Current Economic Statistics and Review For the Week Ended September 15

The Tenth Five-Year Plan (2002-07): An Mid-Term Assessment of Policy Objectives and Achievements*

A developing economy is characterised by unutilised or underutilised human resources and unexploited natural resources, under-mobilisation of financial resources, low technology notwithstanding. The task of development planning revolves around deployment of these unutilised resources for speeding growth and making the benefits to the society as a whole. Indeed, the aims of planning cannot be limited to raising the supply of material goods and include amelioration of poverty, reducing unemployment and inequalities in income, wealth and opportunities. The aims also include calibrated intervention where market mechanism does not work adequately such as in protecting environment, ecology, and forests.

India

has a long history of planning. The launching of the first five-year plan in April 1951 initiated a process of development in a planned manner in order to achieve clearly defined objectives within a specific timeframe. In the 55 years that have passed since our independence, the challenges, the imperatives and the capabilities of the nation have undergone profound changes and accordingly, so have the objectives. The Tenth Plan (2002-2007), in the above process, marked a change in so far as a high growth target is aimed.

The objective of this note is to assess the extent of achievement accomplished so far in respect of major objectives based on the approach made by the planning, covering the period 2002-03 to 2004-05.

Broad Objectives of the Tenth Five Year Plan

The Tenth Five-Year Plan aims at achieving an average growth rate of the Gross Domestic Product (GDP) of 8 per cent per annum over the period 2002-03 to 2006-07, with a key sectoral-target of 4 per cent growth in agriculture. It also seeks to create the conditions for a further acceleration in the growth rate over the Eleventh Plan period (2007-12) in order to achieve a doubling of real per capita income of the country over the next ten years. The plan targets to reduce the incremental capital output ratio (ICOR) from 4.53 during the Ninth Plan to 3.58 in the Tenth plan. The average rate of investment is targeted to improve by more than 4 percentage points of GDP from 24.2 during Ninth Plan to 28.4 per cent in the Tenth Plan. The average investment requirement of 28.4 per cent of GDP during the Tenth Plan involves a sharp acceleration in the investment rate from 24.4 per cent in the first year of the plan period (2001-02) to 32.3 per cent in the terminal year (2006-07). Of this, nearly 8 percentage points increase, more than five would be in the private sector and 2.6 percentage points in the public sector. In order to finance the increased investment needs of this magnitude, the domestic savings rate is to increase by 3.5 percentage points from 23.3 per cent during the Ninth Plan to 26.8 per cent in Tenth Plan. For this domestic savings would require to rise by about 6 percent points from 23.5 per cent in 2001-02 to 29.4 per cent in 2006-07.

Although the share of agriculture in total GDP of the country has declined, it still provides livelihood support to about two-thirds of country's population and employment to 56.7 per cent of country's work force. It accounts for about 15 per cent of the total export earnings. The allied sectors like horticulture, animal husbandry, dairy and fisheries also are critical in improving the overall economic conditions of the rural masses. Any change in this sector, has a multiplier effect on the entire economy. Hence growth of this sector has taken a center stage of the Plan.

As the National Agriculture Policy (NAP), 2000, the Tenth Plan envisages a growth rate of around 4 per cent per annum for agriculture sector. To achieve this, the Plan has identified the following policy priorities:

1. To raise the cropping intensity of our existing agricultural land as climatically India is privileged to have multiple crops practically all over the country.

2. Given that only about 40 per cent of the agricultural area is irrigated, to raise public investment in irrigation, which has fallen significantly over successive Plan periods, due to resource constraints.

Over the years, India has developed an extensive system of agricultural research centres and extension services. However, the quality of the agricultural research has weakened while the extension system has virtually collapsed. Strengthening of the agricultural research and development system, with special emphasis on bio-technology, and a significant improvement in the degree of sophistication in the technology dissemination methods are aimed to achieving rapid and sustained growth in agricultural productivity.

The Tenth Plan targets a growth rate of 10 per cent for the industrial sector in order to achieve an 8 per cent GDP growth. This represents a major step-up in view of the less than 7 per cent growth during the last decade. For this, the Plan emphasises to recognise firstly that industry will have to face much stronger international competition, as our domestic market is now more open with quantitative restrictions (QRs) on imports having been removed with effect from April 1, 2001 and secondly decline in relative role of the public sector as a distinct entity, as the process of disinvestment converts many of the existing public sector enterprises from Government controlled enterprises to non-Government enterprises in which Government may have a minority stake but the units will either become board managed or managed by a strategic investor. In either case, they will not be part of the public sector.

In this scenario, there is a need to create a positive investment climate conducive to a dominant private sector role, including setting up state-of-the-art infrastructure, capacity building in industry in order to make it internationally competitive, augmentation of financial resources and efficiency enhancing policy instruments are the important ingredients. Another significant policy issue is foreign direct investment (both portfolio investments and direct FDI). A quadrupling of FDI is required in order to achieve a 10 per cent industrial growth rate. FDI is not only an additional source of funds but it brings technology and provides greater world market access with implications for productivity and quality.

· Enhancement of excise duty exemption limit for SSI units from Rs.50 lakh to Rs.100 lakh.

The infrastructure development has been identified as a critical area for the Tenth Plan in recognition of the fact that the quality of infrastructure in India is far below the level required to achieve 8 per cent GDP growth. The importance of these sectors is reflected in the establishment of a Committee on Infrastructure (August 2004) headed by the Prime Minister. The Planning Commission will undertake a review of the regulatory structure in these sectors to identify critical initiatives needed to bring the existing structure in line with international best practice. This is essential if public-private partnership is to become a reality. The areas targeted as priority areas include power sector, energy-transport infrastructure, atomic energy as an important source of electric power, railways, road transport, civil aviation and telecommunications.

A basic shift in priorities signalled by the National Common Minimum Programme (NCMP) was the need to give greater importance to social sector expenditures as part of the effort to promote development with social justice, in particular for the scheduled castes and scheduled tribes. The Tenth Plan specifies monitorable targets for certain indicators of social development in health, education and gender equality. They are as follows:

· Providing gainful and high-quality employment at least to addition to the labour force over the Tenth Plan period;

The role of employment in reducing poverty has been clearly recongnised by the Plan. Therefore, the Tenth plan has focused on number of self-employment and wage employment schemes and carried forward some of them planned in the Ninth Plan. Some of them are Swarnajayanti Gram Swarojgar Yojana (SGSY), which merged Integreted Rural Development Programme (IRDP) with allied programmes in April 1999 aiming at forming self-help groups (SHGs) for rural poor, Jawahar Gram Samridhi Yojana (JGSY) for the creation of rural economic infrastructure with employment generation as an objective. Food for Work Programme started in 2000-01 for augmenting food security through wage employment and Sampoorna Gramin Rozgar Yojana (SGRY) which merged JGSY, Food for Works Programme and Employment Assurance Scheme, 1993. The Tenth Plan envisages a single wage employment programme as SGRY, which would seek to provide productive employment to address the needs of three streams:

1. Creation of rural infrastructure like water tanks, primary school buildings, sanitation, primary health etc.,

2. Reducing widespread poverty by providing employment guarantee of at least 100 days for areas facing chronic unemployment and poverty, and

Apart from this, the Special Group on targeting ten million employment opportunities per year over the Tenth Plan period has been constituted by the Planning Commission to explore appropriate policies and programmes for generating targeted gainful employment for 50 million persons over the Tenth Plan. The Plan also gives significant weightage to rural housing and social security schemes.

The targets set by the NDC reflect the concern that economic growth alone may not lead to attainment of long-run sustainability and improvement in social justice.

Mid –Term Appraisal of the Tenth Plan

The Mid-Term Appraisal presents a detailed assessment of the performance of the economy as a whole as well as progress made in the individual sectors as compared to the targets. The appraisal portrays a mixed picture of Indian economy wherein the economy has done well in certain areas and has remained weak in others.

The experience of the first three years of the plans suggests that both the overall growth target as well as the agricultural sub-target would be difficult to achieve and scaling down of the targets seems unavoidable even though efforts are being made to improve the performance in the last two years of the Plan. In such a scenario, the critical and somewhat difficult objectives like employment and poverty reduction are likely to slip.

The growth in the first three years of the Plan has averaged 6.5 per cent, much below the ambitious target of 8 per cent against the expected average growth rate of about 7.4 per cent the actual growth has been 4.1 per cent in 2002-03, 8.6 per cent in 2003-04 and 6.9 per cent in 2004-05. The growth rate for 2005-06 is projected at 7.6 per cent, which may further accelerate in 2006-07. Even so, the average growth rate in Tenth Plan period is likely to be below 7 per cent.

The rate of savings as reported by the Central Statistical Organsiation (CSO) shows a very sharp increase in the first two years of the plan taking the domestic savings rate to about 27 per cent of GDP as against the target of 24.5 per cent of GDP. Correspondingly, the rate of investment also exceeded the plan target in the first two years, though by a relatively lesser amount. (However, the plan projections for 2004-05, 2005-06 and 2006-07 are based on high estimates of savings and investments, which have high levels of errors and emissions in the CSO’s quick estimates. Therefore, the plan document has adopted more conservative savings and investment rates. If these rates turn out to be higher, we could have higher growth rates.)

The targeted and actual savings and investment rates during Tenth Plan are shown below in Table No. 1.

Table 1. Savings and Investment Scenario during the Tenth Plan (percent of GDP)
	2002-03	2003-04	2004-05	2005-06	2006-07	Tenth Plan	Post Plan
Investment rate
Tenth Plan	24.5	25.9	27.7	30.1	32.3	28.4	32.3
Actual/MTA*	24.8	26.3	26.0	27.1	28.6	26.6	29.4
Public Investment Rate
Tenth Plan	7.5	7.5	7.8	9.0	9.9	8.4	9.9
Actual/MTA*	5.9	6.4	6.9	7.6	8.6	7.1	9.1
Domestic Savings Rate
Tenth Plan	23.8	25.2	26.6	28.1	29.4	26.8	29.4
Actual/MTA*	26.1	28.1	25.9	26.6	27.7	26.9	27.9
Public Savings Rate
Tenth Plan	-1.5	-0.6	0.3	1.2	2.1	0.4	2.1
Actual/MTA*	-1.1	-0.3	-0.1	0.0	0.6	-0.1	0.8
Note: Numbers in italics are actuals and others are projected for Mid-Term Appraisal (MTA). Source: Planning Commission, Mid-Term Appraisal of Tenth-Five year plan

Sectorally, the targets that had been set for the Tenth plan have been missed in almost all the sectors during the first two years, and are likely to continue to fall short in the future as well. The sectoral growth targets for the plan along with the actual and projected performance are presented in Table 2.

Table 2: Sectoral Growth Rates during Tenth Plan (at factor cost and at 2001-02 prices)
Sector	2002-03	2003-04	2004-05	2005-06	2006-07	Tenth Plan	Post Plan
Agriculture and Allied
Tenth Plan	3.5	3.7	4.0	4.2	4.4	4.0	4.4
Actual/MTA	-6.8	9.5	1.1	4.0	3.2	2.2	3.4
Industry
Tenth Plan	7.2	8.0	8.8	9.7	10.6	8.9	10.6
Actual/MTA	6.6	6.6	7.6	8.2	8.9	7.6	9.1
Services
Tenth Plan	8.0	8.5	9.5	10.0	10.3	9.3	10.3
Actual/MTA	7.3	8.4	8.3	8.5	8.8	8.3	9.0
GDP at factor cost
Tenth Plan	6.7	7.2	8.0	8.6	9.1	7.9	9.1
Actual/MTA	3.7	8.2	6.5	7.5	7.7	6.7	7.8
Notes: The Tenth plan does not have annual targets. The figures shown against Tenth plan are obtained through interpolation. The figures for the first three years (2002-05) are based on National Accounts estimates whereas those for the last two years are projected from the plan period. Source: Planning Commission, Mid-Term Appraisal of Tenth-Five year plan

The most worrying feature of the recent growth experience has been the performance of agriculture. The target of achieving a 4 per cent growth rate of agricultural GDP is nowhere near in sight. The average agricultural GDP growth in the first two years of planning has been only 1.35 per cent as against the targeted 3.6 per cent and for 2004-05 it has turned out to be 1.1 per cent. Hence for the first three years the average growth is almost 2.5 percentage points below the target. Progress in implementing Plan programmes was also slow. There was delay in starting new schemes.

Bringing wastelands and degraded lands into productive use was an important component of the agricultural strategy. To this end, two major initiatives were proposed – the bamboo mission and the bio-diesel programme. It appears that the issue of land rights is yet to be resolved for the most part. For both forest and government lands, it is difficult to involve local communities unless land ownership is given to them.

There is a general deceleration in the agricultural growth due to number of structural problems. Although institutional credit to agriculture has been stepped up substantially since last year, the underlying problems of farm debt and of the cooperative sector remain. Availability and management of water has been identified as another important constraint on agricultural productivity. The priority areas therefore should be the major irrigation projects, watershed development, reformed Public Distribution System, pricing and agricultural research. It is evident that the agriculture sector thus far has not demonstrated the resurgence of growth that was expected in the Tenth Plan

The industrial performance has been much better due to faster growth of manufacturing. However, the achievements have fallen short of target during the first three years of the plan. The average industrial growth during the first two years of the plan was 6.6 per cent, which is short of expected rate (average 7.6 per cent). Although industrial growth has picked up in 2004-05, however, we are still far from the rates needed to achieve Plan targets. The projections indicate that the industrial growth will accelerate in coming years estimated for 2005-06, but it would require concentrated efforts on certain policies and on infrastructure.

The robust performance of the services sector is reflected in the average growth rate of 7.85 per cent in the first two years of the plan. In spite of being low as against the target of 8.3 per cent for the above mentioned period, the sector is exhibiting a satisfactory growth attributable to the telecommunications, which has grown much faster than expected. This strong performance of the services sector is expected to continue for rest of the Plan period, though it may fall short of the original targets, mainly because of the commodity-producing sectors (agriculture and industry) are growing slower than expected and are not likely to provide the level of demand support that had been anticipated.

The MTA has made an assessment of the position in each major infrastructure sector, including the scope for increasing capacities through a combination of enhanced public and private investment. A committee on infrastructure chaired by the Prime Minister has so far considered Civil Aviation and National Highway sectors as prime areas for action.

The National Highway Development Programme (NHDP) appears to have gained considerable momentum. However, the rural roads programme does not appear to be gaining the needed momentum. One of the reasons for this is that the rural roads programme is entirely dependent upon the flow of budgetary support without any effort at leveraging the cess funds through borrowing as has been done for the NHDP. The position with regard to State highways and district roads is of serious concern, and there is no programme to ensure that these too come up to the standards necessary for a high quality road network in the country. As far as the Railways are concerned, there has been practically no movement in terms of implementing many of the key recommendations of the Plan. The development of port infrastructure appears broadly satisfactory, but the collateral measures needed to increase water-borne transport, whether coastal or river line, do not appear to have progressed.

The telecommunication sector is a major success story with an impressive increase in both capacity and service levels. The issues which deserve focused attention. Include broad-band connectivity, critical for development of Internet and also for spreading the benefits of e-Governance in rural areas.

The area of urban infrastructure is also of concern. The demographics of urban India is changing and needs of towns and cities of different sizes are very different. There is at present, no programme that addresses these issues in a long-term sense and in a case-sensitive manner. Development of mass rapid transport systems, drinking water and sewage systems, solid waste management, urban roads and lighting, etc need to be addressed.

Social Developments

The targets regarding education required that 100 per cent enrolment in primary schools be achieved by 2003 and 100 per cent retention be achieved immediately thereafter. The slow pace of roll-out of Sarva Shiksha Abhiyan (SSA) has led to a situation that the 100 per cent enrolment target is unlikely to be achieved even by 2005. The fiscal implications of SSA, especially for State finances, does not seem to have been factored in adequately.

Inadequate progress on the health and family welfare front is a matter of grave concern. Unless prompt and decisive steps are taken, the Plan targets on IMR and MMR will not be met and the MDG targets too will almost certainly be missed. There is no real blueprint for the development of the primary health sector.

Concerns about gender equity are reflected in the monitorable targets of the Plan, but little appears to have been done about empowering women so that these intentions are backed up by gender-sensitive institutional structures. More generally, inadequate attention has been paid to finding ways of mainstreaming gender concerns in our policies and programmes, an issue which needs careful consideration while designing intervention strategies. Social justice and empowerment of backward classes by and large continue to be followed as special programmes rather than as part of an integrated strategy.

State-wise Targets

The Indian central plans have tended to focus on setting up only national targets. However, recent experience suggest that the performance of various states vary considerably. Although the economy as a whole has accelerated, the growth rates of different states have diverged and some of the poorest states have actually seen a deceleration in growth. In order to emphasise the importance of ensuring balanced development for all states, the Tenth Plan includes a state-wide break-up of the broad development targets which are consistent with the national targets. These state specific targets take into account the needs, potentialities and constraints present in each state. However, it is important to note that these plans are not substitutes for State-Plan formulation. They are more in the nature of indicative guidelines for facilitating planning process in the states.

On the whole, the average GDP growth of about 6.5 per cent in the first three years of the Tenth Plan is clearly below the targeted level of 8 per cent. However, a robust average growth performance during the first two quarters of 2005-06 at around 8 per cent, does permit us to be optimistic about achieving the targeted average rate, which may not diverge radically from the target level. It is expected that the real GDP would meet at least 7 per cent level.

Despite buoyant growth numbers, there remain serious structural bottlenecks and regional disparities hindering socio-economic growth of the country. There are inherent problems like lower productively in agriculture, lack of adequate infrastructure and various social problems like inequality of incomes and wealth, persistent poverty and widespread unemployment across the nation. No doubt that industry and services sector performances have shown strong growth impulses in post-reform period where the market economy had played a significant role through competition and export promotion strategies. In doing so, however, the role of the state and subsequently that of the planning, seems to have shown fading impact in the process of development. Given the limitations of private sector in a core socio-economic development of the county, the role of the state still remains critical. It is imperative to build specific policy objectives and work out programmes for their effective implementation in order to address the needs of neglected segments of the economy.

The Central Silk Board has demanded sericulture cultivation to be covered under crop insurance to boost the Indian Silk Industry. The crop insurance is needed to cover the losses owing to unpredictable monsoon and drought and also mortality of silk worms due to epidemics. The board has also suggested to cover this industry under market intervention and to fix a minimum support price for the crop. Currently India produces 16,500 tonne of silk while nearly 9,000 tonne are being imported from other countries.

The Agriculture Ministry plans to set up 3,471 grain banks with an investment of about Rs 20.2 crore with the objective to provide food grains to people living below poverty line in food deficient areas, like drought prone regions, deserts, and inaccessible areas of the country. Apart from people living below poverty line, those availing the Antyodaya Anna Yojana will also be encouraged to become members of such banks. Each bank will have about 40 such members.

The central government has increased the subsidy on single super phosphate (SSP) fertilizers by about 50 per cent. The new subsidy now will be Rs 975 per metric tonne as against Rs 650 earlier. The State government has also increased the retail price of these fertilizers by Rs 333 per tonne to Rs 4010. The increase in the subsidy and raise in their retail price has motivated farmers to buy more of these fertilizer stocks. The move also leads the BSE PSU index to rise 0.9 per cent. The subsidy will help all the sick units to continue or increase their production.

The estimated crop size of cotton for the year 2004-05 may come down owing to adverse climate in various parts of the country. The output might be below 240 lakh bales against the October estimates of 270 lakh bales. Production of extra large sample (ELS) has been hit badly. It is estimated to decline by 50 per cent from 3 lakh bales of production in 2004-05. The short fall in the supply is usually met through imports from Egypt and US, which is not possible this time owing to fall in ELS cotton output in those countries.

INDUSTRY

Industrial production growth has slowed down to 8.5 per cent in October 2005 as compared with 10.6 per cent in the corresponding period last year. The slowdown is attributed to poor performance in the manufacturing and mining sectors, which grew at 1.8 per cent and 9.6 per cent respectively compared to 6.2 per cent and 11.9 per cent in October 2004. The electricity sector showed a better growth rate of 7.4 per cent in October 2005 as against 3.5 per cent in the same month a year ago. The slow down is explained as the effect of a very high base from last year, which was difficult to maintain.

The cumulative growth in industrial production during April-October 2005 was 8.4 per cent. Marginally lower than the 8.7 per cent growth registered during the same period last year. For the cumulative period manufacturing industries grew at a robust 9.6 per cent, electricity by 5.2 per cent and mining is a mere 0.7 per cent.

A large number of drug manufacturers including Novartis, Cipla, Ranbaxy, Alembic Ltd, Wockhardt and Torrent have come under the government scanner for alleged tax evasion amounting to a total of over Rs 283 crore since 2002-03. There has been a steady increase in default amount in the last three years – the amount was over 72 crore in 2002-03, Rs 90 crore during 2003-04 and is estimated at Rs 107 crore for 2004-05.

INFRASTRUCTURE

The government has announced a draft energy policy proposing to set up a national energy fund by the levy of a cess of 0.1 per cent on all petroleum, power and coal companies to fund research and development activities in the energy sector. A rebate of up to 80 per cent of this cess might be given to firms as an incentive for in-house R&D.

In order to arrest the declining trend in the domestic crude oil and gas production, the petroleum ministry plans to convert the nomination acreages of ONGC and OIL to production sharing contracts (PSCs). This is mainly due to the government’s concern regarding the lower exploration and production success ratio of ONGC as against private or joint venture companies and other international companies working in India .

With LPG prices skyrocketing to $548 per metric tonne (mt) and kerosene prices to $503 per mt in the international markets during November, Indian Oil Corporation (IOC), the country’s largest oil retailing firm, has sought an immediate increase in the ex storage point prices of LPG by Rs 203.79 per cylinder and Rs 10.87 per litre of kerosene. Retail selling prices would be even higher as they would include excise duty and sales tax components. Additionally, IOC has sought a Rs 4.11 per litre hike in petrol prices and Rs 4.32 per litre in diesel prices. The petroleum minister has ruled out an immediate increase in prices of petroleum products while confirming that the ministry would present various options for bridging the huge gap between the cost price and the retail selling price of petroleum fuels.

The union cabinet has cleared the Petroleum and Natural Gas Regulatory Bill, which aims at setting up a regulatory body to administer downstream oil refining, natural gas and fuel marketing. A statutory board – Petroleum and Natural Gas Regulatory Board (PNGRB) – will be created to ensure uninterrupted and adequate supply of petroleum products and natural gas in the country.

Coal

The public investment board (PIB) has cleared 16 proposals of Coal India (CIL) and its arms, entailing an investment of over Rs 5000 crore, which are expected to add another 100 million tonne (mt) of coal capacity in the country. This increased activity is in the wake of an unprecedented crunch in coal supply coupled with increasing global prices that have made imports expensive.

The finance minister has commented that the Indian economy can grow at a rate of more than 8 per cent if the crucial coal and power sectors step up output. He said that reforms were urgently needed to improve utilisation of natural resources for power output, which is currently suffering due to a lack of any incentive to generate and transmit electricity.

Power distribution companies and utilities from power deficit states forcefully demanded that generation of electricity should be regulated to curb overcharging by power traders. They have also demanded that the regulators should stipulate the return on equity in generation projects on the lines of existing 16 per cent and 14 per cent specified for distribution and transmission projects respectively.

Cement

The Centre for Science and Environment (CSE), a Delhi based NGO, has commended the cement industry as a whole for becoming more environmentally friendly, even as it is accused that the top players in the sector as poor environmental managers. Ranking the top 41 cement producers in the country, the CSE said air pollution caused by the industry was lower than that in the earlier years and the companies had become more energy efficient than their counterparts in developed nations of Europe and US.

Roads

The National Highways Authority of India (NHAI) has slashed its market borrowing target for the current year by more than half – from Rs 8500 crore to Rs 4082 crore for 2005-06. This is when the government imposed a 50 paise fuel cess during the current year for development of national highways. Even during 2004-05 the NHAI did not raise any funds as against a target of Rs 3300 crore. This reduced need to borrow from the market is a result of a lower than expected expenditure from the allotted budgetary support.

The planning commission has released the Model Concession Agreement (MCA) for facilitating public-private partnership (PPP) projects in the infrastructure sector. All new bidding for PPP projects in the roads sector are to now take place on the basis of MCA. The actual road contracts can deviate from the MCA based on circumstances and requires that substantial deviations be placed before the committee on infrastructure for approval.

Aviation

Reliance Industries Limited (RIL) has bagged the Airport Authority of India (AAI) contract to set up aviation turbine fuel (ATF) service stations at 12 non-metro airports in the country. This breaks another PSU bastion, translating into entry of the first private player in ATF, which has been monopolised by PSU oil companies like IOC, HPCL and BPCL. At present, IOC has a total of 95, BPCL 17 and HPCL 10 ATF stations across the country. RIL has offered a hefty incentive to AAI in the form of a throughput charge of Rs 400 per kilolitre, which were not being paid by the PSU oil companies. So far, RIL has been exporting the entire 1.5 million tonne of ATF produced at its Jamnagar refinery.

INFLATION

The annual point-to-point inflation rate based on wholesale price index has gone up marginally to 4.55 per cent during the week ended December 3, 2005 from 4.54 per cent registered during the previous week. The inflation rate was at 7.07 per cent in the corresponding week last year.

The WPI in the week under review has declined by 0.2 per cent to 197.8 from the previous week’s level of 198.2 (Base: 1993-94=100). The index of primary articles’ group (weight 22.02 per cent) has declined considerably by 0.5 per cent to 197.3 from the previous week’s level of 198.2, due to a substantial decline in the price indices of non-food articles by 1.9 per cent to 177.4 from 180.9 in the last week. The lower prices of non-food articles are attributed to lower prices of soyabean, groundnut seeds and fodder. The index of ‘fuel, power, light and lubricants’ group (weight 14.23 per cent) has also declined by 0.4 per cent to 310.7 from the previous week’s level of 312.1, mainly due to the lower prices of naphtha and furnace oil. The index of ‘manufactured products’ group constituting the maximum of 63.7 per cent of total weight, has declined a tad by 0.1 per cent to 172.7 from the previous week’s level of 172.8. The lower index of this group is attributed to lower prices of chemicals, base metals, non-metallic mineral products and machinery.

The latest final index of WPI for the week ended October 8, 2005 has been revised upwards; as a result both, the absolute index and the implied inflation rate moved up to 197.7 and 4.88 per cent instead of the provisional levels of 197.2 and 4.62 per cent, respectively.

Overall, the rate of inflation has remained reasonably contained in the range of 4 to 4.5 per cent in the month of November and up to mid-December. Moreover, the Finance Minister has also assured over price stability by emphasising on fiscal measures, if necessary. He added that the current rate of inflation, which is below 5 per cent is not a cause of concern.

The Tata group is teaming up with the country’s largest commercial bank, State Bank of India , to launch its credit card – christened Tata Card by the end of the current financial year.

Bank of Baroda (BoB) has commissioned its state-of-the-art data centre in Mumbai for running its core banking solution (CBS) and other applications in about 2,000 branches across India and in 20 overseas territories. Data Centre has been designed and implemented by the bank’s technology partner, Hewlett-Packard and it complies with critical technology standards.

The RBI has cancelled the licence of the Gujarat-based Janata Co-operative Bank, as a final step after examining all options for revival of the bank. The Registrar of Co-operative Societies, Gujarat has also been requested to issue an order for winding up the bank and appointing a liquidator. Meanwhile, the Deposit Insurance and Credit Guarantee Corporation (DICGC) will soon set in motion the procedure for paying the amount insured, to the depositors of the beleaguered bank.

Thrissur-based Catholic Syrian Bank has launched a new personal accident insurance policy, ‘CBS Travel Support’ for pilgrims, domestic tourists, business travelers or those on professional and education tours. The policy validity for 21 days would have a premium of just Rs.50.

In order to ensure uniformity in the regulatory framework across the banking domain, the RBI is expected to review all the existing guidelines issued to the public sector banks (PSBs).

The RBI would take tough action against the banks named by the SEBI in the latest scam that broke out regarding opening of benami demat accounts during the time of the initial public offer (IPO) of Yes Bank.

Even as the RBI has announced its decision to meet the entire India Millennium Deposits (IMD) outgo of $7.3 billion from its foreign exchange (forex) reserves, banks across are actively launching attractive deposit and products to mobilise a portion of the IMD redemption. While SBI has already introduced at least 4 deposit products for NRIs and is expecting at least 10-15 per cent of the entire outgo. The SBI has taken adequate steps to mobilise rupee resources to purchase the foreign exchange from RBI. As per the arrangement, SBI will repay the central bank, the equivalent amount of the $7.3 billion in Indian rupees, at the exchange value prevailing on the date of redemption i.e. December 29, 2005. This amount – including the principal and interest is likely to be around Rs.33,000 crore. Further, any exchange loss on account of depreciation of rupee would be shared between SBI and the Government of India. Accordingly, SBI and GoI, both have contributed their respective share in the exchange loss that has accrued during certain years after the launch of IMDs. The contributions received are held with RBI in the Maintenance of Value (MoV) account.

A transition to the Exempt-Exempt Tax (EET) regime would mark a departure from the current system of a tax exemption at all three stages of investment – contribution, accumulation and withdrawal for specified investments or schemes. This includes Public Provident Fund, the Employees Provident Fund, Equity Linked savings Scheme (ELSS) National Savings Scheme, Kisan Vikas Patra, Unit Linked Insurance Plan and other insurance plans and investments. Investments made up to the end of this financial year are set to fall outside the purview of the system.

During April-October 2005, telecom services contributed about 21 per cent of the total service tax revenues of Rs 10,283 crore, although growth in payout has slowed down. Telecom service providers till end-October 2005 contributed Rs 2,152.9 crore as service tax, up 12 per cent from Rs 1,920.9 crore in the corresponding period last year. In the corresponding period last year, telecom services contributed about 32 per cent of the total service tax revenues of Rs 5,964.5 crore. In year 2004-05, telecom services accounted for about 28 per cent of the service tax revenues. Telecom was one of the three services first brought into the service tax net in 1994-95. Its contribution to the service tax collection was 60 per cent in 1995-96, but as more services were brought into the net, the share of telecom services declined to about 34 per cent in 2003-04 and then to 28 per cent in 2004-05.

Some exporters are against the recent ordinance promulgated by the government for leaving a large chunk of exporters to claim exemption provided under the Income-tax Act (section 80 HHC), even on income from sale of Duty Entitlement Passbook (DEPB) benefits. But the ordinance promulgated last month, has restricted the benefit to small exporters whose turnover is 10 crore or less. The left out exporters are now agitating against “discrimination that is unconstitutional.” Federation of Indian Export Organisation (FIEO) thinks the ordinance is discriminatory with retrospective effect and unconstitutional. The core of the dispute is the reopening of Income Tax assessment of exporters for previous years, for disallowing claims made on income from sale of DEPB.

The centre has disbursed about Rs 251 crore to Karnataka towards the compensation claim made by the state for the revenue losses arising out of state level value added tax (VAT) implementation. With this claim settlement, the centre has so far disbursed Rs 1,027 crore as against compensation claim of about Rs 1,400 crore. Karnataka had made a claim of about Rs 460 crore for the April-October 2005 period. The mid-year review of the economy tabled in the Lok Sabha by the Finance Minister said that the central government is playing the role of facilitator in the process of Switchover by States/Union Territories to State-level VAT.

The Indo-American Chamber of Commerce (IACC) has called for the withdrawal of the Fringe Benefit Tax (FBT) at the earliest, stating that it has adversely impacted the competitiveness and the globalisation efforts of Indian companies.

The BJP on December 12, 2005 decided “in principle” to adopt the value-added tax (VAT) in the five party ruled states of Gujarat , Rajasthan, Madhya Pradesh Chattisgharh and Jharkhand. The BJP had stayed away from adopting VAT in April 2005. Although the party did not mention when it would implement its decision, it is expected to do so from April 1, 2006. However, there was no consensus on the issue in the meeting of chief ministers from BJP ruled states held on December 12, 2005. Although Gujarat was keen on VAT being implemented immediately, there were apprehensions from Chhattisgarh and Jharkhand, which will suffer revenue loss on account of the proposed reduction/abolition of CST as it is not compatible with VAT.

The Centre’s tax collection has increased by 19 per cent to Rs 1,90,879 crore during April-November 2005 as compared to the corresponding period of the previous year. Except excise collections, all other taxes, especially service tax recorded double-digit growth. Income Tax collections have increased by 27 per cent to Rs 31,799 crore upto November 2005 from Rs 25,057 crore in the corresponding period of the previous year.

The finance ministry has moved amendments to the Central Sales Tax (Amendment) Bill, 1965, to make appeals to disputes on Central Sales Tax (CST) easier. The CST (Amendment) Bill 2005 has also proposed appointing chairman and member (legal) of Authority of Advance Ruling (AAR) constituted under the Income Tax Act, 1961 as chairman and member of Central Sales tax Appellate Authority. At present, the income tax AAR is doubling up as CST Appellate Authority (AA).

Further, to provide operational flexibility in the constitution and functioning of the authority, it has been proposed that proceedings before the Authority shall not be questioned or invalidated due to any vacancy or defect in the constitution of Authority. This has been done to ensure that the appellate mechanism at the State level continues to be available to the dealers. It will also facilitate smooth functioning of the CST-AA as disputes would go through a screening at the state level .

Other assessee-friendly measures in the Bill include increasing the time limit for filing of appeals before the CST to 90 days from 45 days at present

The finance ministry’s plan to maximize direct tax collection this financial year by completing income tax assessments by December 31, 2005 instead of the usual deadline of March 31, has been demoted by the officers of the department. According to the I-T Gazetted Officer’s Association, the deficiency in infrastructure, staff and other practical difficulties, makes it difficult to officers to comply with the order to advance the deadline for assessments.

There is disagreement between major financial institutions and the government over the payment of stamp duty for purchase or sale of government securities, shares, scripts, stocks, bonds, and debentures for the period 1996-2005. The total amount to be paid is likely to be over Rs 1,000 crore. As per the provisions of the Bombay Stamp Act, the financial institutions are liable to pay stamp duty on all government related financial trade. However, the Indian Banks’ Association (IBA) has pointed out that the stamp duty is payable if there is any agreement or its records or memorandum of an agreement relating to sale or purchase of government securities. As far as sale or purchase of securities by banks are concerned, the trading is used to be negotiated on phone and now such negotiations are done through computer messaging. The actual transactions are made effective by passing requisite entries in the accounts of the buyer and seller maintained by the depository or any other entity, such as the RBI or Clearing Corporation of India . Thus in such trade transactions, no document or instrument is recorded. Under such circumstances, no stamp duty can be charged on the transactions in principal trades.

Bartronics India Ltd is tapping the market between December 20 and 24 through offer of 60 lakh shares of face value Rs 10 each offered in a price band of Rs 63-75 per share.

Educomp Solutions Ltd is tapping the market between December 19 and 22 through offer of 40 lakh shares of face value Rs 10 each offered in a price band of Rs 110-125 per share.

Celebrity Fashions Ltd is tapping the market between December 19 and 22 through offer of 45.50 lakh shares of face value Rs 10 each offered in a price band of Rs 160-180 per share.

Ginni Filament is issuing 252.63 lakh shares worth Rs 10 per share offered through 100 per cent book building process in price band of Rs 19-22 per share.

Despite volatility and uneasiness about the current level of valuations of the frontline stocks, the domestic and international investors have been bullish about the domestic stock markets as expectations of improved third quarter corporate results and good economic indicators have been supporting the underlying bullish sentiments. Some market participants are expecting that even the long year-end holiday may not disturb the bullishness in the market.

The market breadth was positive with 21 out of 30 stocks of BSE sensex ended the week in a positive territory. As the news of finance ministry proposing to hike FII investment limit in PSU banks to 24 per cent from the current 20 per cent, buoyed the market sentiments.

Among the sectoral indices of BSE, the highest gains have been recorded by the metals and bankex indices of 5.88 per cent and 4.58 per cent, respectively. While BSE sensex registered gains of 2.40 per cent, while BSE mid-cap rose by 0.35 per cent and BSE small-cap fell by (-) 0. 20 per cent.

In the first 12 trading sessions, the FIIs have been net buyers of equities to the extent of Rs 3957.7 crore with purchases of Rs 17,467 crore and sales of Rs 13,509 crore. From the beginning of the current calendar year until December 16, the net FIIs investment stood at US $ 9525 million or about $ 10 billion.

Sebi has unearthed irregularities in the allotment of the Yes Bank public offer and has directed NSDL to freeze more than 7,000 depository participants (DPs). Further Sebi has aked the Book Running Lead Managers (BRLMs) to finalise the basis of allotment of ICICI Bank further public offer only after eliminating the names of those suspicious entities that were found involved in the allotment of Yes Bank.

Everest Kanto Cylinder made its debut on the BSE on December 15 at Rs 190, a premium of 18.75 per cent to its issue price of Rs 160.

The US Federal Reserve policy makers raised the benchmark federal funds rate by another quarter percentage point, to 4.25 percent. It is the 13th consecutive quarter-point increase since the Fed began raising rates in June last year pushing the federal fund rate to the highest level in more than four years.

The daily average turnover during the week has ranged between Rs 18391 crore and Rs 25506 crore.

The cut-off yield set on 91-day TB rose from 5.65 per cent to 5.78 per cent in the week under review.

The RBI has auctioned Kerala State Development Loan, 2015 for a notified amount of Rs 361 crore at a cut-off yield of 7.33 per cent.

During the week under review, liquidity situation came under pressure on account of advance tax payments, which was reflected through the fall in the size of bids tendered under LAF reverse repo and hardening of the overnight rates. Despite the rise in inflation rate, the weighted average YTM on 8.07 per cent 2017 eased marginally from 7.22 per cent on December 9 to 7.20 per cent on December 16.

While the US fed rate hike has been already discounted, the market keenly awaited a change in the FOMC statement accompanying the Fed rate hike. However, FOMC affirmed the view that economic activity remained strong despite a particularly damaging hurricane season, which additional did not have prolonged effect on prices. Core inflation as well as inflation expectations remained contained. However, another source of inflation there was due to possible increases in resource utilization as well as elevated energy prices have a potential to add to inflation pressures. Market participants have interpreted that the stance is closer to a neutral position.

In the domestic market, the sentiments turned cautious after the RBI governor hinted that there could be a temporary pressure on liquidity due to IMD redemption, which is due towards the end of the month.

Power Corporation of India has tapped the market to mobilize Rs 300 crore in the range of 7.45-7.60 per cent for 10 years tenure.

In the forex market, the rupee appreciated as the dollar weakened in the overseas market against the major currencies such as the yen and euro; this was triggered by US Fed’s exclusion of words such as accommodative from its policy statement. The rupee rose persistently from Rs 46.10 to Rs 45.40. Also, the six-month forward premia rose from 0.81 per cent December 9 to 1.04 per cent on December 16

The RBI has replaced its five country indices of NEER and REER with new six currency indices. The base year has been set at 2003-04 and the new basket includes apart from US dollar, euro, the British Pound Sterling, Japanese Yen, they now also have Chinese Yuan and Hongkong’s dollar. Besides, the RBI has also revised the 36-country indices by including new 8 countires and revising the base year from 1985 to 1993-94.

RBI has put in place arrangements for redemption of India Millennium Deposits (IMDs), in close co-ordiantion with the SBI. The entire foreign exchange outgo of about $ 7.3 billion will be met by RBI by way of sale out of its foreign exchange reserves to SBI and the exchange loss, if any, on account of depreciation of rupee would be shared between SBI and the government of India .

The FMC is considering allowing the mutual funds, FIIs and banks to operate in the commodities market; the Union agriculture and consumer affairs minister said that such a move would increase liquidity in the commodities trade.

Further the minister said in regard to granting autonomy to the FMC, said that the government would introduce a bill in the next parliamentary session, but also empower it to maker the necessary changes in the legislation such as prevention of Food Adulteration Act and Essential Commodities Act for facilitating greater transparency and check manipulation.

He has denied the reports of a merger of FMC with Sebi; the consumer affairs secretary said that this move was not in horizon for next three years.

NCDEX and National Multi-commodity Exchange (NMCE) have suspended trading in Jute contracts following the decision of Jute Commissioners order to fix the prices of different varieties of Jute and no dealers would sell or purchase at a price exceeding the price announced.

The disparity between spot and futures prices of wheat is likely to widen further as the fresh demand and the ongoing supply squeeze are keeping the prices in spot prices high, but prices in futures are slipping.

Results of a recent study conducted by the World Bank revealed that after several years of rising commodity prices, there are indications of a stabilization and even reversal of gains in the markets for agricultural products and for metals and minerals

Highlight of the report

Agricultural prices have been declining most of this year and are down 5 percent since March 2005. However, prices of agricultural raw materials have been rising, partly because of higher prices for commodities that are close substitutes for crude oil-based products (for example natural rubber prices are up 41 percent between October 2005 and December 2004 because of increases in synthetic rubber costs). Although metals and mineral prices rose during the first months of the year, they have since stabilized, and in October 2005 they were at the same level as in March of that year. In so far as high fuel prices increase production costs in both agriculture and metals and minerals, they may have reduced the supply response, keeping prices higher longer.

INSURANCE

Bajaj Allianz Life Insurance company, the number two private sector life insurer has launched four innovative unit linked insurance products, Unitgain Premier, Unitgain Super, Family Gain and Healthcare.

Crisil has assigned ‘A+/Stable’ and ‘P1+’ ratings to the Rashtriya Chemicals and Fertilisers Limited’s Rs. 1.5 billion long-term debt programme and Rs. 0.3 billion short-term debt programme, respectively. The assigned ratings reflect the company’s diversified revenue profile across urea, complex fertilizer, and industrial chemicals segments. Moreover, the company also has a strong presence in industrial chemicals, with a wide product range comprising methanol, methylamines, AN Melt, nitric acid, ammonia, and technical urea.

Crisil has assigned ‘AAA (SO)’ ratings to Standard Chartered Tristar Series I and the Grindlays Fixed Maturity Plus Plan I schemes of Standard Chartered Mutual Fund (SCMF). Standard Chartered Asset Management Company Private Limited (SCAMC) is the Asset Management Company of SCMF.

Crisil has reaffirmed the ‘AA+/Stable’ rating assigned to Syndicate Bank’s three different Tier-II bond issues worth Rs. 5 billion, Rs. 1 billion and 1.25 billion, respectively. Further, the agency has also assigned ‘AA/Stable’ rating to the bank’s another Rs. 5 billion Tier-II bond issue. The ratings continue to reflect the comfort provided by the government of India ’s ownership and the bank’s superior resources profile that is supported by its low cost deposit base.

Crisil has reaffirmed the ‘P1+’ rating assigned to Rs. 3 billion commercial paper programme (enhanced from Rs. 2 billion) of Bajaj Auto Finance Limited (BAFL). The rating continues to reflect the strong managerial, operational and financial support derived by BAFL from its parent, Baja Auto Limited, rated ‘AAA/FAAA/Stable/P1+’ by Crisil.

Icra has assigned an ‘LAAA (SO)’ rating to the Rs. 50 billion Government of India guaranteed Bond programme of Food Corporation of India (FCI). The rating is based on an unconditional and irrevocable guarantee issued by the Ministry of Consumer Affairs, Food and Public Distribution, Government of India ensuring that all repayment obligations are met in a timely manner

The change in ownership of Falcon Tyres as given in the press release stating that the P.K. Ruia Group has acquired a majority stake in Dunlop Tyres and Falcon Tyres Limited from the Jumbo Group; Icra has put the short-term rating of ‘A2+’ assigned tot he company’s Rs. 50 million commercial papers programme under Rating Watch with Developing Implications.

Icra has assigned an ‘A1+’ rating to the Rs 15 billion (enhanced from Rs. 10 billion) certificate of deposits programme of Indian branches of ABN Amro Bank N. V. (ABN). The short-term rating is supported by the comfortable liquidity profile of the Indian operations and factors in the strong demand deposit base and committed credit lines from domestic nationalised banks.

Fitch has assigned a long-term rating of ‘A +( Ind )’ to IndusInd Bank’s Rs. 500 million subordinated debt programme. Fitch has also affirmed the short-term rating of ‘F1+( Ind )’ to the bank’s Rs. 500 million certificate of deposit programme and the Long-term rating of A+( Ind ) to its outstanding Rs. 4,075 million subordinated debt.

Fitch has assigned ‘a+( Ind ) (SO)’ rating to the pass through certificates (PTCs) issued by a special purpose vehicle (SPV) called Corporate Loan Securitisation Series VIII Trust 2005. The transaction is a securitisation of a three-year loan of Shriram Transport Finance Company Limited (STFC). The PTCs are backed by the three-year loan, aggregating to Rs. 500 million, extended by Kotak Mahindra Bank Limited (Kotak Mahindra Bank) to STFC in December 2005.

Bajaj Auto Finance Limited has decided to raise up to Rs 950 crore for company’s expansion plans.

Finolex Cables Limited is getting into manufacturing of compact fluorescent lamps (CFL) as part of its expansion strategy. The CFL project is estimated to cost around Rs 18 crore and will be implemented at the existing factories at Urse near Pune.

Ispat Industries Limited has commissioned its sinter plant with a capacity of 2.24 million tonne per annum. Two Chinese companies China First Metallurgical Construction Corporation (CFMCC) and Metallurgical Equipment Corporation of China (MECC) have built the sinter plant on Chinese technology.

Carborundum Universal Limited has set up a 100 per cent subsidiary in Ras Al Khaimah, UAE for marketing its products in the Middle East .

Italian company Fagioli group, that specialises heavy lifting and transportation services for the civil, power and petrochemicals industries has completed heavy lifting project for Reliance Industries.

Xerox India has announced the launch of three laser printers. The new products are priced at Rs 8990 (Xerox phaser 3121), Rs 8900 (Xerox phaser 3116) and Rs 15000 (Xerox workcentre PE 114e).

ABG Shipyard Limited is building a pollution control vessel for Indian guard a tits Magdalla shipyard in Surat . Coast Guard has ordered for three such modern vessels to be inducted into service. It will be delivered by October 2006.

The capacity of Reliance Energy Limited’s mega power project near Dadri in Uttar Pradesh is being scaled from 3740-mega watt (MW) to 5500 MW.

Mahindra and Mahindra (M&M) through its auto component division, Mahindra Systems and Tools, has acquired 88.4 per cent shares in Plexion Technologies Private Limited, which provides engineering services in automobile and aerospace sector, at a cost of approximately Rs 46 crore. Through this acquisition M&M has entered into aerospace design sector.

Apollo Hospitals Enterprise Limited has decided to acquire 51 per cent equity shares in Bangalore based Imperial Cancer Hospital and Research Centre Private Limited with a total project cost of Rs 988.40 million.

Opto Circuits India Limited, India ’s leading manufacturer of non-invasive healthcare equipments based in Bangalore , has completed the acquisition of EuroCOR GmbH, a company that designs and manufactures various types of Stents in Germany . The acquisition has valued at Rs 59.91 crore.

Indian Hotels Company Limited has acquired the W Sydney Hotel in Australia for A $ 36 million.

Videocon Industries has acquired 81 per cent in Eagle Corporation Limited, by making it a wholly-owned subsidiary of Videocon.

Tata Steel , India ’s largest private sector steel producer, has signed a deal to acquire a 55 per cent equity shares in Millennium Steel Company, Thailand ’s largest steel maker, for $ 130 million.

Great Eastern Shipping Company has acquired a 26 per cent shares in barging and cargo handling firm United Shippers Limited for an undisclosed amount.

Associated Cement Companies (ACC) has acquired 98.84 per cent shares in Tarmac India for Rs 12.4 crore.

Chennai based GV Films Limited has entered into an Memorandum of Understanding with 1-Net Singapore , a communications solutions provider, for providing broadband content.

Cadila Healthcare Limited has entered into 50:50 joint venture with Bharat Serums and Vaccines Limited for development, manufacturing and marketing of oncology products.

Ferro Alloys Corporation Limited has entered into a joint venture agreement with Platinum Mining Corporation of India Limited based in UK and is planning to undertake extensive exploration of platinum group of metals in their mines after obtaining government approval.

HCL Technologies has entered into an agreement with Japanese system integrator EXA Corporation to provide information technology solutions and system integration services to its blue-chip customers.

After having number of negotiating meetings in the Labour Ministry, the employees’ Provident Fund Organisation (EPFO) has finally decided to cut the interest rate payable to its 40 million subscribers, by 1 percentage point to 8.5 per cent from 9.5 per cent for the current financial year. In spite of having strong protests from trade unions, the Prime Minister has ruled out the possibility to provide any budgetary support to retain the EPF interest rate at 9.5 per cent in the current year. He has clearly said that any rate that has to be paid has to come only from the EPFO. He added that it is a question of affordability and financial stability of the EPFO based on which the rates have been determined. However, the Labour Minister has assured that he would talk to the Prime Minister regarding the same to explore the possibility of increasing the rate for this year.

According to the Survey conducted by Confederation of Indian Industry (CII), which covers 149 companies focused on medium and large companies, women constitute only 6 per cent of corporate workforce. The survey states that although women constitute nearly half of the population, their participation in economic development has come into focus only in recent years. It is interesting to note that women form a higher proportion of the workforce in the southern states as compared to other zones of the country.

With the Indian healthcare industry stepping up investments in technology, the demand for networking and technological solutions from the healthcare sector is gradually increasing. The Indian healthcare industry is a huge market, which is rapidly expanding. The combined medical expenditure of the private and public healthcare sector currently is Rs 86,000 crore and this is expected to touch Rs 200,000 crore by 2012, an increase of 132 per cent approximately over the next 7 years. With the increasing demand from domestic as well as foreign patients, the private hospitals are keen on leveraging IT to improve efficiency of healthcare services.

Housing

Housing Development Finance Corporation (HDFC) has seen its average disbursed loan amount increasing to Rs.7 lakh per application from Rs.5 lakh issued two years back.

Japan

has pledged to donate $10 billion over three years to help promote developing countries exports in an effort to highlight its contribution to the World Trade Organisation.

The Haryana government will sign a MoU with Reliance Industries for the development of a special economic zone in the state. The proposed SEZ is expected to be developed at an investment of Rs 25000 crore.

Export of finished leather and leather products registered a modest rise of 3.03 per cent to $1230.41 million from $1194.24 million in the first half of the current financial year. the increase was mainly due to the 19.21 per cent surge in the exports of footwear.

A high-level committee, comprising DGFT, KT Chacko and member (customs)-CBEC AP Sudhir, has said that most of India ’s export promotion schemes, including the duty drawback scheme, Target Plus, Vishesh Krishi Upaj Yojna, are incompatible with the World Trade Organisation. The panel has found 90 per cent of the country’s export incentive schemes untenable under the WTO’s pact on subsidies and countervailing measure.

According to a Ficci study, South Korean companies have received approval for foreign direct investment amounting to $2.63 billion from 1991 to 2002 but only 23 per cent of this amount has translated into actual flows.

The finance ministry is working on reducing India ’s peak custom duty for non-agriculture products by 5 per cent to a level of 10 per cent in the next budget, in an attempt to bring down duties to Asean level. Import duty in Asean countries is around 5-8 per cent.

China

has become the world’s largest exporter of information and communication technology goods as reported by OECD.

The parliamentary standing committee on taxation laws (amendment) Bill 2005 has endorsed the proposal for levy of penalty up to five times the value of goods, to crack down on misuse of export promotion schemes.

INFORMATION TECHNOLOGY

The country’s top three information technology companies – Wipro, Tata Consultancy Services (TCS) and Infosys are planning to increase their work force in the next 12 months by hiring 50,000 employees to keep pace with rapidly growing business. Wipro is planning to add 18,200 employees in the coming one year to a base of 45,835 employees. Infosys will be adding around 16,000 to its rolls and TCS is planning to add a total of 15,000 employees to its work force over the next one year.

India

’s exports of software and related services may almost triple to $60 billion by March 2010, according to a study completed by consultant McKinsey & Co for NASSCOM. According to the study released recently, software services, call centre and transaction-processing exports may grow more than 25 per cent annually in the next 5 years.

Bharati Enterprises has sold more than 10 per cent of its stake in Bharti Telesoft to a group of US-based investors led by Westbridge Capital in a $13.5 million deal

*These statistics and the accompanying review are a product arising from the work undertaken under the joint ICICI research centre.org-EPWRF Data Base Project.