Indian Holocaust My Father`s Life and Time - SIX HUNDRED SIXTY THREE
Palash Biswas
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Pranab Mukherjee prepares for US visit to sell India story so that the FDI TANGO gets Momentum as US interested to INVEST in Bengal under Mamata`s Regime!Reliance Industries Ltd. (RIL), India's biggest company by market value, hired 18 banks for a five-year term loan of $1.09 billion to be used for refinancing debt!
Mamata names SEVETEEN Names from Industry in her Core Team for industrialisation!West Bengal chief minister Mamata Banerjee on Saturday announced a 25-member team that will look at refurbishing the state's industry. This "core" team comprises 17 members from the industry and six key departmental secretaries and the chief minister herself. Banerjee's announcement came during her first interaction with industry at The Belvedere Club . As many as 258 industrialists from across the country turned up, of which 40 corporate bigwigs managed to express their views. Prominent industrialists who attended the mega event included ITC's Yogi Deveshwar, Fortis' Shivinder Singh and Godrej Industries' Adi Godrej.
Top Indian and American business leaders will meet here next week at a key conclave to deepen bilateral economic and trade ties.
The two-day meeting will take stock of the US-India commercial relationship, calibrate a fresh course for progress, and accelerate the partnership's path of prosperity, benefitting both countries for decades to come, Washington-based US India Business Council (USIBC) said in a statement.
The Union Minister of Commerce and Industry Anand Sharma would represent India at the 36th annual conclave of USIBC to be held on June 22-23. US President Barack Obama's chief of staff William Daley will also address the annual meeting.
The theme of this year's USIBC Leadership Summit is 'Addressing Challenges, Boosting Ties', reflects a growing concern among investors over headwinds that the US-India relationship has recently encountered.
Despite President Obama's historic visit to India in November, 2010, a series of events - external and internal to both countries - has tempered enthusiasm for government-to-government engagement, USIBC said.
"Unrelated, but almost simultaneously, a series of political events in India froze the progress of its ambitious reform agenda. Regional elections in the states of West Bengal, Tamil Nadu, and Kerala then preoccupied India's leadership," USIBC said.
Meanwhile,Amid war of words between the representatives of government and civil society, the two sides will meet tomorrow in a last ditch effort to iron out their differences on the Lokpal Bill.
While the government has virtually ruled out bringing the post of the prime minister under the ambit of the anti-corruption watchdog, Congress core group has favoured convening an all-party meeting on the issue of inclusion of the PM.
HRD Minister Kapil Sibal , a member of the Joint Drafting Committee, said the view within the government is that prime minister should not be included within the ambit of Lokpal. He, however, said once the PM demits office, he should not be "exonerated" from prosecution.
A final view on the ticklish issue will be taken by the union cabinet once the draft bill reaches it after consultation with political parties, he said.
A government representative of the Committee said the inclusion of judiciary and conduct of MPs inside Parliament in the proposed legislation was "not possible" as it would amount to amending the Constitution.
"The Committee's mandate is clear and that is to enact a legislation. The members led by Anna Hazare are also clear about the mandate...it is in the notification," he said.
But the member insisted that the government side will try its best to convince the civil society members about its "stand and compulsions".
However, the Anna Hazare team dubbed the argument to keep the prime minister out of Lokpal's ambit as "absurd".
CBI rejects RTI applications; no info on corruption
Citing recent exemption given to it by the government, the CBI has refused to make public information about disproportionate asset cases against government servants, including bureaucrats and ministers.
The Centre through a notification issued on June 9 placed the agency in the organisations listed in the second schedule of the Section 24 of the RTI Act which also comprises intelligence and security agencies.
The exemption granted to agencies listed in the second schedule does not give blanket immunity from making disclosures under the transparency law as the Act states that information on "allegations" of corruption and human rights violation is to be disclosed even by these organisations.
Ironically, the CBI officials feel that by placing them under second schedule organisation, they have got blanket cover from making any disclosure as it was evident from the reply given to activist S C Agrawal by the agency.
"The Government of India ...has placed the Central Bureau of Investigation at Serial Number 23 of the second schedule of the Right to Information Act, this act is not applicable to the Central Bureau of Investigation," CBI joint director Prabodh Kumar replied.
Agrawal had filed four RTI applications, three months before CBI got exemption, seeking details of corruption cases accusing officials and ministers of amassing disproportionate assets.
The questions asked by him pertained to recoveries done by the agency from accused and fine slapped on corrupt officials on the orders of courts.
Politics News
US impressed with Mamata, keen to invest in WB
Priyanka Gupta , CNN-IBN
Posted on Jun 19, 2011 at 02:02pm IST
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Kolkata: Mamata Banerjee's mission industry has just got a leg-up. After decades of mistrust for everything American Bengal may soon see more dollars in its coffers. The US assistant secretary Robert Blake on a visit to the Chief Minister's office made America's intentions clear, that Bengal is destination next for large scale US investment. But there are hiccups like the law and order problem of the state.
Blake said, "For the investors it is important that there is a good law and order situation in the state. Mamata Banerjee has assured me that the law and order aspect as well as the general investor climate is being improved upon."
This came just a day before Mamata Banerjee hosts the who's who of Indian Industry who are in Kolkata for a business summit on Saturday. But many think that the recent Singur Bill and the land bill recommendations might make many investors turn cautious.
Bengal Chamber of Commerce President Sandipan Chakrabarty said, "Mamata Banerjee needs to convey the industry people that she is willing to meet them half way and that her promise of co-existence of industry and agriculture will be delivered. Right now it doesn't appear that way."
The Left Front who once called Mamata Banerjee a US agent after a WikiLeaks cable showed US wanted to cultivate her, is watching the developments closely.
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Ambani's Reliance Said to Hire 18 Banks for $1.09 Billion Loan
By Katrina Nicholas - Jun 17, 2011 2:41 PM GMT+0530
Reliance Industries Ltd. (RIL), India's biggest company by market value, hired 18 banks for a five-year term loan of $1.09 billion to be used for refinancing debt, according to a person familiar with the matter.Reliance, controlled by billionaire Mukesh Ambani, plans to replace debt maturing in about two years that has higher interest costs, another person familiar with the matter said last month. Reliance borrowed $1 billion in December and paid a margin of 195 basis points more than the London interbank offered rate, according to data compiled by Bloomberg.
The facility being organized by banks currently will pay a margin of about 150 basis points, one of the people said today, asking not to be identified as the details are private.
Mumbai-based Reliance, India's fourth-most indebted company, has the equivalent of $10.2 billion of loans maturing before the end of 2017, Bloomberg data show. The petrochemical and textiles maker is seeking to expand in the financial services business as demand increases in the world's second-fastest growing major economy.
The banks hired include Australia & New Zealand Banking Group Ltd. (ANZ), Bank of America Corp. (BAC), Bank of Nova Scotia (BNS), Bank of Tokyo-Mitsubishi UFJ Ltd., Banco Bilbao Vizcaya Argentaria SA (BBVA), Barclays Plc (BARC), BNP Paribas (BNP) SA, Citigroup Inc. (C), Credit Agricole CIB, DBS Group Holdings Ltd. (DBS), DnB NOR ASA (DNBNOR), HSBC Holdings Plc (HSBA), Intesa Sanpaolo SpA (ISP), Mizuho Financial Group Inc. (8411), Royal Bank of Scotland Group Plc (RBS), Standard Chartered Plc (STAN), State Bank of India (SBIN)and Sumitomo Mitsui Banking Corp., one of the people said.
Ambani is the world's ninth-richest man with an estimated wealth of $27 billion, according to Forbes magazine. Reliance sold $1 billion of 10-year, 4.5 percent dollar-denominated notes and $500 million of 30-year, 6.25 percent bonds in October, Bloomberg data show.
To contact the reporter on this story: Katrina Nicholas in Singapore onknicholas2@bloomberg.net
To contact the editors responsible for this story: Shelley Smith at ssmith118@bloomberg.net
http://www.bloomberg.com/news/2011-06-17/billionaire-ambani-s-reliance-said-to-hire-18-banks-for-1-09-billion-loan.html
Economic times reports:
WASHINGTON, DC: In a few days, finance minister Pranab Mukherjee will arrive in the US capital on a trip that is being billed as a major effort to reassure foreign investors about India's continued medium- and long-term viability as an investment destination.
It is not going to be an easy task, with the India story having lost some of the lustre lately, and a dip in growth rate, the growth of 7.8% in first quarter this year was the lowest in five quarters. From an international investor's perspective, despite relatively strong fundamentals, there's a long list of worrisome issues.
That includes an inflation that continues to linger. The immediate reaction of the private sector to RBI decision to increase interest rates has not been positive. The unending saga of high-profile corruption cases, which have dented the image of the government of Prime Minister Manmohan Singh , is another one.
Nothing is Happening
Lower returns, compared with China and some other Asian markets, has also been forcing investors to look elsewhere. "China has had huge returns, India hasn't had," says Kanwal Rekhi, co-founder of Inventus Capital Partners and a veteran of many US-India ventures. Other pet peeves among investors and fund managers are the slow pace of reforms and regulatory and infrastructure obstacles.
While no one has jumped off the India bandwagon yet, many are not as gung ho about it anymore, as they fear the country might take more time to reach its potential. Those who say India has veered off track include investors with deep Indian roots, such as Rekhi, one of the best-known Indian American investors in Silicon Valley.
"The Indian government shoots itself in the foot all the time. The common wisdom is India is a banana republic. It is always changing rules," says Rekhi. Specifically, Rekhi blames the country's tax system. Last year, Sierra Atlantic, a company he was part of, was sold. Rekhi says he did not know how much is owed in taxes due to the sale.
Confusing Tax Policy
He cites the government's attempts last year to levy tax on Vodafone's $11-billion purchase of Hutchison Essar as the kind of move that would undermine investor confidence in India. "People like me who are believers in India have a tough time convincing about investing in India," he says.
The sluggish pace of reform has frustrated investors both in India and abroad. "The government has been very slow on economic reform, much slower than the investors hoped for," says Anup Maheshwari, a Dubai-based portfolio adviser for BlackRock India Fund . What the investor is going to be looking at is that the government has not been up to speed.
"We would like to see the government do more privatisation. There are some good businesses which have a lot of scalability ahead of them," Maheswari adds. According to him, financial services, one of the areas still under penetrated in India, could help from lesser regulation.
http://economictimes.indiatimes.com/news/pranab-mukherjee-prepares-for-us-visit-to-sell-india-story/articleshow/8908208.cms
"I came here to hear the new chief minister and to learn the new mandate. The meeting has gone very well. The mood and flavour were both very positive. We have already invested `300 crore, and now I am looking at adding another `300 crore more," said Shivinder Singh, managing director, Fortis Healthcare.
For his part, Adi Godrej, president designate, CII, said: "The investment climate has changed so much. Mamata's speech was very refreshing. I will also ask other CII members to look at Bengal. It has a lot of potential. We have invested `2,000 crore here in real estate, cattle and poultry feed business".
Principal priority areas outlined at the meeting were IT, health and tourism among others. "I want you to join us in re-building West Bengal" Mamata told at the outset. "We will have to introduce a do-it-now culture for work. The core committee will therefore meet, thrash out problems and take decisions with speed," she said.
19 JUN, 2011, 04.38AM IST, ANDY MUKHERJEE,ET BUREAU
Can UPA for once do the right thing by investors?
Contrary to popular perception, overseas investors' love affair with India has hardly soured. Or so says Christopher Wood, the Hong Kong-based CLSA equity strategist with something of a rock star reputation in the Asian investing world for the astute commentary he dispenses in his widely read newsletter, Greed & Fear.
If anything, the top-ranked analyst with his trademark shock of curly, shoulder-length, salt-and-pepper hair finds the absence of selling pressure from foreign investors "remarkable", considering the huge disappointment that investing in the Indian market has been for foreigners in 2011.
The numbers tell the story: by June 10 this year, the Sensex had slumped about 11% in US dollar terms from end 2010, securing a place alongside Egypt and Tunisia among the world's 10 worst-performing equity markets (see graphic 1) .
Yet, foreign institutional investors (FIIs), who poured $29 billion into Indian equities last year, haven't panicked. Their cumulative net investment in India up to June 9 was $52.5 million. It's not a number to write home about, not only is it a fraction of the money that the Indonesian and the Taiwanese markets have received, even Pakistan has done better than India (see graphic 2) .
But although net foreign buying, which subtracts sales from purchases, has been in the negative territory for most of this year, the divestment by foreigners has been relatively benign compared with 2008, a year most investors in the Indian, and indeed global, markets would like to forget.
Wood says he can only attribute the resilience of foreign investors "to the continuing belief in the potential of the Indian growth story, both from a top-down and bottom-up perspectives".
Rational To Bet On India?
Is this a rational belief? On that question, opinion is divided. Growth in the Indian economy is slowing. Jim Walker of Asianomics in Hong Kong cites the 0.1% dip in gross fixed capital asset formation in the March quarter, the first decline in almost two years in this broad measure of investment demand across the economy, to conclude that "capital expenditure cycle in India has turned decisively for worse". Even maintaining 8% expansion in gross domestic product this year will prove "challenging", notes Walker.
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The deterioration in investment demand is also evident in corporate order books. According to data compiled by Morgan Stanley analysts Akshay Soni and Pratima Swaminathan, order backlogs for engineering and construction companies show that the recovery from the credit crisis that had begun in the December 2009 quarter, after the United Progressive Alliance (UPA) government returned to power in May of that year minus the baggage of the Left parties, began to peter out just a few months later at the onset of the European debt crisis.
The slowdown in capital-goods order growth worsened in the final months of 2010 and the first quarter of calendar year 2011 as sordid tales of widespread corruption started surfacing, the 2G spectrum allocation scam; the loans-against-bribes swindle; the Adarsh Housing Society scandal; the Commonwealth Games loot; the list goes on.
http://economictimes.indiatimes.com/news/politics/nation/can-upa-for-once-do-the-right-thing-by-investors/articleshow/8908708.cms
| US official calls for pro-biz climate | ||
| A STAFF REPORTER | ||
The Mamata Banerjee government will have to create an "enabling environment" to draw American investment, a senior official in the US government said on Friday. Robert O. Blake, Jr., the assistant secretary of the state bureau of south and central Asian affairs, was asked at a CII meeting in the city whether America was interested in investing in Bengal. "It depends on the enabling environment the new government puts together. They will have to compete not only with other states in India but also other countries to attract investment," the official said. Blake said the same to chief minister Mamata Banerjee during a "courtesy call" at Writers' Buildings in the afternoon. The official said after the meeting that he had congratulated the chief minister and discussed educational tie-ups and the law and order situation with her. "Law and order is important for providing a conducive climate for investment. The chief minister assured us that things were improving, including the Maoist situation," said Blake. Before meeting Banerjee, Blake and US consul-general Beth Payne called on finance minister Amit Mitra. Asked about America's areas of interest in Bengal, Blake cited mining, tourism, agriculture, energy, infrastructure and education. Blake also touched on educational partnerships at the CII session on "West Bengal and Beyond: US India Business Links and Prospects for the Future". According to him, for educational partnerships to take off institutes in Bengal will have to draw the attention of American universities and colleges. "American businesses see India as a vibrant laboratory for research and innovation that will produce tomorrow's goods and services…. Calcutta's position as a gateway to Asia will help disseminate those breakthroughs to Bangladesh and Southeast Asia," Blake said at the CII event. |
*http://www.telegraphindia.com/1110618/jsp/calcutta/story_14127192.jsp
Ensure hospitable climate for investors: US diplomat
Times of India - Jun 17, 2011
Blake has invited Mamata to the US. The diplomat was accompanied by Beth Payne, US consul general in Kolkata. After his meeting with the CM, he said: "We are here to promote investment in education ... we talked about the law and order situation in ...
Go-getter Mamata sets terms for business
Times of India - 14 hours ago
Countries like Japan and the US have also asked us to send delegations there to look for possible investment. We may also want to set up some offices abroad to showcase what Bengal has to offer," the chief minister said. Even as the day's proceedings ...
US official calls for pro-biz climate
Calcutta Telegraph - Robert Blake, Sayantan Ghosh - Jun 17, 2011
The Mamata Banerjee government will have to create an "enabling environment" to drawAmerican investment, a senior official in the US government said on Friday. Robert O. Blake, Jr., the assistant secretary of the state bureau of south and central ...
Mamata gives industrialists a patient hearing, hope
Times of India - 20 hours ago
Sometimes, we all talk so much that we forget to do things. Let us start this meeting by saying that we are all keen to invest in Bengal. We will set up an NRI cell under the finance department to attract investment from abroad,"Mamata said. ...
Mamata names core team to push industrialisation
Economic Times - 19 hours ago
"I want you to join us in re-building West Bengal" Mamata told at the outset. "We will have to introduce a do-it-now culture for work. The core committee will therefore meet, thrash out problems and take decisions with speed," she said.
Mamata talks tough at India Inc meet
Business Standard - Jun 18, 2011
"Land had been promised to us five years back and now we have been told to go and buy it ourselves. It is possible to buy small amount of land but one cannot buy large tracts. It will be difficult for investors to come if they find procurement of land ...
Robert Blake calls on Mamata
Zee News - Jun 17, 2011
Kolkata: US Assistant Secretary of State (Bureau of South and central Asian affairs) Robert O Blake on Friday called on West Bengal Chief Minister Mamata Banerjee who urged him to send a business delegation to the state. ...
Mamata sets up core group on industrialisation
iNewsOne - Jun 18, 2011
Banerjee said the governments of Japan and the US have invited business delegations from West Bengal. 'A delegation from Japan will also come to the city in October.' After opening a cell for NRI entrepreneurs, Banerjee Saturday announced a cell under ...
Carrom in 'corruption den'
Calcutta Telegraph - Jun 16, 2011
Why is the chief minister after us?" Food minister Jyotipriya Mullick on Wednesday had asked the employees to give him a list of the possible files stacked on the floors in order to make a database, as demanded by Mamata. ...
A Red Tutorial, And Enemies In The Class
Outlook - Dola Mitra - Jun 18, 2011
As one student puts it, "We're waiting for the new chief minister, Mamata Banerjee, to deliver us from the present rot that has set in the education system in our state." By common consensus, at the top of the list is what a Burdwan University student ...
Mamata likely to discuss financial package with Pranab
Hindustan Times - 41 minutes ago
PTI West Bengal chief minister Mamata Banerjee is scheduled to go to Delhi on Monday on her maiden visit after assuming office with a bail-out financial package from the Centre high on her agenda. Sources close to the chief minister told PTI that ...
Mamata woos industrialists
NDTV.com - 13 hours ago
At Mamata Banerjee's first interaction with industrialists after becoming West Bengal Chief Minister, the focus was very much on land acquisition. And Mamata, very clear on the way forward, said that the government did not want to have a role in land ...
Mamata to meet Montek with great expectations
Times of India - 14 hours ago
KOLKATA: After clearing the air on the industrial front, chief minister Mamata Banerjee has got down to the most pressing need of the state: finance. She will meet deputy chairman of the Planning Commission, Montek Singh Ahluwalia, on Wednesday to ...
Rise of the model Bengal
Times of India - 14 hours ago
KOLKATA: Chief minister Mamata Banerjee on Saturday made it clear to industrialists that she would not emulate the Gujarat model but revitalize Bengal with a homegrown model for rapid industrial growth. Responding to industrialists' proposal that ...
'Will follow own model, not Gujarat's'
Indian Express - 15 hours ago
It was billed as a mega event, but Bengal Chief Minister Mamata Banerjee's first interface with the industry Saturday failed to match the hype and expectations. Most of the "big ticket" industrialists from outside the state were absent, ...
Mamata woos investors to Jangal Mahal region
The Hindu - Raktima Bose - 19 hours ago
Kolkata: Highlighting the untapped tourism potential of vast stretches of forest area in the three south-western districts of West Bengal, commonly known as Jangal Mahal, Chief Minister Mamata Banerjee on Saturday urged investors to shed fear of ...
West Bengal not to follow Gujarat model: Mamata
The Hindu - 20 hours ago
West Bengal Chief Minister Mamata Banerjee said here on Saturday that her government will not follow the Gujarat model for industrialisation, indicating that the State will evolve its own model for creating a resurgent West Bengal. ...
Delhi-bound Didi on a fund-raising trip
Times of India - 20 hours ago
NEW DELH: After Tamil Nadu chief minister J Jayalalitha, it's the turn of her West Bengal counterpart MamataBanerjee to make her presence felt in the national Capital. On her first trip to Delhi as chief minister, Banerjee's itinerary will focus on ...
Industry to purchase land, not govt: Mamata
Indian Express - 22 hours ago
Kolkata: West Bengal Chief Minister Mamata Banerjee sent a clear message to the industry that land for setting up units would have to be purchased directly and the government would not take a part in it. "Land has to be purchased by the industry. ...
Mamata promises a 'cabinet' for, by industry
Hindu Business Line - Jun 18, 2011
Strong on intent: The West Bengal Chief Minister, Ms Mamata Banerjee, at the interactive session with industrialists in Kolkata on Saturday. She is flanked by Mr Amit Mitra (right), Finance Minister, and Mr Partha Chatterjee, Industry and Commerce ...
Mamata Banerjee hobnobs with honchos
Daily News & Analysis - Sumit Moitra - Jun 18, 2011
With this thinly veiled dig at the former Left Front government, Mamata Banerjee signalled to a gathering of industrialists that she means business and wants to do it fast. But to her surprise, the newly appointed chief minister of West Bengal realised ...
Buy land directly from land-owners: Mamata to industry
Financial Express - 48 minutes ago
Kolkata: It was chief minister Mamata Banerjee's first meeting with industrialists, and coming as it did after the Singur Bill, there was some apprehension about the state government's land policy. It was articulated by several industrialists, ...
Mamata forms Special Committee on natural disaster
indiablooms - 2 hours ago
Kolkata, June 19 (IBNS) West Bengal Chief Minister Mamata Banerjee has stressed on improving the state`s infrastructure to fight against natural disasters with monsoons knocking at the doors. With an aim to improve the state`s infrastructure, ...
We will not adopt Gujarat model for industrialisation: Mamata Banerjee
Daily News & Analysis - Jun 18, 2011
Place: Kolkata | Agency: PTI The West Bengal government would not follow the Gujarat model of industrialisation, but will rebuild the state's industry in its own way, chief minister Mamata Banerjee said today while stating that time was of essence. ...
Mamata's new land policy: will it woo investors?
IBNLive.com - Jun 18, 2011
Kolkata: In her first attempt as Bengal Chief Minister to woo investors, Mamata Banerjee will be meeting over 300 industrialists in Kolkata on Saturday. It is a much needed effort to restore confidence, given that her government's proposed land policy ...
Bengal to return Tata factory land to farmers
South Asia Mail - 9 hours ago
The chief minister of West Bengal, Mamata Banerjee, said the move would undo the injustice to farmers. The land in Singur, near Calcutta, was acquired by the state's former communist government in 2006 for Tata Motors to make its low-cost Nano car. ...
Mamata announces health sector reform
South Asia Mail - 9 hours ago
Kolkata: West Bengal Chief Minister Mamata Banerjee Monday said a three-phase developmental system will be taken up to improve the state's ailing health services sector. 'We have to go through three systems for health service development. ...
Bengal govt will not buy land for industry
Deccan Chronicle - Kaushik Pradhan - 10 hours ago
Chief minister Mamata Banerjee on Saturday once again made it clear that the state government would not procure land for the private investors. They would have to purchase their land directly from the owners at the market price. ...
West Bengal industry disagrees with expert committee recommendation on land ...
Economic Times - Jun 17, 2011
The draft on a new land use policy was submitted by the two-member expert committee, appointed by the new Trinamool Congress-Congress state government, to Chief Minister Mamata Banerjee on June 15. It recommended that the state government stay away …
Reserve Bank addresses inflationary tendencies
OOMMEN A. NINAN
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The apex bank expects that the 25 basis point hike in repo rate will contain price spiral
As widely expected the Reserve Bank of India (RBI) raised the short-term indicative rate by 25 basis points to quench the flames of inflation. This is the tenth time since March 2010 the RBI raised the rate as inflation crossed the 9 per cent mark in May. But the market believes this hike was only a portion of the rise that the markets were expecting in the current financial year.
It increased the repo rate by 25 basis points from 7.25 per cent to 7.50 per cent with immediate effect. Consequently, the reverse repo rate under the Liquidity Adjustment Facility (LAF) will stand automatically adjusted to 6.50 per cent and the marginal standing facility (MSF) rate to 8.50 per cent with immediate effect.
While raising the rate, the RBI used strong words in its introduction. It stated that since the Reserve Bank's annual policy statement of May 3, global environment had changed for the worse, while domestic conditions were broadly consistent with the statement's projections. Growth expectations in advanced economies were visibly moderating, even as inflationary pressures, primarily from commodity prices, had increased. The capacity for conventional policy responses appeared limited, with many countries having already committed to fiscal consolidation amidst growing sovereign debt risks. From our monetary policy perspective, global commodity prices still remained the key external risk though some signs of moderation were becoming visible.
Domestically, inflation persists at uncomfortable levels. Moreover, the headline numbers understate the pressures because fuel prices have yet to reflect the rise in global crude oil prices. On the growth front, even as signs of moderation are visible in some sectors, broad indicators of activity — 2010-11 fourth quarter profit growth and margins and credit growth — do not suggest a sharp or broad-based deceleration.
In the current mid-quarter policy review, the central bank was more concerned on the global economy (sovereign debt crisis) and commodity prices. The global economy weakened in the second quarter of 2011. Lead indicators suggest that growth moderated in advanced and emerging market economies (EMEs) under the impact of high oil and other commodity prices, the spillover from the Japanese natural disaster and monetary tightening in EMEs to contain inflationary pressures.
Further, the memories of the 2007-08 global financial crisis are still fresh and haunting the policy makers. "Uncertainty about the resolution of the sovereign debt problem in the euro area has increased. These developments increase downside risks to global growth prospects," said the RBI.
International commodity and oil prices showed signs of moderation on weak economic data and unwinding of financial positions. However, on a year-on-year basis, commodity price inflation is still high. Consequently, headline inflation rose in major advanced economies despite negative output gaps. As inflation in EMEs remained elevated due to high commodity prices and strong domestic demand, many EMEs persisted with monetary tightening during the second quarter of this calendar year to contain inflation. The Union Finance Minister, Pranab Mukherjee, also said that the major challenge right now was to contain price rise admitting that the growth process might have to take a back seat, which he was not ready to accept earlier. "Monetary measures may end up moderating the growth if they have to be persisted for an extended period of time."
A look at the inflationary trend, as RBI explained, reveals it: The headline wholesale price index (WPI) inflation rate was 9.7 per cent in March 2011. In April, it was 8.7 per cent and rose to 9.1 per cent in May. The numbers for April and May are as yet provisional and, given the recent pattern, these numbers are likely to be revised upwards. Thus, the headline WPI inflation rate remains elevated, consistent with the projections made in the annual policy statement of May 3. The main drivers of WPI inflation in April-May were non-food primary articles, fuel group and non-food manufactured products. The consumer price inflation for industrial workers (CPI-IW) rose from 8.8 per cent in March to 9.4 per cent in April.
Non-food manufactured products inflation was 8.5 per cent in March. Provisional data indicate that it increased from 6.3 per cent in April to 7.3 per cent in May, much above its medium-term trend of 4 per cent. "This pattern in non-food manufactured products inflation is a matter of particular concern. Besides reflecting high commodity prices, it also suggests more generalised inflationary pressures; rising wages and costs of service inputs are apparently being passed on by producers along the entire supply chain". The monetary policy stance remains firmly anti-inflationary, recognising that, in the current circumstances, some short-run deceleration in growth may be unavoidable in bringing inflation under control. This is a remarkable change from the central bank's earlier stance that "sustains growth in the medium-term by containing inflation". However, the RBI will continue to maintain liquidity conditions such that neither surplus liquidity dilutes the monetary policy stance nor large deficit chokes off fund flows to productive sectors of the economy.
The rate hike in future is dependent upon the extent to which the current global uncertainties impact domestic growth. The RBI expects that this rate hike will result in "containing inflation and anchor inflationary expectations by reining in demand-side pressures and mitigate the risks to growth from potentially adverse global developments". The markets are expecting another 50 basis points hike in the near future but in two stages of 25 basis points each.
Keywords: Reserve Bank of India, inflation
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http://www.thehindu.com/business/article2118280.ece
War of words as Coal Ministry cancels five NTPC coal blocks
SUJAY MEHDUDIA
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The HinduThe coal yard of NTPC Limited. File Photo
A war of words has erupted between the country's largest electricity producer -- NTPC Ltd -- and the Ministry of Coal over the latter's recent diktat of cancellation of three coal blocks to NTPC and one each to Damodar Valley Corporation and to Jharkhand State Electricity Board.
The recent directive of the Ministry of Coal to cancel allotment of five coal acreages including three to NTPC has led to the state-run power company alleging that the decision was "irrational" and lacked transparency. The Coal Ministry has charged NTPC and other developers of not being serious in undertaking exploration of these coal blocks despite them being allotted long time back.
However, NTPC has accused the Coal Ministry of adopting a biased approach towards it stating that it had completed more works in the blocks allotted to it than any other private firm has done in their mines allocated to them. "NTPC is the leading power producer and its track record speaks for itself. The company is committed towards developing all these blocks but what has been done is not at all good and there is a serious need to have a re-look at the whole process of de-allocation," a senior NTPC official said.
Interestingly, the official pointed out that some of the blocks adjoining to these coal blocks in North Karanpura coal field are much behind NTPC's blocks but yet they have been spared. NTPC was given Chhati Bariatu (South), Chatti Bariatu and Kerandari blocks in Jharkhand. Chatti Bariatu and Kerandari blocks in North Karanpura coal fields were allocated in 2006, while it got Chatti Bariatu (South) in 2007.
Earlier, the Power Ministry had written to the Coal Ministry seeking a review of the decision to cancel allocations to NTPC. It had stated that this development is likely to impact NTPC's plans to add over 15,000 MW generation capacity.
http://www.thehindu.com/business/Industry/article2118126.eceEconomy can weather external disturbances
P. A. SESHAN
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The prospects for achieving balanced economic growth in 2010-12 and the opportunity for harvesting bumper food and cash crops for the second season in succession have enabled the Reserve Bank of India and the Union Finance Ministry to have a firm grip on food inflation. The relevant index thus declined to a low level of 7.55 per cent at one stage against over 22 per cent in the same period in 2010. Thereafter, however, the index has been witnessing a two-sided movement on account of dearer milk, eggs, onions and fuel. In fact, green vegetables were extremely costly at one stage but there had been a return to normalcy in the ground situation. After rising to 9.01 per cent in the week ended May 28, the food index has declined to 8.96 per cent in the subsequent week. There is now confidence that some secondary products also will become cheaper and the index may decline to below 6.5 per cent as there will be plentiful availability of foodgrains and the deficits in respect of oilseeds and pulses may get contracted.
However, non-food inflation will remain worrisome as the policies of the various ministries as well as the inadequate availability of coking coal and non-coking coal from indigenous sources will be intensifying inflationary pressures. Besides, the Union Ministry of Petroleum and Natural Gas is anxious to deregulate diesel oil and also increase retail prices for LPG. But decisions in this regard can be taken only at the appropriate stage. In the interregnum, small upward adjustment in the retail prices may be effected for minimising the burden of subsidy. But for avoiding hardships to consumers, efforts may be made to adopt suitable fiscal measures and request also the State governments to lower their levies tangibly. It remains to be seen how the difficulties in this regard will be overcome but it is clear that non-food inflation will not decline noticeably in the near future unless world inflationary trends tend to subside.
Food inflation
Because of the increase in the inflation rate to 9.01 per cent in May from 8.66 per cent in the previous month and necessity to avoid an uncomfortable increase in the burden of oil subsidy and improve also the financial position of the oil marketing companies, it was speculated in industry, money and stock market circles that whether the monetary authorities would adopt a harsh approach when reviewing the developments in the economy for the first quarter. The fears in this regard have happily not materialised and the repo and reverse repo rates are being raised by 25 basis points to 7.50 per cent and 6.50 per cent respectively with credit under the MSF being available at 8.50 per cent. These adjustments have been effected for the 10th time since March last year. The RBI need not have taken even this decision as the variations in key interest rates have not yielded the desired results. The pronounced decline in the food index is due to a significant improvement in the performance of the agricultural sector.
The most favourable development from the point of view of the economy and the Ministry of Agriculture is the unprecedented improvement in the yields of food and cash crops in the 2010-11 season. On the basis of the success in procurement operations and upward adjustments in estimates of production, it can now be safely stated that the output of foodgrains in 2010-11 will constitute an all time record at 237 million tonnes. This big rise in output and harvesting of a record wheat crop have necessitated brisk procurement purchases and buffer stocks have already exceeded 65 million tonnes. There will be compulsion to intensify procurement of rice from October with the crop estimate at 102 million tonnes for the whole of the current season. The wheat crop also may again be 84 million tonnes. For obviating an undue increase in buffer stocks the Ministry of Agriculture has decided to release 20 lakh tonnes of rice and wheat to the State governments at economic cost for disposal in various ways and through the public distribution system (PDS) for bringing down open market prices nearer to the revised minimum support price. It will not be inappropriate to state at this stage that the eagerness of the UPA Government to improve the incomes of farmers with periodic adjustments in MSP (minimum support price) is also a factor aiding inflation. In view of the optimistic assessment of meteorologists and agro experts, it can be hoped that the happenings in the later half of this year will be heartening and the monetary authorities will be in a position to adopt helpful measures for avoiding unnecessary slowdown of the growth process. There is likelihood of a new record being established in respect of the yield of foodgrains at over 246 million tonnes.
Promising outlook
The outlook for the economy has thus considerably improved. However, it is emphasised that the contribution to gross domestic product (GDP) growth by the agriculture and allied industries will be around 4 per cent against 6.6 per cent and 0.4 per cent in the two previous years. Union Finance Minister Pranab Mukherjee and Chairman, National Advisory Council C. Rangarajan, have estimated that the growth in GDP may be 8.75 per cent and 8.5 per cent against the pessimistic estimate of 8 per cent of RBI. For ensuring higher GDP growth it is emphasised that the industrial sector should make a contribution of 8.6 per cent and services sector 9.6 per cent. The trends in industrial production even on the basis of a revised series with base year being changed to 2004-05, the growth in April was only 6.3 per cent though higher than 4.4 per cent according to the old series. The growth of the established industries will be 'stunted' where the industries concerned had made rapid progress in 1998-2005.
With a view to minimising the handicaps in this regard, established entrepreneurs having schemes involving huge outlays should be helped to secure the badly needed financial resources. The Union Ministry of Industry and Commerce is aware of the urgent need to enlarge the industrial base for facilitating an increase in the share in GDP to 25 per cent by 2025 from 16 per cent now.
The industrial output has to be maximised for sustaining also the export effort. The growth in export was even more impressive in April-May and the objective is to double export earnings to $500 billion in three years.
There should have been a favourable reaction in the bourses as the upward adjustments in key interest rates have been only marginal. But trading on Thursday and Friday was not encouraging and the Bombay Stock Exchange sensitive index closed at 17870 on Friday.
In view of the significant improvement in the ground situation, the new measures should be helpful instead of being retrograde. The economy has strong fundamentals and the difficulties on account of the happenings in the external sector can be overcome as in 2007-08.
Keywords: Indian economy, food inflation
http://www.thehindu.com/business/Economy/article2118283.ece19 JUN, 2011, 03.11PM IST,ET NOW
Golden period of Indian equities is still ahead: Rakesh Jhunjhunwala
In an exclusive conversation with ET Now, Big Bull Rakesh Jhunjhunwala says that the next 3 months are likely to be very difficult period for the markets, but he is extremely bullish on their long-term prospects. Excerpts:ET Now: Indian markets have been stuck in this range from last six months. Do you think we could remain in this range for an extended period of time?
Rakesh Jhunjhunwala: The next three months are going to be a very difficult period for the markets. The chances to break down to me seem to be greater than the chances to break up, at least in the next three months.
ET Now: Do you see 5000 acting as a base for this market?
Rakesh Jhunjhunwala: That is difficult to say, but I would think so, 4800-5000 is a level where markets will surely find a base, strong support which goes there.
ET Now: So what is the biggest risk for Indian markets currently?
Rakesh Jhunjhunwala: The headwinds are on Indian markets, the most important thing is inflation. Because inflation controls everything, interest rates, growth and the second headwind is the government inaction. Although we have very good people at the helm of government and they know what needs to be done, but politically they are not able to give any consens US at all. There was ho PE of some big reform after the elections, but nothing has happened up until now. And unless we get some kind of a reform in the subsidies and some kind of a clear roadmap for the DTC and goods and sales tax, GST, the markets are waiting for that.
ET Now: But would you bang the table and say that or predict rather that in next 3 years, Sensex will be at least 50% higher than where it is?
Rakesh Jhunjhunwala: I am extremely bullish in the longer period. Three months unless and until we get clarity on the monsoons which we will get by August end, and we will see what kind of government action comes through. Until then, the markets are going to have a downward bias. Three years, 5 years, 10 years, I am extremely bullish.
ET Now: Do you think the golden period for Indian equities is not over?
Rakesh Jhunjhunwala: It has not even started.
Why do you say that?
Because the Indian economy is going to grow for the next 30-50 years and that growth is going to surpass everybody's expectations. In terms of consequence of that growth, equity and with such low exposure to equity markets, local investors and India this year will save about $650-700 billion. It is legitimate to expect that at least 10% of that should come to equity markets, but we are not seeing that at all. It will come with time. So the golden period is still ahead.
What do you make of the earnings? One is getting a sense that earnings are slowing down and India's economy generally seems to be slowing down?
The interest rate sensitive companies are going to face some kind of pressure and the banks are going to face some kind of pressure. But it is very difficult to say on earnings. The market may project itself partly on the current year's earnings, but also the market is going to predict itself on what it thinks the long-term earnings are going to be. In near term there could be pressure in earnings, but in longer term there is no reason why earnings will not grow 15-20%.
ET Now: Let me get this right and this is one point I do not want to get it wrong for our viewers, near term you are not bullish, but your long-term outlook is still intact.
Rakesh Jhunjhunwala: Absolutely and near term I mean until things clarify and it depends how events turn out. If the monsoon is good and commodity prices ease which I personally expect, oil prices should be at $80-85 and some government action comes through and inflation may not have come down, but it becomes apparent that in future months, inflation is going to come down, then the Indian markets will have a very strong ride after that. So I am saying that the next 2 to 3 months are uncertain depending on how events turn out. The period for the next 9 months could be very good or could be okay.
ET Now: But is the rampant speculation in commodities over?
Rakesh Jhunjhunwala: I do not think so. Speculation in commodities is at an all-time high.
ET Now: But insiders tell me that you have been short commodities of late.
Rakesh Jhunjhunwala: Yes, I am short on some commodities.
From an India perspective, after QE2 if a QE3 comes, is that bad news for us?
I do not think a QE3 will come. If it comes and if the US economy grows further because of some stimulus or there is ease on money or there is a downward pressure on the dollar, it is always good for India.
Which to your mind could be the biggest moving part for next 12 months?
Inflation and government action are the most important points.
Are markets seriously disappointed with lack of any government action?
They are. The tragedy is that we, instead of blaming any individual, as a nation are not able to form a political consensus. No use blaming the politicians or those who are in power. We have so many conflicts in our society that to come to a consensus and do what is right is very difficult. That will last essentially until behind the era of coalition governments.
But are you a bit surprised with the resilience Indian markets, of late, have exhibited? On a relative basis, India is still outperforming and foreign institutional investors have not been rampant sellers this year?
No. If the predicted earnings come through at Rs 1200 earnings for the Sensex, 15 times is a long-term average. Long-term, everybody is extremely bullish on India, if markets are down or they are correcting, people are going to do individual stock picking. We must also understand that the exposure of the foreign institutional investors worldwide in relation to the emerging economic size is very low. That is going up and I think that helps.
What do you make of the recent US economic data?
There is no doubt that the world economy is slowing and also it is partially slowing in the western societies because of the structural challenges and economic challenges. It is slowing in developed world because the governments want to fight inflation in the developing world.
http://economictimes.indiatimes.com/opinion/interviews/golden-period-of-indian-equities-is-still-ahead-rakesh-jhunjhunwala/articleshow/8913066.cms
Saharpur Jamarpani and Banhardih -- both in Jharkhand -- are the other blocks, where the allocation has been cancelled. Saharpur Jamarpani was allocated to Damodar Valley Corporation in 2007, and Banhardih given to Jharkhand State Electricity Board in 2006. The Coal Ministry, had last year, issued notices on allocation of 84 coal and four lignite blocks. It had sought explanations from the companies about why their allocation should not be cancelled.
Keywords: NTPC Limited, Coal Ministry, Jharkhand State Electricity Board.
19 JUN, 2011, 04.08AM IST,ET BUREAU
What is it about billionaire T Ananda Krishnan that India has so much interest
When you want to find out more about 73-year-old Tatparanandam Ananda Krishnan (or combine the initials to call him TAK), there's a good chance you encounter two kinds of responses.One, from people who know him well enough, only to politely decline discussing anything about him. That's because "TAK doesn't like it." Two, people who have, of course, heard his name but are sailing in the same boat as you. The few who know a thing or two about TAK and are ready to speak do so only on the condition of anonymity.
It's a Tamil-sounding name, alright, but Ananda Krishnan has his roots in Sri Lanka. He was born in Brickfields, a neighbourhood in Kuala Lumpur. He did his schooling in Malaysia and flew to Australia for his BA in political science. An MBA from Harvard University followed.
The TAK legend is not too well understood even in his hometown Malaysia. But everyone wants to know more. There are good reasons. He's the second richest Malaysian around. He comes 93rd in Forbes' global list of billionaires, with a net worth of just below $10 billion. Not just that. The otherwise reticent man, who on those rare photographs appears with a stressed-out smile, has a reputation of always cultivating contacts at high places.
Under the Scanner
As Joe Studwell pointed out in his Asian Godfathers, "the two richest Malaysians, Robert Kuok and Ananda Krishnan, are masters of being all things to all politicians." Kuok is the richest Malaysian. But it is about TAK that there's so much interest in India .
Not just because he has business interests here but, of late, some of his business deals have come under the scanner of investigating agencies. For instance, the Central Bureau of Investigation is probing whether his businesses invested in the direct-to-home business of the Maran brothers as a quid pro quo for bagging the telecom company Aircel, which itself is under cloud.
His close aide and Astro's top official Ralph Marshall, who is said to have roots in Sri Lanka as well, couldn't be reached. Calls to Sandip Das, CEO of Maxis, Aircel's parent, went unanswered. Ditto with calls to Maxis' official spokesperson.
Sun TV officials couldn't be reached. However, this is what a senior Maxis employee in Malaysia had to say: "TAK does not like to blow his own trumpet. He does not like people interviewing him and shoving him in limelight. That is one reason not many know about him."
But, he says, "had TAK been in the limelight, he would have given tough competition to some of Asia's top businessmen, like the Ambanis". The comparison isn't out of place. TAK's business interests include entertainment, shipping, telecom, power generation and even satellites.
Four years back, Sri Lankan Rajkumar Kanagasingam wrote about TAK's Sri Lanka connection in his book German Memories in Asia but couldn't meet the man. "I got information and details through friends and sources he says."
http://economictimes.indiatimes.com/news/news-by-company/corporate-trends/what-is-it-about-billionaire-t-ananda-krishnan-that-india-has-so-much-interest/articleshow/8907977.cms
19 JUN, 2011, 12.12AM IST, ANURADHA HIMATSINGKA,ET BUREAU
Bridging Bengal: PE investors who will drive new Bengal Inc
A day before Mamata Banerjee's Trinamool Congress swept to power in West Bengal on Friday the 13th, ushering in the much-called-for political poriborton (change in Bengali), 36-year-old Mehul Mohanka was quietly celebrating a professional triumph and the poriborton of the business his father, Madan Mohanka, founded in 1976.
Mehul, executive director of Tega Industries, who heads its international business division, had just sealed a deal with TA Associates , a Boston-based private equity (PE) firm. TA invested $40 million in Kolkata-based Tega, which offers products and services for the mining industry, for a nearly 15% stake. It was the first time that Tega, which has manufacturing facilities in India, South Africa and Chile and customers in 65 countries, roped in an outside institutional investor.
"The first reaction post transaction was that of relief," recalls Mehul. "It was a long and gruelling six months during which the entire team worked tirelessly to complete the equity-raising process," he adds. On that day, the Mohankas and the Tega team popped a bottle of bubbly.
That's something many companies in West Bengal have been doing in recent times, as some of the marquee PE firms are investing in companies in a state that has been for long considered the boondocks of the Indian business landscape. Private equity giant Bain Capital, which had set up offices in India in 2008, made its debut investment in the country by investing in Kolkata-based Himadri Chemicals & Industries in January 2010. Bain has a 26% stake in Himadri, with a total investment of around $90 million. It was almost immediately followed by Nine Rivers Capital, a Mauritiusbased PE investing in GPT Infraprojects, a Kolkata infrastructure company. In June 2010, Sequoia Capital acquired over 7% in another city-based company Hindusthan National Glass & Industries (HNG), for around `127 crore.
According to VCCEdge, since April 2009, PE investments worth $380 million in 22 deals have gone to West Bengal. Of this, nearly $140 million have been invested in companies in the past three months. That's staggering considering that companies invested about $97 million in the whole of 2010-11, and $143 million in 2009-10. The deals have bought attention to companies beyond West Bengal's traditional big businesses like Haldia and ITC. "For Kolkata-based companies, such deals are critical as it is one step closer to relinquishing the city's tag of being an unattractive destination for PE money," says Mohanka.
 * |
New Beginning
So, why are blue-chip PE firms that are known for their better-safe-than-sorry approach investing in companies that are based out of perhaps India's most investor-unfriendly state? West Bengal had not been able to attract PE investments in the past for various reasons, one of them being its political climate and the negative attitude of the government. State government officials were not proactive enough to attract investment in the state. "Although things changed over the past five-to-six years with Buddhadeb Bhattacharjee-led government realising that industrialisation was the way ahead.
http://economictimes.indiatimes.com/news/news-by-company/corporate-trends/bridging-bengal-pe-investors-who-will-drive-new-bengal-inc/articleshow/8906337.cms- [PDF]
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Two-day global meet of Non-Resident Biharis next year
PATNA: Hundreds of Non-Resident Biharis (NRBs) from across the world will gather here early next year to share their views on the state and its development, officials said Sunday.
The Bihar Foundation is organising the two-day global meet of NRBs Feb 18-19, 2012.
Deputy Chief Minister Sushil Kumar Modi, who is the chairman of the foundation, said they have started disseminating information about the meeting in advance to ensure that a large number of NRBs participate in the event.
"NRBs from across the world who have excelled in their fields and made a difference towards development would be invited to share their views regarding the state and its development," Modi said.
Indian Administrative Service officer K.P. Ramaiah, who is the CEO of Bihar Foundation, said it was a "single window system of the state government to interact with NRBs around the world".
Speaking to IANS, Ramaiah said they expect a gathering of hundreds of experts and investors who are concerned about the development of Bihar.
He also said that all the Bihar Foundation chapters in the US, Britain , Australia , Canada , South Korea and Qatar have began preparations to invite NRBs for the meet.
UP Cong celebrates Rahul's birthday as Kisan Adhikar Diwas
The birthday of AICC General Secretary Rahul Gandhi , who turned 41 today, is being celebrated all over Uttar Pradesh by party workers as Kisan Adhikar Diwas (Farmers' Rights Day).
With Assembly elections in Uttar Pradesh due early next year the opportunity is being utilised by the state unit to reach out to the farmers.
The agitation at Bhatta Parsaul in Greater Noida on the land acquisition issue by Gandhi recently had generated a lot of heat politically.
Enquiries at his residence at 12, Tuglak Lane residence revealed that the young leader is not at home and no celebration has been planned.
Ahead of the birthday, party General Secretary Digvijay Singh had said Rahul has got "all the qualities and capabilities" that are required to become a "good" Prime Minister.
Congress projects Gandhi as potential Prime Minister and future leader.
Meanwhile, Kisan chaupals (farmer gatherings) were today organised in all the nyay panchyats in Gandhi's Amethi constituency.
The party office bearers organised chaupals in all 712 nyay panchyats in Amethi to hear problems faced by farmers.
Party leader Rajesh Srivastav said this year neither cakes were cut nor sweets were distributed on Gandhi's birthday but the party workers tried to mingle with farmers.
"We will fight for the cause of farmers and get their problems redressed," he said.
'High interest rate to put brakes on new investments'
MUMBAI: Business leaders in India have rounded on the government, urging a halt to interest rate rises, amid fears that inflation and lack of institutional reform could hit investment and cut economic growth.
The Reserve Bank of India hiked rates by a quarter of a percentage point this week -- the 10th rise in 16 months and longest streak of monetary tightening in a decade -- to battle inflation of more than nine percent.
"The latest rate hike may not achieve the desired results unless the government comes up with basic reform," Rajiv Kumar, secretary-general of the Federation of Indian Chambers of Commerce and Industry, said on Friday.
The president of the Associated Chambers of Commerce and Industry of India, Dilip Modi, warned that "high input prices, rising finance costs and global uncertainties are adding to negative sentiments".
"A high interest rate environment will most certainly put brakes on new investments," he added.
India's government predicts that the economy will grow at between 8.5 to 9.0 percent in the current financial year but economists are revising estimates downwards to between 7.2 to 7.5 percent.
The economy grew 8.5 percent last year.
The negative mood has already had an impact on India's stock markets and foreign investment.
Shares on the Bombay Stock Exchange have been down for two straight weeks, as domestic concerns combine with wider fears about Greece's debt crisis to make fund managers cautious.
Indian shares are down near 13 percent this year, making it the worst performing market in Asia. Bellwether firms Reliance Industries and Infosys -- the most weighted stocks on the Sensex -- are at near one-year lows.
On Friday, the Sensex closed at almost its lowest level this year.
By this time last year, foreign investors had bought $5.6 billion of Indian stocks but this year they have sold $139 million.
Global fund managers now consider India to be one of the least-favoured investment destinations, according to a recent Bank of America-Merrill Lynch survey.
The country was ranked underweight at -20 percent -- its lowest reading in the last six months.
In contrast, India's great economic rival China is one of the most preferred markets, the study suggested.
"Business confidence in India is low," admitted Phani Sekhar, a fund manager with Mumbai-based Angel Broking .
"(The lack of reform) is taking the sheen out of India's growth story," added Sonam Udasi, head of research at brokerage IDBI Capital .
Experts say the government has dithered on pending reforms in infrastructure development, retail, banking and the fuel sector.
Meanwhile, inflation -- up to 9.06 percent in May and well above the RBI's "comfort level" of 5.0 to 6.0 percent -- driving up the cost of funds and risking a delay in investment in key sectors.
The latest interest rate rise comes at a time when fewer cars are being sold, cement sales are slowing and steel imports have dipped.
Economic growth slowed to 7.8 percent in the three months to March -- its weakest pace in five quarters -- while growth in industrial output in April halved compared with the same period last year.
IDBI Capital's Udasi said the government's disinvestment plans are unclear and with fuel subsidy burdens rising, the fiscal deficit target of 4.6 percent looks "grim".
"Investors are disappointed by the lack of tough decisions from the government, adding to the nervousness," said Angel Broking's Sekhar.
India has deregulated petrol prices but continues to offer widely-used diesel fuel, cooking gas and kerosene -- known as "the poor man's fuel" -- at heavily-subsidised rates to the public.
The government has dithered on hiking diesel and cooking fuel prices, possibly fearing a backlash from opposition and the millions of India's poor, who are already struggling to cope with high food prices.
That comes on top of a series of corruption scandals, including a multi-billion dollar telecom licence scam, that has put the government on the defensive and troubled foreign investors.
18 JUN, 2011, 03.08AM IST, ANURADHA HIMATSINGKA & SUTANUKA GHOSAL,ET BUREAU
India Inc may settle for 50% less land in West Bengal
KOLKATA: India Inc may have to settle for 50% less land in Mamata Banerjee's West Bengal, if current indications prove true.
The two-member committee set up recently by the chief minister to formulate a new land policy has suggested that business houses can acquire up to 5 hectares without having to seek the state government's permission. In the CPI(M) era, the same threshold was 9.7 hectares.
In other words, the Marxists allowed business houses to acquire up to 24 acres, which translates to 9.7 hectares, without having to seek a clearance from the government. The recommendation this time is for 12.5 acres (5 hectares). That, however, does not mean more land won't be given, if asked for.
But for that, a proper detailed explanation needs to be given and state government officials need to be convinced. The two-member committee comprises Debabrata Bandopadhyay , a retired IAS officer and Soumendranath Basu, a legal luminary.
Speaking to ET, Bandopadhyay, a former officer of the state's land and land reforms department and who now heads this committee, said: "Why will business establishments require more than five hectares for their projects?
However, if it is indeed needed for a project, they just need to explain that and seek permission. The state government, with the help of the regulator, will thereafter fix the rate at which the transaction can take place. That is all."
The regulator could be a district magistrate or an additional district magistrate. If the need is for only five hectares or less, a prospective promoter will have to negotiate with land owners directly. The previous Left Front government allowed industrialists to buy 9.7 hectares (up to 24 acres) without seeking permission from the state government, although promoters who required more than that, were required to seek permission under section 14 (y) of West Bengal Land Reforms Act, 1955.
The scaling-down of the threshold isn't a surprise. The entire Singur agitation of Mamata Banerjee was fought on the plank of land requirement by the Tatas for the Nano project. Mamata had always contended that 997 acres was too much land for the Tata project.
The Tatas had tried to argue and substantiate that for a project that size, 997 acres was indeed required. Mamata had stuck to the basic premise that 997 acres was about 400 acres more than actually required. It is on that premise that she had promised Singur farmers that 400 acres would be returned. The passing of the Singur Bill now is a legislative step in that direction only. The operative idea is therefore known to everybody in the present state government.
"All Didi says is that industries should buy only so much land as is required for setting up the project. Every acre needs to be accounted for," said a Trinamool official. The threshold has therefore been brought down to 5 hectares in so far as free land purchase is concerned.
18 JUN, 2011, 01.21AM IST, SOUVIK SANYAL & RISHI SHAH,
Corporate data will talk and government will act now
NEW DELHI: Primary data on corporate investments and savings will find greater consistency and accuracy with economic regulators set to make use of a systematic data collection method allowing real-time access to a regulatory information filed by companies.Replacing the current system of manual sampling of data is an electronic reporting tool which can not only segregate large amount of data from filings made by corporates in stock exchanges and Registrar of Companies but also analyse them to form insightful trends.
Ministry of Corporate Affairs has already directed companies to submit their annual returns and financial results in a data-based format replacing the current practice of submitting scanned copies of such documents which can not be electronically analysed.
"We are in discussion with the corporate affairs ministry to sort out certain glitches after which the data on corporates could be easily available," said TCA Anant, India's chief statistician and secretary at MoSPI. The government aims to further classify primary corporate data into detailed sector-specific indices on investment trends and corporate savings.
"In the current format, we are not able to completely access MCA records and it is not possible for segregation of data to derive at clear trends," said Anant. The Reserve Bank will be able to come up with quicker and better estimates as they will now have a direct access to the corporate data under the new reporting format he said. The Central Statistics office would be able to access the data directly instead of taking it from the RBI . This would mean more accurate and timely data availability.
A high level committee on estimation of savings and investment chaired by Dr C Rangarajan had also recommended that savings and investment estimates from the year 2010-11 may be made using MCA21 data for all companies, dispensing with the blow up factor method," the committee noted in its report.
A senior official with the ministry of corporate affairs said, that one of the largest beneficiary will be the Reserve Bank as it currently uses a sampling system and would have an alternative to it in the future.
"RBI is a major user of the data as it uses it to forecast credit and deposit rates by analysing corporate activity levels," he said. The single reporting medium is being developed by regulators such as the Securities Exchange Board of India , ministry of corporate affairs and the RBI.
Commonly called as eXtensible business reporting language or XBRL, the reporting format becomes mandatory from July 2011. All companies listed in India and their subsidiaries, having paid up capital of Rs 5 crore and above or a turnover of Rs 100 crore or above will have to file their financial statements in XBRL format.
The first phase of the transition has, however, excluded banking companies, insurance companies, power companies and non banking financial companies (NBFCs). The move will further ensure that any mismatch in data filed with different regulators will promptly be reported and ensure inter-regulatory action against companies violating norms.
At present, companies independently share information with different regulators, and there is a possibility of filing different information with different regulators.
http://economictimes.indiatimes.com/news/economy/policy/corporate-data-will-talk-and-government-will-act-now/articleshow/8895198.cms
It's 'Force vs Children' at POSCO agitation zone
Bhubhaneshwar: It is 'force versus children' in the battle for land to set up Posco's proposed mega steel project in Orissa's Jagatsinghpur district where the anti-displacement stir has entered the decisive phase.
A villager sprays water to relieve children lying with other villagers along the entry point to prevent policemen and officials from entering their area at Jagatsinghpur district, about 140 kilometers east of Bhubaneshwar.
While a determined state government have accused the Posco Pratirodh Sangram Samiti (PPSS), a body spearheading agitation against the South Korean steel major, of using the children as a "shield", the villagers sought to differ. "We involve children in the agitation to counter the state's brute force which is trying to forcibly acquire land without consent of the farmers." PPSS President Abhay Sahu said.
About 300 children are leading the anti-Posco agitation for last 12 days as the state government deployed more than 600 armed security personnel to enter into Dhinkia gram panchayat, considered as epicentre of the six-year-old anti-displacement movement.
"I believe the children should never be used in agitation. The persons, be it their parents, should be held responsible for using them in this manner," said Orissa's Women and Child Development (WCD) minister Anjali Behera. The WCD minister said she would like to initiate action against the persons involved in the practice. "It is cruel to make children agitate under scorching sun and heavy downpour," the minister remarked.
Jagatsinghpur Additional District Magistrate (ADM), SK Choudhury also demanded action against those having 'dragged' children into the agitation. "We leave it to the civil society to consider whether the anti-Posco brigade's use of children is legal or otherwise," Choudhury said.
Not buying the logic of the powers-that-be, social activist Swami Agnivesh argued "I don't see anything wrong in children taking up the cause of their parents. Above all, they are not left alone to fight with the government. The children are accompanied by their parents and seniors of the village," said Agnivesh.
Striking a dissenting note noted child right activist Anuradha Mohanty said children must not be used in any form of agitation. "No one including their parents should be allowed to violate rights of children," she said.
The little ones, however, have their own argument. "Can the state government or Posco provide us a better future. It is our parents who will sustain us. If they are going to lose livelihood, who will give us protection," said 11-year-old Rosalin Patra, a class-VII student of Gobindpur Upper Primary School.
Like Rosalin, many students from Dhinkia High School and Patana Primary School have 'voluntarily' joined the 'do-or-die battle' against Posco project. Bapina Mandal, whose father was killed three years ago during an anti-Posco agitation says, "having already lost my father in the fight now it is left for me, my mother and elder sister to carry on the agitation on our own."
Bapina's mother Sabita Mandal said "the soul of my husband can rest in peace if the fight of my children along with others put a halt to the Posco project over fertile land." Echoing Bapina, Bikar Mohanty, a class-III student, said emphatically, "isn't it better to die in a movement than facing starvation death."
Admitting that children's studies were affected due to their involvement in the agitation, PPSS leader Abhay Sahu claimed they have roped in teachers and provided black board and study materials to teach children at the dharna site. "Swami Agnivesh is a witness to facilities provided to children," said the suspended sarpanch of Dhinkia and PPSS Secretary Sisir Mohapatra.
Agnivesh recalled "during my visit to Dhinkia area, I taught children about the environment. They were dumping plastic water pouches here and there. I taught them to collect the plastic pouches and put all in a pit."
Source: PTI
Rahul Gandhi now mature, can become PM: Digvijay
Congress General Secretary, Digvijay Singh said on Sunday that Rahul Gandhi was now a mature person with sound political instincts, and can become the Prime Minister.
"I think it is time that Rahul can become the Prime Minister," Singh said.
"Rahul is now 40 and he has been working for the party for the last seven to eight years," Singh said.
The scion of Gandhi family had the right qualities, instincts and experience to take up the mantle of the prime minister-ship now, Singh said.
He rejected the contention that he himself was doing the politics of minority appeasement. When he was the Chief Minister of Madhya Pradesh, he had taken action against both the SIMI as well as the Bajrang Dal, Singh pointed out. "When Chief Minister Shivraj Singh Chouhan is felicitated by Muslims, that is not called appeasement, but when I went to Azamgarh, I was opposed by the Ulema council on one hand and RSS-BJP on the other."
About another former Madhya Pradesh Chief Minister, Uma Bharti, who recently returned to BJP, Singh said it must not be forgotten that she once maintained that she would not be 'true to her parents' if she went back to the party. Singh added that he had prophesied the day Uma was expelled that she would return to BJP, as she would not find shelter anywhere else.
Singh said that non-elected members of society can never be equated with elected representatives, but the former's views have to be kept in mind.
That is why the Congress President, Sonia Gandhi, included members of the civil society in the National Advisory Council, he said.
Eminent people like Aruna Roy, Jean Dreze and Harsh Mander, who had been been leading members of the civil society, were a part of the process of drafting of Lokpal Bill, he pointed out.
Singh said that since the UPA government was sensitive to corruption, it also included people like Shanti Bhushan and Arvind Kejriwal into the drafting committee, though they were known to be anti-Congress.
Source: PTI
Inflation a major challenge for the government: FM
NEW DELHI: Finance Minister Pranab Mukherjee has said that the major challenge for the government as of now is to control inflation and the monetary policy pursued by the central bank may impact growth."Our major challenge in the short-term is inflation, which has implications of sustaining our growth momentum," he said at an Assocham meet on Friday.
Mukherjee said that the monetary policy has been gradually tightened and monetary measures may end up moderating the growth if they have to be persisted for an extended period of time.
He, however, expressed confidence that India is in a position to sustain high economic growth in the coming decades. "The growth drivers of the economy remain broadly intact," he said, adding, "We should be able to repeat the growth performance of 2010-11 in 2011-12 as well," he said.
RBI on Thursday had hiked key policy rates for the tenth time since March, 2010, in a bid to tame inflation, which crossed the 9% mark in May. In 2010-11, the country's gross domestic production (GDP) is estimated to have grown at the rate of 8.5%. "We need to aim at a GDP growth of 9 to 9.5% for the 12th five year plan," he said.
Mukherjee said that the government is in the process of deepening policy reforms in the financial sector and addressing gaps in the overall economic regulatory architecture.
"Major steps are being taken to simplify and place the administrative procedures concerning taxation, trade and traffic and social transfers on electronic interface, free of discretion and bureaucratic delays," he said.
The Finance Minister said that consolidation of banking services, meeting capital adequacy requirements and effectively managing human resources are some of the key areas of concern for Indian banks. He also expressed concern over the issue of asset quality in banks and said that it is important for them to constantly monitor and bring down the Non Performing Assets (NPA) to the previous level.
"Indian banks need to adopt the best risk management practices to keep themselves abreast with global developments," he said, adding that newer perspectives and strategies towards financial inclusion are needed to reach the un-banked and the under-banked sections of our country.
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Govt considering expansion of village development scheme: PM
17 JUN, 2011, 02.38PM IST,PTI
NEW DELHI: Prime Minister Manmohan Singh today said the government was considering expansion of a pilot scheme that focuses on integrated development of villages with large Scheduled Caste presence.
"The central government has launched a pilot centrally-sponsored scheme Pradhan Mantri Adarsh Gram Yojana in five States, Assam, Bihar, Himachal Pradesh, Rajasthan and Tamil Nadu. This is for integrated development of 1000 villages with Scheduled Caste majority populations.
"Provided the pilot warrants, and encouraging results are achieved, an expansion of this scheme is being considered in the 12th Five-Year Plan," Singh said, addressing a conference of state ministers of welfare and social justice here.
The Prime Minister noted that ensuring equitable development of all sections of society and especially the weaker sections is central to the government's agenda of inclusive growth.
He also said the government proposes to revise the income ceiling and scholarship rates under the post-matric scholarship scheme for OBC students.
Singh also said that the government intends to bring a new law for the disabled population.
"The expert group of the Ministry of Social Justice and Empowerment is drafting a new law in place of the Persons with Disabilities Act, 1995. After consulting state governments and other stake holders, we propose to introduce the bill in Parliament," Singh said.
Noting that various initiatives are being taken to address concerns of persons with disabilities, the Prime Minister said, "but I do recognise that we have to do much more in this regard."
Obama begins re-election campaign through Facebook, Twitter
WASHINGTON: US President Barack Obama has kicked off his re-election bid for 2012 through popular online mediums like Facebook and Twitter, trying to replicate the huge success he had in the 2008 campaign.
Obama's campaign said in a posting on its website that he will tweet regularly from the popular social media service and his personal tweets will be signed "-BO." The campaign said it will now manage both Obama's Twitter account and Facebook page.
All the information regarding election preparations in Washington and other parts of country will be made available here, campaign staff of Obama, wrote on the Facebook page.
Around 23,000 netizens have approved the change and more than 4,000 have commented on the new Facebook page.
The campaign said that the changes "will give us new opportunities to make the most of these channels, using them not only to report what the president is doing every day but to connect to the millions of supporters who will be driving this campaign."
Obama's Twitter account has over 8.69 million followers and over 21.6 million people have "liked" his Facebook page, making him the most-followed politician on the social networking sites all over the world.
9 JUN, 2011, 06.17PM IST,ET BUREAU
For hundreds of refugees, India is their second home
NEW DELHI: For hundreds of refugees and asylum seekers , who left their home to avoid war, oppression or fear of persecution, India is a second home where they feel more secure than in their own country.Despite the pain of leaving their homes and in many cases, part of their families, these stateless people are now hoping for a better life.
And for them, the World Refugee Day on June 20 is not a time to brood over the painful past but to look forward to building their future in their second home -- India.
Lai Za Thang, a 25-year-old from Myanmar, who fled his country along with his brother to avoid persecution by the military government, says he feels much secure here in India than in his own country.
"It was difficult to cope with life as a refugee, but I have slowly started loving this country. India is the second home for us," Lai Za told media.
Lai Za, who came to India in 2008, leads a Myanmarese youth club called 'Nightingale' in Vikashpuri area in the national capital.
Liban Siekh Hassan, a 24-year-old from Somalia, also has a similar experience in India.
"It's not very easy to mingle with people and get private accommodation here and the reason may be our look and language. But by and large, we are much better in India than in our own country, so we should not be complaining," he said.
These refugees have gathered here for a cultural programme organised at the Don Bosco Ashalayam, an NGO and partnering agency on UNHRC , to celebrate World Refugee Day.
Defence brass split over French Mirage upgrade deal
With the $2.4 billion Mirage-2000 upgrade deal with France in its final stages, India's defence ministry and air force top brass seem to be split over the high costs and likely benefits to the country's future air power needs.
With the contract papers said to be headed to the Cabinet Committee on Security (CCS), the volume against the deal is rising, top officials told IANS here.
Among points of contention is the deal cost to upgrade the 52 Mirage-2000 combat aircraft by French company Dassault Aviation. Taking into account $1 billion for new weapons and another $500 million for new facilities at Bangalore-based Hindustan Aeronautics Limited ( HAL . for the upgrade, the cost could rise to $3.9 billion, the officials said.
"The upgrade programme will cost the Indian exchequer $7.9 million per Mirage-2000 aircraft. But India is buying 126 new Medium Multi-Role Combat Aircraft (MMRCA) under a $10.4 billion tender that is to be finalised in this fiscal.
"The cost of the new fourth generation fighter jet works out to $7.9 million per plane. Is it prudent to pay the same price for a swanky new plane and just an upgrade programme for a 25-year-old plane?" said a senior defence ministry official.
Confirming the raging debate, Indian Air Force (IAF) officers said this was the reason the contract has not seen the light of the day yet, though it has been in the pipeline for years now.
There was a strong push for the deal when French President Nicolas Sarkozy's visited India in December 2010 and the country's Defence Minister Gerard Longuet was here in May this year.
Among the upgrades planned for Mirage-2000 under the contract include night vision goggle compatible glass cockpit, advanced navigational systems, advanced Identify Friend or Foe (IFF) system, advanced multi-mode multi-layered radar, fully integrated electronic warfare suite and advanced beyond visual range (BVR) capability. The new weapons include 450 MICA interception and aerial combat missiles.
French firms Thales and MBDA will be the weapons systems integrator and missiles supplier respectively.
"In fact, Thales and MBDA were initially quoting much more," said IAF officers. "But even at this cost and age, an upgraded Mirage can operate efficiently for another 20 years and still be a potent, frontline fighter jet. The upgrade of the Mirages would provide it a fourth generation combat jet capability," the officers told IANS, requesting anonymity as they were not authorised to speak to the media.
India bought 52 Mirage-2000s in 1982 and fully inducted these into the IAF in 1986. Two of the planes will be upgraded in France, another two in India with French help, and the rest 48 entirely by HAL.
Another issue is the nine-year timeframe given by Dassault, the original equipment manufacturer (OEM) of Mirages, to complete the upgrade.
"In comparison, the same firm is quoting deliveries of just six years if it wins the MMRCA deal, on the lines of what its competitor in the final fray, EADS, too has quoted," officials noted.
"Not only will the upgraded Mirages cost as much as a brand new twin-engine fourth generation fighter, but some of the Mirages will be 35 years old by the time they are upgraded," they said.
Dassault, officials said, had in the original 1982 contract guaranteed 30-year plus 10-year life for the planes. "Thus the upgraded Mirages will have just another five years of service left, provided there is no time or cost over-runs. Then why spend a fortune?" they asked.
IAF officers also noted that Israel had also offered to upgrade the Mirages, but at half the price. But the defence ministry quoted an old policy that only OEMs could carry out an upgrade.
"The same ministry has called for competitive bids in recent months for equally complex fighter aircraft, particularly those from Russian or erstwhile Soviet stable," they said.
Sonia sends terse reply to Hazare
New Delhi: In a terse reply to social activist Anna Hazare's letter which charged her party with running a smear campaign, Congress president Sonia Gandhi on Sunday said she had already made her views clear on the issue in an earlier communiqué.
"I received your letter dated June 9, 2011. Since I was not in Delhi I could not reply to your letter. In the meantime, you have also made it public. I will get information in this regard. As far as the questions about the issues raised in the letter are concerned, I have already made my views clear in my letter dated April 19, 2011," . Gandhi said.
Hazare had written the letter to Ms. Gandhi complaining against the Congress media department head Janaradhan Dwivedi calling him an Rashtriya Swayamsewak Sangh-Bharatiya Janata Party "mask". The social activist had refuted these allegations and challenged the Congress, through this letter, to prove their charge.
He had termed this a "conspiracy" of the Congress and the United Progressive Alliance Ministers to defame him, so that he loses his support.
He had informed Gandhi that he was hurt by these comments.
In her reply to Hazare on Sunday, Gandhi has mentioned her April 19, 2011 letter in which she had made it clear that she does not support smear campaigns against anybody.
"As for statements appearing in the media, let me assure you that I do not support nor encourage the politics of smear campaigns," Gandhi had said in her earlier letter.
She had also said that the Lokpal Bill is very much a part of the agenda of National Advisory Council, headed by her.
"I believe there is an urgent necessity to combat graft and corruption. You should have no doubt of my commitment in the fight for probity in public life. I strongly support the institution of a Lokpal that is consistent with the practices and conventions of our parliamentary democracy," Gandhi had said.
Source: PTI
Have realistic expectations from talks with Pakistan: India
New Delhi: India Sunday said Foreign Secretary Nirupama Rao will go to Islamabad with "an open and constructive approach" and with "realistic" expectations, despite a naval row breaking out ahead of her meeting with her Pakistani counterpart Salman Bashir June 23-25.
"We are going to Islamabad for the foreign secretaries-level meeting with an open and constructive approach to discuss all issues of mutual interest and concern, and to build upon the progress achieved in the past," government sources said here.
"Given the histories and complexities of India-Pakistan relationship, we have realistic expectations," the sources said.
Nirupama Rao will be in Islamabad for discussions with Salman Bashir on all outstanding issues including Kashmir, peace and security and friendly exchanges between the two countries.
The meeting comes close on the heels of India and Pakistan trading charges on reported "dangerous manoeuvres" carried out by the other's warships in the Gulf of Aden threatening the safety of their own warship.
Indian warship INS Godavari and Pakistani naval vessel PNS Babar were in the Gulf of Aden to escort an Egyptian bulk carrier that was released by Somali pirates on June 14 to Oman.
During the foreign secretary-level meeting, the two sides will review all preceding meetings of various ministries. "This will naturally cover all issues of mutual concern, especially the continuing threat posed by terrorists," they said.
The sources said India was "satisfied" with the earlier talks that began with the foreign secretaries meeting in Thimphu in February this year.
Between February and May, meetings between their commerce secretaries, Indian home secretary and Pakistan's interior secretary, defence secretaries on demilitarisation of Siachen glacier, apart from a meeting between Pakistan's additional defence secretary and India's Surveyor General on Sir Creek maritime borders, were held.
"Dialogue is a process. It is not an event in itself. We should not expect quick and dramatic solutions to these complex and longstanding issues. But go step-by-step by narrowing the trust deficit with understanding, towards an eventual resolution of all outstanding issues through dialogue," the sources said.
Regarding the court cases against Mumbai terror attack perpetrators in a Pakistani court, the sources said the proceedings were moving at a "glacial pace" with "low satisfactory outcome", even as the judge was changed for the fourth time recently.
"We have submitted all documents and complied with all requests from Pakistan for documentary evidence. Our concerns on Mumbai terror attacks are legitimate and we need satisfactory closure of the case, so we can put this issue behind us," they said.
Sources said the recent revelations on involvement of Pakistan's Inter-Services Intelligence in the Mumbai terror attacks "are part of the larger conspiracy" and India's concerns included the conspiracy that led to the "huge tragedy" on 26/11.
"We have not let our guard down on any of this," they said.
Source: IANS
Police seize Rs 35 lakh from Sai trust's car
Hyderabad: Police in Andhra Pradesh's Anantapur district Sunday seized Rs 35.5 lakh from a car belonging to the Sathya Sai Central Trust that manages the spiritual empire of the late Sathya Sai Baba.
Police seized the cash from the vehicle at Bagepally toll-gate near Hindupur town and arrested one person identified as Harishnanda Shetty. A trust official was believed to have given him the money.
A police officer said the arrested person would be taken to Puttaparthi for investigations.
The money was seized two days after the trust opened Yajur Mandir, the residential quarters of the Sai Baba at Prashanti Nilayam in Puttaparthi.
The trust Friday declared that it found Rs 11.56 crore, 98 kg gold and gold jewellery and 307 kg of silver articles inside which had been deposited with the State Bank of India (SBI).
The arrest and recovery of money has strengthened the apprehensions of a section of devotees that huge amounts of cash and jewellery might have been shipped out of Yajur Mandir when Sai Baba was battling for life at a hospital. The spiritual guru passed away April 24.
Some devotees claimed Yajur Mandir had hundreds of crores of cash, ornaments, diamonds and other articles gifted by his followers in India and abroad. According to them, most of the cash and other valuables were slipped out of Prashanti Nilayam when Baba was in hospital.
As the news of police seizing the cash spread, trust member and Sai Baba's nephew R.J. Ratnakar visited Yajur Mandir Sunday morning. He was accompanied by another member S.V. Giri.
Meanwhile, police in Puttaparthi started checking of vehicles at exit points. Police reportedly seized two bags from a bus passenger but it was not immediately known if they contained cash.
Taking a serious note of the happenings, the Andhra Pradesh government said it would intervene if the trust was found not discharging its responsibilities.
Revenue Minister Raghuveera Reddy, who hails from Anantapur district, said action would be taken if anyone was found guilty.
Source: IANS
Dalit girl raped, minor stabbed in eyes while resisting rape
A minor Dalit girl in Kannauj district was beaten by two teenagers and stabbed in her eyes when she resisted their attempt to rape her. In another incident, another Dalit girl was allegedly raped by a youth at gunpoint in Basti district on Saturday.
The Kannauj incident was reported from Bhurpurwa Mauja Dudwa Buzurg village under the Gursahaiganj police station area and it occurred on June 14. The 14-year-old girl had left her house at around 6 a.m. when she was accosted by two village youths.
When she resisted their attempt to rape her, the girl was repeatedly stabbed in her eyes. Found lying in the field, the victim was rushed to the district hospital and then referred to Hallet Hospital in Kanpur.
Reports quoting the doctors attending on the girl said the cornea of her left eye was completely damaged and there was no chance of repair.
An official spokesman said here on Sunday that a case was filed against the accused.
The spokesman said sub-inspector Shiv Shankar Singh and constable Fakhruddin of the Gursahaiganj station had been suspended for failing to lodge the FIR when the incident was reported to them on June 14. On the Basti incident, Principal Secretary, Information, Prashant Trivedi said the alleged rape was committed by a youth, Shakti Singh, in Ranipur Bolaodi village on Saturday.
CWG Scam: Shunglu finds lapses in Shashi Tharoor's appointment
The Shunglu Committee has found irregularities in the appointment of Congress MP Shashi Tharoor as an international consultant to advise Commonwealth Games Organising Committee about host of activities related to the sporting event.
The Committee has found that "prices were dictated" at Tharoor's term for his engagement with the Games organising body. "In the case of catering consultant Ajay Grover and in case of another consultant Shashi Tharoor, prices were dictated at their terms," the Shunglu Committee noted in its fifth report on the OC which was submitted to the Prime Minister's Office.
The report said Tharoor charged $30,000 (approximately Rs 13 lakh) as attendance fees for 12 days during September 2008 and January 2009.
It cited a copy of a letter written to an OC functionary, dated July 25, 2008 purportedly from Tharoor indicating his fees as $2,500 per day, local travel arrangements, first class air travel, 5 star hotel accommodation including all facilities.
Accordingly, a proposal was made by Ramesh Babu, one of the OC office bearers, on July 28, 2010 for consideration.
The Executive Management Committee had on July 31, 2008 approved appointment of Tharoor accepting all his conditions to advise OC concerning engaging the city, national and international communities from time to time along with Chairman of Organising Committee CWG 2010.
Tharoor is a Congress MP from Thiruvananthapuram.
"When Shashi Tharoor was contacted for details of his travels in connection with the consultancy, he informed on February 4, 2011 inter alia that 'I was consultant for international and national engagement and promotion of the youth games, not the CWG itself' and that 'the consultancy fee charged for was token sum, far below the fee that I used to command per speech as a speaker'," the report said.
He was paid $26,629 (about Rs 11 lakh) through cheque after deduction of tax on July 6, 2009. An additional Rs 4.34 lakh was paid for his airfare. "Since only the copies of these above mentioned letters were provided, the management was requested to provide the original letters from Tharoor. Besides, management was requested to provide a copy of the consultancy contract with the terms of references and deliverables and the functional area head to whom he was attached and if any document was prepared by him as part of the consultancy contract. Till the date of this report, these documents have not been furnished," Shunglu said in his report.
The report, containing relevant extracts of findings, has been sent to Sports Ministry for necessary action.
Prime Minister Manmohan Singh had on October 25 last year appointed a committee under the chairmanship of former Comptroller and Auditor General VK Shunglu to look into alleged corruption in organising the last year's Commonwealth Games.
Source: PTI
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Senior police officer quizzed over Mumbai journalist murder
The city police, probing the killing of veteran crime reporter Jyotirmoy Dey, has questioned a senior police officer in connection with the case.
"Assistant Commissioner of Police (ACP) Anil Mahabole was questioned for several hours yesterday. His statement was recorded and he was allowed to go. During the interrogation Mahabole claimed that he had cordial relations with Dey and he had no role in the murder," a top crime branch official said.
We may summon him again if required, the officer added.
Mahabole, who was under scanner following the murder, was abruptly shunted to Local Arms Control Room in suburban Naigaon from the in-charge post of Azad Maidan division in south Mumbai after the incident on June 13.
A day later, he claimed that he was being falsely implicated in the case and the allegations against him were absurd. "The allegations against me in the case (Dey's killing) are absurd and wrong. I have nothing to do with the case. I hope the investigating officials would be able to detect the case early and catch the culprits soon to clear the air," he had said.
Source: PTI
PM should be out of Lokpal till he demits office: Sibal
New Delhi: The Government on Saturday made it clear its opposition to bringing the post of Prime Minister under the purview of Lokpal till he/she demits office and ruled out opening the conduct of MPs inside Parliament as also the higher judiciary to scrutiny of the proposed ombudsman.
"Within the government, we feel prima facie, the Prime Minister should not be covered (under the Lokpal). But at the same time we want to make sure that if he demits office, he should not be exonerated from prosecution," said HRD Minister Sibal who is part of the joint drafting committee on Lokpal.
However, he said, the five ministers in the joint committee were willing to be persuaded to bring the Prime Minister under the ambit of the anti-corruption legislation if the civil society side gives a "compelling argument".
Contending that it was not the question of "an individual, Manmohan Singh" but "an institution", he said on Karan Thapar's Devil's Advocate programme, "Which Prime Minister in office anywhere in the world has been prosecuted in the world? Please tell me, please give me an example."
The government is also "clear" that the conduct of MPs inside Parliament should not come under the Lokpal, he said.
"What happens inside the House, the Speaker and the House should deal with it...and not the Lokpal. We can have a mechanism within the House where sanction can be given for investigation once the Ethics Committee concludes that there is a criminal offence," he argued.
He said the government was against bringing higher judiciary under Lokpal's ambit but open to look into civil society's suggestions on corruption there in the Judicial Accountability Bill "if they are acceptable to the government".
Speaking two days ahead of the last meeting of the Lokpal Bill drafting committee, Sibal was of the view that the proposed legislation should deal with corruption cases at higher level, otherwise covering 40 lakh odd central government employees would require a massive infrastructure independent of government.
At the same time, he said the government was flexible on the issue of inclusion of officials below Joint Secretary level under the Lokpal.
He was also not in favour of bringing CBI and CVC under Lokpal saying, "unnecessarily there is no need to destroy CBI (or CVC)" while having a separate investigation wing for the ombudsman.
Asked about the fast announced by Anna Hazare from August 16, he said the government will see to any step that the civil society activists take "outside drafting" the bill.
He said people rallied behind Hazare during his protest in April as they were upset with corruption but claimed most of them do not know what is Lokpal Bill.
"Anna Hazare is like the 'Pied Piper of Hamelin' The tune is lilting and people were upset with corruption just as government is. We want to deal with it. But those who follow him, where they say corruption should be deal with, do not know what the Lokpal Bill is," he said.
Taking a dig at the Gandhian, he said, "if Anna Hazare had been in the Constituent Assembly, there would be no Constitution."
He said fasting was a way of self purification and is "not meant to be an act of aggression. I think a lot of people including Hazare has misunderstood the meaning of fasting."
When referred to the comment by activist Arvind Kejriwal that the government was bringing a "jokepal" bill, Sibal said it was the time to be serious about giving the country a strong anti-corruption legislation.
"Abuse and insults should stop...let us not trivialise the subject by calling it a Jokepal," he said.
Sibal disagreed when asked whether the government gave too much space to the civil society, saying with changing circumstances, one needs to have a change in attitude.
Queried whether the Sonia Gandhi-led National Advisory Committee was doing the same as the Hazare team, he said the members of the NAC chip in with good advice but were not the ones "who go to Jantar Mantar and fast".
"There are huge areas of agreements which are not placed in public domain," he said in veiled reference to civil society members' claims that there were large areas of disagreement," he said.
Sibal said the differences with the civil society were "not irreconciliable" as negotiations were meant to bridge differences and not for increasing differences.
"We will try and resolve as much (differences) as possible...When the hurdle comes, we will see...The question is the extent of the area the Lokpal wishes to occupy," he said.
Source: PTI
Hegde not in favour of Hazare going on fast from August 16
Bangalore: Karnataka Lokayukta Santosh Hegde, a Lokpal Bill drafting committee member, says he is not in favour of Anna Hazare undertaking his planned fast from August 16 if a strong Lokpal Bill was not prepared.
Hegde also said on Saturday he was apprehensive about the final outcome of the proposed anti-corruption bill as it could be a watered down version of what was originally envisaged.
"Annaji must continue his fight against corruption, personally. He must not go on any hunger strike immediately. He must go around the country and inform people about the consequences of corruption and on development," Hegde told PTI. Hazare early this week threatened to go on fast again from August 16 if a strong Lokpal Bill is not ready.
Hegde also said that he had advised the Gandhian not to go ahead since he has tremendous public support. The former Supreme Court judge said he would not quit the drafting committee but would not be present in the next meeting of the panel on June 20 owing to prior engagements.
Hegde said he would not go to the fasting place or take to the streets as he continued to occupy the post of Lokayukta in Karnataka till August 2.
"The discussion on the bill is nearly over and after the last meeting...of what you read between two parties, they do not seem to see eye to eye and hence I am apprehensive of the outcome of this effort," a candid Hegde said.
"They will bring a bill for a certain, but how strong the bill is going to be is a question," he said.
Voicing his doubts, he said, "They do not want the PM to come under its scope, they do not want the judiciary, they do not want military purchases being investigated nor the central government employees nor the corrupt conduct of MPs outside the House but having implications inside House."
On the CBI being kept out of the RTI Act, he said, "Today they want to keep out CBI, tomorrow it will be the police". Once an investigation was over, there could be sharing of data to ensure transparency, he opined.
Source: PTI
PM under Lokpal: Hegde opposes govt. stand
Bangalore: Karnataka Lokayukta Santosh Hegde on Sunday flayed the government's stand to keep the Prime Minister out of the purview of Lokpal till he demits office, pointing to the possibilities of evidences being destroyed and also wriggling out by citing "error of judgement" in such cases.
"That (keeping PM out of Lokpal) will not serve the purpose of having an effective investigation because there will not be any trails of the misconduct," Mr. Hegde, a member of the Lokpal drafting committee, told PTI in an interview.
If Lokpal were to conduct investigation after Prime Minister demitted office, there are possibilities of evidences being "swept clean" before that and there could be arguments that it was "error of judgement" (on the part of PM) and it is not a case of corruption, he said.
Mr. Hegde, a former Supreme Court judge, was responding to questions on the government making clear its opposition to bringing the post of Prime Minister within the ambit of Lokpal till he demitted office.
"Prime Minister was never out of it (Lokpal). Constitution never contemplated Prime Minister to be out of it," Mr. Hegde said, adding that the Constitution never contemplated anybody in the country, except the President, out of the purview of the Prevention of Corruption Act.
On Saturday, Union HRD Minister Kapil Sibal and joint drafting committee member said, "Within the government, we feel prima facie, the Prime Minister should not be covered (under the Lokpal). But at the same time we want to make sure that if he demits office, he should not be exonerated from prosecution."
Source: PTI
Mamata talks tough at India Inc meet
Kolkata: The message from the month-old Trinamool Congress (TMC) government in West Bengal under Chief Minister Mamata Banerjee is clear — it will not tolerate delay in implementation of big ticket industrial projects.
During her investors' meet on Saturday, Banerjee almost came down heavily on the delay in implementation of the Rs 35,000-crore JSW Steel Salboni project in this context. She said, the fact that of the 4,000-odd investment proposals in Bengal since 1991, only 1,500 had borne fruit was thoroughly unacceptable to 'this' government.
"Land is there with certain industrial groups, but they are not doing it. Sajjan Jindal Group Salboni industrial...," Banerjee said, while she was stopped in between by the state industry and commerce minister, Partha Chatterjee. She toned it down to, "I know they need time also. Raghunathpur (a Jai Balaji steel plant project) is also pending. Chart out your problems, you have to do it fast," she said.
JSW Steel's 10-million-tonne-capacity project was running behind schedule. The company has started work on its township, while construction for the steel plant is expected to be taken up after the monsoon.
Chatterjee clarified to mediapersons after the interaction that the government had asked for a status report.
"I want to know the exact status of the project. There are only 1,310 projects being implemented out of 4,710 proposed since 1991. First of all, we will check whether or not land that has been asked for is even required in all such projects. A lot of dust has settled, we have to clear it," he said.
In a two-hour interaction with industry chieftains, Banerjee reiterated the government's stance that it would not assist the industry in acquiring land, while stating that the focus of her government's industrialisation drive would be through information technology (IT) and tourism projects.
"We do not have unlimited land, so we will make do with available resources and industries like IT and tourism. No huge land is required for this and can be developed through hubs. Industry, if it wants to acquire land, can do it on its own," she said.
To facilitate the investment process in the state, she also announced the formation of a 23-member core committee with members from industry bodies, ministers and representatives from major departments. "There are bodies at the Centre also, like the Prime Minister's advisory council, it hardly meets. I know how it works. But this core committee will meet once in every 15 days," beamed the state finance minister, Amit Mitra, appearing to be all praise for the body.
Banerjee's stance on land acquisition, however, appeared to have disappointed industry, which had in the past found it difficult to acquire land for large projects on its own. The sentiments were voiced by ITC chairman Y C Deveshwar.
"Land had been promised to us five years back and now we have been told to go and buy it ourselves. It is possible to buy small amount of land but one cannot buy large tracts. It will be difficult for investors to come if they find procurement of land is a problem," he said.
Banerjee disregarded openly the problems faced by industry in acquiring land. When a businessman voiced problems with middlemen and unwanted elements, she said: "Middlemen are there; they will always be there. You have to work with them," she said. Adi Godrej, who said he had investments worth Rs 2,000 crore in Bengal already, was one of the few big-ticket national industry faces present at the event. He said, Banerjee should consider repealing the Urban Land Ceiling Act (ULCA).
"I think the key to Bengal's growth will be the housing industry. For this the state has to amend the ULCA, a redundant act. That aside, we are very interested in investing further in the state," he said.
The meet saw paltry participation from national industry bigwigs. Anand Mahindra received an invitation yesterday and was unable to make it due to prior commitments, but sent his representative.
The meet, which was the first of its kind in Bengal, saw paltry commitment to investment. One such intent came from Shivinder Mohan Singh, MD, Fortis Healthcare.
"We have a 500-bed facility worth Rs 300 crore in Bengal, which we want to double soon," he said. Banerjee, who rode to victory on her Ma Mati Manush stance appeared more interested in healthcare infrastructure than in investment. "You do your business. That is fine. If you have any pro-poor proposal, then tell us," she said. The chief minister also claimed US and Japan had evinced interest in the state and asked for proposals FDI from Bengal.
Source: Business Standard
Tax pitch for Mauritius cash
India wants capital gains tax imposed on investments routed through the island nation; DTAA talks to resume.
New Delhi: New Delhi will pitch for imposition of capital gains tax in India on investments through Mauritius. The negotiations with the island country on amending a tax treaty are expected to resume soon, after a gap of around three years.
"India wants that it (capital gains tax) should be imposed where source originates, and the source is India because gains are in India. As per the (present) treaty, it is with the resident country, which is Mauritius. It does not impose capital gains tax," Central Board of Direct Taxes Chairman Prakash Chandra said here on Saturday.
As pressure on the government mounts on the issue of black money stashed away by Indians abroad, it also expects the revised tax treaty with Switzerland to be operational soon as the parliament of that country has approved it and the Cabinet here has given its nod.
It was primarily the capital gains tax issue, which broke the negotiations on Double Taxation Avoidance Agreement (DTAA) between India and Mauritius in 2008. The latter has now shown willingness to renegotiate the treaty, according to Chandra.
However, the bank information under the revised treaty could be obtained only from April 1 and not with retrospective effect prior to that, said Chandra.
But, will Mauritius agree to India's demand? Chandra said the island nation was willing to have a fresh look. "They (Mauritius) said we could start afresh. We are quite hopeful," he said, adding that negotiations would begin soon.
When asked whether India would ask for taxing capital gains of those who routed investment through Mauritius or the companies based in Mauritius, the CBDT chairman said the demand would not be confined to anyone but would be for all. He hastened to add: "If these are genuine Mauritius companies, it could be a different thing."
Chandra said Mauritius was providing bank information without amendments in DTAA. "However, any such information from Mauritius or Switzerland could be for specific purposes and cannot be fishing expeditions," he added.
A joint working group was constituted in 2006 to negotiate DTAA with Mauritius and its last meeting was held in 2008. The changes in the treaty would change the way foreign investors structured their investments in India.
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Lokpal Bill
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Official Name: Republic of India
PROFILE
Geography
Area: 3.29 million sq. km. (1.27 million sq. mi.); about one-third the size of the U.S.
Cities: Capital--New Delhi (pop. 12.8 million, 2001 census). Other major cities--Mumbai, formerly Bombay (16.4 million); Kolkata, formerly Calcutta (13.2 million); Chennai, formerly Madras (6.4 million); Bangalore (5.7 million); Hyderabad (5.5 million); Ahmedabad (5 million); Pune (4 million).
Terrain: Varies from Himalayas to flat river valleys and deserts in the west.
Climate: Alpine to temperate to subtropical monsoon.
People
Nationality: Noun and adjective--Indian(s).
Population (2010 est): 1.17 billion; urban 29%.
Annual growth rate: 1.376%.
Density: 324/sq. km.
Ethnic groups: Indo-Aryan 72%, Dravidian 25%, others 3%. While the national census does not recognize racial or ethnic groups, it is estimated that there are more than 2,000 ethnic groups in India.
Religions: Hindu 80.5%, Muslim 13.4%, Christian 2.3%, Sikh 1.9%, other groups including Buddhist, Jain, Parsi within 1.8%, unspecified 0.1% (2001 census).
Languages: Hindi, English, and 16 other official languages.
Education: Years compulsory--K-10. Literacy--61%.
Health: Infant mortality rate--49.13/1,000. Life expectancy--66.46 years (2009 est.).
Work force (est.): 467 million. Agriculture--52%; industry and commerce--14%; services andgovernment--34%.
Government
Type: Federal republic.
Independence: August 15, 1947.
Constitution: January 26, 1950.
Branches: Executive--president (chief of state), prime minister (head of government), Council of Ministers (cabinet). Legislative--bicameral parliament (Rajya Sabha or Council of States, and Lok Sabha or House of the People). Judicial--Supreme Court.
Political parties: Indian National Congress (INC), Bharatiya Janata Party (BJP), Communist Party of India-Marxist, and numerous regional and small national parties.
Political subdivisions: 28 states,* 7 union territories (including National Capital Territory of Delhi).
Suffrage: Universal over 18.
Economy
GDP (FY 2009 est): $1.095 trillion ($1,210 billion).
Real growth rate (2009 est.): 6.5%.
Per capita GDP (PPP, FY 2008): $3,100.
Natural resources: Coal, iron ore, manganese, mica, bauxite, chromite, thorium, limestone, barite, titanium ore, diamonds, crude oil.
Agriculture: 17% of GDP. Products--wheat, rice, coarse grains, oilseeds, sugar, cotton, jute, tea.
Industry: 28.2% of GDP. Products--textiles, jute, processed food, steel, machinery, transport equipment, cement, aluminum, fertilizers, mining, petroleum, chemicals, and computer software.
Services and transportation: 54.9% of GDP.
Trade: Exports (FY 2009 est)--$164.3 billion; engineering goods, petroleum products, precious stones, cotton apparel and fabrics, gems and jewelry, handicrafts, tea. Services exports $101.2 billion in 2008-09, represent more than one third of India's total exports.
Software exports--$35.76 billion. Imports (FY 2009 est)--$268.4 billion; petroleum, machinery and transport equipment, electronic goods, edible oils, fertilizers, chemicals, gold, textiles, iron and steel. Major trade partners--U.S., China, U.A.E., EU, Russia, Japan.
PEOPLE
Although India occupies only 2.4% of the world's land area, it supports over 15% of the world's population. Only China has a larger population. India's median age is 25, one of the youngest among large economies. About 70% live in more than 550,000 villages, and the remainder in more than 200 towns and cities. Over the thousands of years of its history, India has been invaded from the Iranian plateau, Central Asia, Arabia, Afghanistan, and the West; Indian people and culture have absorbed and modified these influences to produce a remarkable racial and cultural synthesis.
Religion, caste, and language are major determinants of social and political organization in India today. However, with more job opportunities in the private sector and better chances of upward social mobility, India has begun a quiet social transformation in this area. The government has recognized 18 official languages; Hindi, the national language, is the most widely spoken, although English is a national lingua franca. Although 81% of its people are Hindu, India also is the home of more than 138 million Muslims--one of the world's largest Muslim populations. The population also includes Christians, Sikhs, Jains, Buddhists, and Parsis.
The Hindu caste system reflects Indian occupational and socially defined hierarchies. Ancient Sanskrit sources divide society into four major categories, priests (Brahmin), warriors (Kshatriya), traders/artisans (Vaishya) and farmers/laborers (Shudra). Although these categories are understood throughout India, they describe reality only in the most general terms. They omit, for example, the tribal people and those outside the caste system formerly known as "untouchables", or dalits. In reality, Indian society is divided into thousands of jatis--local, endogamous groups based on occupation--and organized hierarchically according to complex ideas of purity and pollution. Discrimination based on caste is officially illegal, but remains prevalent, especially in rural areas. Nevertheless, the government has made strong efforts to minimize the importance of caste through active affirmative action and social policies. Moreover, caste is often diluted if not subsumed in the economically prosperous and heterogeneous cities, where an increasing percentage of India's population lives. In the countryside, expanding education, land reform and economic opportunity through access to information, communication, transport, and credit are helping to lessen the harshest elements of the caste system.
HISTORY
The people of India have had a continuous civilization since 2500 B.C.E., when the inhabitants of the Indus River valley developed an urban culture based on commerce and sustained by agricultural trade. The Harappan Civilization, as it came to be known, declined around 1500 B.C.E., most likely due to ecological changes.
During the second millennium B.C.E., pastoral, Aryan-speaking tribes migrated from the northwest into the subcontinent, settled in the middle Ganges River valley, and adapted to antecedent cultures. Alexander the Great expanded across Central Asia during the 4th century B.C.E., exposing India to Grecian influences. The Maurya Empire came to dominate the Indian subcontinent during the 3rd century B.C.E., reaching its greatest height under Emperor Ashoka.
The political map of ancient and medieval India was made up of myriad kingdoms with fluctuating boundaries. At the height of the Roman Empire under Emperor Hadrian during the 2nd century C.E., the Kushan Empire, originating in ancient Bactria, conquered north India and the trans-Indus region ushering in a period of trade and prosperity. In the 4th and 5th centuries C.E., northern India was unified under the Gupta Dynasty. During this period, known as India's Golden Age, Hindu culture and political administration reached new heights.
Islam spread across the subcontinent over a period of 700 years. In the 10th and 11th centuries, Turks and Afghans invaded India and established the Delhi Sultanate. In the early 16th century, Babur, a Turkish-Mongol adventurer and distant relative of Timurlane and Genghis Khan, established the Mughal Dynasty, which lasted for 200 years. South India followed an independent path, but by the 17th century large areas of South India came under the direct rule or influence of the expanding Mughal Empire. While most of Indian society in its thousands of villages remained untouched by the political struggles going on around them, Indian courtly culture evolved into a unique blend of Hindu and Muslim traditions.
The first British outpost in South Asia was established by the English East India Company in 1619 at Surat on the northwestern coast. Later in the century, the Company opened permanent trading stations at Madras (now Chennai), Bombay (now Mumbai), and Calcutta (now Kolkata), each under the protection of native rulers.
The British expanded their influence from these footholds until, by the 1850s, they controlled most of present-day India, Pakistan, Sri Lanka, and Bangladesh. In 1857, an unsuccessful rebellion in north India led by Indian soldiers seeking the restoration of the Mughal Emperor led the British Parliament to transfer political power from the East India Company to the Crown. Great Britain began administering most of India directly and maintained both political and economic control, while controlling the rest through treaties with local rulers. Imperial India became the "crown jewel" of the rapidly expanding British Empire.
In the late 1800s, the first steps were taken toward self-government in British India with the appointment of Indian councilors to advise the British Viceroy and the establishment of Provincial Councils with Indian members; the British subsequently widened participation in Legislative Councils. Beginning in 1920, Indian leader Mohandas K. Gandhi transformed the Indian National Congress political party into a mass movement to campaign against British colonial rule. The party used both parliamentary and nonviolent resistance and non-cooperation to agitate for independence. During this period, however, millions of Indians served with honor and distinction in the British Indian Army, including service in both World Wars and countless other overseas actions in service of the Empire.
With Indians increasingly united in their quest for independence, a war-weary Britain led by Labor Prime Minister Clement Attlee began in earnest to plan for the end of its suzerainty in India. On August 15, 1947, India became a dominion within the Commonwealth, with Jawaharlal Nehru as Prime Minister. Strategic colonial considerations, as well as political tensions between Hindus and Muslims, led the British to partition British India into two separate states: India, with a Hindu majority; and Pakistan, which consisted of two "wings," East and West Pakistan--currently Bangladesh and Pakistan--with Muslim majorities. India became a republic, but chose to continue as a member of the British Commonwealth, after promulgating its constitution on January 26, 1950.
After independence, the Indian National Congress, the party of Mohandas K. Gandhi and Jawaharlal Nehru, ruled India under the leadership first of Nehru and then his daughter (Indira Gandhi) and grandson (Rajiv Gandhi), with the exception of brief periods in the 1970s and 1980s and during a short period in 1996. From 1998-2004, a coalition led by the Bharatiya Janata Party governed.
Prime Minister Nehru governed the nation until his death in May 1964. Nehru was succeeded by Lal Bahadur Shastri, who also died in office in January 1966. In one month, power passed to Nehru's daughter, Indira Gandhi, Prime Minister from 1966 to 1977. In June 1975, beset with deepening political and economic problems, Mrs. Gandhi declared a state of emergency and suspended many civil liberties. Seeking a mandate at the polls for her policies, she called for elections in March 1977, only to be defeated by Morarji Desai, who headed the Janata Party, an amalgam of five opposition parties.
In 1979, Desai's government crumbled. Charan Singh formed an interim government, which was followed by Mrs. Gandhi's return to power in January 1980. On October 31, 1984, Mrs. Gandhi was assassinated by her Sikh bodyguards, which led to the killings of thousands of Sikhs in New Delhi. Her son, Rajiv, was chosen by the Congress (I)--for "Indira"--Party to take her place. His Congress government was plagued with allegations of corruption resulting in an early call for national elections in November 1989.
Although Rajiv Gandhi's Congress Party won more seats than any other single party in the 1989 elections, he was unable to form a government with a clear majority. The Janata Dal, a union of opposition parties, then joined with the Hindu-nationalist Bharatiya Janata Party (BJP) on the right and the Communists on the left to form the government. This loose coalition collapsed in November 1990, and the Janata Dal, supported by the Congress (I), came to power for a short period, with Chandra Shekhar as Prime Minister. That alliance also collapsed, resulting in national elections in June 1991.
While campaigning in Tamil Nadu on behalf of his Congress (I) party, Rajiv Gandhi was assassinated on May 21, 1991 by Tamil extremists from Sri Lanka unhappy with India's military intervention in that country's civil war. In the elections, Congress (I) won 213 parliamentary seats and returned to power at the head of a coalition, under the leadership of P.V. Narasimha Rao. This Congress-led government, which served a full 5-year term, initiated a gradual process of economic liberalization under then-Finance Minister Manmohan Singh. These reforms opened the Indian economy to global trade and investment. India's domestic politics also took new shape, as the nationalist appeal of the Congress Party gave way to traditional caste, creed, regional, and ethnic alignments, leading to the founding of a plethora of small, regionally based political parties.
The final months of the Rao-led government in the spring of 1996 were marred by several major corruption scandals, which contributed to the worst electoral performance by the Congress Party in its history. The Hindu-nationalist BJP emerged from the May 1996 national elections as the single-largest party in the Lok Sabha but without a parliamentary majority. Under Prime Minister Atal Bihari Vajpayee, the subsequent BJP coalition lasted only 13 days. With all political parties wishing to avoid another round of elections, a 14-party coalition led by the Janata Dal formed a government known as the United Front, under the former Chief Minister of Karnataka, H.D. Deve Gowda. His government collapsed after less than a year, when the Congress Party withdrew its support in March 1997. Inder Kumar Gujral replaced Deve Gowda as the consensus choice for Prime Minister at the head of a 16-party United Front coalition.
In November 1997, the Congress Party again withdrew support from the United Front. In new elections in February 1998, the BJP won the largest number of seats in Parliament--182--but fell far short of a majority. On March 20, 1998, the President approved a BJP-led coalition government with Vajpayee again serving as Prime Minister. On May 11 and 13, 1998, this government conducted a series of underground nuclear tests, spurring U.S. President Bill Clinton to impose economic sanctions on India pursuant to the 1994 Nuclear Proliferation Prevention Act.
In April 1999, the BJP-led coalition government fell apart, leading to fresh elections in September-October. The National Democratic Alliance--a new coalition led by the BJP--won a majority to form the government with Vajpayee a Prime Minister in October 1999. The NDA government was the first coalition in many years to serve a full 5-year term, providing much-needed political stability.
The Kargil conflict in May-July 1999 and an attack by terrorists on the Indian Parliament in December 2001 led to increased tensions with Pakistan.
Hindu nationalists supportive of the BJP agitated to build a temple on a disputed site in Ayodhya, destroying a 17th century mosque there in December 1992, and sparking widespread religious riots in which thousands, mostly Muslims, were killed. In February 2002, 57 Hindu volunteers returning from Ayodhya were burnt alive when their train caught fire. Alleging that the fire was caused by Muslim attackers, anti-Muslim rioters throughout the state of Gujarat killed over 2,000 people and left 100,000 homeless. The Gujarat state government and the police were criticized for failing to stop the violence and in some cases for participating in or encouraging it.
The ruling BJP-led coalition was defeated in a five-stage election held in April and May of 2004. The Congress Party, under the leadership Sonia Gandhi, the widow of Rajiv Gandhi, formed a coalition government, known as the United Progressive Alliance (UPA). It took power on May 22 with Dr. Manmohan Singh as Prime Minister. The UPA's victory was attributed to dissatisfaction among poorer rural voters that the prosperity of the cities had not filtered down to them, and rejection of the BJP's Hindu nationalist agenda.
The Congress-led UPA government has continued many of the BJP's foreign policies, particularly improving relations with the U.S. Prime Minister Singh and President George W. Bush concluded a landmark U.S.-India strategic partnership framework agreement on July 18, 2005. In March 2006, President Bush visited India to further the many initiatives that underlie the new agreement. The strategic partnership is anchored by a historic civil nuclear cooperation initiative and includes cooperation in the fields of space, high-technology commerce, health issues, democracy promotion, agriculture, and trade and investment.
In July 2008, the UPA won a confidence motion with 275 votes in its favor and 256 against.
In late November 2008, terrorists killed at least 164 people in a series of coordinated attacks around Mumbai. Prime Minister Singh promised a thorough investigation and Home Minister Chidambaram pledged significant reforms to improve India's counterterrorism agencies.
The Congress-led UPA coalition gained a more stable majority following the May 2009 elections, riding mainly on the support of rural voters. Manmohan Singh became the first Prime Minister since Jawaharlal Nehru to return to power after completing a full 5-year term. In July 2009, Secretary of State Hillary Clinton traveled to India to launch the "Strategic Dialogue," which called for collaboration in a number of areas, including climate change, trade, education, and counterterrorism. Prime Minister Manmohan Singh is visiting Washington, DC in late November 2009 for the first state visit of the Obama administration.
GOVERNMENT
According to its constitution, India is a "sovereign, socialist, secular, democratic republic." Like the United States, India has a federal form of government. However, the central government in India has greater power in relation to its states, and has adopted a British-style parliamentary system.
The government exercises its broad administrative powers in the name of the president, whose duties are largely ceremonial. A special electoral college elects the president and vice president indirectly for 5-year terms. Their terms are staggered, and the vice president does not automatically become president following the death or removal from office of the president.
Real national executive power is centered in the Cabinet (senior members of the Council of Ministers), led by the prime minister. The president appoints the prime minister, who is designated by legislators of the political party or coalition commanding a parliamentary majority in the Lok Sabha (lower house). The president then appoints subordinate ministers on the advice of the prime minister.
India's bicameral Parliament consists of the Rajya Sabha (Council of States) and the Lok Sabha (House of the People). The Council of Ministers is responsible to the Lok Sabha.
The legislatures of the states and union territories elect 233 members to the Rajya Sabha, and the president appoints another 12. The members of the Rajya Sabha serve 6-year terms, with one-third up for election every 2 years. The Lok Sabha consists of 545 members, who serve 5-year terms; 543 are directly elected, and two are appointed.
India's independent judicial system began under the British, and its concepts and procedures resemble those of Anglo-Saxon countries. The Supreme Court consists of a chief justice and 25 other justices, all appointed by the president on the advice of the prime minister.
India has 28 states* and 7 union territories. At the state level, some legislatures are bicameral, patterned after the two houses of the national parliament. The states' chief ministers are responsible to the legislatures in the same way the prime minister is responsible to Parliament.
Each state also has a presidentially appointed governor, who may assume certain broad powers when directed by the central government. The central government exerts greater control over the union territories than over the states, although some territories have gained more power to administer their own affairs. Local governments in India have less autonomy than their counterparts in the United States. Some states are trying to revitalize the traditional village councils, or Panchayats, to promote popular democratic participation at the village level, where much of the population still lives. Over half a million Panchayats exist throughout India.
Principal Government Officials
President--Pratibha D. Patil
Vice President--Mohammed Hamid Ansari
Prime Minister--Manmohan Singh
Home Minister--P. Chidambaram
Minister of External Affairs--Pranab Mukherjee
Ambassador to the U.S.--Meera Shankar
Ambassador to the UN--Hardeep Singh Puri
India maintains an embassy in the United States at 2107 Massachusetts Avenue NW, Washington, DC 20008 (tel. 202-939-7000, fax 202-265-4351, emailindembwash@indiagov.org and consulates general in New York, Chicago, Houston, and San Francisco. The embassy's web site is http://www.indianembassy.org/.
POLITICAL CONDITIONS
Emerging as the nation's single largest party in the May 2009 Lok Sabha election, Congress currently leads a coalition UPA government under Prime Minister Manmohan Singh. Party President Sonia Gandhi was re-elected by the Party National Executive in May 2005. Also a Member of Parliament, she heads the Congress Lok Sabha delegation. Congress prides itself as being a secular, left of center party, with a long history of political dominance. Although its performance in national elections had steadily declined during the previous 12 years, its surprise victory in 2004 was a result of recruiting strong allies into the UPA, the anti-incumbency factor among voters, and its courtship of India's many poor, rural and Muslim voters. Congress political fortunes suffered badly in the 1990s, as many traditional supporters were lost to emerging regional and caste-based parties, such as the Bahujan Samaj Party and the Samajwadi Party, but have rebounded since its May 2004 ascension to power. It currently rules either directly or in coalition with its allies in 10 states. In November 2005, the Congress regained the Chief Ministership of Jammu and Kashmir state, under a power-sharing agreement.
The Bharatiya Janata Party (BJP), led by Shri Nitinn Gadkari, holds the second-largest number of seats in the Lok Sabha. Sushma Swaraj is Leader of the Opposition. The Hindu-nationalist BJP draws its political strength mainly from the "Hindi Belt" in the northern and western regions of India. Former Foreign Minister Jaswant Singh was expelled from the party in August 2009 after authoring a book which portrayed the founder of Pakistan, Muhammad Ali-Jinnah, in a positive light, though he was allowed to rejoin in June 2010.
The party holds power without outside support in the states of Chhattisgarh, Gujarat, Himachal Pradesh, Uttarakhand, Karnataka and Madhya Pradesh; it is part of ruling coalitions in few other states including Bihar, Orissa and Punjab. Popularly viewed as the party of the northern upper caste and trading communities, the BJP made strong inroads into lower castes in recent national and state assembly elections. The party must balance the competing interests of Hindu nationalists, (who advocate construction of a temple on a disputed site in Ayodhya, and other primarily religious issues including the propagation of anti-conversion laws and violence against religious minorities), and center-right modernizers who see the BJP as a party of economic and political reform.
Four Communist and Marxist parties are united in a bloc called the "Left Front," which controls 59 parliamentary seats. The Left Front rules the states of West Bengal and Kerala. The Left Front provided external support to the UPA government until a July 2008 confidence vote. It advocates a secular and Communist ideology and opposes many aspects of economic liberalization and globalization, resulting in dissonance with Prime Minister Singh's liberal economic approach. The Maoist-inspired Naxalite insurgency continues to be a major internal security threat, affecting large parts of eastern India. Since the Communists have been in a retreat in West Bengal the Trinamool Congress Party is likely to perform well in the upcoming 2011 state elections.
ECONOMY
India has fared the global financial crisis remarkabley well. Despite the 2008-2009 downturn, the government expects the annual GDP growth to return to around 9%. India's population is estimated at more than 1.1 billion and is growing at 1.55% a year. It has the world's 12th largest economy--and the third largest in Asia behind Japan and China--with total GDP in 2008 of around $1.21 trillion ($1,210 billion). Services, industry, and agriculture account for 54%, 29%, and 18% of GDP respectively. India is capitalizing on its large numbers of well-educated people skilled in the English language to become a major exporter of software services and software workers, but more than half of the population depends on agriculture for its livelihood. 700 million Indians live on $2 per day or less, but there is a large and growing middle class of more than 50 million Indians with disposable income ranging from 200,000 to 1,000,000 rupees per year ($4,166-$20,833). Estimates are that the middle class will grow ten-fold by 2025.
India continues to move forward, albeit haltingly, with market-oriented economic reforms that began in 1991. Reforms include increasingly liberal foreign investment and exchange regimes, industrial decontrol, reductions in tariffs and other trade barriers, opening and modernization of the financial sector, significant adjustments in government monetary and fiscal policies, and more safeguards for intellectual property rights.
The economy has posted an average growth rate of more than 7% in the decade since 1997, reducing poverty by about 10 percentage points. India achieved 9.6% GDP growth in 2006, 9.0% in 2007, and 6.6% in 2008, significantly expanding manufactures through late 2008. Growth for the fiscal year ending March 31, 2009 was initially expected to be between 8.5-9.0%, but has been revised downward by a number of economists to 7.0% or less because of the financial crisis and resulting global economic slowdown. Foreign portfolio and direct investment inflows have risen significantly in recent years. They contributed to the $283.5 billion in foreign exchange reserves by December 2009. Government receipts from the 34-day 3G auction were $14.6 billion.
Economic growth is constrained by inadequate infrastructure, a cumbersome bureaucracy, corruption, labor market rigidities, regulatory and foreign investment controls, the "reservation" of key products for small-scale industries, and high fiscal deficits. The outlook for further trade liberalization is mixed, and a key World Trade Organization (WTO) Doha Ministerial in July 2008 was unsuccessful due to differences between the U.S. and India (as well as China) over market access. India eliminated quotas on 1,420 consumer imports in 2002 and has incrementally lowered non-agricultural customs duties in recent successive budgets. However, the tax structure is complex, with compounding effects of various taxes.
U.S.-India bilateral merchandise trade in 2008 topped nearly $50 billion. Principal U.S. exports are diagnostic or lab reagents, aircraft and parts, advanced machinery, cotton, fertilizers, ferrous waste/scrap metal, and computer hardware. Major U.S. imports from India include textiles and ready-made garments, Internet-enabled services, agricultural and related products, gems and jewelry, leather products, and chemicals.
The rapidly growing software sector is boosting service exports and modernizing India's economy. Software exports crossed $35 billion in FY 2009, while business process outsourcing (BPO) revenues hit $14.8 billion in 2009. Personal computer penetration is 14 per 1,000 persons. The number of cell phone users is expected to rise to nearly 300 million by 2010.
The United States is India's largest investment partner, with a 13% share. India's total inflow of U.S. direct investment was estimated at more than $16 billion through 2008. Proposals for direct foreign investment are considered by the Foreign Investment Promotion Board and generally receive government approval. Automatic approvals are available for investments involving up to 100% foreign equity, depending on the kind of industry. Foreign investment is particularly sought after in power generation, telecommunications, ports, roads, petroleum exploration/processing, and mining.
India's external debt was nearly $230 billion by the end of 2008, up from $126 billion in 2005-2006. Foreign assistance was approximately $3 billion in 2006-2007, with the United States providing about $126 million in development assistance. The World Bank plans to double aid to India to almost $3 billion a year, with focus on infrastructure, education, health, and rural livelihoods.
DEFENSE
The supreme command of the Indian armed forces is vested in the president of India. Policies concerning India's defense, and the armed forces as a whole, are formulated and confirmed by the Cabinet.
The Indian Army numbers over 1.4 million strong and fields 34 divisions. Its primary task is to safeguard the territorial integrity of the country against external threats. The Army has been heavily committed in the recent past to counterterrorism operations in Jammu and Kashmir, as well as the in the Northeast. Its current modernization program focuses on obtaining equipment to be used in combating terror. The Army often provides aid to civil authorities and assists the government in organizing relief operations.
The Indian Navy is by far the most capable navy in the region. The Navy's primary missions are the defense of India and of India's vital sea lines of communication. India relies on the sea for 90% of its oil and natural gas and over 90% of its foreign trade. The Navy currently operates one aircraft carrier with two on order, 15 submarines, and 15 major surface combatants. It is capable of projecting power within the Indian Ocean basin and occasionally operates in the South China Sea, the Mediterranean Sea, and the Arabian Gulf. Fleet introduction of the Brahmos cruise missile, the possible lease of nuclear submarines from Russia, and the introduction of a new aircraft carrier in 2012 will add significantly to the Indian Navy's flexibility and striking power.
Although small, the Indian Coast Guard has been expanding rapidly in recent years. Indian Navy officers typically fill top Coast Guard positions to ensure coordination between the two services. India's Coast Guard is responsible for control of India's huge exclusive economic zone.
Fielding nearly 900 combat aircraft, the Indian Air Force is the world's fourth largest. It is rapidly becoming a 21st century force through modernization, new tactics and the acquisition of modern aircraft, such as the SU-30MKI, a new advanced jet trainer (BAE Hawk) and the indigenously produced advanced light helicopter (Dhruv). In April 2008 six firms submitted proposals to the Indian Government to manufacture 126 multi-role combat aircraft for the Indian Air Force.
FOREIGN RELATIONS
India's size, population, and strategic location give it a prominent voice in international affairs, and its growing economic strength, military prowess, and scientific and technical capacity give it added weight. The end of the Cold War dramatically affected Indian foreign policy. India remains a leader of the developing world and the Non-Aligned Movement (NAM). India is now strengthening its political and commercial ties with the United States, Japan, the European Union, Iran, China, and the Association of Southeast Asian Nations. India is an active member of the South Asian Association for Regional Cooperation (SAARC).
Always an active member of the United Nations, India now seeks a permanent seat on the UN Security Council. Starting in 2011, India will be a non-permanent member of the Security Council. India has a long tradition of participating in UN peacekeeping operations.
Bilateral and Regional Relations:
Pakistan. India and Pakistan have been locked in a tense rivalry since the partition of the subcontinent based on the "two-nations theory" upon achieving independence from Great Britain in 1947. The principal source of contention has been Kashmir, whose Hindu Maharaja at that time chose to join India, although a majority of his subjects were Muslim. India maintains that his decision and subsequent elections in Kashmir have made it an integral part of India. This dispute triggered wars between the two countries in 1947 and 1965 and provoked the Kargil conflict in 1999.
Pakistan and India fought a war in December 1971 following a political crisis in what was then East Pakistan and the flight of millions of Bengali refugees to India. The brief conflict left the situation largely unchanged in the west, where the two armies reached an impasse, but a decisive Indian victory in the east resulted in the creation of Bangladesh.
Since the 1971 war, Pakistan and India have made slow progress toward normalization of relations. In July 1972, Indian Prime Minister Indira Gandhi and Pakistani President Zulfikar Ali Bhutto met in the Indian hill station of Simla. They signed an agreement by which India would return all personnel and captured territory in the west and the two countries would "settle their differences by peaceful means through bilateral negotiations." Diplomatic and trade relations were re-established in 1976.
The 1979 Soviet invasion of Afghanistan caused new strains between India and Pakistan. Pakistan supported the Afghan resistance, while India implicitly supported the Soviet occupation. In the following eight years, India voiced increasing concern over Pakistani arms purchases, U.S. military aid to Pakistan, and Pakistan's nuclear weapons program. In an effort to curtail tensions, the two countries formed a joint commission. In December 1988, Prime Ministers Rajiv Gandhi and Benazir Bhutto concluded a pact not to attack each other's nuclear facilities and initiated agreements on cultural exchanges and civil aviation.
In 1997, high-level Indo-Pakistani talks resumed after a three-year pause. The Prime Ministers of India and Pakistan met twice, and the foreign secretaries conducted three rounds of talks. In June 1997 at Lahore, the foreign secretaries identified eight "outstanding issues" around which continuing talks would be focused. The dispute over the status of Jammu and Kashmir, an issue since partition, remains the major stumbling block in their dialogue. India maintains that the entire former princely state is an integral part of the Indian union, while Pakistan insists upon the implementation of UN resolutions calling for self-determination for the people of the state.
In September 1997, the talks broke down over the structure of how to deal with the issues of Kashmir and peace and security. Pakistan advocated that separate working groups treat each issue. India responded that the two issues be taken up along with six others on a simultaneous basis. In May 1998 India, and then Pakistan, conducted nuclear tests. Attempts to restart dialogue between the two nations were given a major boost by the February 1999 meeting of both Prime Ministers in Lahore and their signing of three agreements. These efforts were stalled by the intrusion of Pakistani-backed forces into Indian-held territory near Kargil in May 1999 (that nearly turned into full scale war), and by the military coup in Pakistan that overturned the Nawaz Sharif government in October the same year. In July 2001, Mr. Vajpayee and General Pervez Musharraf, leader of Pakistan after the coup, met in Agra, but talks ended after two days without result.
After an attack on the Indian Parliament in December 2001, India-Pakistan relations cooled further as India accused Pakistan of involvement. Tensions increased, fueled by killings in Jammu and Kashmir, peaking in a troop buildup by both sides in early 2002.
Prime Minister Vajpayee's April 18, 2003 speech in Srinagar (Kashmir) revived bilateral efforts to normalize relations. In November 2003, Prime Minister Vajpayee and President Musharraf agreed to a ceasefire, which still holds, along the Line-of-Control in Jammu and Kashmir. After a series of confidence building measures, Prime Minister Vajpayee and President Musharraf met on the sidelines of the January 2004 SAARC summit in Islamabad and agreed to commence a Composite Dialogue addressing outstanding issues between India and Pakistan, including Kashmir.
In February 2004, India and Pakistan agreed to restart the "2+6" Composite Dialogue formula, which provides for talks on Peace and Security and Jammu and Kashmir, followed by technical and Secretary-level discussions on six other bilateral disputes: Siachen Glacier, Wuller Barrage/Tulbul Navigation Project, Sir Creek estuary, Terrorism and Drug Trafficking, Economic and Commercial cooperation, and the Promotion of Friendly Exchanges in various fields. The restart of the Composite Dialogue process was especially significant given the almost six years that had transpired since the two sides agreed to this formula in 1997-1998. The UPA government continued the Composite Dialogue with Pakistan. Following the October 2005 earthquake in Kashmir, the two governments coordinated relief efforts and opened access points along the Line-of-Control to allow relief supplies to flow from India to Pakistan and to allow Kashmiris from both sides to visit one another.
The Foreign Secretary talks resumed in November 2006, after a three-month delay following the July 11, 2006 terrorist bombings in Mumbai. The meeting generated modest progress, with the two sides agreeing to establish a joint mechanism on counterterrorism. Since 2006, India and Pakistan have continued to take part in the Composite Dialogue process in an effort to maintain the peace process and strengthen bilateral relations. Since Pakistani elections in February 2008 the Indian Minister of External Affairs and the Indian Foreign Secretary have met with their new counterparts to advance the Composite Dialogue talks, reaffirming a commitment to maintain the ceasefire along the Line-of-Control as well as increasing people-to-people connections through improving cross-border bus services. The July 2008 bombing of the Indian Embassy in Kabul and the Mumbai terrorist attacks in November 2008 have increased tensions between India and Pakistan. Though Prime Minister Singh and Prime Minister Gilani agreed to resume talks following the 2010 SAARC Summit. India continues to insist that Pakistan must do its part to dismantle terror networks operating from its territory and prosecute those who had a hand in planning the Mumbai attacks.
SAARC. Certain aspects of India's relations within the subcontinent are conducted through the South Asian Association for Regional Cooperation (SAARC). Its members are Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka, with the People's Republic of China, Iran, Japan, European Union, Republic of Korea, and the U.S. as observers. Established in 1985, SAARC encourages cooperation in agriculture, rural development, science and technology, culture, health, population control, narcotics, and terrorism.
SAARC has intentionally stressed these "core issues" and avoided those which could prove divisive, although political dialogue is often conducted on the margins of SAARC meetings. In 1993, India and its SAARC partners signed an agreement gradually to lower tariffs within the region. Forward movement in SAARC had slowed because of tension between India and Pakistan, and the SAARC summit scheduled for 1999 was not held until January 2002. In addition, to boost the process of normalizing India's relationship with Pakistan, the January 2004 SAARC summit in Islamabad produced an agreement to establish a South Asia Free Trade Area (SAFTA). All the member governments have ratified SAFTA, which was slated to come into force on January 1, 2006, with a series of graduated tariff cuts through 2015. As of December 2006, however, the FTA partners were still negotiating sensitive product lists, rules of origin, and technical assistance. India hosted the 2007 SAARC summit, which called for greater regional cooperation on trade, environmental, social, and counterterrorism issues. At the 2008 SAARC summit in Sri Lanka, the SAFTA member countries signed a protocol for Afghanistan's accession and several countries (Including India, Pakistan, and Sri Lanka) agreed to drop some items from their sensitive product lists.
China. Despite suspicions remaining from a 1962 border conflict between India and China and continuing territorial/boundary disputes, Sino-Indian relations have improved gradually since 1988. Both countries have sought to reduce tensions along the frontier, expand trade and cultural ties, and normalize relations. Their bilateral trade reached $24 billion in 2006. China is India's second-largest trading partner behind the U.S.
A series of high-level visits between the two nations has improved relations. In December 1996, Chinese President Jiang Zemin visited India on a tour of South Asia. While in New Delhi, he and the Indian Prime Minister signed a series of confidence-building measures along the disputed border, including troop reductions and weapons limitations.
Chinese Premier Wen Jiabao invited Prime Minister Vajpayee to visit China in June 2003. They recognized the common goals of both countries and made the commitment to build a "long-term constructive and cooperative partnership" to peacefully promote their mutual political and economic goals without encroaching upon their good relations with other countries. In Beijing, Prime Minister Vajpayee proposed the designation of special representatives to discuss the border dispute at the political level, a process that is still under way.
In November 2006, President Hu Jintao made an official state visit to India, further cementing Sino-Indian relations. India and China are building on growing economic ties to improve other aspects of their relationship such as counterterrorism, energy, and trade. In another symbol of improved ties, the two countries opened the Nathu La Pass to bilateral trade in July 2006 for the first time in 40 years. Though it is the first direct land trade route in decades, trade is expected to be local and small since the pass is open only four months a year.
Prime Minister Manmohan Singh met Chinese President Hu Jintao in January 2008 in Beijing in an effort to reinforce their confidence to further develop ties, vowing to promote their relations to a higher level. The meetings cemented a shared vision for the 21st century, agreeing to raise the annual volume of bilateral trade to $60 billion by 2010. Despite flare-ups over border issues, China-India relations remain stable at the strategic level. 2010 has seen a large number of high level visits from Indian government officials including National Security Advisor Menon, External Affairs Minister Krishna, and President Patil.
Former Soviet Union. The collapse of the Soviet Union in 1991 and the emergence of the Commonwealth of Independent States (CIS) had major repercussions for Indian foreign policy. India's substantial trade with the region plummeted after the Soviet collapse and has yet to recover. Longstanding military supply relationships were similarly disrupted due to questions over financing. Russia nonetheless remains India's largest supplier of military systems and spare parts.
Russia and India have not renewed the 1971 Indo-Soviet Peace and Friendship Treaty and follow what both describe as a more pragmatic, less ideological relationship. The visit of Russian President Boris Yeltsin to India in January 1993 helped cement this new relationship. The pace of high-level visits has since increased, as has discussion of major defense purchases. UPA leader Sonia Gandhi and Prime Minister Singh visited Russia in July 2005. President Vladimir Putin traveled to India in January 2007 to attend an Indo-Russia Summit and was the guest of honor at India's Republic Day celebrations. President Medvedev visited India in December 2008 and signed a civil nuclear agreement.
U.S.-INDIA RELATIONS
Recognizing India as a key to strategic U.S. interests, the United States has sought to strengthen its relationship with India. The two countries are the world's largest democracies, both committed to political freedom protected by representative government. India is also moving gradually toward greater economic freedom. The U.S. and India have a common interest in the free flow of commerce and resources, including through the vital sea lanes of the Indian Ocean. They also share an interest in fighting terrorism and in creating a strategically stable Asia.
There were some differences, however, including over India's nuclear weapons programs and the pace of India's economic reforms. In the past, these concerns may have dominated U.S. thinking about India, but today the U.S. views India as a growing world power with which it shares common strategic interests. A strong partnership between the two countries will continue to address differences and shape a dynamic and collaborative future.
In late September 2001, President Bush lifted sanctions imposed under the terms of the 1994 Nuclear Proliferation Prevention Act following India's nuclear tests in May 1998. The nonproliferation dialogue initiated after the 1998 nuclear tests has bridged many of the gaps in understanding between the countries. In a meeting between President Bush and Prime Minister Vajpayee in November 2001, the two leaders expressed a strong interest in transforming the U.S.-India bilateral relationship. High-level meetings and concrete cooperation between the two countries increased during 2002 and 2003. In January 2004, the U.S. and India launched the Next Steps in Strategic Partnership (NSSP), which was both a milestone in the transformation of the bilateral relationship and a blueprint for its further progress.
In July 2005, President Bush hosted Prime Minister Singh in Washington, DC. The two leaders announced the successful completion of the NSSP, as well as other agreements which further enhance cooperation in the areas of civil nuclear, civil space, and high-technology commerce. Other initiatives announced at this meeting include: an U.S.-India Economic Dialogue, Fight Against HIV/AIDS, Disaster Relief, Technology Cooperation, Democracy Initiative, an Agriculture Knowledge Initiative, a Trade Policy Forum, Energy Dialogue and CEO Forum. President Bush made a reciprocal visit to India in March 2006, during which the progress of these initiatives were reviewed, and new initiatives were launched.
In December 2006, Congress passed the historic Henry J. Hyde United States-India Peaceful Atomic Cooperation Act, which allows direct civilian nuclear commerce with India for the first time in 30 years. U.S. policy had opposed nuclear cooperation with India because the country had developed nuclear weapons in contravention of international conventions and never signed the Nuclear Non-Proliferation Treaty. The legislation clears the way for India to buy U.S. nuclear reactors and fuel for civilian use.
In July 2007, the United States and India reached a historic milestone in their strategic partnership by completing negotiations on the bilateral agreement for peaceful nuclear cooperation, also known as the "123 agreement." This agreement, signed by Secretary of State Condoleezza Rice and External Affairs Minister Mukherjee on October 10, 2008, governs civil nuclear trade between the two countries and opens the door for American and Indian firms to participate in each other's civil nuclear energy sector.
In July 2009, Secretary of State Hillary Clinton traveled to India to launch the "Strategic Dialogue," which called for collaboration in a number of areas, including energy, climate change, trade, education, and counterterrorism. Prime Minister Manmohan Singh visited Washington, DC in late November 2009 for the first state visit of the Obama administration. The inaugural session of the U.S.-India Strategic Dialogue was held June 1-4, 2010 in Washington, D.C. The event was very successful and showed progress in teh U.S. India relationship. The President expected to visit India in the Fall of 2010.
Principal U.S. Embassy Officials
Ambassador--Timothy Roemer
Deputy Chief of Mission--Steven White
Public Affairs--Michael Pelletier
Political Affairs--Uzra Zeya
Economic, Environmental, and Scientific Affairs--Blair Hall
Commercial Affairs--Carmine D'Aloisio
Regional Security Officer--Earl Miller
Agricultural Affairs--Holly Higgins
Management Affairs--Gerri O'Brien
Consular Affairs--James Herman
USAID Mission Director--Erin Soto
Consuls General
Mumbai (formerly Bombay)--Paul Folmsbee
Kolkata (formerly Calcutta)--Beth Payne
Chennai (formerly Madras)--Andrew Simkin
Hyderabad--Cornelis Keur
The U.S. Embassy in India is located on Shantipath, Chanakyapuri, New Delhi 110021 (tel. 91-11-2419-8000; fax: 91-11-24190017, website http://newdelhi.usembassy.gov). Embassy and consulate working hours are Monday to Friday, 8:30 a.m. to 5:30 p.m. Visa application hours are Monday to Friday, 8:30 a.m. to 10:00 a.m.
*This number includes the Indian state of Jammu and Kashmir. The United States considers all of the former princely state of Kashmir to be disputed territory. India, Pakistan, and China each control parts of Kashmir.
NOTE
Travel: Please consult Consular Affairs.
Business Information: Please consult the Department of Commerce.
TRAVEL AND BUSINESS INFORMATION
The U.S. Department of State's Consular Information Program advises Americans traveling and residing abroad through Country Specific Information, Travel Alerts, and Travel Warnings. Country Specific Information exists for all countries and includes information on entry and exit requirements, currency regulations, health conditions, safety and security, crime, political disturbances, and the addresses of the U.S. embassies and consulates abroad. Travel Alerts are issued to disseminate information quickly about terrorist threats and other relatively short-term conditions overseas that pose significant risks to the security of American travelers. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain country because the situation is dangerous or unstable.
For the latest security information, Americans living and traveling abroad should regularly monitor the Department's Bureau of Consular Affairs Internet web site athttp://www.travel.state.gov, where the current Worldwide Caution, Travel Alerts, andTravel Warnings can be found. Consular Affairs Publications, which contain information on obtaining passports and planning a safe trip abroad, are also available athttp://www.travel.state.gov. For additional information on international travel, seehttp://www.usa.gov/Citizen/Topics/Travel/International.shtml.
The Department of State encourages all U.S. citizens traveling or residing abroad to register via the State Department's travel registration website or at the nearest U.S. embassy or consulate abroad. Registration will make your presence and whereabouts known in case it is necessary to contact you in an emergency and will enable you to receive up-to-date information on security conditions.
Emergency information concerning Americans traveling abroad may be obtained by calling 1-888-407-4747 toll free in the U.S. and Canada or the regular toll line 1-202-501-4444 for callers outside the U.S. and Canada.
The National Passport Information Center (NPIC) is the U.S. Department of State's single, centralized public contact center for U.S. passport information. Telephone: 1-877-4-USA-PPT (1-877-487-2778); TDD/TTY: 1-888-874-7793. Passport information is available 24 hours, 7 days a week. You may speak with a representative Monday-Friday, 8 a.m. to 10 p.m., Eastern Time, excluding federal holidays.
Travelers can check the latest health information with the U.S. Centers for Disease Control and Prevention in Atlanta, Georgia. A hotline at 800-CDC-INFO (800-232-4636) and a web site at http://wwwn.cdc.gov/travel/default.aspx give the most recent health advisories, immunization recommendations or requirements, and advice on food and drinking water safety for regions and countries. The CDC publication "Health Information for International Travel" can be found at http://wwwn.cdc.gov/travel/contentYellowBook.aspx.
Further Electronic Information
Department of State Web Site. Available on the Internet at http://www.state.gov, the Department of State web site provides timely, global access to official U.S. foreign policy information, including Background Notes and daily press briefings along with the directory of key officers of Foreign Service posts and more. The Overseas Security Advisory Council (OSAC) provides security information and regional news that impact U.S. companies working abroad through its website http://www.osac.gov
Politics
US wants Mamata as West Bengal CM: WikiLeaks
New Delhi: All India Trinamool Congress chief Mamata Banerjee would better serve American interests as Chief Minister of West Bengal if she wins the 2011 Assembly election in the state, according to an Embassy cable leaked by online whistle-blowing website WikiLeaks.
The October, 2009 Kolkata Consulate cable, headlined 'Trinamool's Mamata Banerjee: from oppositional street fighter to West Bengal Chief Minister-in-waiting,' advises United States officials to cultivate Banerjee as the likely next Chief Minister of West Bengal.
Though skeptical of Banerjee's makeover from a political maverick to someone "cooler, more level-headed, and willing to accept outside advice," the cable said Trinamool's "public rhetoric, devoid of any anti-Americanism, and private outreach to post's officers are encouraging signs that a Banerjee-led West Bengal government will be friendlier to the United States than the current CPI-M one."
"Consensus exists that she is conscientiously trying to transform her image from political maverick and firebrand to a woman ready, able and willing to lead India's fourth most populous state," the cable said.
"Post recommends USG officials continue to cultivate Banerjee, who has not yet visited the United States, in her current capacity as Railways Minister and the likely next Chief Minister of West Bengal," it said.
The consulate said that following her party's success in West Bengal in the 2009 Lok Sabha election, Banerjee, has conscientiously sought to re-brand herself as West Bengal's Chief Minister-in-waiting.
"She is using the considerable administrative resources at her disposal as Railway's Minister, political resources as leader of the state opposition party, and personal resources to initiate this transformation."
But it remained doubtful of whether Banerjee's transformation is indeed a new product, or simply new packaging.
Under a sub-head of 'Mamata Courts Industry and Vice Versa' the consulate discussed how Banerjee assiduously courted "Kolkata's business community through outreach and appointment of respected business advisors to combat her perceived anti-industry label."
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| Until the late 1990s, the United States often ignored India, treating it as a regional power in South Asia with little global weight. India's weak and protected economy gave it little influence in global markets, and its nonaligned foreign policy caused periodic tension with Washington. When the United States did concentrate on India, it too often fixated on India's military rivalry with Pakistan. Today, however, India is dynamic and transforming. Starting in 1991, leaders in New Delhi -- including Manmohan Singh, then India's finance minister and now its prime minister -- pursued policies of economic liberalization that opened the country to foreign investment and yielded rapid growth. India is now an important economic power, on track (according to Goldman Sachs and others) to become a top-five global economy by 2030. It is a player in global economic decisions as part of both the G-20 and the G-8 + 5 (the G-8 plus the five leading emerging economies) and may ultimately attain a permanent seat on the United Nations Security Council. India's trajectory has diverged sharply from that of Pakistan. With economic growth, India acquired the capacity to act on issues of primary strategic and economic concern to the United States. The United States, in turn, has developed a growing stake in continued Indian reform and success -- especially as they contribute to global growth, promote market-based economic policies, help secure the global commons, and maintain a mutually favorable balance of power in Asia. For its part, New Delhi seeks a United States that will help facilitate India's rise as a major power. Two successive Indian governments have pursued a strategic partnership with the United States that would have been unthinkable in the era of the Cold War and nonalignment. This turnaround in relations culminated in 2008, when the two countries signed a civil nuclear agreement. That deal helped end India's nuclear isolation by permitting the conduct of civil nuclear trade with New Delhi, even though India is not a party to the Nuclear Nonproliferation Treaty. Important as the agreement was, however, the U.S.-Indian relationship remains constrained. For example, although U.S. officials hold standing dialogues about nearly every region of the world with their counterparts from Beijing, Brussels, and Tokyo, no such arrangements exist with New Delhi. 12516: Ambassador relays concerns about activities of Indian intelligence agentsOn December 3 the Ambassador raised with Indian Ambassador Shyam Saran reports that intelligence agents assigned to the Indian Embassy in Kathmandu have been characterizing USG policy and motives in Nepal as malevolently aimed at undermining Nepal's sovereignty. 12516 12/4/2003 2:14 03KATHMANDU2366 Embassy Kathmandu SECRET//NOFORN 03REF:KATHMANDU2282 "This record is a partial extract of the original cable. The full text of the original cable is not available." "S E C R E T KATHMANDU 002366 SIPDIS NOFORN STATE FOR SA/INS E.O. 12958: DECL: 12/03/2013 TAGS: PREL, PTER, NP, IN SUBJECT: NEPAL: AMBASSADOR RELAYS CONCERNS ABOUT ACTIVITIES OF INDIAN INTELLIGENCE AGENTS REF: A. REF: KATHMANDU 2282 B. KATHMANDU 2298 Classified By: AMB. MICHAEL E. MALINOWSKI. REASON: 1.5 (B,D). 1. (S/NF) On December 3 the Ambassador raised with Indian Ambassador Shyam Saran reports that intelligence agents assigned to the Indian Embassy in Kathmandu have been characterizing USG policy and motives in Nepal as malevolently aimed at undermining Nepal's sovereignty. The Ambassador told Saran that the reports had been passed to us by several Nepali political sources, who claimed to have had such conversations in the recent past with Research and Analysis Wing (RAW) agents based at the Indian Embassy. He also briefed Saran about unsubstantiated reports suggesting that some Nepali Maoist women may have received training at a security facility in Dehra Dun in northern India (Ref A). Noting that Nepalis, both within the government and in the opposition, sometimes attempt to play off Indian and American interests, he stressed that the information passed on by these sources had not been verified. He noted that the reports predated the meeting between Nepali Maoists and Communist Party of Nepal - United Marxist Leninist General Secretary Madhav Nepal in Lucknow (Ref B)--an event that has SIPDIS set Nepali nationalists teeth on edge against India. The Ambassador emphasized that he was communicating these concerns to Saran as a friend and ally. 2. (S/NF) Ambassador Saran thanked him and expressed concern, describing the reports as ""unfortunate"" and not an accurate reflection of official GOI policy--a point confirmed in his recent policy discussions in New Delhi (see para 3). The GOI is committed to ensuring Nepal's stability, he said, adding that he has obtained unprecedented levels of development and security assistance for the kingdom. Nonetheless, sometimes people in different branches of the GOI ""go off on their own,"" he acknowledged, and promised to look into the reports. 3. (S/NF) In a separate meeting on November 30, Saran briefed the Ambassador on the just-concluded policy deliberations in New Delhi. He stressed that his interlocutors had expressed concern about possible spill-over of the insurgency onto Indian territory. According to Saran, Indian Defense Minister George Fernandes told him that ""the fight against the Maoists is also India's fight."" Saran noted, however, that certain quarters within the GOI had argued that India should maintain contact with the Maoists in order to influence them and to keep open communication channels in the event of a worst-case scenario in which the Maoists ultimately gain power. 4. (S/NF) We cannot discount the possibility that our Nepali sources, many of whom resent India's influence in their country, may have their own motives in conveying to us reports of Indian double-dealing. We have always found Saran professional, collegial, and cooperative, and believe that he does not sanction--and may probably not be aware of--all of RAW's activities in Nepal. His acknowledgement that some in the GOI ""go off on their own"" and that some advocate maintaining contact and influence with the Maoists is his first admission to us that some elements within his Embassy may be working at cross-purposes to official GOI policy. MALINOWSKI 191725: Ambassador presses Menon to implement civil nuclear cooperation with U.S.The Indian civil nuclear bureaucracy understands it is "essential" to advance cooperation with the U.S., but claims progress is stymied by the inability of U.S. firms to share sensitive technical information pending the authorizations required under U.S. licensing regulations. 191725 2/12/2009 12:24:00 PM 09NEWDELHI267 Embassy New Delhi CONFIDENTIAL 09NEWDELHI152|09NEWDELHI48|09SECSTATE8510 VZCZCXRO0064OO RUEHBI RUEHCI RUEHDBU RUEHLH RUEHPWDE RUEHNE #0267/01 0431224ZNY CCCCC ZZHO 121224Z FEB 09FM AMEMBASSY NEW DELHITO RUEHC/SECSTATE WASHDC IMMEDIATE 5367INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVERUCNNSG/NUCLEAR SUPPLIERS GROUP COLLECTIVERUEAIIA/CIA WASHDCRHEBAAA/DEPT OF ENERGY WASHINGTON DCRUEKJCS/JOINT STAFF WASHDCRHEHNSC/NSC WASHDCRUEKJCS/SECDEF WASHDCRUEHUNV/USMISSION UNVIE VIENNA 1735RUCNDT/USMISSION USUN NEW YORK 7611 C O N F I D E N T I A L SECTION 01 OF 03 NEW DELHI 000267
SIPDIS
E.O. 12958: DECL: 02/11/2019 TAGS: PREL, PARM, TSPL, KNNP, ETTC, ENRG, TRGY, IN SUBJECT: AMBASSADOR PRESSES MENON TO IMPLEMENT CIVIL NUCLEAR COOPERATION WITH U.S. REF: A. NEW DELHI 48 B. SECSTATE 8510 C. "TALKING POINTS FOR EMBASSY NEW DELHI ON THE MENON-BURNS LETTER" (MCCLELLAN-HOLMES EMAIL 02-04-09) D. NEW DELHI 152
Classified By: Ambassador David Mulford for Reasons 1.4 (B and D)
1. (C) SUMMARY. Highlighting U.S. industry concerns about the slow pace of civil nuclear cooperation and stressing the opportunities it holds for U.S. commerce and job creation, Ambassador Mulford pressed Foreign Secretary Shivshankar Menon February 11 for swifter action on implementation. Menon reiterated India's keen interest in early, senior-level discussions on nonproliferation with the Obama administration. The Indian civil nuclear bureaucracy understands it is "essential" to advance cooperation with the U.S., but claims progress is stymied by the inability of U.S. firms to share sensitive technical information pending the authorizations required under U.S. licensing regulations. India plans to bring its IAEA Safeguards Agreement into force soon, perhaps in March when it also plans to submit its Additional Protocol to the IAEA Board of Governors for approval. Parliament will not act on the Convention on Supplementary Compensation for Nuclear Damage (CSC) until after elections in April-May, but U.S. firms should not feel the need to wait for ratification to begin commercial discussions and reliminary commercial activities. Menon confirmed that the designation of reactor sites for U.S. industry does not have to wait for the completion of the election. One problem is interest from the state of West Bengal, which is most keen to host a U.S. site. Menon is pushing back, and the Ambassador stated that the area was highly unlikely to be acceptable to U.S. companies. 2. (C) SUMMARY CONTINUED. Menon hoped consultations on reprocessing "arrangements and procedures" under the 123 Agreement could begin as soon as possible. He claimed that a clear statement that the Obama administration stands by the commitments made in the 123 Agreement would be sufficient to address concerns in India that U.S. policy favoring a global ban on further transfers of enrichment and reprocessing technology (ENR) in the Nuclear Suppliers Group (NSG) constitutes a "derogation" of the 123 Agreement, but he was vague on why this was necessary. He expressed his hope that Special Representative Holbrooke's visit would be viewed as a success and that a new Indian draft text on end use monitoring (EUM) would result in an agreement. END SUMMARY. Eager to Talk Nonproliferation with Obama Administration - - - 3. (C) Ambassador Mulford February 11 pressed Foreign Secretary Shivshankar Menon for action on several civil nuclear cooperation implementation issues, including bringing the IAEA Safeguards Agreement into force, holding consultations on reprocessing arrangements and procedures, designating reactor park sites now for U.S. firms, and implementing liability protection. He highlighted growing concern on the part of U.S. industry that India appeared to be moving faster in implementing cooperation with competitors. He stressed that civil nuclear cooperation has taken on a new dimension in the current economic climate in that it will lead to new and important commercial opportunities for U.S. companies as well as to new job creation. Delays are becoming increasingly difficult to explain in the face of agreements with France and Russia. 4. (C) Menon replied first by stressing that he wanted to reiterate India's keen interest in early, senior-level discussions on nonproliferation matters with the Obama administration (ref A). Menon believed there to be an impression among policy makers in India and the United States that U.S. nonproliferation policies under the Obama administration could be unpopular in India, but Menon said he had not yet heard anything alarming. On the contrary, "Speaking as a Nuclear Weapons State, we see a lot we like in President Obama's views on nonproliferation." He specifically mentioned the Fissile Material Cut-Off Treaty (FMCT) as just one example among many. (Comment: Menon seemed genuinely eager for such talks. His reference to India as a 'Nuclear Weapons State' was deliberate.) NEW DELHI 00000267 002 OF 003
Civil Nuclear Implementation Update - - - 5. (C) Menon took pains to explain that the slow pace of implementing civil nuclear cooperation with the United States as compared to other competitors was not deliberate, but rather the cumulative affect of several independent issues. Menon said the External Affairs Ministry has consistently stressed to the Nuclear Power Corporation of India Limited (NPCIL) that it was "essential" to move forward with U.S. firms. NPCIL replied that progress had been stymied by the inability of U.S. firms to share sensitive technical information pending the authorizations required under U.S. licensing regulations, according to Menon. Menon brushed aside the suggestion that the issuance of licenses depended on India first bringing its IAEA Safeguards Agreement into force, saying, "We will take care of the Safeguards very soon." He added that progress on negotiating an Additional Protocol with the IAEA was going well and that India hoped to submit the agreement for approval at the March meeting of the IAEA Board of Governors. (Comment: India signed its Safeguards Agreement February 3 when its delegation was in Vienna for talks on the Additional Protocol. Similarly, Menon suggested that India may bring the Safeguards Agreement into force in conjunction with its plan to complete the Additional Protocol negotiations by March. End Comment.) 6. (C) It would be "impossible," according to Menon, for the current session of Parliament to take action on the Convention on Supplementary Compensation for Nuclear Damage (CSC). Ratifying the convention will not take place until the first Parliament after the April-May general elections, likely in June or July. Menon said he understood the importance of the Convention, but he expressed puzzlement as to why U.S. firms felt they needed to wait for ratification of the Convention to begin commercial discussions. (Comment: Indian officials at the working level have noted that Westinghouse signed a reactor deal with China and began construction on the plant hoping that China would ratify the Convention before the reactor was completed. Senior officials have given no indication they envision such a lengthy process, but they are no doubt keenly aware of the lengths to which U.S. firms went to do business with China. End comment.) 7. (C) Menon confided that the designation of reactor parks sites had become a "problem," with the state of West Bengal most keen to host a U.S. site. He added, "You would not believe how strongly West Bengal is pushing to get you." Menon and Ambassador Mulford commiserated briefly about Tata's high-profile failure to establish its Nano car factory in the state, prompting a move to more business-friendly Gujarat. Menon clearly appreciated that designating a site for U.S. firms in a state dominated by parties that staunchly opposed civil nuclear cooperation with the U.S. would send the wrong signal about India's appreciation for U.S. efforts on its behalf and its genuine desire for robust cooperation. Menon was clear that no decisions had been made and specifically asked that U.S. firms not be informed of West Bengal's lobbying effort until he has had the chance to push back. Ambassador Mulford, however, made it abundantly clear that asking U.S. firms to set up businesses in West Bengal would be unacceptable to most U.S. firms. Ready to Get Moving on Reprocessing Arrangement - - - 8. (C) Menon said he hoped consultations on reprocessing "arrangements and procedures" in accordance with Article 6(iii) of the 123 Agreement would begin as soon as possible to "remove the reprocessing issue" as an impediment to commercial cooperation. He was confident these consultations would proceed smoothly and without controversy, observing that the U.S. already had similar arrangements in place with Europe and Japan, so the technical framework was already established. Menon confirmed that he shared our interpretation of the timeline set forth in the 123 Agreement, that we have six months to begin the negotiation and, once initiated, twelve months from that point to complete them, but added that he hoped we could complete the process far more rapidly than the allotted time. Menon also confirmed his understanding that the six-month clock had NEW DELHI 00000267 003 OF 003 begun ticking February 3 when he sent his letter to Under Secretary Burns. (Note: Embassy delivered ref B demarche February 3 by fax to Gaitri Kumar, MEA Joint Secretary for the Americas, and Gitesh Sarma, MEA Joint Secretary for External Relations at the Department of Atomic Energy, and in person to Gaddam Dharmendra, MEA Director of the Disarmament and International Security Division (MEA/DISA).) An Un-enriching Discussion of Reprocessing - - - 9. (C) Ambassador Mulford delivered points cleared by the Department (ref C) responding to Menon's assertion in his February 3 letter to Under Secretary Burns that U.S. policy favoring a global ban on further transfers of enrichment and reprocessing technology (ENR) by the Nuclear Suppliers Group (NSG) constituted a "derogation" of the 123 Agreement. Ambassador Mulford asked what more we could say to convince Menon that this issue did not warrant the aggressive posture adopted by India. Menon expressed surprise that his letter had generated concern. He replied, "All we need is a clear statement that your position has not changed. We would like to know that what we agreed in the 123 Agreement stands." 10. (C) Comment: Menon briefly and vaguely elaborated on why such a statement was necessary, but he was not clear how reaffirming the 123 Agreement commitments would satisfy India's concerns. Indian officials feel that a criteria-based approach to ENR transfers that requires signature of the Nuclear Non-proliferation Treaty (NPT) is discriminatory toward India and not consistent with the spirit of the Agreement. Some officials -- particularly Department of Atomic Energy Chairman Anil Kakodkar, who professed a sense of "betrayal" over the issue (ref D) -- may also feel that our policy is not consistent with their view of assurances provided during the 123 Agreement negotiations that, while the U.S. would not transfer ENR to India, we would not stand in the way of others doing so. Menon's February 3 letter to Under Secretary Burns made a legal claim that an ENR ban would be inconsistent with Article 5.2 of the 123 Agreement itself, which provides for the possibility of amendments to the Agreement to permit ENR transfers, claiming that a ban in the NSG would eliminate the possibility of making such changes. Whatever the truth behind India's concerns, a good place to start would be with a clear affirmation that the Obama administration stands by the commitments made in the 123 Agreement. End Comment. Other Issues: Hopes for Holbrooke Visit, EUM Agreement - - - 11. (C) Observing that Special Representative Richard Holbrooke is the first official visitor representing the new Obama Administration, Menon shared that is was important to India that his visit "be seen as a good visit." India was keenly interested in learning Holbrooke's impressions from his discussions in Pakistan. Menon said National Security Advisor M.K. Narayanan felt he had a good discussion with Holbrooke at the Munich Security Conference and that India liked the idea of a Contact Group for Afghanistan and Pakistan. Asked to comment on reports that Pakistan may take legal action against the Mumbai attack planners, Menon said he would not want to speculate about what a "dysfunctional system" would do. An adequate response would show "there are serious people there willing to act," but he added, "The good guys seem to be losing there." Menon remarked that the substantive discussions the Pakistanis seem to be having with the U.S. stand in stark contrast to their "complete lack of communication" with India. 12. (C) Menon shared that Vice Admiral Wieringa, visiting Bangalore for Aero India 2009, should receive February 13 a new Indian draft of an agreement on end use monitoring (EUM) that Menon claimed adequately addresses the unresolved issues. 13. (U) Ambassador Mulford also raised the New York tax case. Menon's response is reported septel.
MULFORD NSG all set to up-end India's clean waiverSIDDHARTH VARADARAJAN | NEW DELHI, JUNE 18, 2011Proposed restrictions on transfer of sensitive nuclear items are a 'derogation', 'rollback' of U.S. commitments, Indian officials had warned » 191725: Ambassador presses Menon to implement civil nuclear cooperation with U.S.| JUNE 18, 2011The Indian civil nuclear bureaucracy understands it is "essential" to advance cooperation with the U.S., but claims progress is stymied by the inability of U.S. firms to share sensitive technical information pending the authorizations required under U.S. licensing regulations. » 236981: U.S. Tauscher engages Rao in strategic security dialogue| JUNE 18, 2011While each side adhered to familiar positions, the chemistry between the principals was good and the dialogue was cordial and frank. » NSG all set to up-end India's clean waiverSIDDHARTH VARADARAJAN | NEW DELHI, JUNE 18, 2011
Proposed restrictions on transfer of sensitive nuclear items are a 'derogation,' 'rollback' of U.S. commitments, Indian officials had warned »
248366: Scenesetter for Codel Kerry's visit to India| MAY 24, 2011You will find an Indian government that is more committed than ever to building a durable and wide ranging USG-GOI relationship after Prime Minister Singh's Washington visit in November. » 176372: DMK calls off threat to pull support from UPA over Sri Lanka violence| MAY 23, 2011The resignation drama has helped distract attention from the DMK party's woes in advance of next years Parliamentary elections. » 142702: Maran says ruling coalition in trouble| MAY 23, 2011DMK Member of Parliament Dayanidhi Maran spoke candidly about India's current political scene. » Maran called Karunanidhi's October 2008 resignation threat a diversionary 'drama'SPECIAL CORRESPONDENT | MAY 23, 2011Spoke of DMK leader's attempted 'blackmail' on Sri Lanka, warned that the Congress 'will carry this grudge and retaliate at the right time' » When in power, people start making money, Maran told U.S. Political OfficerSURESH NAMBATH | CHENNAI, MAY 23, 2011The estranged DMK M.P. spoke about party's corrupt image & predicted its downfall; criticised 'freebies'; praised Rahul Gandhi; was 'very downbeat' about United Progressive Alliance's electoral prospects » Terror threats keep me awake, Manmohan Singh told U.S. officialNIRUPAMA SUBRAMANIAN | CHENNAI, MAY 21, 2011Prime Minister Manmohan Singh told a visiting United States official in 2009 that he "did not sleep well at night" knowing there were threats of more terror attacks in India afte... » FACTBOX - Hurdles facing U.S. investment in IndiaREUTERS - India needs investment to fuel its rapidly growing economy, overhaul its creaking infrastructure and curb a swollen current account deficit, but crucial reforms to allow foreign investors access to important sectors are stalled. President Barack Obama will meet U.S. business leaders in India as American corporations explore the fast-growing market. The following are major areas of potential U.S. investment in India currently facing domestic hurdles: NUCLEAR POWER Despite landmark legislation passed by India's parliament in August, the entry of U.S. firms into India's fledgling nuclear power market is still uncertain unless New Delhi provides more clarity on compensation liability of private operators. Approved two years after an agreement between India and the U.S. brought New Delhi to the nuclear energy table, a new liability law gives India's state-run operator a "right of recourse" against suppliers in the event of an accident -- something U.S. firms are unhappy with. U.S.-based firms such as General Electric and Westinghouse Electric, a subsidiary of Japan's Toshiba Corp, stand to make up to $10 billion through already-earmarked projects.
DEFENCE India will spend about $112 billion on defence procurement by 2016, a new KPMG report said this month, to overhaul the country's mostly Russian-supplied military. Those orders include a $11 billion deal for 126 fighter jets that six companies are competing for, including U.S. firms Boeing and Lockheed Martin Corp. But Washington faces a host of hurdles, including Indian worries that signing defence pacts which are necessary for the U.S. arms sales to go through may land New Delhi into a wider entanglement with the U.S. military. One pact is the Logistics Support Agreement (LSA), which would allow American military to use Indian facilities for operations like refuelling. Two other pacts are required under U.S. domestic laws to transfer sensitive defence technology. MULTI-BRAND RETAIL India's $450 billion retail industry is currently off-limits for foreign multi-brand retail firms. With the disorganised mom-and-pop stores accounting for over 90 percent of domestic trade, the issue is a political minefield for a ruling Congress party fearful of losing its populist appeal through potential job losses and protests from farmers. The retail sector is largely closed to foreign firms, with 51 percent foreign direct investment allowed only in single-brand retail. Multi-brand retail is restricted to cash-and-carry or wholesale outlets, restricting the entry of retailers such as U.S. giant Wal-Mart. The world's top retailer, which runs cash-and-carry stores in India, has said it is ready to open hundreds of retail outlets as soon as the rules are liberalised.
FINANCIAL SECTOR FDI in India's banking sector is currently limited at 49 percent in private banks, and 20 percent in public lenders. However, current rules restrict foreign investors to only 10 percent of voting rights, regardless of investment level. U.S. and other foreign firms are unlikely to increase their investment unless the cap on voting power is lifted. Insurance industry reform, to allow foreign investors to take a bigger stake in Indian firms, has been on the table for years. But opposition resistance, looming state elections and an ever-growing reform agenda for the ruling Congress party has delayed any legislative progress. (Reporting by Henry Foy; Editing by Alistair Scrutton http://in.reuters.com/article/2010/10/26/idINIndia-52459220101026 India-US Economic Relations | |||||||||||||||||||||||||||||||||||||||||||
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India has been ranked at the second place in global foreign direct investments in 2010 and will continue to remain among the top five attractive destinations for international investors during 2010-12 , according to United Nations Conference on Trade and Development (UNCTAD) in a report on world investment prospects titled, 'World Investment Prospects Survey 2009-2012'. The 2010 survey of the Japan Bank for International Cooperation released in December 2010, conducted among Japanese investors, continues to rank India as the second most promising country for overseas business operations. A report released in February 2010 by Leeds University Business School, commissioned by UK Trade & Investment (UKTI), ranks India among the top three countries where British companies can do better business during 2012-14. India is ranked as the 4th most attractive foreign direct investment (FDI) destination in 2010, according to Ernst and Young's 2010 European Attractiveness Survey. However, it is ranked the 2nd most attractive destination following China in the next three years. Moreover, according to the Asian Investment Intentions survey released by the Asia Pacific Foundation in Canada, more and more Canadian firms are now focusing on India as an investment destination. From 8 per cent in 2005, the percentage of Canadian companies showing interest in India has gone up to 13.4 per cent in 2010. India attracted FDI equity inflows of US$ 1,274 million in February 2011. The cumulative amount of FDI equity inflows from April 2000 to February 2011 stood at US$ 128.642 billion, according to the data released by the Department of Industrial Policy and Promotion (DIPP). The services sector comprising financial and non-financial services attracted 21 per cent of the total FDI equity inflow into India, with FDI worth US$ 3,274 million during April-February 2010-11, while telecommunications including radio paging, cellular mobile and basic telephone services attracted second largest amount of FDI worth US$ 1,410 million during the same period. Housing and Real Estate industry was the third highest sector attracting FDI worth US$ 1,109 million followed by power sector which garnered US$ 1,237 million during April-December 2010-11. The Automobile sector received FDI worth US$ 1,320 million. During April-February 2010-11, Mauritius has led investors into India with US$ 6,637 million worth of FDI comprising 42 per cent of the total FDI equity inflows into the country. The FDI equity inflows from Mauritius is followed by Singapore at US$ 1,641 million and the US with US$ 1,120 million, according to data released by DIPP. Investment Scenario The Government has approved 14 FDI proposals amounting to US$ 288.05 million, based on the recommendations of Foreign Investment Promotion Board (FIPB) in its meeting held on March 11, 2011. These include:
The total merger and acquisitions (M&A) and private equity (PE) (including qualified institutional placement (QIP)) deals in the month of February 2011were valued at US$ 8.27 billion (76 Deals) as compared to US$ 1.95 billion (84 Deals) in the corresponding month of 2010, according to the monthly deals data released by Grant Thornton India.
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| http://www.ibef.org/economy/fdi.aspxDisclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same. | |||||
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