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Indian Economy: Growth -2

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Indian Economy: Growth -2
<span style='color:red'>Hotmail founder will now build Nano City in India</span>

Chandigarh, Nov 1 (IANS) Hotmail founder Sabeer Bhatia Wednesday signed an agreement with the state government of Haryana to jointly set up Nano City, a knowledge hub modelled on the Silicon Valley of the US. To be built at a cost of Rs.18.5 billion (over $410 million), the knowledge city will deal in future technologies like nano-technology, biosciences, software product development, next generation Internet products, materials research and energy. Bhatia's Nano Works Developers and the Haryana State Industrial and Infrastructure Development Corp (HSIIDC) will set up the project that will be spread over 11,000 acres in Panchkula district, about 45 km from state capital Chandigarh. Bhatia said he wanted to set up Nano City on the lines of the Silicon Valley in the US - where he worked in the 1990s and founded Hotmail, the first free e-mail service. Bhatia, 37, sold off Hotmail to global software giant Microsoft for a reported $400 million.

He said India had provided people for the world's software industry and it was now time for the country to develop products and technologies for the world market itself. 'We foresee research establishments such as US universities, research and development centres of companies, which have been the centres of innovation, to carry out multi-disciplinary research and collective research with Indian centres of excellence in this Nano City,' Bhatia said. The new knowledge park will have fully developed infrastructure, including connectivity to airports, railway stations and highways. It will be implemented in two phases with the first phase comprising 5,000 acres.

http://in.news.yahoo.com/061101/43/68z39.html
<b>India's economy, now with muscle</b>


<b>Car sales up 16% in Oct</b>

<b>NEW DELHI : Riding on the festive season, automakers clocked a high double-digit growth in the month of October. Passenger car sales were up 16.3%, while motorcycle sales clocked a growth of 13.2%.

Passenger vehicles which includes multi-purpose vehicle and utility vehicles sales were up 14.5%.

According to primary sales figures released by the Society of Indian Automobile Manufacturers (SIAM) on Thursday, the mini- and compact-segments — which includes all hatchbacks — in passenger cars registered a growth of over 19% and stood at 64,868 units in October as against 54,290 units in the corresponding month last year.</b>

Auto analysts believe the segment’s growth has been largely fuelled by Maruti’s models — Alto and the new Wagon R (including its LPG variant.)

“The mid-size segment also has seen a lot of action this month with many launches compared to last year and has a seen a good growth,” says Abdul Majeeck, auto analyst at PricewaterHouseCoopers. The mid-size segment car sales reported strong growth and were up 34.5%.

A total of 17,051 units were sold as against 12,668 units during October ’05.“The retail sales for all motorcycle makers have been very high this season, which is almost 20% more than the primary sales,” says Atul Gupta, executive VP-sales, Yamaha Motor India.

Also, while 75 cc-to-below-125 cc bike sales registered a growth rate of 13.29%, the 125 cc-to-below-250 cc segment has clocked a growth of 13.01%.

Auto analysts believe this indicates bikers in India are steadily upgrading their vehicles. Commercial vehicles have also clocked a robust double digit growth of 21.7%.

The mid-sized and heavy commercial vehicles segment grew by 27.6% and stood at 22,183 units. Light commercial vehicle sales were up 14.5% and stood at 16,371 units.

Exports of passenger vehicles grew by 9.6% and stood at 15,077 units as compared to 13,750 units in October ’05. Exports of motorcycles have shot up by over 50% and stood at 45,779 units in October

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<!--emo&Sad--><img src='style_emoticons/<#EMO_DIR#>/sad.gif' border='0' style='vertical-align:middle' alt='sad.gif' /><!--endemo--> Where does India need to focus, Cities or Villages?
Lively discussion has started when Financial Times published Boston Consulting Groups Janmejaya K Sinhas views on importance of further expanding Indian cities, ignoring the growth of Indian villages. <<http://www.financialexpress.com/about/feedback.html>http://www.financialexpress.com/about/feedback.html> JANMEJAYA K SINHAPosted online: Wednesday, November 08, 2006 at 0000 hours IST To me, villages are about candles and torches, cow dung, flies and mosquitoes. They are about caste, gender inequality and a static social orderJanmejava K. Sinha, <mailto:Sinha.Janmejaya%40BCG.com>Sinha.Janmejaya@BCG.com Reader will be able to refer to many articles written by experts such as President Abdul Kalam on the subjects of Sustained Development, and Rural Growth. Here, parts of the texts from feedback is given. Your views may be sent to Dr. Mohan Jain <mailto:m.jain%40idc-america.org>m.jain@idc-america.org Feedback: 1. "Gandhi's Seven Steps to Global Change." by professor Guy de Mallack. I am also forwarding an article by Gandhiji and exchange of letters between Nehru and Gandhi 60 years ago on this question, for you to better understand why he so strongly recommended making life better in the villages for an ideal living to fulfill the purpose of life. I am also sending a dialogue between a farmer and educator who is visiting the village to teach the poor farmer. Please click: <http://www.swaraj.org/shikshantar/resources_soni3.html>http://www.swaraj.org/shikshantar/resources_soni3.html . I am also forwarding HH Dalai Lama's observation about the modern life, "Paradox of our Times" for your further enlightenment. I will end this with a quote from a Native American leader about the City life in America. "In our cities we have lost much of our grace and naturalness in the name of civilization. We have created noisy, dirty, crowded places to gather and live in and in this process we have retarded our spirituality. For me there is nothing so rejuvenating as being out in nature and experiencing this sacred hoop of life directly."Dr. Mohan Jain <mailto:m.jain%40idc-america.org>m.jain@idc-america.org 2. This village is classified, in terms of economic well-being, at the 'bottom of the heap' - because the percapita income here is well below the poverty line our economists have drawn. However, these indices are very misleading. It is true that the cash income of these villagers is very low, but the fact is that in this village practically everybody has at least an acre of land. It is dryland, so its economic resale value is low, but it yields them a fair amount of ragi every year, except in drought conditions. Ragi being their main staple food, there is therefore no starvationIn a major study by 1300 scientists sponsored by the UN, completed in 2005 have concluded that mankind's actions have already degraded the 65% natural resources of the planet earth. We need a new paradigm of development. Read Plan B 2.0 by Dr. Lester r. Brown of the Earth Institute, Ecology of Commerce by Paul Hawken, and Rethinking Progress by Dr. Hari Lamba. The present model of development is in contradiction of our age old philosophy of life. The city life does not promote it in any way. Ananthu 4. Just take a look at a village called Manipal near Udupi which does not lack any of the "ultra urban" facilities the author is talking about. Any day Manipal is better than many of the cities suggested as ideals by the author. It is not necessary to have the educational advantages of Manipal. An Indian village with PURA facilities suggested by the President can indeed be million times better than the hell of Dharavi any day. Bhamy V Shenoy , <<mailto:bhamysuman%40hotmail.com>bhamysuman@hotmail.com> 5. The author's (Sinha) views may be acceptable to some people in highly industrialised world. Even there more and more people are slowly realising the futility of large city based socio/economic life. But for a country like India with huge rural population, limited natural resources and traditional life style the concept of large city based socio/economic life will be ruining.I am also worried that the policies of the various govts. in India either explicitly or implicitly seem to indicate that they also are inadvertantly moving towards city based economy. A recent economic report that of late the contribution to GDP by urban areas in India is more than 70% makes it much more worrisome. Shankar Sharma, <mailtoConfusedhankar.sharma2005%40gmail.com>shankar.sharma2005@gmail.com 6. What we have today is some sort of creeping expansion. Rural population is moving in, creating new slums where cheap labor is forced to stay. Since there is no planned expansion, there is utter confusion. Politicians in cities do not wish to make any expansion plan known to the general public much ahead of its implementation. Each politician buys land where a new major facility will be set up. For example, the new airport. Much of the land is "agricultural", but politicians first buy them in a given area, and then announce a major project in that area. Then they "convert" the land -- just a piece of paper -- into residential or industrial. Prices shoot up exponentially, and the first-in makes all the profits from the land deals (the farmer already sold the land to the politician at a low price). This is the officially sanctioned form of corruption. Nothing less. It also gives everyone involved an opportunity to sanitize their black money. Abraham M George, <mailto:amgeorge%40optonline.net>amgeorge@optonline.net 7. Mr. Sinha is missing several things:a) Impact of technology (Internet, Cell phones, etc.) on where the workers can live. Need for masses of workers to support manufacturing is a thing of the past with automation and robots. b) Impact of increasing service sector on where workers need to work. Banking and Credit Card companies in the US have been pushing operations to "boon docks" for years since technology permits. Serivice jobs can go where people are unlike manufacturing where people have to flock to the plants. c) Impact of increasing urbanization. More traffic jams, more pollution, more water problems, so on and so on. d) Infrastructure impact. Suppose you want to move 200 million people into 100 cities as Mr. Sinha wants to do. How many billions of dollars does it take? In the US, number of homes built in the last 60 years is probably in the 50 mil range and may be another 50 million in apartments. How much money does it cost to build them in today dollars? It will be in trillions of dollars. Even in India, the infrastructure costs for moving 200 mil will be in trillions of dollars. e) Impact on physical resources. How much concrete, cement, steel, wood, coal, electricity, oil, water, etc. do we need? Mr. Lester Brown has already covered this topic in his book on Plan B. The world doesn't have resources to put billions of people in cities. f) >>>> Whether we realize it or not, the slums of Mumbai are a virtual Shangri-La compared to a village.>>>> This is the most atrocious comment I have ever heard. May be he hasn't seen the real slums in Mumbai. I come from a village. If you do a survey today, vast majority of the villagers will say that they want to stay where they are if they have a livelihood. Mr. Sinha should read articles by P. Sainath. He has written articles about the plight of the villagers who flocked to cities like Mumbai. Mr. Sinha should have a chat with Sainath. Ratnam Chitturi 8. Sinha wants to celebrate the migration of the rural populace to the city'. Does he ever travel to the slums of Mumbai? Does he fly over them in a helicopter. Mumbai's slums today account between 50-65% of Mumbai. Where will Sinha go, once this number reaches 90%. Ram Krishnan <mailto:rkrishnan46%40yahoo.com>rkrishnan46@yahoo.com
<b>Karma Capitalism</b>

[center]<b><span style='font-size:14pt;line-height:100%'>India's economy</span></b>[/center]

[center]<b><span style='font-size:21pt;line-height:100%'>Too hot to handle</span></b>[/center]

<b>Why the sizzling Indian economy is more at risk than China's</b>

[center]<img src='http://www.economist.com/images/20061125/D4706FN1.jpg' border='0' alt='user posted image' />[/center]

INDIA'S curries can be even hotter than the fieriest of Chinese hotpots; likewise the temperature of the two economies. Despite widespread claims that China's economy is overheating, actually India's shows more signs of boiling over.

In the year to the second quarter, India's GDP grew by an impressive 8.9%, while China's more up-to-date figures show even more breathtaking growth of 10.4% in the year to the third quarter. But to judge whether an economy is too hot, one needs to compare this expansion in actual demand with potential supply, ie, the sustainable rate of growth. Despite India's growth spurt in recent years, its sustainable pace is still much lower than China's, which puts its economy more at risk of overheating and rising inflation.

China's double-digit growth may look like a danger sign but there are few of the usual troubles. Inflation is only 1.4% and China has a widening current-account surplus, which implies excess supply rather than excess demand. Nor do asset price gains look particularly excessive. Average house prices have risen by less than 6% in the past 12 months. And share prices have gained only 42% in the past four years. Even the expansion of bank credit has slowed to an annual pace of 15%, not much faster than nominal GDP growth.

In contrast, India's economy displays an alarming number of signs that things have gone too far. Consumer-price inflation has risen to almost 7% (see chart), well above Asia's average rate of 2.5%. A recent report by Robert Prior-Wandesforde at HSBC finds many other signs of excess. For example, in a survey of 600 firms by the National Council of Applied Economics Research, an astonishing 96% of firms reported that they were operating close to or above their optimal levels of capacity utilisation—the highest number ever recorded. Firms are also experiencing a serious shortage of skilled labour and wages are rocketing. Companies' total wage costs in the six months to September were 22% higher than a year earlier, compared with an average increase of around 12% in the previous four years.

[center]<img src='http://www.economist.com/images/20061125/CFN570.gif' border='0' alt='user posted image' />[/center]

India's current account has shifted to a forecast deficit of 3% of GDP this year from a surplus of 1.5% in 2003—a classic sign of excess demand. Total bank lending has expanded by 30% over the past year, close to the fastest growth on record.

India's share and housing markets also look bubbly. Draft proposals by the central bank on November 17th to cap banks' exposure to stockmarkets and curb reckless lending only mildly dampened the optimism. Share prices are almost four times their level in early 2003. India's price/earnings ratio of 20 is well above the average of 14 for all Asian emerging markets. House prices have also gone through the roof: Chetan Ahya of Morgan Stanley reckons that prices in big cities have more than doubled in the past two years. Housing loans jumped by 54% in the year to June (the latest figures available) and loans for commercial property were up by 102%.

Indian policymakers seem reluctant to admit that economic growth has exceeded its speed limit over the past three years, let alone slow it. They prefer to bask in the belief that India has become another China, able to keep growing ever faster without inflation rising. Palaniappan Chidambaram, the finance minister, has said the Indian economy will continue to grow by more than 8% in the next few years.

India's trend growth rate has almost certainly increased but it is still nowhere near as high as China's. Mr Prior-Wandesforde estimates that it is now around 6.5%, up from 5% in the late 1980s. But India's recent acceleration largely reflects a cyclical boom, thanks to loose monetary and fiscal policy. The Reserve Bank of India has raised one of its key interest rates by one and a half percentage points to 6% over the past two years, but inflation has risen by more, so real interest rates have fallen and are historically low. This makes the economy more vulnerable to a hard landing.

India cannot grow as fast as China without igniting inflation because of its lower investment rate, particularly in infrastructure, and labour bottlenecks. The latest government figures, for the year ending in March 2005, put total investment at 30% of GDP, compared with over 45% officially reported in China.

Some, however, believe that an investment boom is under way. A recent report by Surjit Bhalla of Oxus Investments, an economic research firm and hedge fund, has caused a stir by estimating that investment in the year ending in March 2007 will reach between 38% and 42% of GDP. Such investment, he says, would allow India to sustain 10% annual GDP growth.

Sadly, Mr Bhalla's estimate for investment is almost certainly too high. Unless saving (29% of GDP in 2004-05) has also surged over the past two years, an investment rate of 40% would imply a current-account deficit (which must equal the gap between saving and investment) of close to 10% of GDP. This does not square with trade figures and, in any case, it would hardly be a sign of economic health. Nor does a significant increase in saving look likely given strong consumer spending this year and only a modest fall in the government's budget deficit.

When China's President Hu Jintao held meetings with the Indian prime minister, Manmohan Singh, in Delhi this week, they agreed there was room for both countries to prosper in their overcrowded corner of the world. It is, however, wishful thinking to believe that India can now run as fast as China without a higher investment rate and a more flexible labour market. The danger of red-hot curries is that they can leave one gasping and in tears.

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The latest on Indian Economy , as our Prime Minister sees it:-
Quote
Consensus on growth: Prime Minister

Government of India



There is a consensus across political parties on the need for a high rate of growth, said Prime Minister Dr Manmohan Singh. He was addressing a group of select CEOs attending a tea at his residence as part of the program of the India Economic Summit 2006 organised by the World Economic Forum and the Confederation of Indian Industry in New Delhi today.

The Prime Minister reiterated that while there may be some differences regarding certain issues such as privatization, there was agreement that greenfield projects should be open to the market. The interplay of dynamism between the world entrepreneurial community and domestic entrepreneurs would aid in the growth process.

A lot of work is needed for giving the ‘buzzword’ of inclusive growth substance, stated Dr Singh. Unless jobs are created, opportunities arise, and backward regions are integrated, India’s growth will fall by the wayside. He expressed confidence that with the strong team of the government, India will make progress and march forward at 8 per cent.

Lauding the initiatives of the World Economic Forum and CII, the Prime Minister stated that they had familiarized the international economic community with the progress in India. When the India Economic Summit began more than twenty years ago, it was an act of faith, but since then many hurdles have been crossed. The Summit has managed to sell India to the rest of the world.

Ending his brief address, Dr Singh said that a lot has to be done in India and that his government is committed to doing the necessary work.

Earlier, Mr Klaus Schwab, Founder and Executive Chairman, WEF, and Mrs Collette Mathur, Senior Adviser, South Asia, WEF, welcomed the Prime Minister to the interaction with the CEOs, and expressed gratitude for his support to the India Economic Summit over the years. Mr R Seshasayee, President, CII, wrapped up the proceedings by saying that the power of India’s youth, knowledge and enterprise can meet the challenges of growth. He pointed out that for the first time, the number of overseas delegates exceeded the number of Indian delegates at the Summit.

The session was followed by an interaction of the Prime Minister with the delegates over tea.

New Delhi
26 November 2006

Ynquote

<b>Automobile Industry grows over 16.14 % in April- November 2006</b>

The Automobile Industry registered a total production of 7.4 million vehicles in April-November 2006 and witnessed a production growth of 16.70 percent in April-November 2006 compared to April - November 2005.

<b>Domestic Sales</b>

The cumulative growth of overall Passenger Vehicles during April-November 2006 was 20.68 percent.

Overall Two Wheeler market grew by 14.43 percent during April-November 2006 over the same period last year. Motorcycles grew by 17.20 percent; Scooters grew by 0.62 percent and Mopeds Grew at 4.68 percent.

Three Wheelers sales grew at 18.66 percent. Goods Carriers grew by 22.72 percent and Passenger Carrier grew at 15.88 percent during the April-November 2006, over the same period last year.

Overall Commercial Vehicles segment grew at 35.50 percent. Growth of Medium & Heavy Commercial Vehicles was 37.96 percent. Light Commercial Vehicles also performed well with a growth of 32.13 percent.

<b>Exports</b>

Overall automobile Exports registered 27.25 percent growth rate in April-November 2006 over the same period last year. Passenger Vehicles Exports grew by 11.83 percent.

Two Wheelers Exports grew by 25.32 percent and Commercial Vehicles by 28.31 percent.

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<b>Indian remittances from Gulf reach USD 20 Billion</b>

<b>DUBAI : Some six million Indian expatriates in the six oil-rich Gulf Arab states will send home this year around $20 billion in remittances, a United Arab Emirates official said in remarks published on Friday.</b>

Economy Minister Sheikha Lubna al-Qassemi was speaking at a meeting of Arab and Indian businessmen in Dubai attended by India’s minister of commerce and industry, Kamal Nath, the daily Emirates Today reported.

It quoted Nath as saying Indians’ remittances from the UAE alone would reach six billion dollars this year, and that India could easily get an additional two billion dollars in investment from Gulf Cooperation Council (GCC) states.

India needs as much as 150 billion dollars in foreign direct investment in the next seven to eight years, while the UAE and other Gulf states are looking at lucrative places to invest in, Qassemi told the gathering.

India, which gets most of its oil from the Gulf, is negotiating a free trade agreement with GCC members Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE.

GCC Secretary General Abdulrahman al-Attiyah said in March that a free trade pact would boost the volume of trade between the two sides from an estimated 12.8 billion dollars in 2005 to 15 billion dollars in coming years.

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As if they are doing us a favour
Role reversal Brits head to India
http://news.bbc.co.uk/1/hi/uk/6171837.stm

There are at least 32,000 Britons now living in India, according to new research - and its the economy that is sucking them in, a twist of migration history between the two countries.

Yusuf Hatia is one such Brit who has decided to move to Mumbai after the public relations firm he works for, Fleishman-Hillard, decided to open in India. After testing the waters, he says he is preparing to take his young family out there.

<b>"My major concerns were around the general poverty, the fear of malaria that all British seem to have - and the standard of living,"</b> he says.
......................
Dalbir Bains, however, misses her London life and everything English that was part of it.
......................
I miss my family, my friends, the dialogue, the contact, simple things like finishing work and going to a pub for a glass of wine," she says.

"You can't do that here. <b>I miss English food</b> and I really miss going to Sainsbury's and buying your whole weekly shop in one go. There is nothing really that compares here.
.......................................
Asad Shan is a model-actor who moved to Mumbai earlier in 2006.
Asad also says he has blended in quite well - but is sometimes surprised to find <b>India more progressive in some respects.
"I think our upbringing in England tends to be more traditional and parents expect certain values from you.</b> (--looks like he is a Paki masquerading as an Indian--) , such as you can't be seen with someone or you can't go to certain places.
<b>"Here everything is so open, you are like, wow, I wouldn't do this [in England] but here it's all happening," he said. </b>
..............

<b>Industrial output slumps, Oct's 6.2% lowest this yr</b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->India's industrial output growth trickled to 6.2 per cent in October, the lowest this fiscal, on account of a slowdown in manufacturing production.
The Index of Industrial Production, which measures the growth in output of manufacturing, power generation and mining, rose 6.2 per cent during the month as against 9.8 per cent in the same month last fiscal.

Manufacturing increased at six per cent in October from 10.9 per cent a year ago, as growth in production of consumer goods, durables and non-durables almost came to a standstill, as per the data released by Central Statistical Organisation.

Electricity generation grew 9.7 per cent during the month under review compared to 7.7 per cent, while mining output increased four per cent as against <b>a negative growth of 0.1 per cent in the same month of 2005-06.</b>

<b>The lower growth in industrial production could ease pressure on Reserve Bank of India to raise interest rates.</b>

.............<!--QuoteEnd--><!--QuoteEEnd-->
Not a good sign, agriculture sector is way down, now manufacturing.

[center]<b><span style='font-size:14pt;line-height:100%'>Vehicle Production crosses 10 million in 11 months</span></b>[/center]

An analysis of production data by the Society of Indian Automobile Manufacturers (SIAM) revealed that the vehicle production by Automobile Industry in India crossed 10 million in a calendar year for the first time in the history of the automobile industry in India. For the period, January to November 2006, the total production of vehicles in India, as per SIAM data, was 10,031,886. Given that the 10 million mark was exceeded by just over 31,000 vehicles it is certain that the 10 millionth vehicle was produced on 30th November 2006.

The 10 million mark was achieved as the industry grew at 16.82% as compared to last year. Last year for the same period, 8,587,131, vehicles were produced. The fact that the industry served the needs of mobility of the masses was underscored by the fact that over 77% of the vehicles were two wheelers. According to SIAM, 7,741,261 two wheelers were produced this year as compared to 6,686,963 during the same period last year, reflecting a growth of 15.77 %. Motorcycles and Step-Throughs led the growth in the two wheeler segment with an increase in production of 19.96%.

Other segments including passenger vehicles, commercial vehicles and three wheelers have also demonstrated significant growth in the period January to November 2006 compared to the corresponding period last year. Passenger car production also crossed the 1 million mark in the 11 month period, 1,100,799 passenger cars were produced. In the Passenger Vehicle segment, passenger cars recorded the growth of 18.59% and Multi-purpose vehicle 9.24%. The overall increase in production of passenger vehicles was 16.38% in the period January to November 2006 compared to the corresponding same period in the last calendar year 2005. Passenger vehicles accounted for about 13.60% of the total automobile production.

In the Commercial Vehicle segment, Light Passenger Carriers showed positive growth of 9.26 % and goods carrier in both the M&HCVs and Light Commercial Vehicle category grew by nearly 30%. The 189,716 LCVs and the 251,114 M & HCVs produced in the 11 months, accounted for about 4.4 % of the vehicle production.

In the three wheeler segment production of passenger carriers grew by 34% compared to a growth of 17.20% in the goods carrier category. A total of 485,049 three wheelers were produced in the 11 months so far.

The drivers for this performance continue to be strong fundamentals of the Indian economy, increasing purchasing power, new and contemporary product launches, attractive schemes from manufacturers and financial institutions. The growth in exports also contributed in a major way to reaching this significant mile stone. Export of 561,285 two wheelers, 109,075 three wheelers and 175,746 passenger vehicles, were the highlight, reflecting a growth of 23.79%, 65.09% and 11.26% respectively, over the corresponding period last year.

Reaching the 10 Million mark in production augurs well for the Indian industry and the economy. This was particularly important in the context of the vision set out in the Automotive Mission Plan (AMP) of the Government to make India an automotive hub. Implementation of the AMP would further give an impetus to the industry and the Indian economy.

Cheers <!--emo&:beer--><img src='style_emoticons/<#EMO_DIR#>/cheers.gif' border='0' style='vertical-align:middle' alt='cheers.gif' /><!--endemo-->
<b>Your horoscope holds the key to a plum job!</b> <!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Recently, a brokerage house, which was doing the rounds of some of Mumbai’s B-schools, asked the short-listed candidates to submit their horoscopes for evaluation by a renowned astrologer. The candidates were told their job would depend on the astrologer’s nod.

<b>Darashaw & Co Pvt Ltd</b>, one of the oldest broking and investment banking houses of the country, short-listed a few students and asked for their horoscopes, which <b>will be individually evaluated by Bejan Daruwalla. </b>

According to a source, three students each from IES Management College and Sydenham Institute of Management Studies have been short-listed and one from MET has also made it to the final round—of submitting the horoscope.

“Initially, it was the usual stuff, which comprised of personal interviews and group discussion. After the successful completion of these,<b> we were offered a package of around five lakh. And we were asked to submit our horoscopes, which, we were told, would be evaluated by Bejan Daruwalla</b>,” said a student who did not wish to be named. Attempts to get in touch with the HR director of the brokerage firm proved futile. Placement agencies sources told FE such selection processes are not uncommon.
<!--QuoteEnd--><!--QuoteEEnd-->
In US they do writing evaluation. <!--emo&Big Grin--><img src='style_emoticons/<#EMO_DIR#>/biggrin.gif' border='0' style='vertical-align:middle' alt='biggrin.gif' /><!--endemo-->

<b>Indian Automobile Industry in 2006</b>

Based on the trends observed till November 2006, the automobile industry is expected to register a total production of around 10.9 million vehicles in the calendar year January to December 2006 and witness a production growth of 17%. This is up from 14.5% growth witnessed in 2005 over calendar year 2004.

<b>Domestic Sales</b>

The cumulative growth of passenger vehicles is expected to be almost 19% during the calendar year. This is in contrast to less than 7% growth witnessed in 2005 over 2004. Passenger cars are expected to grow at around 20.5% compared to 12.1% for utility vehicles and 16% in MPVs.

A Look at the sub-segments of the passenger cars one notices mixed performances. While mini-cars (-7.2%) and premium cars (-5.6%) are expected to register a negative growth, the compact (25.3%), mid-size (18.9%), executive (32.9%) segments have registered significant growth during the calendar year.

Overall commercial vehicles sales is expected to grow at 30% with both M&HCV and LCVs showing similar trend (around 30% growth). However, it is expected that while the goods carriers will be growing at around 34-35%, the passenger carrier segment is not keeping pace with the overall growth and expected to be only around 5-7%.

For some time now multi-axle vehicles have been growing steadily due to a boom in economy and improved road network. But the Supreme Court verdict on overloading may have given a boost to the growth and demand for high tonnage vehicles. Also, at the lower end, small transport vehicles have created a new space for themselves and expanded the market in a new direction.

Overall two wheeler market will grow by 15% in January to December 2006 over the same period last year. Motorcycles to grow by over 17% while scooters and mopeds would grow by 4-5%.

Three wheeler sales have been encouraging this year (expected to grow at around 20%). Also passenger 3 wheelers have again picked up momentum and expected to grow at 22% compared to 17% for goods carrier unlike the previous year when goods carrier grew at a higher rate than passenger carrier.

<b>Exports</b>

Overall automobile exports are expected to register a 25% growth in the calendar year 2006 over the last calendar year. Passenger vehicle export is expected to be more than 190,000 in 2006 registering a growth of 11.7%. Two-wheeler and commercial vehicle should register over 24% growth in exports during the year while that of three wheelers will be 65%.

Cheers <!--emo&:beer--><img src='style_emoticons/<#EMO_DIR#>/cheers.gif' border='0' style='vertical-align:middle' alt='cheers.gif' /><!--endemo-->
Mittal seems to be rubbing the French elites wrong way
From The Telegraph
Mittal stirs up French elite, but there's no revolution on the shop floor
Reading the French press you might think that Lakshmi Mittal was imposing an Asian despotism on his European steel workers, fulfilling the worst fears of the Old World after snatching Arcelor from beneath the noses of the Paris establishment last summer.

<b>The Indian-born steel king is accused of tearing up the French "social model", shoving aside Arcelor's veterans and purging every last Frenchman from the combined Arcelor Mittal board. Top staff are said to be leaving in droves, offended that their counsel counts for nothing in a regime ruled capriciously by decree.</b>

Mr Mittal has taken tight control of the 330,000-strong company, the world's number one steel group, with 10pc of global output in 60 countries. By replacing a hapless Luxembourger as chief executive within four months of his conquest, he is accused of breaching the spirit, if not the letter, of the memorandum of understanding, in which he agreed to take a back seat.

<b>The promised "merger of equals" has become a sick joke, says Le Canard Enchaîné magazine, while research and IT operations are already being moved, as feared, from Europe to Brazil and Dubai.</b>
That, broadly, is the indictment, fleshed out with leaks deploring the use of twin helicopters by Mr Mittal and his boy-faced son, Aditya, the chief financial officer, even when visiting the same plant: parvenus, goes the grumbling, with airs of royalty.

<b>In short, nothing much has changed in elite French attitudes since the ex-Arcelor chief Guy Dollé first said a merger was unthinkable because Arcelor distilled perfume while the Mittals made cheap eau de Cologne. The reality on the ground is subtly different, not least because the shop-floor workers are deeply cynical about Paris ideology and the qualities of their own governing elite.</b>

While it would be too strong to say that Lakshmi Mittal has become a hero in the Lorraine rust-belt, French workers are far from hostile to a man viewed as a better long-term bet than the last lot.

"I am amazed to say it, but Mittal has given us hope," said Edouard Martin, a union chief at the CFDT labour federation in Florange.

Here in the Valle de la Fensch, where mills supply Peugeot, Volkswagen, Mercedes, and Toyota – the most demanding, say the workers – with flat steel, the 4,000 employees were already on death watch before the Mittal takeover.

The mills were to be run down over the next three years, more or less ending Lorraine's 200-year role as the hub of Franco-European steel production and the strategic prize of both the Franco-Prussian War and First World War.

The work was to go to the coastal mills of Dunkirk and Ghent, closer to iron ore supplies from Brazil. But that decision was taken before China's industrial take-off pushed prices of coiled steel from $250 to $640 a tonne in four years.

"It is a monumental error to close these plants, but we couldn't stop it. The first thing Mittal did was to take a fresh look," said Mr Martin.

"Everybody here knows that he took over a mill down the road that was about to be closed and it's still going seven years later. He hasn't turned it into a hell-hole, the workers haven't lost their social rights, so we don't believe these scare stories. The old managers hate the changes, of course, because he takes snap decisions, and doesn't listen to them. Nobody knew that Mittal was selling one of our plants to the Americans until it came out in the newspapers, and that rubbed people up the wrong way."

Clearly, the Mittal team needs to smooth a few rough edges. At the furnaces where layers of coke and ore are cooked at 1,350 degrees centrigrade, <b>the staff glower malevolently at a technical instruction chart on the wall written in English.</b>

"I hope Mr Mittal is now going to pay for us all to have English lessons," said an irascible steelman in his control cockpit.

His full bitterness, however, was reserved for ex-bosses, accused of concocting a €6.5bn pay-out to shareholders to fend off the Mittal takeover.

<b>"The management went mad. They gave everything away to save their own skins. That was our investment treasure for the future, and we're the ones who'll suffer for that," he said.</b>

The result of Arcelor's bare-knuckle defence was a windfall for hedge funds which surfed the stock for the ride, to the detriment of stakeholders – exactly the opposite of French social rhetoric.

The upshot of the epic takover battle is that the combined group now has debts of €20bn, compared with €5.9bn for Arcelor, with a gearing of 48pc. The group refinanced €17bn of debt with a syndicate of 26 banks in December.

Lakshmi Mittal seems to take pleasure in ruffling French feathers, contrasting Europe's decadent attitudes with the willingness of the Japanese to commit "hari-kiri" to meet deadlines.

<b>"What frightens us is that Mittal is a financier rather than an industrialist," </b>said Mr Martin.

"The man is obviously brilliant. But there is a feeling that we're all working just to make him richer."

The fear is echoed through every level of the machine Arcelor. "Yes, there is perhaps greater emphasis on profit," said one manager of the Florange operations. "We are marrying the two cultures of dollars and euros, and that takes time, but it is not true that there is some sort of French rebellion against Mr Mittal. On the contrary, there's a new feeling of hope."

Michel Wurth, a member of the management board, said the scars left by the takeover war would heal with time, while fears of the debt mountain were overblown.

"Our style has changed," he said. "The management is much closer to day-to-day business than it ever was, and we have a proper budget at last. A few of the old guard are leaving, but I have a lot of French in my team and they are very happy.

"Our debt ratio to EBITDA [earnings] is only 1.5, falling to 1.3 by 2010, and that is quite reasonable even in a cyclical industry." The debt is coming down fast. Net cash flow in the third quarter was €1.7bn.

As for the historic mills of Fensch Valley, he offered no promises.

"They're making money, and they're very well placed near the heart of Europe's car industry. If the business cycle allows, they may have a useful life beyond 2010."

Of course, family dynasties are nothing new to French steel. The de Wendel family owned the valley for 200 years, running their mills with autocratic severity.

But then that is the problem. The de Wendel mills were nationalised to ensure that a strategic industry employing thousands of workers was run for the benefit of French society.

And, for all their faults, the de Wendels were at least sons of Lorraine, rising to the patriotic cause when push came to shove. The French are entitled to ask whether the Mittals will defend their Florange fiefdom with same fervour if the chips are ever down.
<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>Inflation skyrockets, exceeds RBI's fears </b>
Pioneer News service | New Delhi
Govt 'concerned', corrective steps inevitable: FM
After the feel-good stories of GDP growth and Sensex boom, the bitter reality of the economy is back to haunt the UPA Government. The galloping inflation raises serious concerns about demand-supply mismatch and threatens an all-round increase in the price index.

With the inflation figure far ahead of the 5.5 per cent of the RBI's projection for this fiscal, an all-round interest hike seemed inevitable. The interest hike may come about when the RBI takes up credit policy review on January 31. For the aam admi, who is reeling under the burden of ever increasing prices of consumer goods, including vegetables and foodgrains, there is bad news in store.   

<b>Finance Minister P Chidambaram on Friday admitted that inflation, which has touched a two-year high of 6.12 per cent, is a cause for concern.</b>

Even as the Finance Minister talked of measures to curb the inflationary trend in the economy, industry body Assocham president <b>VN Dhoot said in a statement that inflation was expected to rise further over the next two-three months</b>.

The chamber suggested that the Reserve Bank should take corrective steps in both the repo and the reverse rates in the forthcoming monetary policy review on January 31.

Spelling out measures to contain the inflation, Chidambaram said, "Ultimately inflation is a monetary phenomenon and is influenced by supply side. Hence, the Ministry of Finance is in touch with both the Reserve Bank and the Ministry of Agriculture and Consumer Affairs. We will watch the situation carefully and take whatever steps are required to be taken."

Inflation touched 6.12 per cent for the week ending January 6, compared with 5.58 per cent for the previous week. The reason was primarily sharp increase in prices of consumer goods like tea, vegetables, fruit, maize, arhar, wheat, and various seeds. Aviation turbine fuel, naphtha and furnace oil have also moved up. Prices of some manufactured items like steel products and edible oil have risen too.

<b>The Wholesale Prices-based Inflation (WPI) crossed six per cent for the first time this fiscal. </b>During the last year, inflation stood at just 3.86 per cent during the week ended January 7, 2006.

<b>With agriculture growth stagnated below four per cent, the prices of eatables are unlikely to improve in the near future. This would make the Finance Minister's task to curb inflation all the more difficult</b>. With projections showing that the Government has failed to cut down both revenue and fiscal deficits, Chidambaram may find it difficult to meet the expectation of the allies in presenting his next budget.

<b>Majority of the UPA allies and the Left are opposed to tax increases and reduction of subsidy and are pressing for more populist measures. The rising inflation will reduce the Finance Minister's scope to balance his books while accommodating the demands of the allies.</b>

Aware of the compulsions of coalition politics, both Prime Minister Manmohan Singh and Chidambaram have been pleading with the Left and other allies to unshackle the reform process, but so far they have miserably failed. The rising inflation may just be the side effect of this failure.

Experts feel that there could be more bad news in store on the economic front in the months to come.
<!--QuoteEnd--><!--QuoteEEnd-->

Nareshji,
I told you, Moron Singh and his gang are messing up India's economy. We are seeing and more bad news will soon hit. Even Oil price are dropping but poor management is main problem. Moron Singh should take retirement along with Aiyar and Chitambaram.

<!--QuoteBegin-Mudy+Jan 20 2007, 08:35 AM-->QUOTE(Mudy @ Jan 20 2007, 08:35 AM)<!--QuoteEBegin--><b>Inflation skyrockets, exceeds RBI's fears </b>

Nareshji,
I told you, Moron Singh and his gang are messing up India's economy. We are seeing and more bad news will soon hit. Even Oil price are dropping but poor management is main problem. Moron Singh should take retirement along with Aiyar and Chitambaram.
[right][snapback]63288[/snapback][/right]<!--QuoteEnd--><!--QuoteEEnd-->

<b>Mudy Ji :</b>

Not being an economist one cannot pontificate any altruism.

In addition one is neither a “Manmohan Fan” nor a Kriminal Kaangress Kaamunist Klan”.

However, one does believe that the inflation owes quite a bit to the Oil Prices and also International Commodity Prices.

One of the Forum’s Economic Guru is requested to explain it better.

IMHO : MMS & PC can take retirement or there is even hope of their improving. However, MSA must be deported to Pakistan or China.

Cheers <!--emo&:beer--><img src='style_emoticons/<#EMO_DIR#>/cheers.gif' border='0' style='vertical-align:middle' alt='cheers.gif' /><!--endemo-->
Good news for India despite the predictions of 108 Shri Mudy Maharaj

Quote

MAXIMUM INDIA


S&P upgrades India rating



Investment Grade To Allow Cos To Raise Cheaper Loans Overseas, Lure Foreign Funds & Lift Credit Ratings Of Indian Banks, FIs


Our Bureaus MUMBAI/NEW DELHI




IT'S a rebuff to sceptics who are yet to buy the India story. The world's largest rating agency, Standard & Poor's (S&P), has upgraded the country's sovereign rating to "investment grade".
The move will allow Corporate India to raise cheaper loans in overseas money markets, pave the way for international funds that avoid investing in speculative grade, and automatically lift the credit ratings of several Indian banks and financial institutions.
With this, for the first time in 15 years, all three global rating agencies, including Moody's and Fitch, have placed India in "investment grade". The decision marks a dramatic reversal of the situation in 1991, when S&P downgraded India to below investment grade following the balance of payments crisis.
The upgrade "reflects the country's strong economic prospects and external balance sheet, and its deep capital market, which supports a weak but improving fiscal position", said an S&P release. The sovereign rating now stands at BBB- from BB+. The `stable' outlook signifies there is no threat to the present rating but substantial improvements are required for a further upgrade.
I am happy. It is an acknowledgement of India's improving macroeconomic stability and strength," finance minister P Chidambaram said soon after the announcement.

W H AT T H E U P G R A D E M E A N S . . .



CORPORATE

Indian cos, banks can
bargain for cheaper overseas loans
More merger &
acquisition, LBO opportunities for Indian Inc

MARKETS

Higher inflows
could partly offset a rate hike impact
Pension and other
global funds with low-risk appetite can now invest

ECONOMY

India exposure
limits for foreign banks to rise
Increased inflow
of foreign direct investments into the country

India’s much sought-after destination for investors


EVEN with the upgrade, countries like China, Malaysia, South Korea, Thailand, South Africa and Russia have higher ratings than India while Mexico and a few East European countries are at the same level as India. However, India is still a more sought-after destination due to its growth potential and the fact that it has the largest number of institutions whose ratings are constrained by the sovereign rating.
“The concern over fiscal consolidation has waned. The growth rate is sustainable and though debt levels are high, revenue collections are good...Since India has had a volatile rating history, S&P possibly wanted to wait and make sure there is enough conviction behind the move,” said R Ravimohan, CEO of Crisil, the Indian subsidiary of S&P.
The announcement crystallises the expectations built in by FIIs. It also opens the doors for a number of international funds, which by their charter are not allowed to participate in speculative grade investments, according to economist Saumitra Chaudhuri.
Institutions that now stand upgraded to investment grade are SBI, ICICI Bank, IDBI, Bank of India, Indian Overseas Bank, UTI Bank, Exim Bank, Power Finance Corp and IRFC. All these institutions will now have a wider choice of investors and consequently cheaper foreign loans. Mr Chaudhuri said Indian corporates are already getting a good spread as there are no big borrowers, primarily because of the lack of paper from India. But the rating will be able to get a good spread when borrowings increase.
According to S&P’s credit analyst Ping Chew, “Fiscal consolidation commitments across all levels of governments look to be entrenched.” S&P expects both central and state governments to be able to manage the fiscal vulnerabilities.
The central government’s budget deficit for the current year seems to be back on track to meet its target of 3.8% of GDP due to strong revenue collections. Estimates for the current year suggest that the combined central and state government deficit is likely to fall below 7% of GDP. There is enough tax elasticity in the system to support growth in revenue. For states, implementation of VAT has resulted in robust revenue growth.
The secular decline in general government deficits in the medium term is likely to continue due to tax reform and improved administrations, and implementation of fiscal responsibility laws across more state governments, currently enacted by 23 out of 29 state governments. India’s external balance sheet is strong due to reserves accumulation and prudent debt management. Foreign exchange reserves are more than 16 times the short-term debt and 5 times the country’s gross financing requirements and provide a buffer from changes in external and domestic investor confidence.
Mr Chew doesn’t see the rising current account deficit weakening the strong external sector because despite deficits, capital inflows will be strong. Even liberalisation of the capital market is not expected to impact the external sector. But certain concerns remain as India is still constrained by a weak fiscal profile, especially high government debt burden and deficit, which is still one of the worst among all rated sovereigns.
Further rating improvements will depend on sustained prudent fiscal policy that leads to a decline in the debt and interest burden. Inappropriate policy mix that increases the vulnerability of India’s still weak fiscal flexibility and erodes external and growth strengths could lead to downward pressures on the rating.

Unquote




<i>Mudiji
The Indian economy is expected to be growing at a rate of above 9 percent in the next ten years, that is the prediction of the experts. The leading rating agencies of the world have also indicated an enhancement in the economic rating of India, which is expected to enhance the inflow of foreign capital, particularly FDI into India. All these developments are very welcome sign. The expected growth of the Indian economy in the next two decades is expected to bring in vast social changes as with the increase in the employment opportunity around the country, there will be more urbanization and movement of people from one area to another within the country to man these new jobs.

At the same time, there will be increasing demand in the country for more land for industrial use. The demand for more land for the new industries in the various States may cause much tension and resentment amongst certain section of the general public. We have just witnessed one such example in West Bengal. A study by the Congress Party is understood to have indicated that the move to set up Special Economic Zones in different parts of the country by State acquiring agricultural land may cause severe resentment amongst the people who are going to loose land.


Apart from these problems, the orientation of our economic development needs adjustment so that the fruits of the economic growth reach the 200 million of the poorest of the poor people in India. In the last one decade there has been some improvement in the condition of a very small percentage of these people as a result of our economic growth. It has in fact given a major boost to the economic prosperity of the Indian middle class, which has also swelled in its number.


The need of the hour is to address the core issues facing the most vulnerable section of the society. Now what are the most important problems that we need to tackle to make an immediate impact. Some of the important issues are housing, health care, education and lastly job for the entire work force of the country.
The industrial growth of the nation alone is not going to bring in the change. A vast majority of India still lives in the villages and the economic and social development of the village will be the nodal point for creating any major impact on the condition of the most economically vulnerable section of our society.
In the past and even currently the Government have several development programs, which are aimed at addressing these core problems. However, the impact of these programes has not been much on the socio economic condition of the weaker and economically vulnerable section of the society. In India the infant mortality rate remains high and so is the lack of nutrition among the children and the young mothers. The health facility available to the general public both in the rural and urban areas remains far from satisfactory. Although we have reached a literacy rate of 65 percent, still a substantial number of children do drop out at the primary school stage and the enrolment of the girls remains considerably low in many of the States. The agricultural sector is still faced with inadequate Marketing Avenue for products produced by the marginal and medium farmers.
The sudden increase in the phase of industrialization has brought in substantial increase in the demand for power. Since, the generation capacity is much less than the pick demand there is long hours of power cuts in the country and most of the power cuts is in the rural areas including the agricultural sector.
In the educational sector, the rural schools often lacks the basic facilities and there is shortage of teachers in various States. Even where there is availability of teachers there attendance is very low. Coupled with this is the problem of parent’s reluctance in sending their children to school.
Every year in the rural areas, the Government undertakes small developmental work under the food for work scheme but here again there has been no permanent impact of these small time localized developmental works and after each rainy season not much is left of these developmental works. Even today vast areas in the agricultural sector has no assured irrigation facility except dependent on rain.
With the current ongoing liberalization process in full swing it is only a matter of time before the big business houses enter into retail trade particularly in dealing with farm products in a big way. It is too early to product its impact on the small time vegetable and fruit vendor in the country. In view of these developments it is high time to have a look on the impact of our economic growth on other aspects of our social life as well as other problems that may arise as a result of increased urbanization, economic disparity, more cars and vehicles on the streets etc. It is going to affect life in both the urban and rural areas of India.


So it is high time to examine the various aspects of the current economic boom so that a better deal can be ensured for the poorest of the citizens of the country. I hope we can have a lively debate on these issues which may genera new ideas.</i>
Naresh and Mudy

I am really not aware of any consumer indicators but inflation is going to be a killer if not kept bottled up. The figures in that article too seem somewhat low when compared to some on-the-ground experience. Housing prices have easily gone up 60-70% if not more. Same with office space. Maybe this is how it is during times of hyper-growth but this will have serious repurcussions on the social fabric of the country. I do not know how to keep the cake and eat it too.. <!--emo&Sad--><img src='style_emoticons/<#EMO_DIR#>/sad.gif' border='0' style='vertical-align:middle' alt='sad.gif' /><!--endemo-->


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