE world's second largest mobile phone maker, Motorola, said today that it would start assembling handsets in India by December in a bid to increase its share in the growing telecom market.

To start off, the company will assemble C115 handsets. Motorola has not specified the investment or the location for assembling the handsets.

"Assembling in India is the first step in a multi-phased manufacturing strategy deployed by the company. The assembling of Motorola `C115' handset will be done by one of the MNC partners for Motorola in India," said Mr Allen Burnes, Corporate Vice-President, Motorola Device Business.

Motorola has been lagging behind other handset makers such as Nokia, Samsung and LG in the Indian handset market and is now looking for a larger share.

The company also announced that it had selected India as the first market to launch its new ultra-sleek and ultra-chic Motorola L6 mobile handset. And, in a move to drive rapid expansion and brand presence , Motorola is to establish a strategic relationship with Bharti Teletech Ltd for its full range of mobile handsets and accessories.

More than 11,000 distribution channels of Bharti will help Motorola reach a wide customer base - extending beyond urban centres, a press release said.

"India is all about opportunity - and today's announcements make it clear that Motorola is here to be a major player. We're doing our part to leverage and create opportunities - both for India and for Motorola. And across technologies and price tiers, Motorola is expanding its presence in India.

"From our higher-end `must haves' such as the new Motorola L6 candybar and our best-selling RAZR clamshell, to our popular C115, Motorola is helping connect the unconnected," said Mr Burnes.

Endangered
17 Nov 05,, 06:42
MMK plans Rs 30,000 cr Orissa unit

Magnitogorsk Iron and Steel Works (MMK), the largest Russian steel maker, has sought the Orissa government’s approval for setting up a 10-milllion-tonne integrated steel plant.

MMK Chairman Victor Rashnikov recently discussed the broad contours of the plan with the Orissa government. The estimated investment for a 10-million-tonne plant will be over Rs 30,000 crore.

Sources close to the Orissa government said it might consider the proposal. “MMK will soon start preparing a feasibility report for the project. Only after this, the government will consider allotting land and other raw material. The government may allot nearly 5,000 acres of land in the Keonjhar district,” they added.

MMK, one of the top 20 global steel companies, has Russia’s largest metal producing single-site facility with an annual output of 12 million tonnes.

According to sources, MMK proposes to manufacture a slew of products in the plant, including integrated steel, plates, sheets and auto components. They also said Uttam Galva Steels might join hands with the Russian steel giant for the greenfield project.

Uttam Galva Steels Chairman Rajinder K Miglani was present with Rashnikov at the meeting with state government officials.

When contacted, Ankit Miglani, director, Uttam Galva Steels, said, “MMK is evaluating the feasibility of setting up a steel plant in India. It has approached us to become the partner as and when it decides to implement the project.”

Industry sources said Uttam Galva Steels had old business ties with MMK. It buys steel from MMK, Russia’s only producer of cold-rolled steel. MMK exports almost 60 per cent of its produce to Asia and eastern Europe.

“The relationship with Uttam Galva will come in handy to the Russian giant to have a better understanding of the local market,” the sources added.

Endangered
17 Nov 05,, 06:47
Tata Motors plans big global push

Kausik Datta & Prabodh Chandrasekhar / Mumbai November 17, 2005

Operations in 7 countries to be scaled up.

Tata Motors is setting up an assembly unit in South Africa and a bus-building facility in Turkey, and is scaling up operations in seven countries.

Tata Motors Managing Director Ravi Kant told Business Standard today that plans to enhance the company’s presence in overseas markets were part of a three-pronged strategy to double the company’s sales revenue in five years.

Consolidation of position in all segments and getting into new segments were the other pillars of the strategy, he added.

Tata Motors posted revenue of Rs 20,483 crore last year. Its international business has been registering almost 100 per cent annual growth over the past three years and exports stood at Rs 1,518 crore last year — 7.35 per cent of total revenue. Tata Motors expects to generate 20 per cent in revenue from sales outside India in 2005-06.

Kant said the company had been doing very well in South Africa, a country it entered three years ago. The sale of vehicles in South Africa has gone up to 15,000 units this year from 8,500 three years back.

“We have established a leading position in the commercial vehicle market there and people in the country like our pick-ups. The company is considering setting up an assembly unit there,” Kant said.

He said the company was open to all options, including taking up a plant on lease, sub-contracting a plant and even setting up a facility with a local player in South Africa. It exports vehicles and pick-ups from its manufacturing facilities in India and makes buses in South Africa.

Kant said the company found high-growth potential in Turkey where it exported pick-ups, cars, trucks and buses. “The company may consider setting up a bus-building facility there,” he added.

The other overseas markets where the company will increase its presence include the UK, Russia, Italy, Spain, countries in West Asia and eastern Europe, and Senegal. In Russia, the company had taken “tentative steps with local parties to export its products,” he said.

By the next year, the company will be in a position to begin exports in a big way. Plans are also on to ramp up the capacity utilisation of Daewoo Commercial Vehicle in South Korea.

Tata Motors is also in the process of expanding its distribution network in the UK. With the deal with Rover ending, the company has shortlisted three distributors to sell its passenger cars. The deal will be finalised in three to four months.

Commenting on the performance of the Ace, the only diesel mini-truck in the world, Kant said it evinced demand from South Africa, Sri Lanka and other advanced countries. The Ace is now available in only five states in India. The company has so far sold 35,000 units and plans to increase capacity to 60,000.

On the alliance with Fiat, Kant said it would take three to four months to know the exact outline of the proposed global alliance. “All I can say now is that it is part of overall international plans that we have,” he said.

Endangered
19 Nov 05,, 06:36
OneIndia gets a leg up

New policy will go far to increase teledensity

The draft New Telecom Policy is a bold attempt at accelerating the pace of telecom penetration in the country. Its endorsement of number portability (whereby consumers are able to retain the same telephone number, even if they shift to a different service provider) and carrier access code (whereby consumers can choose between carriers for making long distance calls) is a vote for subscriber convenience. Recommendations such as the need for mandatory approval from the Telecom Regulatory Authority of India (Trai) for mergers and acquisitions that cover more than 50% of the subscriber base in one circle or reduce the number of players in a circle to less than three, are all meant to protect subscriber interests. At the same time, recommendations like sales tax exemption for telecom services and more incentives for rural telephony should encourage corporates to reach out to a wider audience.

What the NTP promises to deliver must also be seen in the larger context of what is being to done to invigorate an explosive growth in Indian telecom industry. Just a days ago, revenue-sharing on national long distance (NLD) and international long distance (ILD) was slashed from 15% to 6%. IP telephony, which was already allowed for ILD, was also allowed for NLD. NTP itself has proposed a more efficient use of spectrum and, more important, pricing of spectrum.

While all this is of a piece with communications minister Dayanidhi Maran’s OneIndia plan to make distances irrelevant by forcing DLD calls at local call rates, the signs of turf battles between the minister and the regulator do not bode well. Whether on access deficit charge (ADC) or on issues relating to BSNL’s market dominance, the minister has not given a free hand to Trai and that could affect the sector’s long-term health.

The rate of growth India now seeks will also depend to a large extent on how the country handles glitches like regular delays in interconnect between different operators and ADC. The NTP is quiet on these two. Trai has recommended that access deficit charges—currently paid as fixed charges—be phased out by 2007 and moved to revenue sharing. But the government is yet to take a call on that. Revenue sharing will bring down the access deficit charge to just 2-3 paise, compared with the 30 paise that operators shell out now. Similarly, the regulator will have to take a very hard line on deliberate delays in interconnecting before such issues become operational hurdles to growth.

Endangered
21 Nov 05,, 06:46
Global retailers gear up for Indian entry

New Delhi , Nov. 20

THOUGH the FDI policy in the retail sector remains unclear, overseas players are bracing themselves for an entry and are firming up plans for the Indian market.

Close on the heels of the Wal-Mart Chief's visit to India earlier this year, UK-based retailer Tesco's CEO, Mr Terry Leahy, is slated to make his first visit to the country next week.

This visit gains significance, considering that Tesco Plc has cut by half its sourcing of Chinese textiles, since the European Union implemented quotas on shipments from China in June, which limited growth in imports from the country.

Tesco is looking at alternatives and is expected to increase sourcing from Indian textile firms. Mother Care UK Ltd, another retailer with a strong European presence, is also gearing up to enter the country in a franchisee tie-up with Shopper's Stop with plans to set up 40 outlets.

Gap Inc, one of the world's largest speciality retailers, is in the process of big-ticket recruitments for its India office, including personnel for global compliance finance, accounting, HR, technical services and product assessment.

Other retailers, who have in the past established a presence here, also seem to be waiting in the wings. UK's Marks & Spencer Group and Dubai-based Lifestyle International have set up shop in India through franchisee ventures, while Germany's Metro and South Africa's Shoprite Holdings have entered the wholesale arena.

A number of UK retailers, including Next, Debenhams and Body Shop, are said to be considering an Indian foray by next year. However, pressure from the Left parties has kept the Government from opening up the retail sector. In April, the Government had said that it was trying to build a consensus on the issue.

Currently, Indian retailing mostly takes place in small mom-and-pop shops and makeshift bazaars.

Organised retail makes up a mere three per cent, or Rs 28,000 crore of the overall industry, but its share is forecast to grow to 8-10 per cent in the next five years.

Endangered
21 Nov 05,, 07:00
Govt wants Bangalore airport ready by 2010

The Centre wants a new airport coming up in Devanahalli near Bangalore completed by 2010, five years ahead of schedule, in view of a much faster rise in traffic than what had been anticipated.

For this, the Centre has asked Bangalore International Airport Ltd (BIAL), which is executing the project, to ensure that the new deadline is met.

The ministry also wants modifications in the proposed airport terminal building to make it more “modern”. The new airport was to be built in two phases — 2005 to 2010 and 2010 to 2015.

“We have asked the company to co-develop the first and second phases,” Civil Aviation Minister Praful Patel told Business Standard, acknowledging that this would push up the cost of execution for BIAL.

German multinational Siemens holds 40 per cent in BIAL, while Unique Zurich and Larsen & Toubro hold 17 per cent each. The Karnataka government, through Karnataka State Industrial Investment Development Corporation, and Airports Authority of India, together hold the remaining 26 per cent.

Patel said the increase in cost would be shared by all the consortium partners. He pointed out that the volume of traffic projected by the executing consortium for 2010 had been achieved this year itself. The traffic volume projected for 2015 is likely to be reached by 2008. Therefore, the two phases of the project must be executed simultaneously.

“The company had not taken the real traffic potential into consideration.... The airport builder should co-develop the second phase along with the first,” Patel said.

According to initial estimates, the new airport was to have a minimum handling capacity of 20 aircraft. It was to handle 5 million passengers by the end of the first phase and 40 million by 2015. The 5-million traffic figure was achieved this year.

The civil aviation ministry has called a meeting with the executives of BIAL to discuss the issue.

About the terminal building, Patel said, “We want it to be a modern building with some modifications in the structure.”

Building the airport is estimated to cost Rs 1,411 crore. The Karnataka government has provided a soft loan of Rs 350 crore to BIAL and a budgetary support of Rs 400 crore. The funding also includes a debt component of Rs 735 crore.

Earlier this year, the Parliamentary Standing Committee on Transport and Tourism headed by CPI (M) Member of Parliament Nilotpal Basu had demanded a probe by an independent agency into the contracts awarded by BIAL to its shareholders.

The contracts recommended for probe included a Rs 884-crore construction and electric system contract awarded to L&T and Siemens.

Endangered
21 Nov 05,, 07:05
Over 90 cos to take part in Aerodrome India ’05

Monday, 21 November , 2005, 09:18

Bangalore: A booming aviation sector, mushrooming airlines and their hectic aircraft buying plans are also triggering a flurry of activities on ground: Indian players in the airport sector are estimated to have a field day in the coming five years with a $100-billion opportunity in the building and upgradation of airports in the country, according to organisers of the country's first airport trade and technology show coming up here.

Aerodrome India 2005, to be held here during December 7-10, will unveil the combined potential that exists for hardware makers, maintenance, policy and security aspects, consultants and service providers in the airport infrastructure, according to Pradeep Devaiah, CEO of the organising firm PDA TF.

PDA TF has tied up with aerospace manufacturers' body, the Society of Indian Aerospace Technologies & Industries (SIATI), as its technology partner to put up a common forum for technologists, manufacturers, airport and airline operators and allied players in the three-day trade show and conference. Over 90 companies from 14 countries, including 36 from India, are slated to participate in the show.

The seminar will touch on civil aviation security and maintenance, new technology products and space management. To be inaugurated by the Union Civil Aviation Minister, Praful Patel, Aerodrome India is to have the participation of top brass of Airports Authority of India, Air India, the Singapore Airport Consortium which built the Changi airport, Bangalore International Airport Ltd, besides Madhavan Nair, ISRO Chairman and President of the Aeronautical Society of India; and Paul Behnke, Director, Airports Council International.

Dr C.G. Krishnadas Nair, SIATI President and former HAL Chairman, told Business Line there was a huge gap in airport maintenance, air traffic control engineers and staff. Along with infrastructure for safe air transportation, Aerodrome India, he said, would highlight the need for a trained technical aeronautics pool in the country.

Endangered
22 Nov 05,, 12:25
IA is planning to lease 17 aircraft

MUMBAI / NEW DELHI, NOV 21: Indian Airlines (IA) is planning to lease 17 aircraft in the next few months to bridge the demand gap till the new fleet of 43 aircraft it has ordered for is delivered. IA currently has a fleet size of 65 aircraft.
A top Indian Airlines official told FE, "Three Airbus 319 will be leased by December 2005 and two more will be added by April next year. These will be deputed on domestic routes. Further, 12 wide-bodied aircraft will also be leased soon to boost the international operations."

These 12 aircraft will be either Boeing or Airbus. The options for wide-bodied aircraft available to IA are Airbus 330, Airbus 340, Airbus 310, Boeing 767 and Boeing 777. These aircraft will be either leased from an international airline company or from a leasing agency.

Endangered
22 Nov 05,, 12:32
Airbus wins $1.9 bn Kingfisher deal

NOV 21: Airbus SAS, the world’s biggest maker of commercial aircraft, won an order for 30 planes worth $1.9 billion from Kingfisher Airlines Ltd, an Indian carrier that’s buying planes to tap rising demand for air travel.

Kingfisher, a Mumbai-based airline owned by UB Group, ordered A320 planes valued at $65 million each, UB Group chairman Vijay Mallya said on Monday at the Dubai Air Show. The orders will be partly funded by the earnings of UB’s brewery business, which produces half the beer sold in India.

“Kingfisher has enjoyed accelerated growth since its launch in May 2005,” Mr Mallya told reporters. “This new order marks the next stage of the airline’s development.”

Indian carriers have ordered more than 200 planes this year as the fastest economic growth in more than a year stokes demand for air travel in a nation of 1.1 billion people. India expects passenger traffic to rise an average 25% annually until 2010 as new airlines start operations with ticket prices that are as low as train fares.

India-based airlines may buy up to 570 new aircraft valued at $35 billion by 2023, according to estimates by the world’s two largest aircraft makers. The country’s airlines have ordered $24 billion of new planes so far this year, excluding Kingfisher’s order on Monday.

As many as five new carriers have emerged in India in the past two years and the government estimates at least eight others are planning to start operations.

Kingfisher, a six-month-old airline named after the UB group’s best-selling beer brand, ordered 10 A320s and three A319s to date and took delivery of three of the A320s. It had an option to buy 20 more single-aisle A320 planes according to an agreement signed with the Toulouse, France-based aircraft maker. The carrier said in June it will buy 15 planes including five of the new 555-seat A380s. It has signed for the double-decker A380s, and not for 10 other planes including five A330-200s.

Neo
22 Nov 05,, 20:49
India to spend $10 bn on airport upgrades

Press Trust of India

Dubai, November 22, 2005


India is embarking on a massive drive to upgrade existing airports and build new ones at a cost of 10 billion dollars over the next four years, its Civil Aviation Minister Praful Patel has said.

The projects involve both upgrading and building airports in 41 cities, including six key cities, he told reporters at the Dubai Air Show on Monday.

While airports in the metro cities of New Delhi, Mumbai, Chennai and Kolkata would be upgraded to receive the largest and latest aircraft, two new airports would be built at Bangalore and Hyderabad.

The minister said these projects would be completed in five years.

Sounding bullish on the growth of the Indian aviation sector, Patel said the industry saw growth topping 25 per cent last year and reaching 30 per cent this year.

Two Indian carriers -- Air-India and Indian Airlines -- will also go public by issuing IPOs early next year, Patel said.

On demand from new private Indian carriers for permission to operate on the lucrative Gulf sector, the minister said the current restrictions would remain in place.

"We want the country to be connected from within and the private airlines have to show consistency for five consecutive years. Then the reward is to fly overseas," he said.

http://www.hindustantimes.com/news/181_1553573,00020016.htm

King
23 Nov 05,, 01:27
I am new here, and this is my first post so i want to just say that our Economy growing in a killing rate and i went to India last yr and i really saw the changes, it is getting really modern and hightech.

Endangered
23 Nov 05,, 06:37
India One may bring STD rates to below Re 1

STD calls made to any part of the country could be priced at a flat rate of less than Re 1 a minute with the introduction of the India One tariff from January 1, 2006.

According to the draft New Telecom Policy, the Department of Telecom (DoT) is considering a single uniform rate based on the weighted average cost involved in carriage of telephone calls.

Currently, the maximum STD rate is Rs 2.80 a minute, which incorporates the carriage cost and the Access Deficit Charge (ADC).

The carriage cost varies between 20 paise and Rs 1.10 a minute depending on the distance of the call. The carriage charge is the amount paid to the long distance carrier by the cellular and fixed telephone operator.

According to the DoT's draft New Telecom Policy, the India One tariff concept would apply to STD calls to anywhere in India.

"The rate could be a single uniform rate irrespective of the distance slab and without `zero dialling.' The determination of this rate could be on the basis of weighted average costs involved in carriage," the draft policy said.

The DoT paper said that the current procedure of terminating the calls would be reviewed and licences may be amended. "The concept of India One would play a significant role in market expansion. Each service area is characterised by presence of six to eight players resulting in intense competition.

DoT has permitted inter-service area connectivity within the four States of Maharashtra, Tamil Nadu, West Bengal and UP. To enable rapid spread of affordable services, it may be appropriate to extend this arrangement to the entire country," the draft policy paper said.

Telecom service providers, however, said the Government must address issues such as ADC (which private telecom companies pay to state-owned BSNL) and lowering the carriage charge further before introducing India One tariffs.

"If the tariffs have to come below Re 1, then the ADC needs to be charged as a percentage of the revenue and not loaded on a per minute basis. Also the carriage charges, paid to the long distance operator, need to be brought down drastically if the new tariffs have to be viable for the access provider," said a cellular industry representative.

Long distance operators, on the other hand, pointed out that the Government must ensure that the access operators pass on the reduction in carriage charges to the consumer.

"There are cases where access providers give only 50 paise a minute for STD calls higher than the 500 km slab. The consumer, however, is still charged more than Rs 2 a minute by the operator. This needs to be checked by the regulator if India One tariff has to succeed," said a national long distance operator.

Some operators pointed out that the telecom regulator must be involved in the process, since it is a matter pertaining to tariff fixation.

Endangered
23 Nov 05,, 06:44
Indigo Airlines to take off next year

Private low-cost carrier Indigo Airlines is planning to launch its operation by February next year by taking aircraft on lease.

“The delivery of the aircraft, we have ordered, will start by July 2006 and we will expedite the launch to February by taking a few aircraft on short-term lease,” Indigo Airlines promoter Rahul Bhatia said.

The company has ordered 100 aircraft from European manufacturer Airbus, delivery of which would be made between 2006-2016.

Bhatia said that the promoter's equity in the airline would initially be $ 80 million, which would go up to $ 250 million by 2008.

The total cost of the 100 aircraft is estimated to be about $ 6 billion, of which 15 per cent would be met by the promoter's equity, the remaining amount would be brought in by the financial institutions.

Bhatia , however, refused to name the financial institutions which will provide the remaining funds. The airline, which will be branded as “Indigo”, will operate not just on the trunk routes, but also on other routes.

“There are 80 cities with over one million people and we will look at those cities and not focus on the major routes only,” Bhatia added.

The airline is also looking at operating on the Delhi-Srinagar route. The fares will be competitive with those of other low-cost carriers like Deccan Air. The fares will be 40 per cent lower than those of full service carriers and will be competitive with other no-frill airlines, Bhatia said.

SpiceJet on new routes: With induction of two more Boeing 737-800 aircraft into its fleet, budget airline SpiceJet will offer new connections on the Delhi-Chennai route via Hyderabad, starting December 4, reports Our Corporate Bureau.

The addition of these two cities now takes SpiceJet’s operations to 11 cities across India and the number of daily flights to 36.

SpiceJet has introduced special fares on these late night flights. The special fares are Rs 1,599 for Delhi-Hyderabad, Rs 999 for Hyderabad-Chennai and Rs 1,999 for Delhi-Chennai routes.

The company will start operations with six aircraft in 2006 and add nine more to its fleet by 2007 and another eight in 2008. After that, the company would add one aircraft every five weeks.

Neo
23 Nov 05,, 15:58
I am new here, and this is my first post so i want to just say that our Economy growing in a killing rate and i went to India last yr and i really saw the changes, it is getting really modern and hightech.
Welcome King!
There's an Introduction subforum here aswell.
Why don't you introduce yourself and tell us more about you! :)

bull
24 Nov 05,, 06:21
Indigo Airlines to take off next year .

I think they wil have to change their name,as indigo is already registered name for TATA motors.

Endangered
25 Nov 05,, 06:22
Vodafone eyes 49% in Bharti Ent

November 25, 2005

British telecom major was happy with an initial equity of 10%.

The government today approved Vodafone Group Plc’s proposal to acquire up to 49 per cent stake in Bharti Enterprises Ltd.

When contacted, senior executives said Bharti Enterprises Ltd will remain the single largest shareholder in Bharti Tele-Ventures Ltd, its telecom services arm.

“Vodafone can increase its holdings if any of our foreign partners are willing to sell their shares. The approval is an enabling permission to help Vodafone avoid going back to the government repeatedly,” an executive said.

Last month, Vodafone announced its decision to subscribe to 9.58 per cent equity in Bharti Enterprises, which held 45.9 per cent in Bharti Tele-Ventures. It had also decided to acquire Warburg Pincus LLC’s 5.6 per cent stake in Bharti Tele-Ventures. Vodafone purchased the shares, with a face value of Rs 10 each, at Rs 351 per share with the deal size estimated at $1.5 billion.

Vodafone chief executive officer Arun Sarin had said that the British telecom major was happy with an initial equity of 10 per cent though it wanted to raise its stake later.

On November 18, Vodafone International Holding BV acquired 106.47 million shares, accounting for 5.63 per cent of the company’s equity through an off-market deal, Bharti Tele-Ventures today informed the stock exchanges. Vodafone acquired Bharti Enterprises’ 4.4 per cent stake on October 29.

Bharti Enterprises now holds around 46 per cent in Bharti Tele-Ventures, with SingTel holding 31 per cent and Vodafone 10 per cent. The total foreign investment in Bharti Tele-Ventures is estimated at close to 66 per cent, 48.52 per cent earlier, company executives said. The company’s scrip rose 1.5 per cent today to close at Rs 358.60 on the Bombay Stock Exchange.

Vodafone’s proposal was one of the 25 foreign direct investment cases approved by Finance Minister P Chidambaram based on the Foreign Investment Promotion Board’s recommendations.

Vodafone’s investment is the first case to be cleared after the government raised the foreign investment limit for telecom services from 49 per cent to 74 per cent.

The deal marks Vodafone return to India. It had exited India in 2003, after selling its 21 per cent stake in Chennai-based RPG Cellular to C Sivasankaran-promoted Sterling group.

ajaybhutani
30 Nov 05,, 09:32
indian GDP gorws at 8% in 2nd quater.

http://in.rediff.com/money/2005/nov/30gdp.htm



India's GDP powers ahead at 8% in Q2

November 30, 2005 12:52 IST
Last Updated: November 30, 2005 14:27 IST

Reflecting the buoyancy, Indian economy grew by 8.0 per cent during July-September 2005 on the strength of manufacturing and services sector, up from 6.7 per cent GDP growth in the corresponding quarter last fiscal.

Overcoming a negative growth in mining sector and a meagre 2 per cent growth in agriculture, the economy continued on its upward trajectory, which was witnessed during the first quarter of the current financial year.

In second quarter, mining sector registered a negative 1.1 per cent growth while electricity, gas and water supply grew by a meagre 3.3 per cent as against 4.7 per cent and 9.1 per cent respectively in the corresponding period a year ago.

The growth in community, social and personal services was higher at 8.0 per cent during July-September 2005 from 6.7 per cent in the year ago period. Construction boom also continued with a 7.4 per cent growth from 4.6 per cent a year ago.

In the first half (April-September) of this fiscal, manufacturing sector grew by 10.2 per cent from 8.8 per cent a year ago but farm sector growth slowed down to 2.0 per cent as against 2.1 per cent in first half last fiscal.

Trade, hotels, transport and communication registered a strong 12.2 per cent growth as against 11.9 per cent while financing, insurance and real estate grew by 9.1 per cent compared to 6.2 per cent in April-September 2004-05.

Growth in mining as well electricity and water supply remained lower at 1.1 per cent and 5.6 per cent during the first half this fiscal compared to 5.8 per cent and 7.6 per cent in the first half last fiscal.

In absolute terms, India's gross domestic product at factor cost was Rs 3,76,878 crore (Rs 3,768.78 billion) during the second quarter of

2005-06 as against Rs 3,48,867 crore (Rs 3,488.67 billion) in the year ago period.

During the first half this fiscal, GDP at factor cost

stood at Rs 7,59,411 crore (Rs 7,594.11 billion) as against Rs 7,02,584 crore (Rs 7,025.84 billion) in April-September 2004-05.

While the real GDP growth at constant prices was 8.1 per cent during the first half, the nominal GDP at current prices expanded by 12.1 per cent during the first half compared to 12.8 per cent last year.

With the release of GDP figures for this quarter, the CSO has also reduced the time-lag in quarterly GDP releases from three months to two months. The first quarter, however, would be an exception where the time-lag would continue to be three months, CSO said.

As per information given by department of agriculture and Cooperation, which has been used in compiling GDP estimates from agriculture in Q2 of 2005-06, rice production is likely to grow by 3.0 per cent and pulses by 0.6 per cent.

Wheat production is, however, expected to decline by 1.0 per cent during the Kharif season of 2005-06 compared to the previous corresponding period.

Among commercial crops, production of oilseeds is likely to decline by 2.5 per cent during Kharif season of 2005-06.

The production of cotton is expected to decrease by 6.5 per cent and that of sugarcane by 10.9 per cent during 2005-06.

According to the latest estimates available on the Index of Industrial Production, the index of mining registered a growth rate of negative 1.7 per cent during the second quarter this fiscal against 5.7 per cent in the previous Q2, while manufacturing grew by 8.6 per cent compared to 9.3 per cent and electricity by 2.1 compared to 5.9 per cent.

The key indicators of construction sector -- cement and finished steel -- registered growth rates of 8.8 per cent and 5.9 per cent, resepectively during Q2 of 2005-06.

ajaybhutani
30 Nov 05,, 10:03
Manmohan Singh targets 10 per cent growth

Special Correspondent

FDI in retail to be explored; power sector to be set right

# Likely to average 7.5 per cent growth in next four years
# Big growth in agriculture, more investment in infrastructure required
# Road map for free trade agreements with China, Japan, South Korea


NEW DELHI: Targeting a GDP (gross domestic product) growth of 10 per cent in two-three years and terming it as "eminently feasible," Prime Minister Manmohan Singh on Tuesday pledged to explore the possibilities of permitting foreign direct investment (FDI) in the retail sector, sort out problems in the power sector and strive to usher in flexibility in the labour market.

Dwelling on the two ticklish issues while addressing delegates at the concluding session of the India Economic Summit here, Dr. Singh said: "We will try for a consensus on making labour markets more flexible ... As for FDI in retail, we are engaged in an intellectually stimulating exercise to understand the possibilities that exist in opening up this sector and how best we can harness it for our needs."

Setting the country's GDP growth target still higher, Dr. Singh said that India was likely to average a growth of 7.5 per cent in the next four years but "we should be targeting 10 per cent growth in two-three years. In my view, this is eminently feasible, if we manage a quantum leap in growth rate of agriculture, if investment in infrastructure provides a fresh impetus to industry and if services continue with their impressive performance," he said.

`Take-off' point

The country's infrastructure, Dr. Singh said, had reached a "take-off" point. "All the elements of an essential institutional framework are now falling in place. If the private sector seizes the initiative, the sky is the limit," he said.

The only hurdle in this regard was the power sector, which was plagued with complex problems. Assuring that this problem too, would be sorted out, Dr. Singh said, "We are determined that we will set many things right in the coming year. I am personally holding wide consultations to remedy the situation here [power sector]."

On the trade front, Dr. Singh visualised the emergence of a free trade area in Asia within the next few years and outlined the road map for free trade agreements (FTAs) with China, Japan, South Korea and possibly, even Australia and New Zealand. "This pan-Asian Free Trade Area could be the third pole of the world economy after European Union and NAFTA and will open up new growth avenues for the economy," he said.

Efforts were being made to move towards a single integrated farm market, Dr. Singh said. For this, an integrated food law, transferable warehouse receipts, an advance forward market in commodities along with amendments to the Essential Commodities Act were essential.

"We should work towards liberating agriculture from controls that shackle its potential. We have nudged many States into amending the APMC Acts ... We may see India emerging as the granary of the world. The private sector must not miss out on this opportunity and must ride the boom that I see on the horizon," he said.

As for FDI, the Prime Minister said the policy regime was already quite liberal. But still, a group of Ministers was looking into ways of further revamping the existing FDI regime with the aim to cut red tape. In fact, "barring the financial, retailing and coal mining sectors, India was extremely liberal in welcoming FDI," he said.

Noting that there were no external constraints to growth, Dr. Singh said that the hurdles being faced were all internal, "imposed by polity, social structure, regional imbalances and inequity, besides [the] inability to take hard but essential decisions."

"We need growth, we need jobs, we need income and we need security," he said. "History will judge us harshly" if bold decisions were not taken, Dr. Singh added.

ajaybhutani
30 Nov 05,, 10:04
Vast potential for Indian retail sector growth
Hyderabad | November 29, 2005 8:15:12 PM IST

India's retail industry is ready to leapfrog and is showing signs of surpassing China and other countries, say industry players.

With one of the highest private consumption rates, the world's youngest population base and a robust GDP growth, India has tremendous potential for growth in the retail sector, speakers at a Confederation of Indian Industry (CII)-organised conference here said.

Private consumption in India currently accounts for 64 percent of GDP, higher than in Europe, Japan and China. While only three percent or $6 billion of retail industry is in the organised sector, the growth is expected to be 25 to 30 percent in the next five to six years, thus surpassing China, where the organised retailing accounts for 20 percent.

India had only three malls in 1997 and today the number has reached 90, and by 2008 the number is expected to go up to 460. The size of the total retail market in India is estimated at $210 billion and is growing at 5 to 7 percent per annum.

Shishir Baijal, managing director and CEO, PFH Investment Advisory Co. Ltd, said while most metros and mini metros had witnessed significant retail development the phenomenon is now spreading to smaller cities. Players are entering these cities early to gain first mover advantage.

Baijal, whose company has plans to develop seven million square feet of retail space in the country, said lack of quality retail infrastructure in smaller cities had become a constraint to retailers' expansion plans. He underlined the need for retail real estate fund managers to create the infrastructure and fuel growth in such cities.

Talking about the potential in Andhra Pradesh, he said while Hyderabad had the presence of all popular brand stores across segments such as food, grocery, apparel and footwear, cities like Visakhapatnam, Vijayawada and Tirupati offer huge potential. He said while expanding to smaller towns, the retailers and mall developers should understand local needs and try different delivery formats.

Anuj Puri, managing director, Trammell Crow Meghraj Private Limited, said given the fact that only three percent of the total retail market is organised, there is ample space and time to experiment with innovative formats and value propositions. "There is enough room for many new players to co-exist," he said.

He attributed the growth in retail sector to increasing demands of consumers and changing Indian demographics like fast growing middle class with higher discretionary income, increase in the number of dual income households and high pressure on time. He also pointed out that 70 percent of the population is under 35 years and 54 percent under 25.

He said the Indian middle class pegged at 57 million households in 2001-02, is expected to rise to 153 million by 2009-10. Over 40 million in India have the same purchasing power as Americans.

According to Puri, lack of policy focus by central and state governments, supply chain inefficiencies, lack of trained manpower and poor infrastructure were among the main obstacles to the growth of retail sector.

ajaybhutani
30 Nov 05,, 10:05
India Inc's profits are envy of the world

DNA
Tuesday, November 29, 2005 23:25 IST




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MUMBAI: Indian manufacturing companies, often overlooked as a competitive force in the global manufacturing arena, are quietly enjoying gross profits and sales growth rates that are nearly twice that of global manufacturers, according to preliminary findings of a global benchmark study by Deloitte Touche Tohmatsu.

Deloitte's study in India suggests that local manufacturers are enjoying average sales growth of 15%, compared with 7% for their global peers.

They are delivering gross profits (earnings before interest and tax) averaging 16%, compared with an 8% global average.

"Deloitte's preliminary benchmark findings reveals that industry capabilities in areas such as product innovation, manufacturing quality, and process innovation are driving the performance of Indian manufacturing companies," says Kumar Kandaswami, manufacturing industry leader, Deloitte Touche Tohmatsu India Pvt Ltd.

The study also found that Indian manufacturers intend to move aggressively to compete globally.

"To effectively compete in the global market over the long term, Indian manufacturers must invest and build scale in crucial areas of production, distribution, and marketingsales," Kandaswami said.

"These are key capabilities needed to efficiently access nationwide and global markets".

The study found some resonance with industry leaders. Vikram Kirloskar, vice-chairman of Toyota Kirloskar Motors, says that while there are still many hurdles for Indian manufacturing to become as competitive as, say, China's, there are quite a few encouraging features in India as well.

Taking the example of the automobile sector, Kirloskar says the very fact that India produces a million passenger cars and over seven million two-wheelers makes it a market where manufacturers can achieve economies of scale much faster than in many other emerging markets.

But Kirloskar also offers a word of caution. "Indian manufacturers need to invest in local capital equipment suppliers and local supply chain. And to become a long-term player in any sector, we need to be technology leaders."

While echoing Kirloskar's sentiment on the size of the Indian market enabling manufacturing companies to achieve economies of scale, the chairman and managing director of Bharat Forge, Baba Kalyani, who is a global No 2 in automobile forgings, says that demand in India is still very elastic.

"But demand can increase by leaps and bounds if the indirect taxes are rationalised." This could help manufacturing sector improve margins.

BVR Subbu, president of Hyundai Motor India Ltd, is more sceptical about Indian industry ability to maintain margins in the face of growing competition.

According to him, in manufacturing sectors in which there is competition, Indian firms profitability will be closer to their global peers.

"As competition goes up in more sectors of the industry, margins will go down."

Amit Rathi, managing director at Anand Rathi Financial services, finds the Deloitte study believable.

"The growth rate is reflective of the high nominal GDP growth rate, which is running at 15% plus. Also, the benefits of restructuring and productivity improvement brought about in the post-1995 period have helped."

Operating margins have gone up substantially, debt levels have gone down and return on investment has gone up, which are also helping, he added.

According to the Deloitte study, most domestic manufacturers surveyed expect industry growth and geographical expansion to drive business growth over the next three years.

A majority of them plan to expand their operations domestically as well as globalise their operations.

China and other south-east Asian countries are viewed as top destinations, especially in areas such as marketingsales and sourcing.

Adil Zainulbhai, managing director of McKinsey & Co in India, says that with manufacturing moving largely towards the north of the country due to excise benefits (that translate into better margins) - given by states such as Himachal Pradesh and Uttaranchal - exports may be hit.

The further up a manufacturing location is from ports, the more the problems on the export front, he said.

Deloitte's ongoing Global Benchmark Study includes more than 800 companies from the Asia-Pacific, which is 10% of the total companies studied globally.

Launched recently in India, the study has generated initial responses from companies and business units in India in the automotive (46%), consumer products (8%), industrial and discrete manufacturing (29%) and processchemical (17%) sectors.

Approximately 30% of initial respondents have total sales of more than $200 million.

ajaybhutani
30 Nov 05,, 16:57
Latest News:
a 3B $ chip manufacturing unit planned in india by a cosmotorium of NRI's with technological help from AMD . it will be a public private partnership.. planned to start functioning in 2-3 years. Location of unit has not yet been decided.

Endangered
01 Dec 05,, 07:57
AMD logs in, India to get first chip plant

Hi-tech: Worth $3 billion, the facility is a three-party MoU between AMD, SMEIndia and govt

It sounds like the country’s dream-run just started: American technology, NRI money and high-tech manufacturing have come together on Indian shores. US chipmaker AMD signed up today to play a major role in the country’s first chip fab worth $3 billion.

The fab, being funded by SEMIndia, an NRI grouping, signals India’s growing reputation as a low-cost, high-growth manufacturing destination. It sets the country among a select group of nations whose manufacturing abilities are trusted by global PC, mobile phone and set-top-box makers.

AMD’s three party MoU with the government to transfer chip-making technology to SEMIndia is likely to yield results beyond 2008, which also brings the computer industry closer than ever to its under-$100 PC ideal.

For AMD chairman and CEO Hector Ruiz, the victory has an undeniable personal edge. Ruiz has beaten arch-rival Intel to Indian shores, perhaps by less than a week. By next Wednesday, Intel CEO Craig Barrett will be in India, and, whether he likes it or not, will be expected to announce mega-manufacturing plans as well.

‘‘We will remember this day as a historic moment in India,’’ Ruiz said while announcing the deal. ‘‘The idea behind the tie-up is to bring down chip costs so that everyone can afford a PC,’’ he said.

AMD will provide SEMIndia with manufacturing and technology licences for the new chip-making and Assembly Test Mark and Pack (ATMP) facility. The plant’s location has not been finalised, though several destinations in South and East India are being considered.

‘‘The location depends on the best offer from states that we are talking to,’’ Communications and IT Minister Dayanidhi Maran said. Maran had roped in Ruiz to visit India and consider a manufacturing base here, during his last visit to the US in March.

‘‘SEMIndia is certainly creating a world class foundation for manufacturing from India. The wafer fab will bring an advanced manufacturing plant to India,’’ said Dr Vinod Agarwal, CEO, SEMIndia. SEMIndia plans to raise funds for the venture through VCs, debt financing as well as strategic partnerships. AMD is likely to keep a stake in the venture, as will the government. Though exact details of the equity are not available yet, the government can have a maximum 24 per cent stake in the tie-up.

AMD’s coming demonstrates that India is essential to its 50x15 plan, under which it wants 50 per cent of the world’s population to have a PC, Internet connection by 2015. ‘‘India’s growing market for phones, computers and broadband, has no doubt raised the interests of all global manufacturers to be here,’’ said Maran after signing the deal.

There are more than 100 million phone subscribers in India today, but less than 3.5 million PC users, due to the unusually-high PC prices. Broadband connections come at Rs 500 a month, three times lower than last year and PC prices have dropped to Rs 10,000 levels, but these have failed to enthuse the market.

The demand for chips in India is expected to be at $30 billion a year starting 2006, from around $800 million. This is still less than the global total chip industry size of $220 billion.

AMD, with sales of $1 billion in the last fiscal, a 13 per cent market share in the mainstream PC-chip industry, may change this with its chips, reputed for their low-cost and high efficiency.

Intel, MS too

• Craig Barrett, CEO of world’s largest chipmaker Intel, lands in Delhi next Monday. He too is expected to announce manufacturing plans

• Bill Gates, chairman of Microsoft, will be in Delhi next Wednesday. Expected to push Indian language software and enhance its software development team

Endangered
01 Dec 05,, 07:59
IT to be $87 bn industry in 2008: Survey

December 01, 2005

India has the world’s largest treasure-trove of skilled manpower and is on the way to become a global IT powerhouse,” Sudhir Trehan, CII western region chairman, today said at the fourth edition of CII’s ICT summit in Pune, “Digital Maharashtra”.

“MNCs are rushing to India to stake claim in the IT outsourcing market. According to a report prepared jointly by Nasscom and McKinsey, these changing circumstances would lead to the country’s IT industry touching $87 billion in 2008,” he said quoting the report.

Maharashtra Industries Secretary V K Jairath said India was the fourth largest IT market in the Asia Pacific region.

According to managing director IBM, Bangalore, Shankar Annaswamy for the industry to move ahead it was important to shift towards providing solutions for the industry.

Appreciating the role played by MIDCS in promoting it industry in the state chairman and managing director Zensar Technologies Ganesh Natarajan said right partnership was needed to be created between industry, government and academia.

Endangered
02 Dec 05,, 06:49
Jet plans $2.4 bn fleet purchase

December 02, 2005

Private sector airline Jet Airways (India) is planning to acquire 30 aircraft for $2.4 billion over three years to cover new international destinations.

Chairman Naresh Goyal said orders have been placed for 10 737-400/800/900 aircraft, 10 Boeing 777 aircraft and 10 Airbus 330 aircraft for longer haul destinations. “The estimated cost of fleet acquisition is over $2.4 billion and the delivery of 737 aircraft will begin from January 2006, while white-bodied 777 and 330 aircraft will start from early 2007,” Goyal said.

Jet would additionally lease two new Airbus 330 for its international operations. Goyal said the airline was focusing on expanding its international network and expecting 50 per cent revenue from overseas by 2008.

“We are looking at global destinations including Nairobi, Kenya, Johannesburg, Durban, Cape Town, Rome, Milan, Zurich, Frankfurt, Paris, Vancouer, Chicago, Newark, JFK, Israel, Tehran, Bangkok and Hong Kong,” Goyal said.

Referring to its the India-UK service, Goyal said Jet has gained 26 per cent market share in this route and more first class passengers from other airlines are opting Jet.

Endangered
02 Dec 05,, 06:53
Siemens bets on India for Asian growth

Friday, 02 December , 2005, 08:02

Mumbai: The German multinational Siemens AG, which has identified India as the group's key growth market for Asia, said on Thursday it will augment its manufacturing facilities in the country.

This includes setting up of a transformer factory at Kalwa near Mumbai- its 14th facility in India. The group would be making a fresh investment of Rs 300 crore in India. However, Dr Klaus Kleinfeld, President and CEO of Siemens AG, said " I would not like to put any limitations in our terms of financing. We will invest in every opportunity that we have expertise in."

Dr Kleinfeld, currently in India along with the group's central executive committee, told presspersons here that India has emerged as a "key pillar" in the Asian region, contributing substantially to the global value chain.

Indian operations were already contributing significantly in the area of software and research through its IT arm, Siemens Information Systems Ltd (SISL). "At present, the company has about 4,000 software professionals, out of which nearly 1,200 are engaged in healthcare software alone. SISL partners with all the businesses of Siemens AG and undertakes software development in verticals as diverse as automotive, telecom and healthcare," he said, adding that it was expanding its software operations across other cities in India.

The company has invested in a new building at Bangalore, which will in the near future house an additional 1,000 professionals.

Dr Kleinfeld said a new area that the company was planning to enter in India was water purification. After a recent acquisition in the US, Siemens now has the technology for water purification and wastewater treatment. "We are exploring the possibility of rolling out the technology in India," he pointed out.

On the research front, he said Siemens had recently set up a high-end research centre in Bangalore, which is the ninth such facility of Siemens Corporate Technology worldwide, serving as a network hub for part of the Asian regions.

The Siemens group is a leading provider of industry and infrastructure solutions in India, with a business volume aggregating about Rs. 5,400 crore.

The share closed at Rs 3364.10 on the BSE yesterday.

Endangered
03 Dec 05,, 07:05
Cellphone firms bet big with mass-market handsets

December 03, 2005

Motorola, Philips and Nokia may launch the Rs 1,000 cellphone soon.

With subscriber addition drying up in older cellphone markets in Western Europe and North America, the bigger players in the mobile phone industry are turning to the emerging markets – India and China to keep growth rates high.

Market leaders Nokia and Motorola, who account for more than 51 per cent of the phones sold in the world today, continue to bring out cheaper and cheaper models in the market with basic features like voice and SMS only. “Mass-market handsets will undoubtedly play a large role in the emerging markets,” says Motorola’s vice-president for “Hi-growth Markets” Allen Burnes.

“Four billion people worldwide have yet to make their first mobile phone call and India represents a large opportunity in driving the overall handset market, and we intend to be a large part of the successful mobile handset adoption by the masses,” he adds.

Motorola presently invests nearly 10 per cent of its total sales revenues, one of the highest percentages in the market, on research on bringing down manufacturing costs of its basic models and adding new features to its higher-end models and has lined up an ultra-cheap C11 range to be rolled out starting middle of next month.

Expected to retail for around $25 (Rs 1,150), the cheaper ones in the line up will be among the most affordable phones available anywhere in the world. The company plans source the C115, the volume driver in many markets, directly from a manufacturer in India from middle of next month.

Nokia, the dominant player in the Indian market, too has the entry-level, voice-and-sms models in its crosshairs. Just a month ago, it released an updated version of its hugely-successful 1100 model, long after other companies have either eliminated monochrome models from their line-ups or stopped coming out with new models in the segment.

Explains Nokia’s director for product communications for mobile phones, Marianne Holmlund said: “In September, we passed the 2 billion subscriber mark worldwide and out of the next billion, to be sold out by the end of 2009, half will be from the Asia-Pacific alone. Besides this, another 20 per cent will be from the Middle East and Africa and (only) the remaining 30 per cent will be from the rest of the world.”

Another player, less dominant in the handset market, but which accounts for almost 15 per cent of the chipset business (the component accounts for more than half of the instrument-cost in the low-end), is Philips.

According to company sources, it will announce the launch of its breakthrough single-chip technology next month. The new chip-set, expected to be made available to equipment manufacturers for just $5, driving the cost of the final product to under Rs 900 ($20).

The company’s optimism about basic models is also reflecting in the sales figures as well.

According to the latest third-quarter market figures released by research firm Gartner, 9.2 crore phones were sold in the emerging markets from Eastern Europe to China to Africa while North America, Western Europe and Japan accounted for only 8.75 crore units sold during the period.

Endangered
03 Dec 05,, 07:11
Boeing, Airbus plan Rs 1,500-cr hub

Maharashtra pitches for aircraft repair centre in Nagpur.

Maharashtra is talking to European aircraft manufacturer Airbus and America's Boeing for setting up a maintenance, repair and overhaul (MRO) facility in Nagpur. The cost of the project is expected to be Rs 1,500 crore.

Maharashtra Chief Minister Vilasrao Deshmukh told Business Standard today that the proposed facility would form a part of the upcoming multi-nodal logistics hub at the Nagpur airport. India requires a number of MRO facilities as the aviation industry is embarking on massive expansion drive.

“The state is in talks with Airbus and Boeing and has invited proposals from them to set up a repair facility at Nagpur airport. The initial investment for this facility will be Rs 700 crore. It will go up to Rs 1,500 crore in its final phase,” Deshmukh said.

Speaking on the sidelines of a seminar held under the aegis of the Aeronautical Society of India, Deshmukh said the state was actively considering various aviation infrastructure projects and training facilities for pilots and engineers.

Indian Airlines and Air-India, as a part of their expansion programmes, had earlier planned to set up mega MROs in association with Airbus and Boeing. However, the plan never took off.

On a smaller scale, Kerala has allotted 11.5 acres of land in Thiruvananthapuram to Air-India for setting up an aircraft maintenance base at a cost of Rs 50 crore.

At a later stage, an additional 3.5 acres of land will be allotted for the project. This will help in undertaking maintenance of B737-800 aircraft in Kerala itself, from where most of flights of Air-India Express are being operated.

Cochin International Airport Ltd (CIAL) is also exploring options for setting up a new MRO with private-public partnership.

“The state will also consider proposals for allotting land for the Aeronautical Society of India and other aviation infrastructure projects,” the chief minister added. Currently, majority of the heavy aircraft go abroad for maintenance.

Sources in Mantralaya, the headquarters of the state government, said hard lobbying was on by some political quarters to shift the location of the MRO to Baramati but the state government was keen to set up the project at Nagpur.

Endangered
03 Dec 05,, 07:14
Intel plans $500-mn India spend in India

Barrett to show hand on Monday.

Intel Chairman Craig Barrett is expected to announce an investment of $500 million in India during his one-day visit to the country on Monday.

While half of this investment is expected to flow into Intel's research lab and marketing division, the rest will be used for developing a community personal computer in tie-up with Xenitis.

On Monday, Intel and Xenitis will sign a memorandum of understanding (MoU) for the low-cost PC project. The PC which is likely to be priced at Rs 11,000, would be the cheapest machine with an Intel chip. It will also be available in eight languages including Hindi, Gujarati, Punjabi and Marathi.

The new Intel-powered PC, which will be made primarily for the rural and semi-urban areas of the country, will be a rugged version of the existing computers.

Irregular power supply and lack of proper air-conditioning would be some of the problems that the new product will address. Consumers will also have the option to choose Microsoft software.

At present, Xenitis sells low-cost PCs under brand names like Amar PC and Apna PC, which are powered by Cyrix chips and are sold at Rs 9,999.

“Under the MoU, Intel will make an upfront investment of $250 million for a low-cost PC project,” senior Xenitis executives told Business Standard.

Meanwhile, senior government officials said discussions on setting up a fabrication facility, like the one announced by Advanced Micro Devices (AMD) on Wednesday, were unlikely to be taken up.

Intel, which has spent $700 million in the last seven years on its India operations, will spend the bulk of the remaining $250 million on its Intel India Development Centre (IIDC) in Bangalore. It is the company's biggest design centre outside the United States.

The company also proposes to significantly increase the head count at the Bangalore centre from the current level of 2,800 employees.

Endangered
03 Dec 05,, 07:24
Foreign banks on expansion spree in India

The most aggressive foreign bank this year has been HSBC. Though it has a presence in 77 countries, it has made an investment of $ 150 million this year in India alone. The bank is willing to step up investments in India as it expects the economy to sustain over seven per cent growth in coming years. Plans are also underway to foray into the pension sector and set up a non- bank finance company as soon as it gets clearance from the Reserve Bank of India.

Says group Chairman Sir John Bond said, "The Indian economy is growing at seven per cent. Our judgment is that any change in growth will be on the upside."

"Our revenues are likely to grow with faster economic growth. We are willing to invest more in India," he said.

Revenues from Indian operations grew by 20 per cent in 2004-05. India, which contributes about one per cent of HSBC’s global profits, is still slightly behind China that adds up to two per cent of its profits. The group recorded a pre-tax profits were at $10.64 billion for the first six months of 2005.

HSBC has also opens its fifth service centre in India, in Kolkata. The centre will take up the basic data entry and the back office job for the US and UK. Subsequently the operations will be extended to other countries. The other centres are located in Hyderabad, Bangalore and Vishakhapatnam.

The other banking giant Standard Chartered Bank is not far behind. It has already invested $ 120 million so far this year in its Indian operations, which is expected to contribute over 10 per cent of its global profits in 2005.

"Last year, the Indian operations contributed about $200 million or 10 per cent of the global profits. We hope to maintain it and grow it," Stanchart General Manager (South Asia), Jaspal S Bindra said.

Standard Chartered Bank Plc posted 39 per cent growth in profit before tax at $ 2.16 billion from worldwide operations in 2004.

The bank plans to continue expanding its Indian operations by opening 10-12 branches every year and focus on India's booming retail segment.

The bank is in no hurry to acquire banks in India as of now, but will explore such possibilities after government and RBI relaxes the regulations governing mergers and acquisitions of banks. It is also a partner with other Indian banks in setting up an asset reconstruction company.

Deutsche Bank is restarting retail banking operations in India. The German multinational bank closed down its single branch retail service five years ago. The bank has now opened a branch in Mumbai with limited services. Other branches will be operational in Delhi, Kolkata, Chennai, Bangalore, Gurgaon and Noida.

The bank finds so much potential in India, that it is the first Asian country to where its retail banking operations will be functional.

Ajay Bimbhet, Managing Director in-charge of retail banking, Deutsche Bank India, said, "We will enter all retail products except auto loans. Services like doorstep delivery will be available to certain categories of customers." The bank is looking to cater to anyone with income of above Rs 5 lakh per annum, he said.

Deutsche Bank will expand in a big way in India in the coming years. Rainer Neske, Member of Group Executive Committee, Deutsche Bank, said, "India is one of the most exiting growth market today. We want to expand our presence as much as the regulator will allow."

Citigroup needs no introduction. It already has a substantial presence in the India market both in retail and corporate banking, is now expanding its presence in the specialised Research and Equity businesses.

The expansion plan included new hires with an aim to bring in extensive experience of delivering cross border and domestic capital market deals.

Citigroup Country Officer for India and Area Head - Bangladesh, Sri Lanka and Nepal - Sanjay Nayar said ''India is a local economy and a big opportunity market.”

This new venture is likely to consolidate the bank’s wealth management model.

Citigroup Investment Research and India Equities are expanding not only in India but also in Hong Kong, Singapore, London and New York to drive the business.

Little-known French investment and corporate bank Calyon Bank has also set up five branches in India over the last few months. Though ruling out a big retail presence in India, Chairman, Jeane Laurent said, "We intend being a long-term player in India."

The bank has already syndicated $2.5 billion external commercial borrowings for domestic financial institutions and corporates in the first nine months of this year.

The bank also intended to get a substantial share of the aviation financing business.

India as a destination seems to have arrived. The pace of economic reforms, the performance of corporates, the bull run on the stock market and interest of foreign institutional investors and the changing image of the country has added to the growing market potential of the economy and has attracted all the top foreign banks. With JP Morgan and BNP Paribas also likely to join the brigade in the coming months, India is becoming a hot banking destination.

Monk
03 Dec 05,, 15:47
The 2nd Quarter growth figure of 8% and overall H1 figures of 8.1% is just fantastic. It has reaffirmed my faith that this is going to be an 8% growth year. But we are still a shade short of rampant growth. Our economy has still to reach the tipping point where there is rampant growth on a sustained basis which will pull millions out of poverty. Good work needs to be done. But I am sure India will succeed. I have never been surer. :biggrin: :biggrin: :)

We are still having a serious problem with Agriculture, a 6% growth instead of 2% would have pushed the growth rate above 9%. We are also beginning to have serious problems with Mining, Electricity etc. They are turning laggards because of lack of reforms. Mining growth given our vast resources and proximity of the chinese market should be a lot stronger. The govt has to address Mining, electricity and Agriculture swiftly if MM singh's dreams of 10% in 2-3 yrs are to be achieved. :)

Endangered
05 Dec 05,, 06:55
Road map to upgrade aviation ready: Patel

The Civil Aviation Ministry has prepared a detailed road map to make Indian airports of international quality, Union Civil Aviation Minister Praful Patel said in Ahmedabad on Sunday.

Inaugurating the new departure building of the domestic airport of the city, Patel said, "The Ministry has prepared a detailed road map to make the existing airports of international quality. Thirty-five domestic airports in the country would be upgraded by 2009."

The Aviation Minister said the intention was not only to upgrade the existing facilities in all the airports of the country but to develop facilities extensively in all areas concerning Civil Aviation.

The upgradations at all major airports were also being done to facilitate the numerous private airlines that were providing air-connectivity to various cities of the country.

Announcing that the Civil Aviation sector will soon be the highest investment and employment sector, Patel said the national carriers Air India and Indian airlines were planning jointly to purchase Rs 44,000 crore worth new aircraft.

"The current planning and changes are not being made for the coming years but keeping in mind a long-term vision so as the to provide quality services to the people for the next 50 years," Patel said.

Giving an example of visionary infrastructure planning, the Aviation Minsiter said the Victoria Terminus at Mumbai was built more than 150 years ago and it still has the capacity to hold numerous people inspite of a huge population boom over the years.

Apart from the Ahmedabad airport, those in Vadoara, Surat and Rajkot would also be upgraded so that more and more flights could land in these cities and air connectivity is increased.

Neo
05 Dec 05,, 20:36
CALCUTTA, India, Dec. 5 (UPI) -- Just a few days after rival Advanced Micro Devices announced its plans to grab a chunk of the Indian mindshare by helping India build a $3 billion chip plant, Intel Chairman Crag Barrett announced the company's first major India investment plan exceeding $1 billion over the next five years.

On the first day of a visit to India that started Monday Barrett said that the four focus areas -- which he called "four areas of advancement" -- of the Intel investment roadmap would be business expansion, venture-capital funding efforts, the company's research and development unit in Bangalore and its education initiatives in the country.

"The investment demonstrates the company's long term commitments and builds on the foundation we created during the last ten years," Barrett said.

The major part -- $800 million -- of this investment will go towards expanding its business operations, while with the balance Intel will set up a $250 million venture-capital fund. This, however, would not be Intel's first venture funding initiative in the country, because the company has already funded about 40 start-ups over past several years including successes like Indiainfoline, Futursoft, NIIT and Satyam Communications.

However, Barrett belied India's hopes of Intel building a chip fabrication plant here. "We are not talking wafer fabrication manufacturing unit in India but would like to focus on Israel for the time being because we feel that Israel offers distinct advantages to Intel compared to India," Barrett said.

For the past six months, ever since India's IT and Communication Minister Dayanidhi Maran visited Intel's California headquarters in mid-June, the country's industry was ripe with rumors that Intel was close to taking a decision for building a chip plant here. In fact, following the visit Maran even announced that he had managed to persuade Intel to invest $400 million in the country -- a claim that Intel denied later.

That speculation reached its crescendo in the past few days following AMD's announcement on Nov. 30 of the $3 billion semiconductor manufacturing facility in the country in collaboration with SEMINDIA, a consortium of U.S.-based non-resident Indians.

Ruling out the chip plant, Barrett said, "The Israeli government happens to be very aggressive in providing incentives for investments in Israel, and because we are in business we always look for what makes financial sense to us as well as being able to build of out installed base of employees and that matches very nicely for us."

He added that, "Intel has a strong infrastructure base in Israel already, which includes two manufacturing facilities and several thousands engineers."

But the chairman confirmed that Intel is "talking to the Indian government" about setting up a back-end manufacturing and chip-testing facility, "although no decision has been taken just yet." That investment, speculate industry sources, could entail an additional investment of $400 million.

This year's visit is Barrett's seventh visit to the country in the past 10 years and his first since he became the chairman of Intel. According to Barrett, the significance of this visit, besides the business expansion efforts, is the fact that developing start-ups in India has also emerged as an important issue.

"In the Indian start-ups we are looking for strategic capabilities and compatibility with Intel apart from sound financial investments," said Barrett, adding that Intel's "first and foremost motivation from these (VC) investments" is strategic alignment that the company derives from introducing the new technologies or capabilities in the market.

"Over the last several years we have made about a 1,000 investments globally," Barrett said. "If you look at the totality of our returns from all those investments we are positive to the extent of a couple of billion dollars. So it has been a good financial return for us, perhaps big enough to go for another big and expensive chip plant."

The other two components of Barrett's "four areas of advancements" are designing low-cost personal computers meant specifically for Indian conditions, "and work closely with the government, industry and educators to increase the impact of the country's information and communication technology."

According to Barrett, Intel's design center in Bangalore is currently working on the design of a low-cost PC meant for the platform that exists in rural marketplaces where machines need to tolerate rugged conditions like moisture, dust and inconsistent power supplies.

According to reports this computer would be developed with local PC maker Xenitis Infotech that focuses on low-cost computers. The PC is likely to be priced at around $250, which would be the cheapest machine with an Intel chip.

Barrett added that the design center in Bangalore that is developing a successor to the Centrino chip is an integral part of several of its products groups, "from enterprise microprocessors to next-generation micro processors" and would "continue to grow in terms of employee count" as well. The R&D center currently employees 2,800 professionals.

The education initiative plans to train an additional 500,000 teachers on new technologies "so that they can make classes more exciting for children." The initiative also conducts a program called "Intel Earth Program," which teaches young children in a community environment how to use technology to solve problems, work together and connect with other young children in the community, Barrett said.

Endangered
06 Dec 05,, 05:38
Bill Gates meets IT Minister

NEW DELHI: Microsoft founder chairman Bill Gates met Union Information Technology and Communication Minister Dayanidhi Maran on Tuesday to discuss various areas of cooperation.

Gates started his four-day visit to India with the 20-minute-meeting with Maran during which both sides discussed the progress made on various areas of cooperation identified during the minister's visit to Microsoft headquarters in Seattle in September this year.

In Seattle, both sides had agreed to cooperate on e-governance and IT literacy among other issues.

Maran and Gates will have another meeting on Wednesday, aimed at creating a more enabling environment for adoption of IT across India.

Endangered
06 Dec 05,, 06:01
India mulls made-in-Russia N-reactors

Moscow, Dec 5: Following the success of the Kudankulam project in Tamil Nadu, Prime Minister Manmohan Singh today conveyed New Delhi's willingness to consider construction of additional nuclear reactors by Russia in view of India's growing energy demand.

"The Prime Minister conveyed India's willingness to consider positively construction of additional reactors by Russia in view of our growing energy needs," External Affairs Ministry Spokesman Navtej Sarna told reporters after the meeting Singh had with Russia's Energy and Industry Minister Viktor Khristenko.

Both sides also agreed to promote commercial cooperation among each other's oil companies through various measures including floating of joint ventures and equity participation.

The Russian minister welcomed India's interest to invest in Sakhalin III oil and gas project and other areas.

They also discussed ways and means to increase investment in aluminium and steel industries and hydro-electric and thermal power stations.

The Prime Minister said India and Russia must develop long-term energy partnership and expressed India's keenness to join Russia in exploration and production of oil and gas in third countries specially those in Central Asia, Sarna said.

Earlier, speaking at a joint meeting of Indian and Russian businessmen, Singh said both nations should expand joint operations in the energy sector to third countries, adding that talks between Indian and Russian oil companies would soon yield concrete results.

Endangered
06 Dec 05,, 06:09
India’s rise in sugar production to surpass global increase

MUMBAI, DEC 4: India is going to account for more than 100% of the overall increase in global sugar production in the current year 2005-06. While India’s production is set to rise by about 4.2 million tonne, global production is set to increase by 3.3 million tonne.

World sugar production for the 2005-06 year is forecast at 144.2 million tonne, raw value, up 3.34 million tonne from the revised 2004-05 estimate. Consumption is forecast at 142.8 million tonne, up 1.7 million tonne from a year earlier.

Exports are forecast at 47.7 million tonne, up 1.4 tonne; and ending stocks are forecast at 31.5 million tonne, down 3.6 million tonne.

According to Global Agriculture Information Network (GAIN), forecast increases in 2005-06 world production and trade are mainly due to higher production in India, up 4.2 million tonne; Brazil, up 5,00,000 million tonne; and China, up 7,00,000 tonne.

The world export forecast for 2005-06 is revised upward by 3% despite reduced shipments from Thailand of 9,00,000 tonne. Reduced Thai shipments are offset by increased shipments from the EU of 1.7 million tonne, and Brazil of 2,00,000 tonne. Thai exports for 2005/06 are forecast at 2.7 million tonne.

Exports during the previous four years averaged 4.5 million tonne. Revisions of the 2004-05 Production, Supply, and Distribution (PS&D) may estimates place world beginning stocks at 38.8 million tonne, down 2,00,000 tonne; world production at 140.8 million tonne, down 1.3 million tonne; world exports at 46.3 million tonne, up 3,00,000 tonne; world consumption at 141.1 million tonne, down 4,00,000 tonne; and ending stocks at 35.1 million tonne, down 6,00,000 tonne.

Principal country changes in 2005-06 PS&D forecast world production from the May estimate are: Brazil, down 8,00,000 tonne; the EU up 8,00,000 tonne; and the United States down 6,00,000 tonne.

Since the May forecast, EU exports are forecast to increase by 1.8 million tonne; Brazilian exports are revised downward by 5,50,000 tonne; Thai exports are reduced by 2,00,000 tonne; Pakistan’s shipments are down 2,15,000 tonne; and India’s exports are up 1,80,000 tonne.

Neo
06 Dec 05,, 19:36
High labour costs coupled with unwillingness of the locals to take up low-end jobs have opened up the prospects of foreign multinationals in Ireland outsourcing their work in India along with a large dose of investments.

Information Technology, biotechnology, engineering and financial services are sectors that Irish manufacturers are said to be keen on investing in. World IT giants like Dell, Ericsson, HP and Intel, pharmaceutical giants Novartis, Roche and Genzyme have their base in Ireland, which exports 80 per cent of its manufactured goods.

The Irish engagement with Indian industry and trade will get a boost when Prime Minister Bertie Ahern leads a Trade Mission to India mid-January next at the head of an over 100-member delegation that is expected to include Chief Executives of a number of multinationals.

Officials in Industrial Development Authority, responsible for attracting Foreign Direct Investment, Enterprise Island and Irish Exporters Association say that joint ventures with Indian companies in information and communication technology and pharmaceutical sectors are also not ruled out.

Enterprise Trade and Employment Minister Michael Martyn said as much when he pointed out that India had an established reputation in the software sector and there was potential scope for collaboration between industries in the two countries in this sector.
A highly export-driven booming economy, the "Celtic Tiger" boasts of Euro 83 billion in exports and Euro 50 billion in imports. Ireland attracted FDI to the tune of Euro 171 billion.

During 2004, exports with India accounted for Euro 109 while imports amounted to Euro 133 billion, show the trade balance slightly in India's favour.

Talking to visiting Indian journalists about prospects of multinationals investing in India, IDA's International Marketing Manager Brendan J Halpin points to a Trade Mission led by the Prime Minister to China earlier this year as part of the Asia Strategy and how exports to that country had risen since then.

Speaking about his "exploratory" Trade Mission to India, Prime Minister Ahern said they were interested in investing in technology and services sector and in joint ventures with India including in third world countries.

He said India could use Ireland as a "launch pad" for its investment in Europe.

The legislation was currently under discussion in Parliament and officials said it was likely to be enacted soon.

At present about 300 to 500 Indian professionals are working in Ireland and an equal number going there to study.

A liberalised visa regime would give multinational giants opportunities to choose and recruit knowledge industry professionals and skilled workers in any sector to work in Ireland, officials both in government and industry feel.

The Science Foundation of India (SFI), which is funded by the Irish government to promote scientific research and development is planning to enter into an agreement with Indian Science Academy, Bangalore, during Ahern's visit to the city.

The agreement is slated to provide for collaboration in areas like exchange visit of scientists.

Kiran Mazumdar Shah, Chief Executive of BioCon, originally Irish firm, will play a major role in facilitating Science and Technology research, SFI's Director of Corporate Affairs, Mattie McCabe said.

Civil Aviation is also one area, Ireland is interested in cooperating with India with the huge opening up of the sector there. Particular attention is being given to the possibility of setting up facilities for Maintenance, Repair and Overhaul (MRO), called in popular parlance as "aviation garage."
Irish Exporters' Association Chief Executive John Whelan said there was a big potential in the services sectors, especially the financial sector, for outsourcing partnership.

Google, e-Bay and Citi group are the biggest exporters of services from Ireland now.

He said at present the manufacturing sector was on the decline in Ireland due to high labour and fuel costs and a lack of willingness on the part of Irish people to take up low-end jobs, a sign of a prosperous society.

Outsourcing in Ireland is already causing problems. Ferry workers are up in arms and are on strike currently over outsourcing workers from some Eastern European countries.

Irish tractor manufacturer Bunsside was already outsourcing engineering components from Pune and some other companies are considering locating units in India, he said.

http://www.hindustantimes.com/news/7598_1566060,000500020009.htm

Endangered
07 Dec 05,, 05:57
Microsoft to invest $1 bn in India: Source

New Delhi, December 7: Microsoft Corp, the world's largest software maker, plans to invest more than $1 billion in India to expand its operations in the fast-growing economy, a source close to the firm told Reuters on Wednesday.

Many foreign companies have announced plans to ramp up investments in India, attracted by low costs, educated work force and good telecommunications links and an economy forecast to grow 7-7.5 per cent in the fiscal year to March.

Microsoft relies heavily on India's booming $17.2 billion software services industry to source quality skills at costs far below average Western salaries.

"The investment is more than one billion dollars and spread over several years," the source said.

It has launched software in local Indian languages to ride a boom for software in the world's second-most populous country, and Microsoft chief Bill Gates has been a regular visitor to India.

Microsoft's investment plans follow chip-maker Intel Corp's announcement on Monday to pour $1.1 billion in the medium term in its Indian operations, including setting up a venture fund to take stakes in local start-ups.

In October, Cisco Systems Inc said it planned to invest $1.1 billion in India over the next three years and triple its staff in the country.

Earlier this week, US banking group, JP Morgan Chase & Co said it hoped to hire 4,500 graduates in India over the next two years.

Endangered
07 Dec 05,, 06:03
Kingfisher set to rule the Indian skies

Kuala Lumpur, December 6: Kingfisher Airlines is poising itself to become India's biggest and best airline, and plans to fly international routes by raising $200 million through its initial public offer (IPO) next year, its chairman said.

Tycoon Vijay Mallya said his Airline was looking at launching the IPO during the second half of 2006. "We are not that enthusiastic about a massive dilution. It will depend on the price," he said on the sidelines of a regional aviation conference.

"Our plans are to also fly internationally and our vision is to be the biggest and best in the Indian skies by 2010," he said.

The airline, which is just six months old, plans to raise 200 million dollars in its IPO to help Finance its shopping bills for 65 new aircraft to help in its global expansion, Mallya, also Kingfisher's managing director, said.

Besides the IPO, Kingfisher, which is a unit of the UB group, may also seek loans from its parent UB group's bankers to raise the financing needed for the aircraft purchases.

He said his airline had a six per cent market share and was expected to break-even in the first year of operation 'if we are lucky, if not most certainly next year'.

Kingfisher has ordered 30 Airbus A320s worth 1.9 billion dollars, 20 ATR 72-500 Turboprop Aircraft amounting to 350 million dollars, five Airbus A380s, five A330s and five A350s.

Mallya said his airline had plans to launch non-stop flights from New Delhi, Mumbai and Bangalore to New York by 2010 when the first A380 jumbo is delivered. The airline is also looking at markets in China, Hong Kong, Singapore and Malaysia as well as the Middle East.

The airline is also bidding for the debt-ridden Air Sahara, which has international routes. Kingfisher has submitted its bid, which is reportedly below the 750 million dollars valuation by Air Sahara's advisors Ernst and Young.

Mallaya said the ball was now in Air Sahara's court. Jet Airways is also reportedly seeking to buy a stake in Air Sahara.

Mallya made it clear that the merger deal with Air Sahara was viable only if the Indian government did not withdraw Air Sahara's international routes, landing slots and other airport privileges. He also urged the Indian government to shorten the time for domestic carriers to enter the global foray to two years. Kingfisher aims to launch first-class seats in March next year but 'at business class price' to target India's 300 million middle-class population, he said.

Earlier at the conference, Kingfisher was named 'Best New Airline of the Year' by the Center for Asia Pacific Aviation. Meanwhile, Malaysian budget carrier Air Asia said it had no plans at the moment to explore the Indian aviation market. The airline also said that it had dropped plans to fly to Singapore. Air Asia chief executive Tony Fernandes said his airline did not submit any new applications after failing several times to secure landing rights in Singapore. He added that the booming Indian market did not feature on Air Asia's regional expansion programme at the moment as the country still had strict regulations on aviation. Fernandes, who is Malaysian of Indian origin, won the 'Aviation Executive of the Year Award' for a second straight year, conferred by the center for Asia pacific aviation during the conference.

Endangered
07 Dec 05,, 06:10
Gates brings good tidings, plans to hike India strength by 3,000

NEW DELHI: Microsoft founder chairman Bill Gates has brought good tidings to the country on his fourth visit to India. The chairman of the software major on Wednesday announced that the company plans to increase its headcount in India by 3,000 over the next three to four years.

"We have 4,000 professionals in India today, we will increase it to 7,000 over the next three to four years," Gates said at the CII-CEO Forum on Wednesday.

On Tuesday, Gates had kick-started his four-day India visit by meeting Union Information Technology and Communication Minister Dayanidhi Maran to discuss various areas of cooperation.

Gates had a 20-minute-meeting with the IT minister, during which both sides discussed the progress made on various areas of cooperation identified during the minister's visit to Microsoft headquarters in Seattle in September this year.

In Seattle, both sides had agreed to cooperate on e-governance and IT literacy among other issues. Maran and Gates will have another meeting on Wednesday, which is aimed at creating a more enabling environment for adoption of IT across India.

Earlier on Tuesday, Gates had reviewed the Avahan initiative on AIDS for which the Gates Foundation has already pledged $112.4 million.

Endangered
07 Dec 05,, 07:23
Niche foreign retailers have big plans for India

New Delhi , Dec. 6

NICHE foreign retailers are making a beeline for the Indian market. In fact, despite the FDI policy pertaining to retail being unclear, over 10 foreign niche segment retailers have recently set up or announced their intention to set up shop in India using the franchisee route, with several others waiting in the wings.

Retailers such as Guess, Esprit, Chanel, Clarks, Mango, Aigner, Bvlgari, Hugo Boss, Mark & Spencers and Tommy Hilfiger have already built a retail presence in the country, while market watchers point out that several more such as Versace, FCUK, Zara, Mother Care, Ikea, Fendi, NEXT, Debenhams, Trussardi, and DKNY have charted out a strategy to enter the Indian market.

Most of the brands entering the market are targeted at the premium end. According to estimates, the premium apparel segment in India is valued at about Rs 1,900 crore and growing at 20 per cent. "All the indicators are pointing in the right direction. India has a considerably young population and the purchasing power is increasing.

In addition, recent estimates show that the super premium market is growing at about 30 per cent annually. For instance, the sale of diamonds in India is growing at about 26 per cent per annum," says Mr Hemchandra Javeri, President, Madura Garments, which recently entered into an exclusive distribution tie-up with fashion brand Esprit. Esprit has launched outlets in Mumbai, Delhi and Bangalore.

Similarly, the UK-based footwear brand Clarks has entered into a franchisee tie-up with Lifestyle India Private Ltd and plans to invest £20 million in India over the next five years to open outlets.

The brand recently set up exclusive stores in Mumbai, Delhi, Bangalore and Ahmedabad.

North India-based Blues Clothing Company has entered into franchisee tie-ups with Italian fashion brands Versace and Cadini and plans to open outlets for these brands shortly. "We have been selling Versace apparel through our own stores. The purchasing power definitely exists," says Mr Abhay Gupta, Executive Director, Blues Clothing Company.

Mother Care UK Ltd, another retailer with a strong European presence, is also gearing up to enter the country in a franchisee tie-up with Shopper's Stop, with plans to set up 40 outlets.

In fact, the Indian retail scene is expected to change considerably over the next year with not only new players coming in, but also with the foreign players operating in India charting out major expansion plans.

Italian brand Benetton recently announced that it plans to double retail space, increase production base and introduce a new brand and other fashion items in India.

The company plans to set up 50 more retail outlets in India, taking the total number of outlets in the country to 100.

Endangered
07 Dec 05,, 07:44
SCI all set to acquire 14 vessels for Rs 2,600 cr

As part of its ambitious expansion plans, national flag carrier Shipping Corporation of India (SCI) is all set to acquire 14 ships at a total cost of Rs 2,600 crore.

“The proposal of acquiring 14 ships at Rs 2,600 crore has been cleared by pre - Public Investment Board (PIB) and is awaiting final clearance from PIB and Cabinet Committee on Economic Affairs (CCEA),” a senior government official said.

The proposed fleet acquisition includes 6 LR-1 Product Tankers of 60,000 dead weight tonne (DWT) each, 2 Cellular Container Vessels of 4,300 twenty foot equivalent units (TEU) each and 6 Handymax Bulk Carriers of 55,000 DWT each.

The company is in the process of floating tenders for inviting global shipyards for construction of these new ships. SCI has already floated tenders for 2 Capesize Bulk Carriers which is now awaiting CCEA approval.

Earlier, SCI had signed a contract with Korean shipyard Daewoo Shipbuilding & Marine Engineering (DSME) for acquiring two very large crude carriers (VLCCs) with a capacity of 3,00,000 DWT at a total cost of Rs 1,136.08 crore.

According to shipping industry analysts, the company has a fleet of 84 ships and induction of container vessels and product tankers would boost business prospects. “As there is no container vessels for Shipping Corporation, this will give an edge as containerised trade is booming. However, delay in vessel acquisition due to government procedures and unavailability of shipyards, will derail the programme,” they pointed out.

The Union government has decided to divest 15 per cent stake in SCI. However, the company has chalked out an expansion programme to acquire 64 ships under the National Maritime Development Programme.

Out of the total vessels, 32 vessels are proposed to be acquired during the remaining part of the Tenth Plan period, up to March 2007. The rest of the vessels will be acquired during the 11th Plan period. The vessels, according to the expansion plan, would be delivered to the company by March 2015.

Endangered
07 Dec 05,, 07:50
LG to invest Rs 900 crore over five years

LG Electronics India Private Limited (LGEIL) plans to invest Rs 900 crore in the next five years in the production of optical storage devices, GSM-based phone handsets, and air conditioners. Of the total amount earmarked, Rs 200 crore will be ploughed into the segments In the next calender year itself.

Speaking at a launch of LG’s new GSM handset, karaoke systems and Express line of notebooks, Managing Director Moon B Shin said that most of the production will happen at the company’s state-of-the-art facility at Ranjangaon in Pune, which will include production of optical storage devices.

The production, expected to be about 30 million units in the first year, will primarily be for export to European markets. Shin adds, GSM handset product line would be expanded to and capacity increased to 18 to 20 million by 2010.

Production of airconditioners at the Pune plant will begin in November, 2006 and will add 300,000 units to the company’s existing capacity of 500,000 units a year.

Production of slim TVs, which the company currently imports, would also commence by November next year and would involve additional tooling costs of around $1 million, Shin said.

LGEIL plans to increase the number of GSM models from the existing 12 to 23 by next year and a target of 1.5 million GSM handsets have been set which would comprise 10 per cent of the market share.

The company’s goal is to produce 20 million handsets by 2010 at the Pune unit and has already started producing the same from March this year with a capacity of 40,000 to 50,000 per month, Shin informed.

“We plan to make India a major export hub and are eyeing revenues of $250 mn for 2006 and plan to raise the share of exports to 30 per cent by 2007, from the current 7 per cent,” Shin said.

The company exports to Africa, Middle East, Latin America and microwaves to Russia as well as Nepal and Bangladesh. LGEIL currently has five notebook models, sales of which contribute about 6 per cent to the total turnover.

Shin said that with a bulk of the investment having gone for the greenfield project in Pune, the company will only contemplate other greenfield projects after the next five years and probably explore locations like Chennai and Bangalore.

The company plans to close the calendar with a turnover between Rs 7,500 to Rs 8,000 core and is on target as on date, signed off Shin.

Endangered
07 Dec 05,, 07:54
ONGC to buy 45% stake in Nigerian oilfield

Wednesday, 07 December , 2005, 12:25

Mumbai: Oil and Natural Gas Corporation Ltd. is set to buy a 45 per cent stake in Nigerian offshore oilfield Akpo for $2 billion, Economic Times newspaper said on Wednesday.

ONGC will make the acquisition through its overseas arm, ONGC Videsh, and partner with French oil company Total SA, the paper said.

"The government is set to give the clearance for the investment shortly," the paper said.

A spokesman for ONGC declined to comment on the report.

An official at the state-run energy explorer told Reuters on Monday ONGC expects a decision on the oilfield auction "soon".

A source with knowledge of the situation told Reuters on Friday that ONGC had won the auction with an offer of between $1 billion and $2 billion. | Read more Finance news. |

The stake in the yet-to-be-developed Akpo oil and gas field was put up for sale earlier this year by Nigerian firm South Atlantic Petroleum Ltd., which is controlled by former Nigerian Defence Minister Theophilus Danjuma, sources have told Reuters.

The deepwater field, operated by Total, needs billions of dollars of investment.

On Wednesday, sources told Reuters ONGC and China National Petroleum Corporatio (CNPC) may bid for privately owned Nations Energy, which pumps heavy crude from a large field in Kazakhstan.

The deal could be worth $2 billion, the sources said.

CNPC beat out ONGC in its $4.2 billion takeover of PetroKazakhstan, another big independent Kazakh producer.

ONGC's Indian fields are in decline, and it is searching the globe for oil and gas to supply India's booming economy.

Shares in ONGC, valued at $32 billion, were up nearly 2 per cent at Rs 1,071 in a firm Mumbai market.

Neo
07 Dec 05,, 14:36
Internet service providers happy with increasing demand
While broadband internet connectivity has failed to take-off as per the expectations across the country and is sure to fall miles short of the target set for 2005, Internet Service Providers (ISPs) in Orissa are least perturbed. The penetration of broadband in India at present is slated to be around eight lakh, far below the target of 30 lakh customers set to be achieved by the end of December 2005.

The number of broadband users in the State is in thousands. At present, broadband connections in the State are less than 10,000. The public sector ISP BSNL has achieved about 2500 customers. For BSNL, the target for its Dataone broadband services for Orissa was achieving 9000 connections against an installed capacity of 10,560. However, it seems to be grossly missing the set target. The Dataone service was launched in 12 cities and towns across the State this year but in most places the response has been lukewarm. In the capital of Bhubaneswar, it has secured only 805 connections while in the neighboring Cuttack the number is only 214. In Rourkela, it has got 197 customers while Berhampur seems to have fared much better than the rest pocketing around 249 connections against a target of 312. According to AGM, IT of BSNL R. Rao, lack of proper marketing of services by the telecom major has proved to be the bane. The public sector ISP has an edge over others in terms of quality and services as well as facilities, but the message has not been delivered properly to the prospective customers, Rao averred. On the other hand, Ortel Communications claims to have notched up over 6000 customers. Launched in 1999, the cable internet services, later advanced to broadband in 2004, provided by the company are available in the cities of Bhubaneswar, Cuttack, Puri, Rourkela and Paradip. The surge in connections was more evident this year. There are over 50,000 internet users in the State and the major chunk of them are dial-up connected ones. However, despite the low take-off rate of broadband, the ISPs are upbeat. ‘‘It is the increase in demand for broadband that has acted as the morale booster for the service providers’’, says senior manager, Ortel Broadband, C.R. Nayak. Falling prices of PCs have contributed to a sharp increase in computer household in the State. And the computer population has led to increase in demand for internet connectivity. With broadband charges coming down to about Rs. 200 to Rs 250 for the minimum 256 kbps speed, the penetration is set to intensify in the coming days, Rao said. What is more heartening is that, the demand is more from the individual sector than institutional and corporate ones. ‘‘More than 80 per cent of our connections belong to the individual customer segment’’, says Nayak

Neo
07 Dec 05,, 14:40
The state-owned Indian Airlines is going in for a makeover with a new name 'Indian' and a logo inspired by Konark sun temple in Orissa, ahead of new aircraft joining its fleet.

Announcing the change in New Delhi on Wednesday, Civil Aviation Minister Praful Patel said the makeover will begin with the three leased Airbus A319s joining the fleet this month.

The first of the A319 arrived in New Delhi on Wednesday bearing a vibrant logo of a flaming orange sun with a dash of blue inspired by the Konark sun temple.

"This is the first new aircraft to join the fleet after 11 years," Patel said.

To begin with, the new design is being implemented only on the Airbus A319s, but gradually the changes will be made in the entire fleet as and when they are refurbished or painted.

The airline has already invited some designers to suggest new uniforms for the staff for a trendy look.

Two other leased aircraft are to be inducted later this month and another two by April, taking the fleet strength to 70 aircraft.

These are apart from the 43 Airbus -- A319s and A320s -- the airline is in the final stages of negotiations. They will join the fleet from August next year.

"We hope to induct one aircraft every month," the minister said.

On the modernisation plans for airports, Patel said the bids would be finalised by December 31 as per the recommendations of the Group of Ministers.

Set up in 1953, Indian Airlines currently has an annual turnover of around Rs 60 billion ($1.2 billion). Together with its subsidiary, Alliance Air, the airline carries over 7.5 million passengers annually.

Endangered
08 Dec 05,, 07:12
Private sector involvement necessary for developing airports, says Civil Aviation Secretary

As the aviation sector is banking on the boom and potential, the union government is planning a second international airport in Mumbai. It is also significant that the union government is finalising the bids for up- gradation of the existing Mumbai and Delhi airports soon.

Talking to media in Bangalore today, Civil Aviation Secretary Ajay Prasad said it was important for private sector to contribute in the development of the airports.

"We feel that it is necessary and imputative for private sector involvement in the development of airports. For Bangalore and Hyderabad we have already demonstrated such success of the policy. In Delhi and Mumbai we are not going to be investing any money from the government. There will be a joint venture company, which will be raising the resources both as equity and as debt for doing all the modernisation work," Ajay said.

"Airport authority will be holding 26 percent equity in this joint venture company, and to the extent of the 26 percent the airport authority will be making an investment in the joint venture company. Rest of the money the private sector parties will bring in as equity and they will be also going into the debt market to raise the necessary money for that," he added.

He also said that government has mooted building a new second international airport in Mumbai for which process of acquiring land was the going.

Prasad was in Bangalore to take part in a three-day international conference and exhibition on Aerodrome India 2005.

Endangered
08 Dec 05,, 07:18
Bill rings in Christmas: $1.7 bn-plus on India

NEW DELHI, DECEMBER 7: With a $1.7 billion budget, Microsoft Corp, the world’s biggest software company, signed up on Wednesday for a major role in India’s drive to modernise and take IT to rural areas.

In a series of announcements made today, visiting Microsoft Chairman and Chief Software Architect Bill Gates said digital inclusion and taking affordable technology to rural India would be its focus for the next four years.

‘‘India is a very big deal for us,’’ said Gates — the world’s richest person. ‘‘It is a successful service exporter and has a highly competitive Information Technology (IT) sector. We are convinced about India’s key role as we go on to the next 1 billion (PC) users. $1.7 billion is a conservative budget,’’ Gates said.

He also confirmed that Microsoft has no plans to adopt the ‘‘free’’ software model in India or any other country. ‘‘Great software is going to have a value always, whether it is in a phone, PC, videogame, or built into a car. Microsoft’s strategy is to drive down prices as much as possible while taking volumes as high as possible,’’ Gates said.

In four years, Microsoft has plans to make India a hub of its R&D activities and innovation hub. It will conduct 100 pilot projects in six states to demonstrate how ICT can be used to transform education and also set up rural kiosks that will cover a population of 700 million people.

The software giant has plans to add 3,000 people to its existing headcount of 2,700 in India. Two new innovation centres, both tie-ups with the National Institute of Smart Governance (NISG) in New Delhi and Hyderabad, are also to be set up.

The NISG is a 49 per cent government-owned non-profit company that promotes e-governance in India. Microsoft will conduct pilot projects on workflow automation in government, e-governance solutions and smart cards in these two centres.

The software giant will also assist the ministry of communications and IT with an ongoing project to set up 100,000 common service centres.

‘‘Only 5 per cent of India’s population can speak, read or write in English. Microsoft’s Project Bhasha will translate Windows into 14 Indian languages, including the 9 that have already been translated,’’ said Gates.

A major affiliation bagged by Microsoft is with the still-new National Manufacturing Competitiveness Council (NMCC), a powerful body set up by the Indian government to improve the performance of small and large manufacturing companies across key sectors such as textile, pharma and auto components.

‘‘As part of the tie-up with NMCC, Microsoft will improve the contribution of Small and Medium Enterprises (SMEs) to the Indian economy,’’ said Ravi Venkatesan, Chairman, Microsoft India.

‘‘SMEs employ 40 million people in India, who are confronting globalisation for the first time. Microsoft will play a role in their vocational training, development of IT skills and provide R&D support, particularly to SME clusters,’’ he said.

Bill Gates also met Reliance Infocomm promoter Anil Ambani on Wednesday.

The two companies are mulling over the launch of an IP-based Television over the last few years.

Endangered
08 Dec 05,, 07:25
India could become a hub for vaccine production: PM

INDIA could play a leadership role in generating low cost, effective, easy-to-deliver vaccines which can reach our vast hinterland, said the Prime Minister, Dr Manmohan Singh.

Inaugurating the third Global Alliance on Vaccination and Immunisation (GAVI) Partners' meeting, Dr Singh said that India has some of the largest vaccine manufacturers in the world. "India supplies more than 60 per cent of the world's requirement of basic vaccines procured by UNICEF. This is made possible due to our ability to produce quality vaccines at reasonable rates, affordable by many developing countries."

Highlighting the role of Indian companies in making the anti-AIDS drugs affordable globally, Dr Singh said that India could become the hub for vaccine production for the developing world.

Mr Bill Gates, Chairman of Microsoft and Co-Founder of the Bill & Melinda Gates Foundation said, "GAVI would have to develop a careful investment strategy to accelerate and catalyse the vaccine programme." Norway, meanwhile, announced a 66 per cent increase in its donation to $75 million. Mr Jens Stoltenberg, Prime Minister of Norway, said that the contribution would be kept at this level till 2015; bringing Norway's total support for global immunisation to about $1 billion.

The Health Minister, Dr Anbumani Ramadoss, hoped that the Global Alliance would provide the necessary support as before to extend the coverage to 11 States in the country. The Minister highlighted the need for developing newer and more effective vaccines. It is envisaged that the on-going research for the development of safe and effective vaccines against major diseases such as malaria, HIV, rota virus and so on, would help the global community in combating these deadly diseases at affordable cost.

The UNICEF Executive Director and Chair of the Board of the GAVI Alliance, Ms Ann Veneman, said an additional 1.1 million lives could be saved with access to under-utilised vaccines that can protect children against preventable diseases such as pneumonia, measles and tetanus.

The three-day GAVI meeting, which will try to chalk out future strategies concerning vaccines and immunisation, marks the launch of phase-II programme of the alliance to cover more children. A Vaccine Fund has been created to provide additional financial support for achieving the immunisation goals.

Endangered
08 Dec 05,, 07:31
Airbus ups sales target for India

Encouraged by the massive orders placed by Indian carriers, European aircraft-maker Airbus Industrie has revised its demand projection for the Indian market to 800-1,000 aeroplanes worth $80 billion by 2026. The earlier projection envisaged orders for 570 aeroplanes worth $40 billion by 2023.

Notably, about 40 of these aircraft are expected to be super jumbo A 380s. “The Indian market is very strong. We see orders between 800 and 1,000 aircraft in the next 20 years, including 40 A-380s,” said Kiran Rao, senior vice-president, marketing and pricing, Airbus Industrie.

This is the third time in less than one year that the European aircraft-maker is upping its sales projection for India. Late last year, it had doubled its projection for sale of aircraft to India from 200 to 400 by 2023.

“India is a major driver for the global aviation market. We see a major upscale for sales from India. India is seeing a boom in airline start-ups and strong economic growth,” said Rao.

Indian carriers have been on an aircraft-buying spree, with Air Deccan ordering 32 AAA-320s, Jet Airways 10 A-330s with buying option for another 10, Kingfisher 15 aircraft including five double-decker A-380s and start-up airline Interglobe placing orders for 100 A-320s. “We have had a good year with many orders. We are also working on some additional deals in India. This includes some start-ups as well as existing carriers,” Rao said.

The airplane industry draws up a long-term forecast for the market, which is revised every two years. The forecast is based on the existing fleets in a given country, various economic parameters and the growth rates of the country.

Rao said Airbus also had plans to set up training centres in India, whose market size would be second only to China’s.

Endangered
08 Dec 05,, 07:35
$10bn, 11 wks: Global majors home in India

In the last 11 weeks, international information technology majors and non-resident Indians have announced investment plans of around $10 billion in the country.

In the last seven weeks, global players including Cisco, Intel, AMD and Microsoft have committed to investing $6.85 billion in India over the next three to five years. These investments span the entire gamut of IT services — software, microprocessors and networking equipment.

Microsoft Corporation today announced its decision to invest $1.7 billion in India over the next four years. Earlier this week, Intel Corporation, the world’s largest chip-maker, announced an investment package of $1.05 billion over the next five years.

To complete the loop, a consortium of Advanced Micro Devices (AMD) and SemIndia (a group of NRIs) and Indian Equipment Manufacturing company (another NRI consortium) announced plans to set up separate fabrication units.

Cisco Systems, the world’s largest provider of networking equipment including routers and switches, had also recently announced an investment plan of $1.1 billion, the company’s largest investment outside the United States.

The bulk of the investments made by the IT majors have been to strengthen their research and development activities in the country.

While half of Microsoft’s investments will be used for the company’s R&D centres, Cisco Systems will invest $750 million of its total $1.1-billion commitment on research centre. Intel will also invest a significant part of its $1.05-billion investment on research centre.

Endangered
08 Dec 05,, 07:43
2.3-m new mobile users added in Nov

New Delhi: GSM-based cellular operators have added 2.32 million new mobile subscribers in November, taking the total user base to 55.31 million. This is now the highest number of monthly subscriber additions recorded by the GSM industry since the inception of service.

According to figures compiled by the Cellular Operators' Association of India, State-owned Bharat Sanchar Nigam Ltd has added the maximum with 7.8 lakh new users, taking its total user base to 13.29 million. Bharti, the largest cellular operator in the country with 15.4 million subscribers, added 6.8 lakh new users. Hutch added 5.2 lakh new users to take its total tally to 10.68 lakh.

Among all circles, Category C circles continued to witness the highest rate of growth at 8.31 per cent, which is much higher as compared to the metros and A and B circles. Within the Category C circles, Bihar recorded highest additions in absolute terms (123,895 new subscribers), followed by Orissa (71,556 new subscribers). | Read more Finance news. |

Category B circles recorded a growth of close to 5 per cent over the previous month. Highest additions were in Kerala (1,87,461 new subscribers), followed by Punjab at (1,80,032 new subscribers).

Category A circles witnessed a growth of 3.9 per cent. Amongst the Category A circles, Gujarat recorded highest additions (1,84,205 new subscribers), followed by Tamil Nadu (1,77,171 new subscribers).

The number of metro subscribers also grew by 3.2 per cent over the previous month. Delhi and Mumbai continue to dominate in terms of both total volume and market share.