Exporters Unhappy, Demand More Sops

The rupee is up 5.24 per cent vis-à-vis the dollar since the start of this fiscal and exporters are running for cover.

Interventions by the central bank have stemmed volatility in the forex market and export sops announced last month are beginning to provide some relief.

Besides, the government now says that the incentives are good enough to meet the $160-billion export target.

Given export sops for Rupee, RBI concessions - 54 per cent of adverse impact absorbed, excessive intervention not good to bolster Rupee. Lot of negative impact on exports by Rupee covered, damage control already done, said Ashwani Kumar, Minister of State for Industries.

Rupee hit exporters, on the other hand, are vociferous that the Rs 1,400-crore relief package announced by the government last month is not enough to take care of the mounting losses.

Source : www.indian-commodity.com

Rupee Dips On Heavy Dollar Demand

The rupee slips against the greenback on August 30 on the back of heavy corporate demand for dollars. The rupee opened at 41, dipped to touch an intra-day low of 41.18 and finally ended at 41.16, against the previous close at 41.10/11. Dealers said the home currency opened strong tracking the buoyancy in the global stock markets but lost its gains as there was sustained dollar demand. The rupee is likely to be range bound in the next few days. In forwards, the six month closed at 1.22 per cent (1.07) and the 12 month ended at 1.29 per cent (1.15).

Source : www.indian-commodity.com

19 % Increase In Seafood Exports

KOCHI: Seafood exports from the country during the year 2006-07 reached an all-time high of $1.85 billion.

Compared with the figures the previous year, there was an increase of 19.62 per cent in the quantity exported, 15.43 per cent in rupee realisation and 12.69 per cent in foreign currency realisation.

For the first time, the country''s marine exports crossed Rs.8,000 crore.Like in 2005-06, European Union continued to be the major market for the marine products with an intake of 33 per cent in value followed by Japan with 16.18 per cent, the U.S. with 16.12 per cent. Another significant development was the emergence of China as a leading buyer for Indian marine products. China''s value-wise intake share went up to 13.83 per cent. Frozen shrimp continued to be the major item in India''s export basket.

Source : www.indian-commodity.com

Rupee Appreciates Tad Against Dollar

The rupee appreciated a tad against the dollar on August 29 buoyed by the upswing in the stock market. The currency opened weak at 41.35/37 but gained during the day to close at 41.10/11, against the previous close at 41.16/17. The rupee also gained on sustained dollar selling by foreign and private banks. The appreciation of the rupee was surprising as there is a lot of month-end dollar demand. In the forwar d premia market, the six month closed at 1.07 per cent (0.70 per cent) and the 12 month ended at 1.15 per cent (0.96 per cent).

Source : www.indian-commodity.com

India, Bangladesh To Sign Agreement To Boost Exports

Bangladesh and India are expected to sign a memorandum of understanding (MoU) for duty-free export of eight million pieces of readymade garments. The offer had been made during the 14th summit of the South Asian Association for Regional Cooperation (SAARC) in New Delhi and was firmed up during a subsequent visit of External Affairs Minister Pranab Mukherjee to Dhaka. Chaired by Bangladesh Chief Adviser Fakhruddin Ahmed, a meeting of the Council of Advisers on Tuesday approved the MoU proposal for duty-free import by the Indian government.

The manufacture has been hit by labour unrest due to bad working conditions and failure to revise wages, while the exports were hit by political turmoil in the second half of 2006. Growth in the readymade garment industry, the powerhouse of the country''s export economy, has slowed with the sector for the first time failing to reach export targets and facing a sharp decline in new orders.

Source : www.indian-commodity.com

IBA Says Banks Incapable To Bear Extra Pension Burden

Mumbai: Indian commercial banks have evinced inability to bear immense burden of over Rs 26,000 crore emerging from bank unions demand to give another chance for pension option to employees who did not opt for it in 1995. Pension cannot be offered in its present format, as the burden will be enormous. United Forum of Bank Unions has given a call for one-day strike on September 12 in support of demand for pension, compassionate named opping outsourcing of banking activities. The bone of contention between the Indian Banks Association and various unions is mobilisation of additional funds needed to cover nearly 2.8 lakh employees of 19 nationalised banks and the seven associates of State Bank of India (SBI) who did not opt for the scheme earlier in 1995.

IBA had placed the additional requirement at Rs 26,000 crore, while unions have estimated that an additional provision of only Rs 4,700 crore would have to be made. Public sector banks (PSBs) have urged the Centre to intervene as negotiations with bank unions for allowing half of their employees a second chance to opt for pension instead of provident fund have reached a deadlock. The Reserve Bank of India has told banks that they cannot outsource core functions such as sanctioning loans, management of investment portfolio and opening deposit accounts.

Source : www.indian-commodity.com

India To Meet 07/08 Export Target If Rupee Stable

India should be able to achieve an export target of $160 billion for the current fiscal year that ends in March if the rupee stays in a 40-41 range to the dollar. Commerce Secretary G.K. Pillai said exports in July likely rose 16 percent from a year earlier, higher than a 14 percent annual rise in June.

The government is scheduled to release the data on Sept. 3, and Pillai said the growth in April-July was also likely to be 16 percent.

We will keep the export target at $160 billion for 2007/08 if rupee stays at 40-41 rupees a dollar, he said after a business conference.

Earlier this month, Trade Minister Kamal Nath said a strengthening rupee was hurting exports and could prevent India from attaining its export target.

The rupee was trading at 41.13/14 per dollar in the afternoon, up nearly 8 percent this year. It hit a nine-year high of 40.20 last month on heavy capital flows into the fast-growing economy, but has since come off on global risk aversion.

The stronger rupee has squeezed export margins for companies such as software firms that get more than half their revenue from the United States, and industry bodies said last month the government may lower the 2007/08 export target to $140 billion.

Exports in May grew an annual 18 percent, slower than a 23 percent rise in April.

Last month, India announced a $320 million relief package for exporters to soften the blow from a stronger rupee.

By 2012/13, we are looking at $300 billion in exports and $400 billion in imports, Pillai said. Exports from special economic zones could touch 1.5 trillion rupees ($36.5 billion) by March 2009.

Source : www.indian-commodity.com

Rising Interest Rates Bite India Inc

Dalal Street may have ridden out the global financial market turbulence but corporate India is only just beginning to feel the heat.Burnt by rising cost of funds and a sudden reluctance from global banks to lend heavily, corporate India is likely to cut back on capex plans.

Morgan Stanley research estimates that capex in FY''08 could drop below 20 per cent of GDP for the first time in three years after hitting a high of 21.7 per cent in 2006-07.

Private corporate investments are also expected to drop from last year''s level of 13.7 per cent. That data is reflected on the ground with CFOs of major industrial groups like the Hindujas saying that corporate India is having to rethink investment plans.

It''s a double whammy for the corporate sector, said Prabal Banerji, CFO, Hinduja Group.

What is hurting the corporate sector''s plans the most is the sharp rise in the cost of funds over the past few months.

The cost of international borrowings even for the highest rated corporates have doubled to LIBOR plus 60 bp. Thanks to the tightness in global credit markets.

Source : www.indian-commodity.com

Rupee Falls Against USD

Rupee fell to 41.16/17 against the US dollar in early trade on Tuesday due to some weakness in equity markets and month-end dollar demand from banks.In active trade at the Interbank Foreign Exchange (Forex) market, the domestic unit opened sharply lower at 41.09/11 a dollar from Monday''s close of 41.0150/0250 per dollar.

Thereafter, it dropped further to quote at 41.16/17 in late morning deals. Dealers attributed fall in the rupee value to weakness in local equity markets as well as narrowly mixed trend in Asian indices.

Month-end dollar demand from state-run banks to meet the importers requirements also weighed on the rupee sentiment, they said.

Though the political situation seemed to be returning to normalcy, operators were still worried about the current political scenario that also depressed the rupee sentiment to some extent.

The general uncertainty over the US subprime mortgage problems and local political conditions kept the operators and traders away from the market as they decided to play safe.

Source : www.indian-commodity.com

Pension For Families Of Bhagalpur Riot Vctims

Bihar Chief Minister Nitish Kumar on Tuesday decided to grant pension to the families of those killed in the 1989 Bhagalpur riots. Accepting the interim recommendations of the Justice N.N. Singh Commission, Mr. Kumar has decided to petition the Centre to accord the same compensation package given to victims of the 1984 anti-Sikh riots and the Gujarat riots. Home Secretary Afzal Amanullah would be visiting Delhi to hand over the State''s petition to the Ministry of Home Affairs and deliver the Chief Minister''s letter to Prime Minister Manmohan Singh in this regard. The official death toll in the riots was 853 and the authorities are likely to add the claims of about 25 more deaths.

A pension of Rs. 2,500 would be given to only one member of the affected family irrespective of the number of its members killed in the riots. Mr. Kumar said that the Cabinet would meet and clear the proposal at the earliest. He hoped that the Centre would also accept the recommendations made by the commission and provide its share of compensation to the families of the deceased and meet the cost of reconstruction of the property lost by about 50,000 families in 250 villages of 15 blocks of the district.

Source : www.indian-commodity.com

FinMin Ropes In Advisors For PPP Projects

The finance ministry has roped in 11 transaction advisors, including PricewaterhouseCoopers and Ernst & Young, for assistance in undertaking infrastructure projects through the public-private partnership route. The panel, finalised through an international competitive bidding process last week, will work out technical and economic specifications of an infrastructure project before handing it over to private firms for development.

Among those selected are Abacus Legal Group, Crisil Infrastructure Advisory, Deloitte Touche Tohamatsu, Feedback Ventures and Grant Thornton of the UK. The panel also included RITES, International Finance Corporation, Infrastructure Development Finance Company and Infrastructure Leasing & Financial Services, sources said.

Sources said the finance ministry was concerned that PPP projects had not taken off although the government expected a major portion of the targeted $450 billion investment in the core sector to come through this route. State governments have also been demanding that there should be a pool of experts to assist them to firm up all aspects of the project before they offer it to private players for development. The appointment of advisors is expected to give a fillip to infrastructure projects, especially in the road, ports, airports and metro train service, in which private sector has shown keen interest.

Source : www.indian-commodity.com

Approval For Rs 63,561 Cr Projects

Major industrial projects, expected to fetch Rs 63,561 crore of investment to Karnataka, were given green signal by the Karnataka State High Level Clearance Committee on Investments chaired by chief minister HD Kumaraswamy. They include 10 IT/ITeS SEZs, 16 IT/BT parks, seven sugar mills, five steel projects, four tourism projects, electronic hardware SEZ and investments in textiles, aviation, cement and cogeneration.

Industries minister Katta Subrahmanya Naidu said 59 projects were approved. It is expected to create an employment of close to 1 million. Of the total projects approved, 24 are located in and around Bangalore, said Industries minister. Jupiter Aviation, promoted by entrepreneur and MP Rajiv Chandrashekar, would invest close to Rs 600 crore in Hassan to set up an aviation training academy and an inland container depot. Jade Holdings has proposed to set up a textile SEZ in Bidar. The steel projects are: 1 lakh tonne plant in Bellary district by Arihant Ispat with an investment of Rs 241.6 crore; sponge iron plant by Srirama Steel Holdings in Bellary district at Rs 450 crore and a mini-steel plant by Dhruvadesh Metal Steels in Koppal district with an investment of Rs 146 crore.

Source : www.indian-commodity.com

India, Pak Swap List Of Items For Trading Across LoC

India and Pakistan have finalized the lists of items that have to exchanged across the Line of Control (LoC) as part of the confidence-building measures by leaders of the both the countries under the larger composite dialogue. Among the items India wants to trade across the LoC with Pakistan is carpets, rugs, wall hangings, paper mache, embroidery, shawl including pashmina, tapestry, cricket bats, furniture and other wooden items, silk and silk products, kashmiri fruits, dry fruits (almonds, walnuts), Kashmiri spices, flower, Kashmiri saffron, Kashmiri wazwan, aromatic plants, medicinal plants, fruit-bearing plants and dhania, moong, rice, basmati, spices of all kind, imli , black mushroom and green tea (North). Among the items Islamabad forwarded to India to trade across the LoC is spices, apples, walnut, rice, precious stones, paper mache powder, gabbas and nawdas (carpet cloth material), furniture, marble, onion, garli c, medicinal herbs, embroidered items, pine nuts (chilgoza) and carpets.

While both the External Affairs Ministry and the Commerce Ministry is keen that the items to be traded across the LoC should be duty-free, the Finance Ministry objects to this due to revenue implications. However, a narrow legalistic view on this should not be taken, Mr Ramesh said, adding that the matter would be resolved at the highest level.

Source : www.indian-commodity.com

Forex Reserves Down To $226.445 Bn

The country''s foreign exchange reserves have dropped by $2.551 billion to stand at $226.445 billion for the week ended August 17.This is for the second consecutive week the forex reserves have declined. In the previous week, the reserves slipped by $346 million to $228.996 billion.

As per the data collated by the Reserve Bank, foreign currency assets (FCAs) decreased by $2.550 billion to stand at $219.103 billion during week ended August 17.

The central bank said foreign currency assets expressed in US dollar terms included the effect of appreciation or depreciation of other currencies, such as the euro, pound sterling and yen, held in its reserves.

During the week, gold reserves remained unchanged at $6.887 billion while reserves in the IMF decreased by $2 million to $453 million. Special Drawing Rights (SDRs) also increased to $2 million up $1 million.

Source : www.indian-commodity.com

Maharashtra Govt Plans Cess To Confine Private Vehicles

Mumbai: The Maharashtra government is planning to introduce a cess targets at restricting the number of private vehicles in India''s financial capital. That the government is considering a congestion tax, on the lines of one in London. Deshmukh told World Bank country director for India Isabel Guerrero that it was becoming increasingly difficult to maintain order on the city''s roads as the number of private vehicles continued to increase, putting existing infrastructure under strain. The state government will required around Rs 2.50 lakh crore to improve the city''s infrastructure which is creaking under the growing burden, the official quoted Deshmukh as saying. In London, the entry of vehicles into the central business district attracts charges. If the congestion tax proposal is implemented, it may result in making a trip in private vehicles to the city centre a bit expensive.

Abatement Rate Increased For Service Tax On Packaged Tours

New Delhi: The Government has increased the abatement rate for levy of service tax on the packaged tours given by tour operators. The abatement rate has been hiked from the current level of 60 per cent to 75 per cent and a notification to this effect was issued by the Finance Ministry. Currently, services given by tour operators, in relation to a tour, attract service tax under Tour Operators Service. At present, a tour operator, giving package tour that comprises provision of transportation and accommodation for stay, is liable to pay service tax on 40 per cent of the gross amount charged for such tour. Under the new dispensation, a tour operator will be needed to pay service tax only on 25 per cent of the gross amount charged on packaged tour. However, the gross amount charged should comprised cost of accommodation, food, transport arrangement, tourist guide, entry to monuments and other similar categories of expenditure.

India, AEM Meeting Postponed

New Delhi: The 39th Asean Economic Ministers (AEM) meeting scheduled on August 26 to discuss the finalizing of the free trade agreement (FTA) between the 10-member Association of South East Asian Nations and India has been postponed. Though no reason was advanced for the postponement of the AEM, sources here indicated that the inability of the Union Commerce & Industry Minister Mr Kamal Nath to take part in the proceedings on the 6th Asean-India trade ministers meet on August 26 might be one of the reasons why Asean has called off the AEM. Since for technical reasons Asean could not go ahead with final talks for the FTA in the absence of India''s Trade Minister, the sources said that the officials will meet to advance the negotiations further so that a mutually convenient date could be worked out to convene a meeting of the trade ministers later to make a final call on the pending issues which have held up the finalisation of an Asean-India FTA on goods.

Rupee Ends At 41.04 Against Dollar

Mumbai: The forex market witnessed volatile movement on Aug 23, with the rupee ending about 13 paise lower against the previous close against the dollar. The rupee closed at 41.03/04 against Aug 22, level of 40.90. It opened at 40.79/80, about 10 paise higher. But as the equity market weakened, the rupee touched a low of 41.20 during day trade, before recovering towards the close. In the forward premia market the six-month premium closed at 1.52 per cent (1.59 per cent) and the one-year at 1.61 per cent (1.62 per cent).

Banks To Embark On New Pension Plan

Public sector banks have in-principle decided to introduce such pension scheme for new recruits in the officer cadre. The cost of servicing the present defined benefit pension scheme has been mounting, with banks having to make provisions to the extent of 32 per cent of the employee''s annual salary. Under the new defined contribution scheme, banks would have to contribute only 10 per cent of the employee''s salary, including dearness allowance. The finance ministry had asked the banks to take a call on introducing the defined contribution pension scheme for their new entrants so that the scheme could be uniformly introduced for all public sector banks. The government had already introduced such a scheme for its employees, including officers, except the armed forces, from January 1, 2004. At present, the Bank Employees'' Pension Regulations, 1995, provides that all those who join the service of the bank on or after September 29, 1995, are compulsorily governed by the regulations and consequently eligible for pension. For changing the existing defined benefit pension scheme, bank boards can propose an amendment to the regulations which has to be notified by the government.

Banks, under the aegis of the Indian Banks'' Association, have informed the government that they would introduce the new pension scheme for fresh officer recruits. Under the government''s defined contribution pension scheme, the employee has to compulsorily contribute 10 per cent of the basic pay and dearness allowance every month. This contribution has to be matched by the employer.

The income that the employee receives is not fixed and depends on the returns earned on the funds contributed towards pension. For higher returns employees, can increase their contribution, even as the employer''s contribution remains fixed. The new employee would be given an appointment letter stating the conditions applicable. It is then upto the employee to accept or reject the terms of appointment, said the official.

India, Japan Agree To Increase Bilateral Trade

The Indo Japan joint business forum met for the first time in the capital on Wednesday morning. More than 200 top companies are in Delhi from Japan to tap the huge potential offered by the Delhi Mumbai industrial corridor for which Japan has promised investment of $90 billion. The two sides decided to work on a joint report to increase bilateral trade now pegged at less than $7 billion. While the Indo Japan interaction created the right atmospherics there were some concerns from the Japanese. The visit of 200 top businessmen from Japan gave the right trigger to more economic cooperation between the two countries. But the two sides will have to work hard to remove the hurdles in the way of investment not just from Japan but from India also.

India, South Africa Trade To Reach $12Bn By 2010

Hyderabad: The trade between Indian and South Africa is set to touch the $12-billion mark by 2010 from the $6 billion. South Africa could offer its expertise in mining, agri-processing and wine making. On the other hand, India could assist South Africa in the areas of skill development to help it sustain the high growth rates it was recording in the last few years. Citing initiatives by Satyam Computer, the Indian private sector could contribute a lot in the areas of skill development. South African Government will help the Indian entrepreneurs in exploring the trade and business opportunities.

FM Says Inflation Goal Is 4-4.5% Range

New Delhi: The Finance Minister, Mr P. Chidambaram, on Aug 22, assured the Lok Sabha that all fiscal, monetary and supply side measures will be taken to rein in the wholesale price index (WPI) based inflation in the 4-4.5 per cent range. Their goal is to keep inflation close to 4 per cent. They will take all fiscal, monetary and supply side steps to keep it between 4-4.5 per cent. For fiscal 2007-08, the Reserve Bank of India has estimated the inflation target at 4.5-5 per cent level. Mr Chidambaram highlighted that average inflation in 1979-80 was 17.1 per cent, 11 per cent in 1990-95 and 4.9 per cent in 2000-04.

India-Japan Agree On Currency Swap

India and Japan have agreed to sign a basic bilateral agreement on currency swap, which will add to a regional network of such accords designed to provide emergency financial liquidity to either or both parties in times of currency market or other turbulence. A basic agreement has been reached on bilateral currency swap in response to short term liquidity crunch, Japanese Prime Minister Shinzo Abe said on Wednesday, while speaking at an interactive session with business leaders from the two countries organised by apex industry chambers.

Though he did not elaborate on the issue, sources said as per the agreement, India and Japan will help each other if their currencies were to come under the attack of speculators. It will also enable both countries to swap foreign currencies like US dollar or Euro to maintain the value of Rupee and Yen in foreign exchange markets. Sources said the Reserve Bank of India and Bank of Japan would be the nodal agencies, going by such agreements that Japan has entered into with other countries. Japan has swap deals with other Asian countries like Thailand, Korea, China, Malaysia, Philippines, Singapore and Indonesia. In some cases, the swap is one way, while in some others it is two-way. Japan and Thailand signed such an agreement in July, under which Bangkok can swap up to $6 billion while Tokyo can swap up to $3 billion in case there is need for short-term liquidity.

Australia, India Finalising Negotiations For FTA Study

New Delhi: Australia is finalising talks with India about a possible joint feasibility study for a bilateral free trade agreement (FTA). This was stated by Mr Michael Moignard, Senior Trade Commissioner-South Asia, Australian Trade Commission. Mr Moignard also declared the unveiled of a new business portal www.utsavaustralia.in that will enable Indian companies to access offers from Australian companies looking for partners, customers and markets in India and also find valuable information about Australian industry, expertise and capabilities. The business portal will showcase Australian industry''s expertise and service skills to the Indian business community and bridge the information gap that exists in India on the capabilities of Australia in sectors such as agriculture, information and communication technology. India is Australia''s fastest growing merchandise export market. Bilateral trade of merchandise goods and services is over A$12 billion, moving towards A$13 billion.

Rupee Ends 40.90 Against Dollar

Mumbai: The rupee ended firm against the dollar on Aug 22, because the dollar supply outstripped demand. The rupee opened at 41.05/06 and closed at 40.90, about 18 paise up from the previous close of 41.08/09. In the forwards market, the six-month premium closed at 1.58 per cent (1.46 per cent) and the one-year closed at 1.62 per cent (1.56 per cent).

Japan Looks To Treble Trade With India

Japan, where Buddhism remains the most famous import from India, aims to treble trade with the sub-continent nation to $20 billion by 2010 for which it has sought early conclusion of an economic partnership pact. Addressing MPs in Parliament, Japanese Prime Minister Shinzo Abe favoured signing of the Economic Partnership Agreement (EPA) soon to firm up relations and raise volume of bilateral trade three-fold. Trade between the two countries in 2006 was about $6.5 billion. I likewise urge the Indian side to give their support to enable the early conclusion of this high quality agreement, he said.

He said bilateral relations are blessed with the largest potential for development, adding that a strong India is in the best interest of Japan and a strong Japan is in the best interest of India. Outlining various fields in which the two countries can cooperate closely, he promised to help India in the field of energy by providing technology. But, he did not mention nuclear power. Japan, which has been one of largest economic assistance providers to India through ODA, also wants to partner India in mega projects like the Delhi-Mumbai industrial corridor being funded by it now.

Direct Tax Collections Zoom 44.39%

The government announced a 44.39 per cent jump in collection of direct taxes, including corporate and income tax, to Rs 59,210 crore till August 15 over Rs 41,006 crore a year ago.

The continued buoyancy in direct tax collections is a reflection of the robust growth in the economy, better tax compliance and improved tax administration, a Finance Ministry statement said.

The government aims to collect Rs 5,48,122 crore in tax as against Rs 4,67,848 crore (budget estimates) in the previous fiscal, an over 17 per cent increase. The targeted amount includes Rs 2,67,490 crore through direct taxes.

Till August 15, collections through corporate tax recorded a growth of 52.25 per cent to Rs 33,164 crore from Rs 21,783 crore during last fiscal.

Personal income tax, including fringe benefit tax, security transaction tax (STT) and banking cash transaction tax (BCTT), grew by 35.57 per cent at Rs 25,989 crore, against Rs 19,170 crore during the same period last fiscal.

The statement said that STT posted a growth of 36.30 per cent at Rs 2,495 crore, while BCTT grew by 29.71 per cent at Rs 207 crore. Meanwhile, during April-July period, government has collected Rs 66,417 crore through customs and excise duties, posting an 11.6 per ce

Rupee Closed Higher At 41.08 Against Dollar

Mumbai: The rupee saw good two-way movement against the dollar on Aug 21, and closed higher at 41.08/09, about 25 paise up from Aug 17, close of 41.33/34. The rupee opened higher at 41.13 and rose to touch 40.97 on dollar selling. The forward premia did not see much action, with the six-month premium closing at 1.46 per cent (1.3 per cent) and the 12-month at 1.56 per cent (1.48 per cent).

India, Pak Accord On Truck Service To Enhance Trade

New Delhi India and Pakistan agreed to permit cross-border cargo truck services, targeting at encouraging trade between the nuclear-armed neighbours, as part of moves to improve ties that started in 2003. Trucks from one side will be permitted to go to the designated points on the other side from the Attari-Wagah border crossing starting October 1. India and Pakistan have asked to enhance economic cooperation to find a solution to the six-decade-old conflict that has hindered growth in the region.

Massive Credit Offtake By Infrastructure Sector In Last 2 Years

New Delhi: Led by roads and ports, power and telecom sectors, credit disbursement by banks to the infrastructure sector has increased in the last two years at 43 per cent and 36 per cent, respectively, according to industry chamber Assocham. The chamber carried a study covering financial years 2000 to 2007 on sectors such as iron and steel, construction, petroleum, power, telecommunication, roads and ports. The study disclosed that compounded growth in credit disbursement has been highest in the power sector at the rate of 58 per cent, followed by roads and ports at 46 per cent. Credit allocation to the telecommunication sector has grown at the rate of 34.4 per cent.

Even as immense investment of $384 billion is needed to enhance the infrastructure sector in the Indian economy, the fast increase in the credit offtake to this sector in the last two years has fuelled the GDP growth at the record level of nine per cent in 2005-06 and 9.2 per cent in 2006-07. The amount of credit flow to the sector in the last two financial years was Rs 1,87,337 crore and Rs 2,56,056 crore compared with Rs 46,536 crore in 2000. Total non-food bank credit in 2006-07 was Rs 17,52,439 crore, of which credit expenditure to the infrastructure sector was Rs 2,56,056 crore. Over the last six years, the proportion of bank credit to the sector has increased from 10.8 per cent to 14.6 per cent.

Maharashtra Government Sings MoU For Projects Worth Rs 833Cr

Mumbai: Maharashtra government inked memorandum of understanding with three different companies on Aug 21, which will bring an investment of around Rs 833 crore and create direct employment for more than 2,000 persons. All these projects have been given mega project status under the state government''s mega project policy. These three investment proposals comprise proposal from Yash Birla group company Birla Cotsyn to expand operations of cotton ginning, pressing and spinning mill at Khamgaon and Malkapur in backward Vidarbha region. The company is hoped to infuse around Rs 315 crore in the expansion project. The expansion will increase capacity of the mill to 36,000 spindles of cotton yarn and 19,040 spindles of synthetic yarn per year.

The Pune-based Precision Automation and Robotics India Ltd (PARI), which gives solution in the field of industrial robotics and automation will infuse around Rs 258 crore at Khandala in Satara district where it will set up its design and manufacturing facility. The ISMT Ltd, a manufacturer of seamless tubes, will infuse Rs 260 crore in its expansion project at Baramati. Under the state government''s mega project policy, the projects which infuse Rs 250 crore or more in backward areas of the state or industries which invest Rs 500 crore or more in developed parts of the state like Mumbai, Pune, Nashik etc. are granted mega project status.

No PAN, No Refund On FD Earnings

Come April 2008, fixed deposit holders will not be allowed to avail any credit against taxes paid on their interest earnings if banks do not quote their PAN numbers.

Many fixed deposit holders could be left in lurch as income tax department has tightened rules on TDS or tax deducted at source.

Banks are supposed to cut tax at source for interest income above Rs 10,000. But in 2005-06 less than half of non-salaried income had PAN numbers and in future these will not be eligible for refunds.

The Finance Minister has recently discussed the matter with public sector bank chiefs although taxman is yet to issue formal instructions to banks.

Depositors having taxable income but not quoting their PAN will not be permitted to fill up specific forms explaining why they do not have one.

Government''s alarm stems from the fact that from next financial year it proposes to demat all TDS certificates and that will need PAN numbers to be tracked. With TDS payments accounting for over 30 per cent of direct tax collections for the government it is better to be safe than sorry.

India Growth To Steam On, Unharmed By Political Woes

India''s economic reform process is as good as stalled due to differences between the government and its communist allies, but analysts say the economy has gained its own momentum and will keep growing robustly for now.

The latest and loudest disagreement, which blew up at the weekend over a nuclear energy deal with the United States, has yet to be resolved. While many expect a compromise rather than a new election, reforms are seen as the likely losers once again.

The four communist parties, who provide crucial support to the coalition headed by Prime Minister Manmohan Singh, have already blocked plans for partial privatisations. Reforms of pensions and insurance have also slowed to a crawl.

Despite this, economic growth has averaged 8.6 percent a year since the coalition took power in 2004. Growth hit 9.4 percent last fiscal year and foreign investors, attracted by the long-term prospects, have poured in billions of dollars.

I don''t think it will derail the strong economic performance, but (it) will delay reforms, said D.K. Joshi, principal economist at domestic rating agency Crisil.

India''s stock market, a barometer for political risk, shrugged off the crisis and ended nearly 2 percent up on Monday, with attention focused more closely on how international markets were faring. The rupee and bond markets were closed for a local holiday.

Free Trade, Investment On Japan PM Aagenda In India

Japanese Prime Minister Shinzo Abe''s visit to India this week could speed negotiations for a free-trade deal between the countries, and also lead to more Japanese investment, an Indian trade ministry official said. Abe arrives in New Delhi on Tuesday, and a Japan-India comprehensive economic partnership agreement (CEPA), including free trade in goods and services as well as investment promotion measures, will be among the issues figuring in talks with his Indian counterpart, Manmohan Singh.

It (CEPA) will be done in less than two years, Dinesh Sharma, a joint secretary in the trade ministry, told reporters on Monday.

We want more trade, investment and technology.

Two-way trade between India and Japan could double to $14 billion by 2012 from an estimated $7 billion in 2007, the Federation of Indian Chambers of Commerce and Industry said.

India mainly exports gems and jewellery, marine products, minerals and textile products to Japan. It imports machinery, transport equipment, electronic goods, chemicals and metal products.

Sharma said the two sides will discuss Japanese investment in a planned industrial corridor between New Delhi and Mumbai.

Last month, India''s trade minister said the $90 billion corridor would be built with Japanese assistance.India is also eyeing Japanese cooperation in civilian nuclear energy to meet the country''s growing demand for electricity, said V Raghuraman, principal adviser to the Confederation of Indian Industry.Prime Minister Singh said on Monday that India was committed to developing its nuclear energy capability and other sources of power as its oil bill would impose an unbearable burden on the fast-growing economy.

Haryana Industries Afraid Of SEZ Growth

Chandigarh: Not only farmers, even the living industries in Haryana are concerned over the decision of the government to promote the special economic zones (SEZs) in the state. In Haryana, 29 SEZs have got formal permission, 28 got in-principle approval and 7 SEZs have been notified. In a discussion with the Director Industries, Haryana, D R Dhingra, on the sidelines of meeting of sub-committee of State Level Bankers Committee for Export Promotion for Haryana, the representatives of the industries manifested their reservations over the plethora of industry that will come as a result of the incentives offered to new investments in SEZs and make the competition tougher

In the year 2006-07, the major share in exports from the state was of steel (22 per cent), followed by basmati c rice (18 per cent), handlooms and handicrafts (15 per cent), textiles (8 per cent) and medicines (7 per cent). These items collectively formed 80 per cent of the total exports from the state. Hisar, Panipat, Karnal, Gurgaon, Faridabad and Sonepat districts contributed 83 per cent to the total export turnover in the state.

TNCCI Welcomes VAT Exemption For Tobacco Products

Madurai: The Tamil Nadu Chamber of Commerce and Industry (TNCCI) has hailed the re-instated VAT (value added tax) exemption for tobacco products by the Government of Tamil Nadu with retrospective effect from April 1, 2007. Due to the removal of tobacco and tobacco products from additional excise duty, by the Union Government, cigarettes, beedi and other tobacco products attracted 12.5 per cent in Tamil Nadu.The Chamber urged the Tamil Nadu Government to re-instate VAT exemption for beedi, cheroot and tobacco products other then cigarettes as these were hand-made and produced by cottage industries, giving employment and livelihood to thousands of illiterate men and women in rural areas. The Chamber also requested the Government to permit VAT exemption for chewing tobacco from April 1,2007.

India-Japan Alliance Must Concentrate More On Trade, Tech

New Delhi: India-Japan partnership should concentrate more on trade, investment and technology with prominence to economic interest, said Mr Dinesh Sharma, Joint Secretary, Department of Commerce, Ministry of Commerce and Industry. At a meeting on India-Japan allianced organised by the Confederation of Indian Industry on Aug 20, Mr Sharma said that economic interest should overcome the political interest to build up relationship and formulate trade policy with Japan. The India-Japan relationship has so far been led by the Japanese initiative in giving development assistance. Japan has shown interest in portfolio investment but foreign direct investment (FDI) and trade has been substantially below expectations. Japanese manufacturing skill can create a platform for India to meet the global expectations. Japan''s FDI to India will totaled to around $5.5 billion over five years from 2006 to 2010 only by totalling 27 FDI projects.

India, Australia To Begin Negotiations For FTA Soon

New Delhi: India and Australia are soon likely to start negotianiton for a free trade agreement (FTA). They are in the initial phase of looking at the prospect of a free trade agreement with Australia. A joint study group, likely to be established within this year, will look at the sectors that could benefit from such an agreement. The Australian government had last week given its go-ahead to hold talks for the pact. The commerce ministry is now likely to send a formal request for setting up the group to the Prime Minister''s Trade and Economic Relations Committee (TERC). Talks will begin after the study group''s nod. Australia has been enjoying a healthy trade balance with India. During 2006-07, India exported merchandise goods worth $924.64 million, a growth of 48 per cent over the previous fiscal. India is negotiating similar deals involving goods, services and investment with Sri Lanka and Thailand with whom it already has free trade agreements.

FM Plans Major Transfers In I-T Dept

New Delhi: The Finance Ministry has planned a major transfer of Chief Commissioners of Income Tax (CCITs) and Directors General of Income-Tax (DGIT) across the country to among other reasons fill up certain critical posts that were lying vacant. As many as 38 officers in the grade of CCITs/ DGITs have been transferred. Of the 38 officers transferred, 16 of them were for filling vacant posts. Some of the transfers are critical as they would fill the vacancies of important cadre controlling commissionerates like CCIT -1 Mumbai, CCIT-1 Calcutta, CCIT-Kochi, CCIT-Chandigarh. Apart from the transfers, the Ministry has also made additional charge arrangements for 21 officers in the CCIT/DGIT grade.

The additional power was being given, as the Departmental Promotion Committee (DPC) had not met for the last six months. If DPC had met in time, the question of giving additional charge would not arise. The Centre''s net direct tax revenues registered 45.6 per cent increase in April-July 2007 to Rs 53,397 crore. For fiscal 2007-08, the budget estimate for direct taxes has been pegged at Rs 2,67,400 crore. This represents a 27.08 per cent increase over the budget estimate of Rs 2,10,419 crore for fiscal 2006-07. The actual collections in direct taxes in fiscal 2006-07 placed at Rs 2,29,181 crore.

WB TDS Collection Decreases

Kolkata: West Bengal''s share of TDS in its overall tax collection was under the national average because of lack of awareness and lethargy among the tax deductors. Last year, TDS contributed Rs 2281 crore to West Bengal''s overall tax collection of Rs 9808 crore. The state''s TDS share was 23.25 per cent, as compared to the national average of 27 per cent. The biggest defaulters were the government, as officers were uninformed of the latest TDS norms and not very inclined to learn them. Of late, the income-tax department had embark upon an initiative for modernisation of the current system of collection, processing, monitoring and accounting of direct taxes using technology. The electronic filing of TDS return has been made compulsory for all the tax deductors. In the light of these changes, a deductor has a greater responsibility as those having the tax sum deducted could not get the credit of tax paid owing to mistakes on the part of the deductor.

Ficci Says Export-Based FDI To Increase Ties With Japan

New Delhi: India should take on an export-oriented foreign direct investment (FDI) strategy that channelises large volumes of FDI into the country for production and export of final products to the Japanese market. This will increase trade between the two countries, the Federation of Indian Chamber of Commerce and Industry (Ficci) said in a paper on India-Japan economic relations. The new economic engagement model that the industry chamber has recommended will increase bilateral trade from a projected $7 billion in 2007-08 to $14 billion in 2012- 13. In order to put the process of economic growth in the region on a higher trajectory, Ficci has recommended people-to-people contact between India and Japan. The chamber has recommended establishing a training cell that can act as an aggregator for Indian SMEs wishing to benefit from Japanese technical and management expertise for performance enhancement.

FM Recommends 49Pc Cap On Foreign Investment In Credit Info Cos

New Delhi: The Finance Ministry has suggested to the Commerce and Industry Ministry that the foreign investment cap on credit information companies be placed at 49 per cent. The Department of Financial Services in the Finance Ministry has suggested the cap on such companies to the Department of Industrial Policy and Promotion (DIPP) in the Commerce and Industry Ministry.

Currently, there is no specific policy on foreign investments in credit information companies. The proposed cap will comprise FDI and foreign portfolio investment via FIIs. Banks, financial institutions, State financial corporations, non-banking financial companies, credit card companies and housing finance companies are often keen to gain a full picture of the payment history of credit applicant. In India, Credit Information Bureau (India) Ltd or CIBIL, which was incorporated in 2000, was the first to enter the credit information market. With growing consumerism, credit information market has grown tremendously and more players, including credit rating agencies, are eyeing this market. CIBIL has diversified shareholding comprising certain commercial banks, foreign companies and non-banking finance companies.

Spanish Region Looks For Joint Venture With Kerala

Kochi: Castilla y Leon, the largest region in Spain, is keen to foray into joint venture with entrepreneurs in Kerala on projects of compatibility. Spain offered wide opportunities for beginning joint ventures with it. The Spanish region was strong in food processing, dairy, pharmaceuticals and IT.

India Post To Open Forex Counters

Post offices in metros are set for a major change with the Government deciding to introduce new facilities like forex counters, cargo services, access to instant money order and other revenue generating services. We have got the licence from the RBI to start the foreign exchange business in some post offices in selected metros. We are finalising the deal which would be operational soon, S Samant, Chief General Manager, Business Development, Department of Post (DoP), said.

The department is acquiring an Air India flight to operate a dedicated cargo service carrying parcels, mails and couriers to north eastern states which will swift the delivery of mails in the region, Samant said. The cargo flight would take off from Kolkata every morning and return in the evening after delivering the services at Agratala and Imphal, he said. The Postal department recently signed an MoU with the Railways to sell train tickets in some of the post offices. Besides, it has undertaken the task of verifying pre-paid mobile subscribers in some areas, Samant said. The future vision of DoP is of a socially committed, commercially oriented and technologically driven organisation which can deliver services to the farthest corners of the country at affordable rates, Samant said.

There are about 1,55,669 post offices all across the country with a significant number of employees. However, its core business of selling stamps and post cards has dipped over the last five years. To keep its market share intact, the department is also planning to set up a bank, which has been tentatively named as the Post Bank of India.

Pakistan Seeks Tech Role

Pakistan, which has been affected by Islamic extremist violence and civil unrest against the current government, is trying hard to compete for a share of the offshore outsourcing business.

The country''s highly skilled, English speaking people provide a key advantage, said Yusuf Hussain, managing director of the Pakistan Software Export Board (PSEB), a government agency set up to promote the IT, BPO (business process outsourcing) and call center industries in Pakistan. Some multinational companies have centers in Pakistan, while others are outsourcing work to IT and services companies in the region, he added.

Salaries in Pakistan are lower by 30 percent than in neighboring India, said Ashraf Kapadia, president of the Pakistan Software Houses Association (PASHA), an association of software, call center and BPO companies in Pakistan.

On the downside, the country has an image problem, according to Kapadia. There is this perception abroad that Pakistan is politically unstable, he said.

However, these problems have not scared away customers, Kapadia said. His software and BPO company, Systems Limited, has a number of large multinational customers, including Bank of America Corp. and Citigroup Inc., which continue to do business with his company, despite the country''s unrest, he said.

India To Spend $1.2 Bln To Raise Food Output

India will spend 49 billion rupees ($1.2 billion) over the next four years to raise wheat output to 80 million tonnes, and step up production of rice and pulses, the finance minister said on Thursday.Palaniappan Chidambaram told reporters the cabinet had approved a plan to boost grains and pulses output, which had been stagnating while consumption rose.

The government has identified 305 of India''s more than 600 districts in which to implement the plan, he said.

It wants to boost rice production to 101 million tonnes annually by 2011, from around 90 million tonnes now, as part of efforts to reduce the need for costly imports.

In an interview with Reuters in June, Agriculture Commissioner N.B. Singh had said India aimed to increase oilseed production to 35 million tonnes and pulses output to 15 million tonnes by 2011.

Singh said a country of India''s size, with more than a billion people, could not afford to import large amounts of food, and should strive to become self-sufficient.India imported 5.5 million tonnes of wheat in 2006 to overcome a supply squeeze and has already contracted 511,000 tonnes of wheat this year to build stocks. It is thought to have harvested more than 74 million tonnes this year.

CCEA Approves Farm Schemes

New Delhi: The Cabinet Committee on Economic Affairs (CCEA) on August gave a green signal for two major schemes - Additional Central Assistance (ACA) scheme and the National Food Security Mission (NFSM) for wheat, rice and pulses - with a total expenditure of more than Rs 29,800 crore to accelerate growth in the agriculture sector.

They are aimed at enhancing public investments in agriculture sector to raise its growth rate to 4 per cent per year. Under the ACA scheme, an outlay of Rs 1,500 crore has been approved for the current fiscal, along with an allocation of Rs 25,000 crore for the Eleventh Five-Year Plan. The funds released under the ACA scheme would be provided to states as 100 per cent grant by the central government.

Rupee Slips On Global Worries

The rupee on August 16 and closed about 60 paise lower at 41.36/37 against Tuesday''s close of 40.7450/7550, following a sell-off in the domestic stock market. The rupee had opened at around 41 levels on Thursday. It had touched levels of 41.20 in June this year

Following the sub-prime crisis in the US and sharp fall in other Asian markets, foreign investors are pulling out of assets such as the Indian rupee. Though some public sector banks were seen selling dollars, it was unlikely that it was on behalf of the Reserve Bank of India. Among global currencies, the pound and euro lost ground against the dollar, while the yen gained, as ''risk averse'' investors flocked towards it. In the forward premia market, the six-month premium closed at 1.81 per cent (1.96 per cent) and the 12-month at 1.87 per cent (1.95 per cent).

Cabinet Approves Delhi-Mumbai Corridor Involving $90 Bn

New Delhi: The government on August 16 cleared the first phase of the ambitious Delhi-Mumbai Industrial Corridor (DMIC) project, which expects a total investment of over $90 billion during the next decade, with assistance from Japan. The Union Cabinet approved the DMIC project outline on the eve of the visit of Japanese Prime Minister Shinzo Abe, according to Information and Broadcasting Minister P R Dasmunshi.

The Cabinet cleared the organisation structure of the project, including the setting up of an apex authority chaired by the Union finance minister. The Cabinet also approved the formation of DMIC Development Corporation for which the Department of Industrial Policy and Promotion (DIPP) will initiate immediate action. The Cabinet also approved setting up of the 1,483-km Dedicated Freight Corridor (DFC) between Delhi and Mumbai for high-speed connectivity for high-axle load wagons, he said. The construction on the freight corridor would begin during 2009-09 and completed by 2012. The development of DMIC Phase-I, which will cover six states of Uttar Pradesh, Haryana, Rajasthan, Madhya Pradesh, Gujarat and Maharashtra, will coincide with completion of the DFC project. As many as 100 to 120 projects are likely to come up under the DMIC alongside the 150-km DFC.

Under Phase-I, six investment regions of more than 200 sq km each and six industrial areas of about 100 sq km each would be developed. These regions are Dadri-Noida-Ghaziabad (UP), Manesar-Bawal (Haryana), Khushkhera-Bhiwadi-Neemrana (Rajasthan), Pitampura-Dhar-Mhow (MP), Bharuch-Dahej (Gujarat) and Igatpuri-Nashik-Sinnar (Maharashtra).

The industrial areas shortlisted for development under the project are Meerut-Muzaffarnagar (UP), Faridabad-Palwal (Haryana), Jaipur-Dausa (Rajasthan), Neemach (MP), Vadodara-Ankleshwar (Gujarat) and Alewadi/Dighi (Maharashtra).

Excise Duty Mop Up Rises By 2.1% In July

The Centre''s excise duty collections went up by 2.1 per cent in July 2007 to Rs 9,388 crore as compared with collections level of Rs 9,193 crore in the same month last year. The 2.1 per cent year-on-year growth in July 2007 is the lowest so far this fiscal. In April-July 2007, excise duty mop up rose by 5.5 per cent to Rs 34,571 crore as compared with Rs 32,753 crore collected in the same period last year. In the first quarter of the current fiscal, excise duty collections had gone up by 6.8 per cent. On the other hand, provisional figures available with the States show that revenues from items under value-added tax (VAT) grew about 24.6 per cent in April-June 2007. The Finance Minister, Mr P. Chidambaram, had recently acknowledged that there was high degree of excise duty evasion in certain sectors and indicated that the Revenue Department would give more thrust to high impact excise audits this fiscal. The Centre has already asked State Governments to share information on state-level VAT collections with the Excise Department to help identify cases of excise duty evasion.

Meanwhile, customs duty revenues of the Centre continue to be upbeat, with collections in April-July 2007 up by 19.1 per cent to Rs 31,845 crore (Rs 26,742 crore). In July 2007, revenues grew by 16.8 per cent to Rs 8,253 crore (Rs 7,065 crore).Service tax collections of the Centre increased by 37.90 per cent during April-June 2007 to Rs 10,012 crore (Rs 7,260 crore).

India Inc For Reforms In Social Sector

Unsatiated by individual success stories essayed through mega acquisitions globally, industry titans Ratan Tata, Sunil Mittal and Venugopal Dhoot said that India needs to push reforms to overcome economic disparities and be counted among the top nations.

Though agonised by the painfully slow pace of growth in agriculture and social sector like education, the captains of industry felt that the country had achieved remarkable success since independence 60 years ago.

They were unanimous that India''s time has come and that the country is universally recognised as a nation on the move to take its place amongst the successful economies in the world.

The industry icons and associations-Confederation of Indian Industry, Federation of Indian Chambers of Commerce and Industry and Associated Chambers of Commerce were responding to Press Trust of India on India''s progress since 1947 and the path ahead.

After decades of protection through licensing and high tariffs, corporates have restructured to meet global competition and step out into the international marketplace as competitive and strong entities, Mittal, who heads one of the biggest Indian conglomerates Bharti Enterprises and apex association CII, said.

Focus On Rural Transformation: PM

Transforming the fortunes of rural India is not possible without increasing farm productivity and farmers'' incomes - goals to achieve which the government would invest Rs 25,000 crore, Prime Minister Manmohan Singh said.

We have kept our focus on giving a new deal to rural India. We have doubled the supply of credit for farmers, reduced its cost, and where farmers have been in distress, we have written off interest and rescheduled loans, he said in his address to the nation.

Agriculture share in GDP has fallen to less than 20 per cent now from over 50 per cent in 1947, mirroring the decline in the sector from which about two-thirds of the country''s population derives livelihood.

We will soon launch a special programme to invest Rs 25,000 crore in agriculture, to enhance the livelihood of our farmers and increase food production. We will also focus on the needs of our farmers in dry and drought prone zones. I am touring a few states to personally review the agricultural situation across the country, he said.

He said the UPA government has helped in increasing farmers'' income by raising substantially the support price for wheat and rice. Through the Bharat Nirman, the government is investing in road, power and telecom connectivity in the rural areas to bridge the rural, urban divide.Rural transformation

Singh, however, said: This, I believe, is only a part of our total effort. There is more to be done and more will be done. In the coming years, our main emphasis will be on agricultural development, the Prime Minister asserted.

Rupee Rise Brings Down Value Of Forex Reserves By 8%

Dollar-denominated reserves went up $29.49 billion between mid-March and end-July 2007. The $1 billion equals Rs 4,000 crore rule of thumb puts the rupee equivalent at Rs 120,000 crore. Because the rise of the rupee per ''dollar'' of the dollar-denominated basket caused a Rs 70,000-crore drop in the rupee value of total reserves. An idea that has been doing the rounds for many months is that lending surplus forex to corporates could increase yields on reserves, while help check their runaway growth.

But the idea has not progressed beyond the level of wishful thinking.The irony is that the rise in the rupee reduced the value (rather than the level) of our reserves, even as it brought down the liabilities of the corporates that had gone in for ECBs.Though repeated efforts to get a response from the RBI met with no success, two points are worth noting. First, the rupee rose vis-a-vis all major currencies between March 16 and July 27; vis-a-vis the dollar by 9.49 per cent, the euro by 5.67 per cent, the yen by 14.38 per cent, the pound sterling by 4.53 per cent, the Swiss franc by 8.94 per cent, the Chinese yuan by 7.26 per cent and the Singapore dollar by 8.79 per cent.

Second, as of now forex losses (or for that matter gains on ECBs) are merely notional.

Actual losses (or gains) will be registered only when the bills are due.

Rupee Closes Flat At 40.6350

The rupee closed flat at 40.6350/6450 against the dollar on August 13. The rupee opened at 40.62/65 and touched a high of 40.53/54 in the first half, as foreign banks sold dollars. But later, it fell to end at the same levels as the previous close on dollar buying.The pressure on the rupee was relatively less today because the Sensex closed higher and the Japanese Nikkei also closed higher. The forward premia were down slightly due to the bullish rupee. The six-month premia closed at 1.89 per cent (1.9 per cent) and the 12-month at 1.85 per cent (1.94 per cent).

NCAER Revises GDP Forecast To 8.5%

The National Council of Applied Economic Research (NCAER) has raised the gross domestic product (GDP) forecasts for the current fiscal a tad higher at 8.53 per cent, as compared to its projection in April at 8.3 per cent. In its latest quarterly review of the economy, the Council said the increase is on account of the projected improvements in the growth of all the three sectors of the economy, but more particularly in the cases of agriculture and industry.For agriculture, the improved rainfall scenario provides the impetus for acceleration in output growth and in the case of industry, it is essentially the higher foreign capital inflows that ease some of the constraints posed by higher interest rates and stronger rupee.

While export growth is now likely to be stronger, imports are projected to rise at a faster rate of 19.2 per cent in comparison to the projected growth rate of 18.5 per cent in April.The inflation rate is projected at a slightly lower rate because a lower rise in agricultural prices generally translated into a slower inflation rate, the Council noted adding that the Centre''s fiscal deficit is projected to decline relative to GDP as GDP growth has also increased by 0.2 percentage points.The Council noted that the rupee has strengthened relative to the dollar by about 8 per cent between February 2006 and May 2007.

Central Pension Scheme Sought

The state convention of the All-India Navodaya Vidyalaya Staff Association (AINVSA) has demanded the implementation of the Central Government pension scheme in Navodaya Vidyalayas and the formulation of a proper guideline for transfer of employees.

The convention held at Picnic Hall in Malampuzha was inaugurated by N N Krishnadas MP.

AINVSA Kerala state unit president M V Kunhikrishnan welcomed the gathering. The convention also called for the recognition of the association.

AINVSA leader T P Mani called for the restoration of gratuity to the employees of the Navodaya Vidyalayas.

AINVSA state unit general secretary K.M. Rajan submitted a report explaining the various activities of AINVSA.

ABRSM state secretary T S Gireesh Kumar, Kerala State Teachers Association state secretary K N Sukumaran, GSTU state secretary Aniamma Joseph, AIJNVAF president V L Balasubramaniam and NVSENA regional president P Raghunath Pillai spoke.

AINVSA Palakkad unit secretary M T Davies proposed a vote of thanks.

Gujarat Emerges As Top Investment Destination

Gujarat has emerged as the top investment destination for investors in new projects, with the state more than doubling its share of total investments in 2006-07. Maharashtra, the top investment destination last year, has fallen a bit in 2006-07. The state is ranked first in the study with the proposed investment of Rs 73,170 crore in 86 projects accounting for 25.8% of total investment of Rs 2,83,440 crore during FY07, followed distantly by Andhra Pradesh, Maharashtra and Tamil Nadu.

Tamil Nadu continues to maintain its lead position in attracting highest number of projects. In 2007-08, 157 new projects were sanctioned in Tamil Nadu as against 124 in the previous year. Gujarat, however, is a distant fourth in the number game with 86 projects (95) while Maharashtra bagged a higher number of projects during the year.

It bagged 142 projects (121) while Andhra Pradesh managed 105 (76). The annual study by the central bank covering projects funded by banks, financial institutions and also through external commercial borrowings and equity, expects corporate investments to be robust in 2007-08, though investment growth may be slower than that in 2006-07.

The report says, The turnaround in corporate investment, which began in 2002-03 and peaked in 2004-05, is expected to be sustained in 2007-08. According to RBI, the sharp increase in production and import of capital goods, and envisaged capacity accretion supported by improved corporate profitability, high capacity utilisation rates and robust growth in manufacturing GDP point to the continued momentum in fixed capital investment.

The total capital spending envisaged was markedly higher in 2006-07 reflecting increased investment opportunities. Infrastructure projects, in particular, power projects continue to dominate the scene.

India Will Be Second Largest Economy: Kamalesh Sharma

India will be the second largest economy in the world by the mid-century, according to the country''s High Commissioner to the UK, Kamalesh Sharma. Sharma also spoke about the rapid strides the country was making in varied fields and said by mid-century, India will be the second largest economy in the world.

According to economists, for over a century the US has been the largest economy in the world. Major shifts have, however, taken place in the last two decades and during the last 30 years the weight of the world economy has shifted from the US and the rich countries of Europe to China and India.

Of late, economists have been proclaiming the emergence of India and China as economic superpowers in not-too-distant future. The World bank says India will become the third largest economy after China and the US by 2025.

World Bank Managing Director Graeme Wheeler, who was in India recently, noted the country''s tremendous progress in recent years and emphasised the need for sustaining the growth in high-value sectors along with strides in the fields of health care and education.

Lauding achievements of NRIs here, Sharma said people of Indian origin are doing extremely well and now advancement at home mirrors the advancement made outside.

Noting that there is no relationship in the world like the one between India and Britain, the High Commissioner said the NRIs have shown that they are prepared to live by the standard of excellence in developed countries.

I-T Dept Issues Notice To Fgn Firms To Pay Rs10,000Cr Addl Tax

New Delhi: The Income Tax department has asked foreign companies to pay about Rs 10,000 crore as additional tax after collecting information from other sources and scrutinising their returns. A Finance Ministry official told that Income Tax department has raised demand for additional tax amounting to Rs 54,823 crore from corporates and individuals, including Rs 9,890 crore from foreign companies till March 31, 2007. Foreign companies have been asked to pay Rs 9,400 crore additional corporate tax and Rs 496 crore as income tax. Out of this, they have deposited Rs 113 crore. In total, around Rs 1,400 crore has been deposited with the department.

Foreign companies have to pay 40% corporate tax, 2.5% surcharge and 3% educational cess. In fact, the Central Board of Direct Taxes (CBDT) has asked chief income tax commissioners to ensure that foreign companies are taxed properly, especially after Supreme Court''s decision in the Morgan Stanley case on captive BPOs. The Supreme Court had held that income tax department cannot tax a part of the global income of a foreign company by attributing it to its India-based BPO.

Orissa Govt To Re-Evaluate Land For Industry

Bhubaneswar: The Orissa government intends to make realistic assessment of the land requirement of various industries interested in setting up manufacturing facilities in the state. The government is worried over the resistance of the people to land acquisition and allegations of land grabbing by industrial houses in the name of setting up industries. In the process, the government has decided to take a re-look at Arcelor-Mittal''s land requirement for its proposed 12 million-tonne-per-annum steel plant in Keonjhar district''s Patna Tehsil. The company has sought 8,000 acres for the project, which includes land for construction of a 750MW captive power plant and a civil township. However, all indications are that only a ''reasonable'' piece of land will be given to the company.

Regarding the reassessment of the land requirement by Arcelor-Mittal, he said that the proposal is being evaluated, and it will take some time to complete the process and arrive at a decision. Interestingly, the land issue also figured in the discussion between L N Mittal, CEO, Arclor-MIttal with the chief minister Naveen Patnaik and other senior government officials during the former''s recent visit to the state. The Arcelor-Mittal group had signed a memorandum of understanding (MoU) with the Orissa government to set up a green field steel plant in December 2006. The estimated investment of the project is about Rs 40,000 crore. MN Dastur & Company, commissioned by Arcelor-Mittal, is preparing a detailed project report on the integrated steel project, which is expected to be completed by middle of the next year. The report would include captive mining facilities, power supply, water supply infrastructure and other facilities as required, including setting up townships for employees.

Govt Set For Tribal Rehabilitation Policy

Even as rehabilitation for farmers affected by SEZ projects hangs fire, the government is all set to clear a new look for Tribal Rehabilitation Policy, which will give displaced tribals a share in the companies that displace them. Indications are clear that tribal tracts bearing much of the mineral wealth, which have been protected by the forest laws, are all set to be opened up. Protests like the ones in Orissa over the POSCO project may soon wind down if the government''s new tribal rehabilitation policy finds takers. For two crore adivasis around the country who have been displaced by various projects, the policy on paper at least promises the moon.

It will give displaced tribals shares in the company. Compensation will be calculated not on existing market rates but the land''s long term potential. The compensation will be invested to provide dividends and tribal land will be given only on lease. We will give stake and security to the tribals, said PR Kyndiah, Minister Tribal Affairs.

Employees In Corporate India Having A Ball

It seems that more and more modern companies are making quite a song and dance about motivating their employees. From fun and games at work to sponsored dates and massages, work hard and play harder appears to be the mantra. In fact, companies like IT education giant NIIT don''t mind playing cupid. Once a year, staffers get a cool Rs 3,000 as dating allowance for a special occasion, and that too no strings attached.

For us a dating allowance is just a label. That''s a day on which if you are married, you renew your relationships and take your spouse out. If you are a bachelor, you can have a good time with friends. But the dating label creates a lot of excitement among young people, said M Rajendran, COO, NIIT. Not surprisingly, the employees are not complaining. But 25-year-old HR executive Ritesh Chutani says that this is different from dating in college.

In college you think whether to go a costly hotel or not, but here the company is paying for your date. You can go to a movie and visit a restaurant of your choice, said Ritesh Chutani.

Besides this, modern companies are increasingly deciding to go with the flow and invest in their employees'' interests.

For instance, when a group of like-minded techies approached their bosses at the Bangalore based Tavant Technologies and wanted to form a music band, there was some hesitation but only for a fleeting moment.

The authorities not just gave us the money to buy the equipment but also a place in the office where we could jam, Kapil Pandit, Tavant Technologies.

Deadlines are everywhere. But here, we work and leave. Something like a band helps us work better. It is cathartic. It helps you work better and get through the week, said Swetanshu, Tavant Technologies.

Re Ends Tad Lower At 40.53/$

Mumbai: The rupee was volatile against the dollar on Aug 9, taking cues from the stock marke, which lost heavily following news that international bank BNP Paribas has been forced to suspend calculation of the net asset value of three of its mutual funds due to problems in the US subprime mortgage sector. The domestic currency opened higher at 40.45/46 and strengthened to 40.39/40, due to good dollar inflows. The rupee fell and closed at 40.52/53, unchanged from Aug 8, close of 40.52/53. The rupee may trade in the 40.50-40.60 range said the dealer. In forwards, the six-month premia closed at 1.96 per cent (1.79 per cent) and the 12-month premia closed at 1.94 per cent (1.82 per cent).

Inflation Witnessed At 4.41Pc On July 28

MUMBAI: India''s wholesale price inflation rate is estimated at 4.41 per cent for the 12 months to July 28, slightly higher than the previous week''s annual rate of 4.36 per cent. At its policy review last month, the Reserve Bank of India increased banks cash reserve ratio to 7.0 per cent from 6.50 per cent in a bid to mop up excess funds that could fuel inflation. The RBI held its short-term lending rate steady at the review, as expected, after raising it five times since mid-2006. Annual inflation hit 6.69 per cent in late January, its highest in more than two years, but decreased as the central bank tightened policy and the government cut duties on a range of items to calm prices. It decline to a 14-month low of 4.03 percent in mid June.

FM Rules Out More Sops For Exporters

Finance Minister P Chidambaram has ruled out any more sops for the exporters hit hard by the rising rupee asking them to get used to stronger currency as dollar inflows would continue to grow. The government had announced Rs 1,400 crore package in July for exporters. We have taken note of the short-term pain of exporters and we have given them a package. But we hope that they will quickly adjust to the new level of rupee, Chidambaram said.

Exporters are demanding more sops to deal with rupee appreciation against the US dollar, complaining that their realisations have gone down due to the rupee effect and the prices they are quoting for new orders are turning away customers. The rupee has appreciated around nine per cent since March. From the lows of over Rs 45 in October-November last year, it is now ruling slightly above Rs 40. Commerce and Industry Minister Kamal Nath also supported the exporters yesterday stating that the government was thinking of a new package for exporters. The appreciating rupee has impacted exports and we are seized of the matter, he said.The Finance Minister, however, said there could not be a situation where the economy grows but rupee remain weak and exporters should take this into account while booking new orders.

India To Remove Roadblocks On Import Of 20 Items From Pak

ISLAMABAD: India has accorded to remove barriers on import of 20 items from Pakistan without asserting on Most Favoured Nation status and transit facility for Afghanistan. . A meeting of Joint Study Group (JSC) of the two countries followed the two-day talks held in New Delhi under the fourth round of composite dialogue process. The Commerce Ministry will consult all stakeholders before communicating the list of 20 items of Pakistan''s preference. India made the offer without insisting on MFN status and transit facility for Afghanistan. The list to be prepared in consultations with the business and industry should comprise items, which Pakistan can export easily, without affecting domestic needs. India also displayed readiness to import Pakistani cement and for this purpose, six cement factories have been selected. Indian said New Delhi decided to facilitate trade on 20 items of interest to Pakistan, while looking addition of 484 items in the 1,075-item list on which Islamabad permits trade with New Delhi. The bilateral trade between currently stood at $1.67 billion with balance of trade heavily in favour of India.

India To Curb Foreign Borrowing

India has set new limits on how much national firms can borrow from abroad, in a move to cool the rapidly expanding economy and calm inflation. Indian firms wanting foreign loans of $20m (£9.8m) or more will need consent both for the loans and the right to bring the money into the country. Increasing numbers of Indian companies have sought credit from overseas, where interest rates are lower. In the 12 months to March, Indian firms borrowed some $16bn from abroad.

ECB Curbs To Impact Infrastructure Funding

India needs big money to transform its infrastructure dreams into reality and its the long-tenor loans that is the lifeline to make sure that long gestation projects are on the fast track. But now with the government limiting the external commercial borrowings tap to just $20 million for domestic projects, the infrastructure sector may soon feel the heat as project costs are likely to jump.

I would not call it retrogate, I think they have to balance currency, inflation and money supply, and something like this was expected. The sector, which will get hurt is the infrastructure sector because we need lot of money for funding infrastructure, said YM Deosthalee, CFO, L&T.

Infrastructure investment target has been pegged at $320 billion for the Eleventh Plan, out of which the private sector is slated to pump in $120 billion. Long term funding is critical for infrastructure projects and companies will now turn to domestic financiers for money.

However, some industry watchers say that the cost impact on infrastructure projects may not be that significant as very little money flows into this sector through the ECB route.

Availability of money may not be a problem for infrastructure projects as domestic banks are flush with funds. The bigger challenge of course will be to work out innovative financing instruments. For long gestation projects to make sure that the costs don''t shoot up to make the projects unviable.

India Inc Upset Over ECB Norms

The rising tide of greenbacks could be a problem of plenty and the curbs on overseas corporate borrowing has taken India Inc by surprise. Around 88 per cent of corporate India believes that tightening of ECB norms has dampened spirits. Most of businesses are going through expansion phase and putting a cap on borrowings will hurt capital expenditure plans says 73 per cent of India Inc. However, the good news for exporters is that the rupee might weaken. Around 77 per cent of institutions believe that rupee will touch 41.50 against dollar.

But a minority 23 per cent is even more optimistic. They believe rupee to touch 42.50 by 2007 end. This has come a big sentiment booster for exporters. Around 71 per cent of corporate house expects rupee decline will boost earnings. Banks who were reeling under margin pressure, its time for them to cheer up. Around 66 per cent of the bankers believe that with tightening of overseas borrowing norms, domestic lending for banks are likely to rise. However, 86 per cent of corporate India expects the cost of funds to move up. The street is evenly divided on government''s new ECB norms. Citigroup says that software and banking companies are to benefit, where as CLSA feels its negative for auto, capital goods and mid-cap companies.

Govt Unlikely To Cut Tariffs On Fully Built Auto Units Under Indo-Asean FTA

New Delhi: Concerns of the domestic auto industry have been allayed with the Government unlikely to decrease tariffs on the import of completely built units (CBUs) of cars and bikes during the upcoming Indo-Asean free trade agreement (FTA) talks. There will be no tariff concessions on completely built units with regard to the FTA with Asean countries. In the case of the auto component industry the Government was likely to maintain 50 products in the negative lists. Currently, the Government has received negative lists from Malaysia and Thailand and hopes to receive the lists from other Asean countries in the ministerial meet to be held in the last week of August.

The industry had refused the Government''s attempt to include certain models of passenger cars and auto components in the sensitive list where tariffs were likely to be brought down to 5 per cent. The proposed move was seen impacting the investment and competitiveness of the domestic auto industry. At present, the import duty on CBUs of cars and bikes stands at 60 per cent in addition to which other taxes amounting to 13-14 per cent are levied. This has led to companies like Daimler Chrylser, BMW, Hyundai, Ford, Toyota, Nissan-Renault set up their manufacturing base in the country to make the prices of their products competitive for the domestic market. With most of these players having their manufacturing base in Thailand and other Asean countries, diversification of current investments in the domestic auto industry to these countries had been a matter of concern.

India Inks MoU With Switzerland On Intellectual Property Rights

New Delhi: India and Switzerland on Aug 7, inked a memorandum of understanding (MoU) on protection of Intellectual Property Rights (IPR). The MoU was inked by the Union Commerce Minister, Mr Kamal Nath, and the visiting Swiss Federal Counsellor and Minister of Economic Affairs, Ms Doris Leuthard. As per the MoU, a joint working group will be set up to answer to questions relating to intellectual property, such as preventing the production, distribution and sale of counterfeit products, as well as increasing awareness of the risks associated with these products.

India is not a country that anyway permits counterfeiting or production of fake products. It’s the credibility of India, which is important for the world to notice. On the progress made towards the proposed trade and investment agreement with EFTA countries (Iceland, Liechtenstein, Norway and Switzerland), Mr Nath said that the joint study group is likely to submit its report by November and that the talks are expected to start from December.

Rupee Ends Flat At 40.42 Against Dollar

Mumbai: The rupee ended flat at 40.41-42 against the dollar on Aug 7, against the previous close of 40.41. The rupee opened at 40.35-36, which was also the intra-day high and closed at 40.41-42. In forwards, the six-month premia closed at 1.63 per cent (1.75 per cent), while the 12-month closed at 1.73 per cent (1.80 per cent).

Customs Play Essential Role In Controlling ODS Traffic

Hyderabad: Customs agencies and other enforcement bodies play a key role in the effective monitoring and control of ozone depleting substances (ODS) and therefore must be made familiar with its regulatory mechanism, said the National Academy of Customs, Excise and Narcotics (NACEN). Since monitoring and control of ODS traffic has become inevitable to prevent illegal trade as also to effectively implement and enforce a given regulatory regime, customs agencies must be made familiar with any legislative and regulatory mechanism that need their attention. It said developing countries were still using them mostly in the refrigeration and air-conditioning (RAC) sector. According to the phase out schedules agreed upon by the parties of the Montreal Protocol, developing countries had to freeze their production and consumption of the main ODS, chlorofluorocarbon, starting from July 1, 1999. The phase out schedules for other ODS such as halons, carbon tetrachloride, methyl, chloroform and methyl bromide have already begun. NACEN said developing countries have began phasing out ODS in line with the Montreal Protocol.

Import Of Sensitive Items Grows 11.6Pc In First Quarter

New Delhi: Import of sensitive items increased 11.6 per cent in value terms during the first quarter of the current fiscal to Rs 4,877 crore compared with Rs 4,371 crore registered in the same period last year. Gross imports of all commodities during April-June 2007 stood at Rs 2,26,321 crore (Rs 1,85,988 crore). The import of sensitive items constituted 2.4 per cent and 2.2 per cent of the gross imports during the first quarter of the last fiscal and current fiscal respectively. Imports of fruits and vegetables, products of SSI, spices, marble and granite, tea and coffee and milk and milk products showed a decline at broad group level during April-June 2007.

On the other hand, imports of edible oil, cotton and silk, automobiles, rubber and alcoholic beverages have displayed an increase during the period under review. Edible oil imports have gone up in the first quarter of the current fiscal to Rs 2,802 crore as compared to Rs 2,407 crore in the same period last year. Imports of both crude oil as well as refined oil have increased by 15.7 per cent and 30.9 per cent respectively. Imports of sensitive items from Indonesia, China, Brazil, Germany, Japan, Thailand and Australia have increased during April-June 2007.

SME Rating Agency Sets Up Seva Kendra In Coimbatore

Coimbatore: The Small and Medium Enterprises (SMEs) in the country, which have awarded rating from the SME Rating Agency of India Ltd (SMERA), have been able to obtain financial assistance at concessional rate of interest from the lending institutions - the interest rate reduction ranging from 0.25 percentage point up to even 3.5 percentage points. SMERA, which established the first SME Seva Kendra in Coimbatore on Aug 6, to guide the SMEs to give greater access to bank credit through quality rating and trade intelligence on products etc, plans to open 60 Seva Kendras for the SMEs across the country.

The awareness among the SMEs at the grass root level of various Government schemes unveiled to benefit them was very low. The Kendras will assist to bridge this gap. It will also help train the SMEs in areas of their weaknesses basics of accounting, IT, HR practices etc. The Seva Kendras opened by SMERA will assist more and more units to obtain rating. More than 20 per cent of the entities that were rated by SMERA obtained interest rate benefits or loans on preferential terms such as reduction in margin requirements or increased exposure by the banks. The interest rate cut ranged from 0.25 percentage point to one percentage point and in some cases, it was as high as even 3.5 per cent.

Weak Asian Markets Dragged Sensex: FM

Finance Minister P Chidambaram has attributed the sharp fall in the stock market to the plunge in the Asian markets, but said it was not a cause for concern.

When this government took over, the benchmark index was near 4,400 and it is on either side of 15,000 now, the Finance Minister said against the backdrop of the over 430 points fall in the benchmark Sensex in morning trade.

The Finance Minister''s comments assume importance in the wake of market plunging from its peak of 15,868 by around 1,100 points in a fortnight.

Asked to comment on the three major falls the market suffered in the recent past, Chidambaram said: That''s because the Asian markets are down. We are part of the globalised economy today. If there is a downturn in one market, it will affect other markets.

India Wants Israeli Expertise In R&D

India on Aug 6, asked Israeli expertise in strengthening its own research and development base as the proportion of Israeli gross domestic product to R&D is quite substantial in science and technology. Inaugurating the joint business forum here, organised by the Federation of Indian Chamber of Commerce & Industry (FICCI) and the Israel Export & International Cooperation Institute, the Minister of State for Industries, Mr Ashwani Kumar, said India requires Israeli expertise and experience in R&D for small and medium enterprises in areas such as agriculture, irrigation and chemicals.

India has a huge market of 350-million strong middle class segment and 7.9 million people would have purchasing power of Rs 14,00,000 crore. Mr Kumar highlighted India''s growth story and its integration with global economy and the challenges of inclusive growth, which it was addressing now. Israel with a large percentage of unemployed in sectors other than high-tech could draw some points from the upgradation and rationalisation of traditional industries currently being successfully implemented by India. The Israel Export & International Cooperation Institute said that India is the third trading partner of Asia for Israel after Hong Kong and China and said a potential free trade agreement between the two would ease the way for more joint projects, including one with third parties. The institute is working with Exim Bank of India to identify additional sectors, more partners and fresh ideas to extend the scope of cooperation to new and frontier areas.

CBDT Estimates Cost Inflation Index For 2007-08 At 551

New Delhi: The Central Board of Direct Taxes (CBDT) has estimated the cost inflation index for the financial year 2007-08 at ''551''. The cost inflation index defined by the Income-Tax Department is useful for income-tax assesses in the computation of tax on long-term capital gains. For the financial year 2006-07 and 2005-06, the Finance Ministry had estimated the cost inflation index at ''519'' and ''497'' respectively. Tax experts feel that the CBDT has adequately factored in the increases in inflation while deciding on the cost inflation index for 2007-08. The increase in inflation has been duly reflected in the cost inflation index specified for 2007-08. Currently, the income-tax law permits long-term capital gains to be computed after adjusting for inflation. The cost of acquisition as well as the cost of improvement is adjusted for inflation between the date of purchases and date of sale before the long-term capital gain is ascertained.

Re Ends Lower At 40.41/$

Mumbai: The rupee weakened by about seven paise against the greenback on Aug 6, due to the bearish domestic stock market. The home currency closed at 40.41, down from the previous close of 40.34. It opened at 40.46/47 and saw an intra-day low of 40.52 due to the decline in stock market before ending the day at 40.41. Market participants expect the rupee to trade in the 40.25-40.50 range. In forwards, the six-month premia closed at 1.75 per cent (1.74 per cent) while the 12-month closed at 1.80 per cent (1.79 per cent).

Plan Committee For Increase In Farm Sector Funding

New Delhi: The Planning Commission is considering an increase in public sector investment in the farm sector to 4 per cent of agricultural gross domestic product towards the end of the 11th Plan (2007-12). This implies the government will have to allocate around Rs 26,000 crore every year for the sector towards the end of the 11th Plan. The government has granted Rs 8,558 crore for agriculture and allied services for financial year (2007-08). An increase in public spending on the farm sector is significant as the contribution of agriculture production to GDP has been falling since the 1950s - from over 50 per cent of GDP then to around 18 per cent in 2006-07.

The government is aiming 4 per cent agricultural growth in the current Plan period, up from the present level of 2.7 per cent. A 4 per cent farm growth is deemed crucial for attaining and maintaining a double-digit GDP growth rate. The Planning Commission is considering the issue after the recommendations of a steering committee for formulating the 11th five-year Plan headed by CH Hanumantha Rao, chairman, Centre for Economic and Social Studies.

Plan allocation for agriculture will be around Rs 4,000 crore during the Plan period. Investment in agriculture fell from 1.6 per cent of GDP in 1993-94 to 1.3 per cent in 1998-99. This was due to a fall in public investment from Rs 4,467 crore in 1993-94 to Rs 3,869 crore in 1998-99. Although the trend was halted in 1999-2000, with public sector capital formation rising to Rs. 4,122 crore from Rs 3,869 crore in the preceding year, there has not been any improvement in the share of investment in agriculture GDP from the preceding year''s level of 1.3 per cent.

E-Payment Of Direct Taxes Compulsory From Next Year

Hyderabad: e-Payment of direct taxes will be compulsory for corporate taxpayers and taxpayers who come under the purview of Section 44AB with effect from January 1, 2008. For e-payment of taxes, the taxpayers will need a Net banking account with a bank authorised for giving the facility. The bank will forward an identical data to the Tax Information Network. The taxpayer will get an e-counter foil containing all the necessary challan fields which should be saved and printed out for record of the payer. The Challan Identification Number available on the counterfoil should be quoted while filing the returns. Currently, State Bank of India, UTI Bank, IDBI Bank, HDFC Bank and Union Bank of India are offering the facility for their customers.

UK Asks India To Set Up Financial, Legal Sectors

Chennai: The British Deputy High Commissioner in Southern India, Mr Micheal Connor, on Aug 4, made a pitch for opening up India''s financial and legal sectors. Lloyd''s of London is one of the largest and most successful insurance companies in the world, but is currently prevented from operating in India. Foreign joint venture partners are limited to 26 per cent in their shareholding. In banking, there are still regulatory barriers. Higher ceilings on foreign shareholding in banks would encourage transfer of expertise. Mr Connor dwelt in greater detail on the issue of FDI in legal services, mentioning at the outset that British lawyers have no intention of practising at Indian courts. Mr Connor said that the BPO companies of Standard Chartered Bank (SCOPE) and HSBC, both British companies, employed about 5,000 and 10,000 people respectively. Mr Connor also asked the retail sector to be opened up for FDI.

Israel Proposes Free Trade Pact With India

Israel is keen on forming a free trade agreement with India on the back of robust economic relations between the two countries that began in 1992. The Israeli asked to involve Israeli companies in infrastructure development in India for the forthcoming Commonwealth Games in 2010. Israel is keen on setting up a trade office in Bangalore apart from the one in Mumbai to address the growing demand for exporters from both countries. Israel was also keen on sharing India''s experience in inclusive growth on the upgradation and rationalisation of traditional industries in India as Israel has a large number of unemployed people.

Booming India creating jobs In US

In recent times a rapidly growing Indian economy has actually meant job opportunities for many in the US.In the past outsourcing has been a big political debate in the US.Those who opposed it argued that countries like India, a preferred outsourcing destination for US companies, were eating into the American job market. But that''s changing now. The President of Boeing commercial Scott Carson hosted a private party on a luxury yacht in Seattle’s lake Washington. A gesture for a very special guest of honour Air India. After ordering 68 planes estimated to be around $7 billion, Air India is now Boeing''s most valued customer. This is the biggest ever order by any airline to Boeing in the past few years, said V Thulasidas, Air India CMD. Air India is a special customer also because it will be one of the first to use the 787 Dreamliner, the most modern plane from the Boeing’s table.

Net Direct Tax Mop Up Grow 46% In April-July

The Centre''s net direct tax revenues collections in the first four months of the current fiscal reported a 45.6 per cent increase to Rs 53,397 crore. In April-July 2007, the growth in gross direct tax mop ups has also been robust at about 28 per cent to Rs 65,236 crore.

While net corporation tax collections recorded a 23.3 per cent increase to Rs 30,288 crore, the net personal income-tax collections rose by 39.3 per cent to Rs 20,066 crore.

Official sources said that fringe benefit tax collections stood at Rs 971 crore. While the securities transaction tax collections increased by 16.9 per cent to Rs 1,831 crore, banking cash transaction tax collections stood at Rs 201 crore. For fiscal 2007-08, the budget estimate for direct taxes has been pegged at Rs 2,67,400 crore. This is against the budget estimate of Rs 2,10,419 crore for fiscal 2006-07. The actual mop up in direct taxes in fiscal 2006-07 stood at Rs 2,29,181 crore.

Kerala Eyes Investment From Taiwan

As part of the efforts to provide support to its growing software industry, Kerala is trying to attract companies from Taiwan to invest in the electronic hardware sector in the State. A team of Government officials is leaving for Taiwan on Friday for showcasing the State''s ''inherent strengths'' in the electronics field at seminars and interactive sessions there over the next one week. A group of local entrepreneurs are also part of the team, according to officials in the Industries Department.

They pointed out that South India is a major hub of software industry in the world and Kerala has set in motion major policy initiatives to keep pace with other States in the region. However, the electronic hardware sector has yet to rise to the desired levels so as to complement the software industry''s growth.The officials said that Taiwan has emerged as the global leader in the manufacture of electronic hardware, especially computer chips, overtaking other countries such as Japan and China.

An inherent strength of Kerala in the electronics sector is that it was the first in the country to promote a State electronics development corporation (Keltron), a model that was later emulated by many other States.

Rupee Up 4 Paise Against Dollar

Mumbai: The rupee appreciated by about four paise on August 2 on modest gain in domestic stock markets. The home currency opened at 40.41/43 and saw an intra-day low of 40.47/48 and a high of 40.39 before ending the day at 40.41/42, up from the previous close of 40.45/46. Market participants expect the rupee to appreciate further. In forwards, the six-month premia closed at 1.95 per cent (1.89 per cent) and the 12-month at 1.91 per cent (1.84 per cent).

FII Money To Stay Despite Volatility

Global markets are reeling under selling pressure on subprime woes and yen carry trade unwinding. Despite this uncertainty, confidence on Dalal Street has not been shaken.

On an exclusive NDTV brokerage poll, 86 per cent of the brokerages say that this is an opportune time to take fresh position in stock markets. However, 14 per cent has a word of caution.

Foreign institutional investors including hedge funds have unwound massive position in past few trading sessions. However, 54 per cent of the brokerages believe FII money is to stay in India on its robust economic growth story.The Sensex has broken a very important psychological level of 15,000 mark. However, 87 per cent of the brokerages believe that there won''t be any major correction from current levels.

But 92 per cent of the brokerages say that the volatility in the markets will stay in absence of any clear direction.

The million-dollar question now be, should one buy into equities? About 63 per cent of the brokerages are recommending to their clients for a buy and the value they are seeing post correction is in mid-caps.

There are brave-hearts on Dalal Street, brokerages are sticking their neck out in giving year-end targets. Around 93 per cent of the brokerages believe that by year-end Sensex should touch 16,000 mark on corporate earnings growth and India growth story.

June Export Growth Slows Down To 14%

Hit hard by the appreciating rupee, India''s export growth is tapering off and stood at 14.05 per cent in June 2007, considerably down from the 23.06 per cent growth rate at the start of the fiscal in April.The export growth rate was down in May at 18.07 per cent, slowing further to 14.06 per cent in June, when exports stood at $11.87 billion against $10.40 billion in the year-ago period.

This has brought down the overall increase in exports in the first quarter of April-June to 18.11 per cent, which is much below the 28 per cent growth targeted for the current financial year. In 2007-08, the government has targeted exports of $160 billion against $125 billion in the previous fiscal.

Impact in July

Exports for the April-June period grew by 18.11 per cent to $34.3 billion compared to $29 billion in the corresponding period of last fiscal. Imports during June grew 36.68 per cent to $19.19 billion compared to $14.04 billion in the same month in 2006.

For the April-June period of 2007-08, imports stood at $54.9 billion, a growth of 34.3 per cent from $40.8 billion in the year ago period.

India''s trade deficit for June 2007 has more than doubled to $7.3 billion from $3.6 billion in the same month of 2006. Trade deficit for April-June widened to $20.60 billion from $11.84 billion in the corresponding quarter of 2006-07.

Oil imports during June stood at $5.66 billion, up 9.85 per cent from the $5.15 billion in the same month of the previous fiscal. For April-June 2007, oil imports were valued at $14.83 billion, up 4.21 per cent from the corresponding period last fiscal.Non-oil imports during the month are valued at $13.53 billion, which is 52.25 per cent higher than the $8.88 billion imports in June 2006. During the quarter, non-oil imports grew 50.36 per cent to $40.07 billion.

India''s Trade Deficit Widens In June As Imports Surge

India''s trade deficit in June widened to $7.33 billion, data showed on Wednesday, and an analyst said growing demand for imports, including oil, in a fast-growing economy could lead it higher in the months ahead. Imports surged an annual 36.7 percent to $19.2 billion in June, while exports rose by a slower 14 percent from a year earlier to $11.87 billion, hit by a rising rupee.

The economy is growing at a fast pace and industry is doing well -- that means more imports. Exports have not performed well, mainly due to currency appreciation, said D.K. Joshi, an economist with domestic rating agency Crisil.With the rise in oil prices, the trade deficit may widen in the coming months, he said, adding buoyant services exports would maintain a favourable balance of payments.The deficit was $20.61 billion in the first quarter of the fiscal year that began in April, wider than $11.84 billion in the year-ago period. It was $3.64 billion in June a year ago.

During April-June, exports rose by 18.11 percent to $34.3 billion as the rupee gained about 6.75 percent against the dollar and squeezed the margins of exporters.

Last month, the Indian government announced a $320 million relief package for exporters hit by currency appreciation, including a cut in bank lending rates and an increase in duty refund rates.