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Indian State Economies
TN has better purchasing power now

CHENNAI: Tamil Nadu is said to have considerably improved its ranking among the major five states in terms of total purchasing power (PP), luxury goods consumption and composite economic activity. This has been found in a study by the Business Intelligence Unit, a Chennai-based policy research and consultancy organisation.

It is estimated that India’s PP has almost doubled to Rs 14,86,200 crore in 2003 from Rs 7,63,500 crore in 1998. It indicated that the composition of basic goods in PP has fallen to 48% from 65% while that of luxury goods rose to 7% from 3% during the period.

The study has found Tamil Nadu in a stellar performance emerging third largest in total PP. It has surged by Rs 67,420 crore in the five-year period to Rs 1,19,509 crore . Its compounded annual growth rate of 18.07% is said to be the highest among the five major states. TN’s share also improved to 8.04% from 6.82% in 1998.

In 1998, it was ranked fifth in PP trailing Maharashtra , UP, West Bengal and Andhra Pradesh. It is now ranked third below Maharashtra which had Rs 2,11,690 crore (14.24% share) and UP Rs 1,74,056 crore (11.71%). WB had Rs 1,09,090 crore (7.34%) and AP Rs 97,558 crore (6.56%).

In the luxury consumption class, TN with Rs 8.520 crore ranked third after Maharashtra (Rs 22,824 crore) and Delhi (Rs 11,530 crore). In PP for luxury goods, TN has improved its position from seventh to third in a span of five years and its share in the aggregate luxury goods PP of the country has increased from 5.51% to 8.14%.

BIU’s index of economic activity(IEA) indicated that TN holds the third position among the five major states in terms of IEA-composite. In agriculture, industry, trade and finance, the state is ranked third in the country while it is second in transportation, professional services and housing. Maharashtra dominates in IEA with a composite index of 26.30 followed by Delhi 10.94, TN 9.89, Karnataka 6.61 and AP 6.58. The study found that 14 out of 30 districts of TN have 10,000 households in the income class above Rs 3.5 lakh per annum. There are 128 such districts in India . Twenty districts in TN (total 205 districts) have PP exceeding Rs 2,500 crore. Again 11 (total 91 districts) have PP luxury goods exceeding Rs 250 crore.

In terms of relative purchasing power ( measures PP of a district relative to India ’s aggregate PP), TN has 14 of the 100 districts in the country while 12 districts ( of 100) find a place in IEA composite.

Poverty line in the state appears to be sliding sharply. In 2003, 35.14% of households were earning less than Rs 37,500 per annum ( slightly over 55 lakh households). This compares favourably with the national average of 41.57% of households earning below the mark. However, 17 districts have households in the lowest income group higher than the state average of 35.14%. Worst among them are the erstwhile Ariyalur ( now merged Perambalur district), Tiruvannamalai, Vilupuram, Dharmapuri, Pudukottai and Ramanathapuram. These districts have low IEAs with low levels of agri and industrial activity. The services sector is also not well developed. Obviously, these districts cry for the attention of Government, said BIU.

well 35 % earn less than 37,500 ?
i think we may comfortably reduce some 15 % of it !
In my place a average mason/coolie earns 100-150 Rs/Day , add to that another partners income ....
<b>India's Top 10 Towns</b>

A ranking of the wealthiest, the highest consuming and the most aware towns in India springs many surprises.

By Rohit Saran

As Every resident of Thiruvalla town in Kerala on an average has bank deposits worth Rs 4,61,000. That is four to five times more than the per capita bank deposits in other Indian towns. Families in Indore in Madhya Pradesh spend more on low-priced consumer durable products than families in any other Indian city. People in Chandigarh splurge the most on high-end consumer durables. Over 90 per cent of Kochi reads at least one print publication-a feat no other Indian town can boast of. Panaji in Goa has the highest number of wealthy families in India. Valparai, not Chennai or Coimbatore, is Tamil Nadu's most prosperous town

This is not random economic trivia. These are snapshots from urban India's economic profile. Derived from the latest RK Swamy BBDO Guide to Urban Markets that ranks 784 towns in India-all urban centres with population of over 50,000 barring those in Jammu and Kashmir. The guide, unique in its depth and breadth, reveals an economic fabric of urban India that has not been put together before. Using data sources ranging from the Census of India to the Indian Readership Survey 2001 and the Fourth Economic Census Survey, the guide quantifies the purchasing power of Indian towns-a town's real economic value.

A town's worth is not just the total of income of the people living in it. Income indicates the ability to buy, which isn't the same as the willingness to consume. People's inclination to buy is reflected in their consumption pattern, which varies from region to region. Vadodara and Guwahati are among the top five spenders on expensive consumer goods, even though neither figures in the 10 richest cities. In contrast, people in Valparai are fourth richest in India, but they don't figure in the top 10 consuming towns.

The Super Rich
West and north India dominate ithe richie rich club. Surprise entry: Valparai

Family Wealth
Puppy Punjab dominates the ranks Surprise: Delhi's lead over Mumbai

Banker's Best
Flush with Gulf repatriations, Kerala cities win hands down


Per capita annual income in Rs.


% households with monthly income more than Rs. 10,000


Per capita bank deposits in
Rs '000

Chandigarh Union Territory 26710

Panaji Goa 77 Thiruvalla
Goa 26075 Ludhiana
Punjab 63 Panaji
Goa 150
Delhi 24141 Delhi
Delhi 62 Kottayam
Kerala 111

Tamil Nadu 23772 Amritsar
Punjab 60 Chittur-Thathamangalam
Kerala 98

Greater Mumbai
Maharashtra 23109 Jalandhar
Punjab 60 Tandur
Andhra Pradesh 90

Maharashtra 22817 Chandigarh
Union Territory 57 Margao
Goa 83
Punjab 22178 Pune
Maharashtra 56 Quilandy
Kerala 77
Tamil Nadu 21885 Greater Mumbai
Maharashtra 56 Mormugoa
Goa 76
Himachal Pradesh 21348 Valparai
Tamil Nadu 53 Malappuram
Kerala 72
Punjab 21254 Faridabad
Haryana 51 Thrissur
Kerala 70
Source: RK Swamy BBDO Guide to Urban Markets

Even with money and inclination, people may not buy a product if they don't know about it. Awareness becomes another critical factor influencing the purchasing power. Finally, how does a product or service reach a town if the transport and trade infrastructure isn't well established? Armed with 18 indicators reflecting income, consumption, awareness and market support (i.e. trade and transport facilities), RK Swamy BBDO ranked towns in 21 states and three Union Territories on their prosperity levels.

The rankings were used to arrive at three key indices: market potential value-an index that reflects the prosperity levels of towns; market intensity index-a measure of the quality of a market (after all some of the richest Indians do not live in the biggest towns); and a media exposure index that indicates exposure of a town to television, radio, newspapers, magazines and cinema. The tables used in these pages were derived exclusively for India Today by RK Swamy BBDO, one of India's oldest and largest advertising companies, to show not only the rankings on 12 out of the total 18 indicators, but also the values behind each ranks (see tables). The selection of the top 10 towns-from the vast pool of 784-provides just a glimpse of what urban India earns and consumes. All data used are the latest available at the level of towns.

Of Pots and Pans
Madhya Pradesh is a haven for makers of low-priced consumer durables The Big Spenders
Chandigarh's lead is awesome. Ranks of Guwahati and Shimla surprise Soap Sanctuaries
When it comes to personal hygiene, no region is in the clear lead
Town/State Ownership of products priced less than Rs. 1000 per 1000 papn Town/State Ownership of products priced over Rs. 6000 per 1000 popn
Town/State Average monthly spending on FMCG products in Rs.
Madhya Pradesh 1852 Chandigarh
Union Territory 720 Chandigarh
Union Territory
Andhra Pradesh 1792 Panaji
Goa 586 Greater Mumbai
Maharashtra 2955
Maharashtra 1766 Vadodara
Gujarat 585 Chennai
Tamil Nadu 2886

Punjab 1617 Guwahati
Assam 498 Ahmedabad
Gujarat 2869

Chhattisgarh 1593 Shimla
Himachal Pradesh 497 Vadodara
Gujarat 2816

Assam 1575 Margao
Goa 478 Pune
Maharashtra 2804
Madhya Pradesh 1538 Delhi
Delhi 470 Coimbatore
Tamil Nadu 2684
Madhya Pradesh 1536 Kochi
Kerala 469 Ludhiana
Punjab 2674
Madhya Pradesh 1536 Ludhiana
Punjab 463 Faridabad 2596
Madhya Pradesh 1535 Mormugao
Goa 442 Hyderabad
Andhra Pradesh 2533

The nuggets of wisdom the guide offers are both exciting and instructive. For instance, the size of a market may have little to do with the quality of the market. Mumbai is India's biggest market, but Chandigarh is India's wealthiest town. The implication is simple: an average family in Chandigarh, Panaji or Delhi has a higher purchasing power than an average family in Mumbai. Chennai and Hyderabad have higher per capita income than Kolkata but the capital of West Bengal is a bigger market. Bangalore is ahead of Hyderabad and Ahmedabad if income, consumption, awareness and market support are all taken into account. But in sheer size of the town income (per capita income multiplied by the population) Bangalore lags behind the other two a bit.

At the regional and state levels, the picture of urban markets gives an idea of prosperity patterns in the country. Towns in the west account for 33 per cent of the country's total urban prosperity. North Indian towns contribute 27 per cent, whereas towns in the east account for just 14 per cent. The regions south of the Vindhyas contribute to about 60 per cent of India's urban affluence-even though they account for less than 40 per cent of the country's population. Maharashtra alone has 20 per cent share in India's urban prosperity, while Uttar Pradesh, Uttaranchal, Jharkhand and Bihar together add up to just 12 per cent of the country's urban purchasing power.

Towns of Kerala present many paradoxes. The state stands head and shoulders above the rest of the country in awareness. India's top 24 towns in the readership of print publications are all from Kerala-the first town from outside the state entering the ranks is Guwahati at number 25. Similarly, the 26 towns that lead the country in radio listening are all in Kerala. But relative to the state's exceptionally high level of awareness, it ranks way down on all factors of consumption and prosperity.

When it comes to visual mediums of awareness, towns from other states catch up with Kerala. Panaji has a stunning 99.4 per cent exposure to TV. If the figures of TV exposure look unrealistically high (see table: The Most Eyeballs), keep in mind these are only town, and not district figures. And the slum population of a town (with lower access to TV) is not usually a registered resident. Towns of Andhra Pradesh have the best spread of cinema halls in the country. Tuni in Visakhapatnam district of the state has the maximum number of cinema hall seats relative to its population.

Consumption across regions follows an interesting pattern. A surprise is Madhya Pradesh's dominance in the consumption of consumer durables priced less than Rs 1,000 (e.g. pressure cooker, bicycle, wristwatch). Five towns of the state are in the top 10 town list, rubbing shoulders with towns from Maharashtra, Punjab and Andhra Pradesh. At least on this factor Madhya Pradesh is doing better than other states of the Hindi belt. Gujarat and Maharashtra monopolise the list on consumption of consumer durables priced between Rs 1,000 to Rs 6,000 (e.g. black & white TV, sewing machine, vacuum cleaner). But the ranking of big spenders-consumption of consumer durables priced more than Rs 6,000-expectedly resembles the list of India's richest cities. Delhi-the country's largest car market by a huge margin-loses first place to Chandigarh on per capita ownership of cars.

The 470-page Guide to Urban Markets contains thousands of town, state and region specific economic indicators. And together they offer almost endless interpretations and insights into the economic life of Indians. For a market executive-or even a company CEO-such data is the holy grail to making inroads into the Rs 3,00,000 crore urban market. For laymen, it is a revelation of how an individual's income, consumption and awareness affects and is affected by the income, consumption and awareness of the town one lives in.

Uttar Pradesh coffers almost empty

<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->According to an official estimate, the state's revenue receipt could meet only 60 per cent of the salary expenditure for government employees. 
Obviously, the state government faces crisis after every three months to pay salaries to the state employees. 

Officials are constantly involved in fire-fighting operations to meet even salary expenditure. In such circumstances, <b>the state government is all set to devise a new method of shifting the liability for two years by enhancing the retirement age of employees. 
Though the state government's approach would spell disaster to the state's finances, political masters are certainly not worried by the long-term implications. Two-year is certainly a long term in politics. Yadav is certainly more keen to win over the state employees than managing the state's finances.  </b>

<!--emo&:furious--><img src='style_emoticons/<#EMO_DIR#>/furious.gif' border='0' style='vertical-align:middle' alt='furious.gif' /><!--endemo-->

UP now figures far below Bihar in terms of development in health and education. The apparent implication is that the development was hardly an electoral issue in these elections.


I think this nation will only move forward if netas are zealously lynched in every street of every town of the country.
When UPites don't want development, why to worry about them.
Yes, they will whine afterwards but on voting booth they just see CASTE or GANDHI family.

India should put fencing around Bihar and UP for 10 years.
<b>World Bank no more Buddha's anathema</b>
Saugar Sengupta/ Kolkata

<b>Majboori ka naam dialectical materialism</b>. <!--emo&Big Grin--><img src='style_emoticons/<#EMO_DIR#>/biggrin.gif' border='0' style='vertical-align:middle' alt='biggrin.gif' /><!--endemo--> That seems to be the online mantra incorporated in the Marxist Government's Gita of performance. Suddenly, class enemies like Dunkel, World Bank and the International Monetary Fund (IMF) have ceased to be an anathema in the Left corridors of power with an upbeat lot of babus feeling free to chant at will the names of some world financial bodies that could soon be extended a red carpet welcome at the historic Writers Buildings. The reason: The cash-starved State desperately needs international funds to invigorate its sagging infrastructure, health and other services.

After years of drinking deep from the cup of old fogeyisms, the Marxist dispensation is on the way to effecting an abrupt turnaround by roping in the World Bank - once bandied as the bank of American colonialism - to bring round the State's ailing services. For instance: health, infrastructure and education. However, there would be no change in theory and policy in the Leftist rank as to how it visualised the colonial institution or how the Centre should conduct itself in the face of an IMF or World Bank economic onslaught. Both the State and the Centre should be careful about falling in the trap of these multinational institutions.

"We have to be selective in accepting their offers," said a top State CPIM leader refusing to be quoted. According to a top leader of the CITU, the CPIM's labour wing, "We never say the World Bank is untouchable. There is no harm in taking loans from it. But once again one has to exercise one's discretion."

The State had a few years ago spurned a World Bank offer to help liberally in the fields of infrastructure and basic health facilities on the grounds that it did not want to step into a debt trap and that the conditions put by the world agency smacked of neo-colonial attitude.

No more. Acute financial exigencies and all-round criticism about its failing infrastructural facilities seems to have led the Buddhadeb Bhattacharjee Government to adjust to the changing times, say experts. <b>"The good news is: The Government which has already accepted an offer of Rs 700 crore from the World Bank is likely to take another grant of Rs 1,200 from the British Department of International Development for rejuvenating its primary health care system," said Dr Prabhakar Chatterjee, State Director of Health.</b>

According to officials, "Negotiations are on with the world agency and if things move in the right direction then soon we could be getting loans and grants for sectors like health, education, urban development and panchayat."<b> Highly-placed sources said, a loan-cum-grant package of Rs 200 crore would soon be made available out of which around Rs 60-65 crore will come as grants. This will be utilised to improve the facilities at Government and private engineering institutions</b>.

Interestingly, the sudden change in the Government's attitude comes in the wake of long discussions being held between the World Bank and Government officials in which the latter managed to dissuade the financial institution from attaching conditions with the grants, sources said, adding, the Government has told World Bank officials that it would not be possible to close down the sick units or end placing deficit budgets.

<b>It is another matter, however, that the Government on its own accord decided to restructure a group of 18 (and then 60 more) anaemic industrial units. <!--emo&Big Grin--><img src='style_emoticons/<#EMO_DIR#>/biggrin.gif' border='0' style='vertical-align:middle' alt='biggrin.gif' /><!--endemo--> Interestingly as well, the process of privatisation and the World Bank grant were not linked. And even if the process of the World Bank grants and industrial restructuring coincide they are nothing more than coincidence, insiders feel</b>.
<b>Gujarat poised for 20% growth, concludes seminar</b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->On the energy and infrastructure front, it was recommended that subsidy to farmers be targeted through the use of a coupon system where farmers were given a specific number of coupons amounting to certain number of units every month. The panelists also emphasised the need for a world-class infrastructure, especially an integrated road and rail network linking up the ports. With a 1600 kilometre coastline, strategies were discussed to channelise wind and tidal power for energy generation.

The seminar also discussed the advantages of the Sardar Sarovar Project. Prof. Alagh said that Gujarat was the first state in the country to link seven rivers. He said the waters of Narmada were now flowing in Sabarmati. It was also revealed that Gujarat is ready for a second green revolution and this revolution would involve value additions in the form of agro-based and food processing industries.

The seminar debated the human and gender development policies of the state. It was felt that the state should do a lot more for empowerment of women. It was argued that empowerment of women will lead to better health for the entire family, including lower infant mortality rates.

The seminar also discussed the need for highway network and a good mass rapid transit system for cities like Ahmedabad, Surat and Vadodara. It was also emphasised that environmentally friendly technologies and material are available for construction. The seminar also witnessed a lively and an intellectually stimulating panel discussion chaired by Prof. Abhijit Sen, Member Planning Commission.
<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>World Bank knew why Chandrababu Naidu lost</b>
Monday February 21 2005 08:22 IST IANS

NEW DELHI: Former Andhra Pradesh chief minister N Chandrababu Naidu may have been the poster boy of India's new economy and reform brigade at one time, but the World Bank knew all along that the image was a facade.

A report prepared by the bank points out how the reforms-friendly Naidu regime was no different from previous governments in Andhra Pradesh and negates all claims made by Naidu about dramatically improving the state's economy and infrastructure.

"Higher productivity and growth are not just about more investment, bigger infrastructure projects, tallest buildings, longest roads, finest flyovers and highest viaducts," the bank said in the highly critical report prepared in 2003.

The report, in the possession of IANS, found major failings in Naidu's Vision 2020 that sought to turn the primarily agrarian state into a knowledge-intensive one with IT and biotechnology envisaged as engines of growth.

"He (Naidu) stopped the World Bank from releasing the report before the general election in April-May 2004 because it was highly critical of his tenure," a bank official told IANS, speaking on condition of anonymity.

Naidu's Telugu Desam Party (TDP) was handed a humiliating defeat in the polls after ruling Andhra Pradesh for a decade and the Congress party returned to power in the state.

While Naidu was focussing on making the state a cutting edge e-governance destination, the report said its agriculture sector was witnessing a decline in investment but did not give any figures to substantiate its findings.

And the yields from agricultural land had dwindled due to widespread informal tenancy arrangements, said the report "Unlocking the Growth Opportunities in Andhra Pradesh".

"Achieving the Vision 2020 growth targets would also involve a change in mindset," the report said, alluding to Naidu's fixation with IT and emerging technologies.

The report was finally released in August 2004, three months after Naidu lost the polls after nearly nine years as chief minister.

"The growth rate of Andhra Pradesh in the post-reform period has not been much different from what it was in the pre-reform period," the report said.

Though the gross state domestic product (GSDP) growth rate increased marginally from an annual 3.9 percent in the 1980s to 4.1 percent during the 1990s, the increase was not due to any improvements in real GSDP growth.

<b>"But it was due to a rapid decline in the population growth rate,"</b> the report said.

"It was precisely due to the reason that the report went against him in almost every aspect of governance that Naidu tried to defer its release until after the elections," the World Bank official said.

"While it (the state) is a constant fixture on the international investment circuits, at the same time, it is also home to the last Maoist," the World Bank report said, drawing attention to extremist problems that plague Andhra Pradesh.

Other problems were an uprising by farmers, labour unrest, ethnic violence and a political movement for dividing Andhra Pradesh to create a separate Telangana state.

<b>While the TDP opposed the division of the state, the World Bank hinted the demand for creation of Telangana was justified.</b> [<i>Who are they to justify, why do they care?, It is India's internal issue</i>].

"In terms of irrigation, Telangana lags substantially behind both south coastal Andhra Pradesh and Rayalseema.

"Telangana districts also have significantly lower access to public services like schools or financial institutions, resulting in lower literacy rate or worse availability of bank credit compared to the rest of the state," it said.

This finding was in sharp contrast to Naidu's claim of providing better amenities to the people of Telangana, a region that lies in the northwest corner of the state.

The report also had a piece of advice for Naidu which had he heeded probably would have turned the tables in his favour.

"While the so-called hardwares (infrastructure) are important for growth, it also involves creation of a favourable investment climate that nurtures innovations and entrepreneurship, a competitive and predictable environment and good institutions.

"Besides the state needs independent regulators, transparent rules and a responsive and honest government that works for all its citizens. In short, what Andhra Pradesh needs is an effective software to complement the hardwares."

From Deccan.com, 22 Feb.,2005...
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Every Telugu owes Rs 11,000

Hyderabad, Feb. 22: Every man, woman and child in the State has a debt burden of Rs 11,000. If the State government has its way, this will go up to Rs 16,714 next year.  <b>Alarmingly, the asset to liability ratio has melted to 63:100 from 101:100 in 1994. This means for every Rs 10 that the State owes its lenders, it owns assets worth Rs 6. Meaning, the huge borrowings have not translated to assets.</b>

The State’s total outstanding public debt stands at Rs 75,619 crore, up by a whopping 500 per cent during the past decade. It was Rs 15,614 in 95-96. It will go up to Rs 1,17,000-crore next year if the Congress government takes loans for the 26 proposed irrigation projects. Against this, the State earns just Rs 35,976 crore — or less than half the current debt. The poor asset-to-liability ratio indicates that most of the borrowings have gone into meeting the revenue deficit.

Economists do not fault the government for going in for loans but they say the money should not be spent on paying salaries or cutting the revenue deficit. Noted economist and DC columnist Jayati Ghosh says the TD government had spent on luxury consumption and unproductive works like building stadia. “Debts per se are not bad. What is important is the way the money is spent. If money is not spent on people it will not yield growth. Problems arise when loans are used on unproductive heads,” she points out.

Planning Commission former member Ch Hanumantha Rao agrees with Ghosh but argues the financial position of Andhra Pradesh is not bad, its debt notwithstanding.  “We are still within the limits. There are many States which are financially worse than Andhra Pradesh. It is a healthy sign that the State has reduced its revenue deficit,” he observes.

<b>According to Rao, the State’s economic growth depends on how the government spends the borrowed money. If it spends on irrigation, power and roads the government will be in a position to repay the debts. Money obtained through loans should not be spent on revenue heads like salaries. The government has decided to clear the revenue deficit, which stands at Rs 1,401 crore, by next year. It stood at Rs 1,461 crore last year. </b>

Andhra Pradesh is the only State besides Karnataka to bring lower the revenue deficit. Indeed, Chief Minister YS Rajasekhar Reddy has asked his party legislators and ministers not to seek any project or work that involves revenue expenditure.

“If we do not curb the revenue deficit, we will become another Uttar Pradesh and Bihar,” he warned them on Tuesday. <b>Tamil Nadu, Andhra Pradesh, Maharashtra and Karnataka have a debt to Net State Domestic Product ratio higher than 30 per cent.  It is more than 50 per cent in States like Bihar, Orissa, Punjab, Himachal Pradesh and Sikkim have.</b>
<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>Autonomy blues</b>
The Pioneer Edit Desk
February 22, 2005, will be recalled for long as the day the UPA Government kept its tryst with the economic reforms programme. The announcement of unprecedented dozes of autonomy to public sector banks will give the sector its much needed operational freedom. The Government will not be required to monitor their day-to-day administration. They would now have the right to set up overseas branches and subsidiaries, withdraw from non-profitable ventures and even buy into other banks. New areas of business are now on their radar screens.

But functioning autonomy does not mean total independence from state interference on larger questions. There is ambiguity on whether the banks will be at liberty to take steps against defaulters, many of who are the biggest names in the Indian corporate world. Moreover, the distinction made between strong and weak banks suggests that the proposal to merge the unprofitable entities has been shelved. <b>The autonomy falls short of allowing them the leeway to develop their own strategies to meet RBI's lending targets for the agriculture sector. </b>

Contrary to the entrenched view that banks are reluctant to offer credit to farmers, they are actually inhibited by bureaucratic limits from lending up to the viable extent. The district technical committees are not receptive to the banks' views and tend to fix the lending limit at levels which satisfy nobody. According to a Planning Commission report of 2001, the scale of finances is not in alignment with the real requirement of farmers. As a result, the farmers are forced to run to money-lenders to raise the remainder of their requirements.

The plethora of ills still afflicting the banking sector will not go away with superficial tinkering. Every Government needs the public sector banks because they finance a large part of the deficit. This leads to the banks themselves needing dole-outs because their own deficits increase. This dilemma was sought to be attacked in 2000 by the NDA's finance minister, Mr Yashwant Sinha, by upholding in his Budget speech the recommendations of a banking reforms committee that the Government's stake be diluted from 51 per cent to 33 per cent. He even had the courage to pilot a Bill on this, but owing to the Congress-Left combine's intransigence, it had to be referred to the Standing Committee where it lapsed with the last Lok Sabha. Now, however, the Congress is waiting gingerly to see how the Left will permit it to carry out Mr Sinha's unfinished agenda.

The paper that Finance Minister Chidambaram circulated ahead of his recent meeting with bank chairmen carried a tantalising proposal-dilute stake or perish. If the aam admi has to be served, then precious funds cannot be locked up in banks anymore. At any rate, the RBI's supremacy as the central bank will prevail. The coming public offering by the Oriental Bank of Commerce promises to be the first battleground as it is speculated that the 51 per cent ceiling may be stretched. <b>Will the Left bite? Watch this space for more</b>.
What a joke?
<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>VAT: Sheila presses for a roll back  </b>
Agencies/ New Delhi
In a significant measure that would bring substantial relief to consumers and traders, the Delhi Government today decided to roll back the increase in tax on diesel and LPG and totally exempt life saving drugs and devices from the tax levied under new VAT regime in force since April one.

Besides, the tax has been reduced on about 190 items including stainless steel, utensils and kitchenware excepting crockery.

A number of other items like school exercise books not costing more than Rs 30, vaccine, syringes, khadi readymade garments, footwear costing up to Rs 300 and plastic waste have also been totally exempted from VAT.

The decision was taken by the Cabinet after it reviewed the situation on the 13th day of the implementation of VAT in the capital and found that the sale of diesel had gone down sharply and prices of consumer items had registered steep hike after VAT, Chief Minister Sheila Dikshit told a press conference here.

She said there was 40 t0 50 per cent drop in diesel sale due to the fact that it was cheaper in the neighbouring states which had not implemented VAT.

Ms Dikshit told reporters that the proposals regarding diesel and LPG will be placed before the empowered committee on VAT at its meeting on April 15 and will be made effective after its approval.

However, the decisions regarding exemption or reduction of tax on all other items will be implemented as soon as the government issues a notification, which is likely tomorrow. The proposals have already been sent to the Lt Governor for his approval, the Chief Minister said.

Delhi Finance Minister A K Walia said the roll back will cause the government a loss of Rs 150 crore. <!--QuoteEnd--><!--QuoteEEnd-->
<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>Amarinder seeks waiving off entire special term loan </b>
Pioneer News Service/ New Delhi
Punjab Chief minister Capt. Amarinder Singh on Friday vehemently pleaded the state's case with the Government of India to waive off the entire outstanding amount of loan and interest given by the Central Government to Punjab during 1984-85 to 1993-94 for combating insurgency and militancy in the State.

Taking part in the deliberations during the Chief Ministers Conference on Internal security and Law and Order here at Vigyan Bhawan, Mr Singh said that the Government of India gave a special term loans of Rs 5799.99 crore to Punjab during 1984-85 to 1993-94 to contain terrorism in the State.<!--QuoteEnd--><!--QuoteEEnd-->
<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>White revolution in the offing in Rajasthan </b>
Lokpal Sethi/ Jaipur
Rajasthan is heading for a "white revolution" comparable to Gujarat in terms of turn over and technology. It has the capacity to transform the rural landscape by its sheer size.

The Rajasthan Cooperative Milk Federation is set to increase the milk procurement in a big way, after achieving a land mark of collecting 20 lakh lt of milk in a single day. It has now targeted collection of 25 lakh litres of milk in a day, during the current financial year.

In the past six months, Saras, the brand name of federation's products, launched as many as 12 new products, ranging from srikhand to a variety of ice creams, in a bid to increase its business volumes. After increasing its business in the state, it is now eyeing markets in neighbouring of Delhi, Gujarat, Haryana and Punjab. It has already open retail outlets, in these states, to sell products like chhach and ghee. According to Jagdish Chandra, CMD, competitors have already started feeling the heat, and have reduced prices of their products to stay in the market.

On Saturday, CM Raje, who is also its brand ambassador, announced the setting up of a milk chilling plant in the area .<b>Within hours officials set about laying the groundwork for its installation. Last year the federation's turn over had crossed the Rs.1000 crore mark earning a net profit of Rs10 crores</b>. At the same time it bought milk from the producers at a price which was 37 per cent higher<!--QuoteEnd--><!--QuoteEEnd-->
Gujarat got to be India’s leading industrial state through small government and corruption-free policies

<b>India’s star state

National Post (One of Canada's Leading National Dailies), </b>Tuesday July 12, 2005

<span style='font-size:14pt;line-height:100%'><b>Please visit www.hccanada.com to learn more about HCC</b></span>

India has achieved great economic and technological progress. However, growth and development has been uneven, with some states excelling and others remaining stagnant. Good governance and leadership has created stars, while the lack thereof has created laggards. Unlike totalitarian China, India’s staggering diversity ensures that regions where progressive governments are elected show different results than those with corrupt and discriminatory rulers.

The western state of Gujarat has benefited from exceptionally enlightened and far-sighted leadership. The BJP administration and its visionary leader, Narendra Modi, have implemented policies that have vaulted Gujarat to the status of most-industrialized state in India. It is a leading foreign investment destination and has spawned world-class companies such as Reliance Industries.

Under Mr. Modi’s leadership, the state has responded admirably to natural and man-made calamities. In 2001, a massive earthquake in the Kutch area killed 20,000. The Modi administration mounted a relief effort that garnered international praise. In less than five months, 400,000 children were back in rebuilt schools and today the area brims with activity as new industries and townships spring to life.

Crisis stalked Gujarat again in 2002, when Islamic mobs attacked and burned to death 61 Hindu men, women and children on a train in Godhra. Outraged by the savagery of the attack, thousands of Hindus protested throughout the state. Rioting ensued and state police struggled for days to restore order. Eager to destabilize Gujarat and India generally, a collection of extreme communists and Islamic fanatics began a vilification campaign to discredit Mr. Modi and his government. A global media effort was launched, foreign governments were influenced and spurious human rights reports were fabricated, alleging government complicity in the riots. Democracy eventually triumphed: In the 2002 state election, the people of Gujarat resoundingly delivered their verdict by reelecting Mr. Modi with a large majority.

Further vindication came in 2005, when the Rajiv Gandhi foundation, after an exhaustive study, concluded that Gujarat leads the nation in several key indices of governance and is a paragon of “economic freedom.” The study closely parallels the methodology of the Fraser Institute’s World Economic Freedom index. Economic freedom is the absence of government constraint in the production, distribution and consumption of goods and services beyond what is necessary for citizens to maintain liberty.

Of all states, the government sector in Gujurat accounts for the smallest percentage of the state economy. Wasteful subsidies are minimal and the state has the lowest number of days lost to labour strife. Corruption, the bane of so many Third World economies, is minimal in Gujarat. On personal safety, the state also scores well: A very small percentage of crimes are violent and the justice system speedily resolves outstanding cases. The infamous red tape and bureaucracy that plagues much of India has been attacked in Gujarat, such that licences and permits are quickly available and foreign investors find it easy to do business.

According to the World Bank study India Investment Climate Assessment 2004, Gujurat’s economy grew more than 8% between 1990 and 2000, contrasted with the overall Indian rate of 6%. The heavily industrialized state contains only 5% of India’s population, yet accounts for 11% of GDP. Sixteen per cent of India’s exports originate from this state, and Gujurati traders capitalize 30% of the stock market. New investments in the 1990s totaled US$35-billion, and the per capita monthly income is more than double the national average.

Canadian firms, especially oil and gas companies from Alberta, have found rich pickings in Gujarat. The state is especially strong in the oil and gas sector. Calgary-based Niko Resources worked with Gujarat State Petroleum Corporation (GSPC) to develop the Hazira offshore oil field. Last week, GSPC and partner GeoGlobal Resources of Calgary discovered a blockbuster natural gas field off the coast of Andhra Pradesh — an estimated 20 trillion cubic feet of natural gas, worth US$50-billion, which single-handedly doubles India’s gas production. Mr. Modi described the find as an historic achievement.

Gujurat’s achievements can be contrasted with other regions of India. The eastern state of Bihar, for example, is the country’s poorest and most backward. Kidnapping, banditry and grinding poverty rule. Technology and development is virtually unknown. Much of this is the result of the state’s leader, Laloo Yadav. Mr. Yadav, who has been charged with crimes including corruption, misappropriation of public funds and protection of criminals, has managed to hang on to his parliamentary seat while being out on bail for the past few years. His party, currently headed by his wife, Rabri Devi, has many members who face criminal charges, including murder. Yet Mr. Yadav and his party have managed to stay in power for more than 15 years.

Another example of a mediocrity is West Bengal, once India’s leading industrialized state. Intellectual and cultural leadership flourished there until communists came to power in 1977. Communist rule has resulted in predictable consequences. In addition to driving away investment with strikes and militant unions, it has systematically attacked and denigrated traditional Hindu culture, which values education and achievement. According to The Economist, West Bengal’s share of industrial output fell from 10% in 1980 to less than half of this in the mid-’90s.

Poor leadership and the adoption of policies that sacrifice merit in favour of quota fulfillment, minority appeasement and discrimination against the majority Hindu community are a clear recipe for disaster. The entrepreneurial savvy, high education levels and strong work ethic of the Indian people can only be unleashed through merit-based leadership as provided by leaders like Narendra Modi.

Ron Banerjee is a director with the non-profit

Hindu Conference of Canada.
<b>Delhi has second highest per capita income</b>
Harish C Menon (IANS)
New Delhi, July 25, 2005
Delhi has the second highest per capita income in the country after Chandigarh.

According to figures for 2004-05 from the Central Statistical Organisation (CSO), an average Delhi resident earns Rs 51,664 ($1,190) per annum - way above even the industrialised states and the all-India figure of Rs 20,989.

According to officials, Delhi sustains this income level due to a flourishing tertiary sector.

"Delhi is a major trading centre and economic activity here is fuelled by an excellent tertiary sector," Delhi Chief Secretary S Reghunathan said.

"It has a booming garment export trade. Now a thriving IT sector too is supporting it. As long as there is demand for these two commodities, high levels of income can be sustained in the capital," Reghunathan said.

The importance of the capital's apparel industry was evident in the interest generated during a three-day India International Garment Fair that concluded Thursday and generated business worth Rs 2.8 billion ($65 million).

"In terms of exports, the National Capital Region of Delhi is just behind Bangalore and far ahead of Hyderabad in IT and IT-enabled services. The region will only move ahead from here," said Delhi IT Secretary Prakash Kumar.

According to the latest state-wise data concerning 17 states and union territories for 2003-04 available with the CSO, the per capita income was highest in Chandigarh (Rs 57,621) followed by Delhi (Rs 51,664), Pondicherry (Rs 40,947), Haryana (Rs 29,963), Maharashtra (Rs 28,414), Punjab (Rs 27,851) and Gujarat (Rs 26,979).

Some of the lowest per capita income was recorded in states like Bihar (Rs 6,213), Orissa (Rs 11,858) and Madhya Pradesh (Rs 14,011).

The country's per capita income rose by 10.7 per cent in 2004-05, touching Rs 23,241 ($534), despite the poor performance of the agricultural sector due to a less than average monsoon.

The national income is estimated at Rs 25,356 billion in 2004-05, as compared to Rs 22,520 billion in 2003-04, showing a rise of 12.6 per cent.

India has been growing at an annual average rate of more than six per cent in the 15 years since economic reforms started in 1991. The Reserve Bank of India (RBI) has projected the economy to grow at seven per cent during fiscal 2005-06 subject to a normal monsoon.
<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>For investors, Gujarat is most favoured state  </b>
Pioneer News Service/ New Delhi
In a befitting reply to the critics of Gujarat, the details provided by the UPA Government in Parliament bolster the pro-industrial image of the state. Going by the figures presented by the Centre, Gujarat tops the states in attracting maximum industrial investment.   

The figures placed by Union Minister of State for Industry and Commerce Kamal Nath in Lok Sabha on Tuesday in a reply to a question have proved that with a whopping investment of Rs 94,357 crore, Gujarat has emergednumero uno with Andhra Pradesh at second place with investments totalling Rs 91,027 crore, followed by Chhattisgarh, Orissa, Tamil Nadu and Maharashtra.

A day after the Government acknowledged Gujarat's achievement, the state cabinet met under the chairmanship of Gujarat Chief Minister Narendra Modi and credited him for bringing laurels to the state.

Briefing the media later, the spokesperson of the State Government, Urban Development Minister IK Jadeja and Minister of State for Planning Saurabhbhai Dalal, said "The statewise comparative details presented by Government of India in Lok Sabha are a clear cut reply to the critics of Gujarat."

The two spokespersons further noted that the details provided by the Union Government in Lok Sabha were only for the period up to March 31, 2005. However, during the current year from January till May this year, Gujarat had attracted investments of Rs 43,000 crore which was again highest with a share of 31.17% in the country, they said.

<b>Describing it is as a "historical achievement for Gujarat," the two added that this was the result of qualitative changes brought about under the leadership of the Gujarat Chief Minister in administrative efficiency, transparency and simplification of policies and procedures. "Gujarat has attracted the maximum investments of Rs 94,357 crore and thus Gujarat becomes number one in the country,"</b> they said. 
Now FOIL and all other 1000 breed of pinkoos should paint there face with black paint and march towards 10 Janpath, New Delhi.
Todays TOI has a front page article..

<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Country bumpkins turn biggest shoppers

by Swati Bharadwaj

Dont be surprised if you spot a pantaloons boarding towering over the highway near himmatnagar or a pot holed road in Unjha sporting a sales india signage. Or even tractors parked cheek by jowl with cars outside a mall on SG road.

The tobacco farmer from kheda, the spice trader from unjha or the merchat from gandhidham is lapping up everything from plasma TVs and DVD players to mobile phones, apparel, diamond jewellery and even home furnishings.

In the bargain he's bringing anywhere between 20 to 50% in sales for retailers, who have already discovered what a recent study has just found - that rural India accounts for a sizable chunkk of Indian crorepatis.

Big Bazaar (superstore in abad) woke up to rural power when it found tractor loads of farmers chugging to their stores on SG Road and Raipur, ringing up 20% to 25% of total sales. Explains Pataloons Retail India reg mgr Anand Adukia : "Their average purchase sizes range from Rs 2000 and Rs 10000 higher that urban consumers who tend to buy smaller lots".

Pataloons figured it out after it found 17-20 % of its loyalty programme card holders hailed from semi-urban and rural pockets. As did consumer durables retailer Sales India, when many of its Rs 1.5 lakh upwards plama TV buyers turned out to be villagers..<!--QuoteEnd--><!--QuoteEEnd-->
<b>I want to promote medical tourism </b>
<i>Narendra Modi is the Chief Minister of Gujarat</i>
Is 'Vibrant Gujarat' an effort to promote the state as a tourist destination?
<i>* Gujarat was never on the tourism map despite it's scenic destinations and vibrant culture. I wanted to change that and decided to spread awareness at national and international level about what the state has to offer. I also want to promote it as a medical tourist destination.</i>

What does it have to offer for medical tourists?
<i>* A large number of Gujarati NRIs come here every year for treatments that are very expensive abroad and cheaper here. Among the top 10 doctors in the US, most are Gujaratis. So, they are a trusted lot.</i>

Is this an attempt to re-invent the state's image after the 2003 riots?
<i>* Every person is free to have personal opinions. You can either stagnate in the past or look forward positively. The choice is yours.</i>

Will this fuel economic growth in the rural areas?
<i>* As tourism sector is unorganised, artists and craftsmen are exploited by middlemen. Once the government steps in, they would get more exposure and opportunities. This will result in more earnings. </i>

Any other tourism plans?
<i>* 2006 is Gujarat Tourism year and many activities have been planned for it. In January, a Sharad Purnima festival will be organised in the Rann of Kutch. We are also planning to launch a cruise from Mumbai to Kutch. There are plans for tour packages to Lothal (a part of the Indus Valley Civilisation), Udwara and Champaner (a world heritage site).</i>
<!--QuoteBegin-vasu+Apr 25 2004, 08:11 AM-->QUOTE(vasu @ Apr 25 2004, 08:11 AM)<!--QuoteEBegin-->I think this nation will only move forward if netas are zealously lynched in every street of every town of the country.

if i had written the above, i'd most likely have been given a warning ("post responsibly") or even banned.

that said, i must say that i agree with you. Our netas are giving the finishing touches to the crimes of the colonials.
<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>Bankrupt after 29 years </b>
Business Standard / New Delhi April 03, 2006
The Left Front government first came to office in West Bengal in the summer of 1977, and has won five subsequent elections, all by a landslide. No other state government in India has been in office for such a continuous period. Fresh elections have been called, and in the coming weeks of campaigning, many claims will be made about performance over the past three decades. So the Comptroller and Auditor General’s latest report on the state government’s finances (for 2004-05) has come out at a useful time, and should provide a reality check.

The first and most interesting point to note is that the interest paid on accumulated state debt (Rs 9,767 crore) is virtually equal to the total tax revenue collected by the West Bengal government (Rs 9,924 crore). The second is that the government’s bill for salary and pensions (Rs 13,137 crore) eats up much more than the rest of the money that is available, namely funds received from the Centre under various heads and non-tax receipts (Rs 10,741 crore). We therefore have a variation of Lincoln’s definition of democracy: government of, by and for its own employees.

The starting point, therefore, is that even before the state government undertakes any programme activity, it is already in deficit to the tune of over Rs 2,500 crore. The result of the consequent fiscal squeeze is that total expenditure by the government (not counting interest payments) has grown by barely 7 per cent over the past four years—which is much less than the rate of inflation. In areas like medical and public health, irrigation and flood control, and transport, expenditure has shrunk in even absolute numbers over the last four years. In other words, the size of government activity has been shrinking. We are witnessing a withering of the state in a very non-Marxian sense.

This is the result of patent financial mismanagement. The state government borrows at an average interest cost of 10.08 per cent, and lends at an average interest on loans of no more than 2.84 per cent. The difference in the rate of interest paid and received is 7.24 percentage points, and the loss is a couple of thousand crore rupees. West Bengal is among the most indebted states in the country, which is the reason why interest payments eat up the state’s all tax revenue. Indeed, interest payments have climbed 83 cent in four years, while (as already noted) other government expenditure has been relatively flat. This situation will get worse because more than three-quarters of the net borrowings each year are used to pay for current consumption, and therefore not used to build repayment capacity. As a result, the state’s fiscal liabilities too have been growing rapidly—and are no longer covered by its financial assets. This is even before counting the state government’s contingent liabilities (on account of various guarantees given) and future pension payment obligations.

It is hard to describe this overall situation as anything other than a fiscal disaster. The level of accumulated debt and annual interest payments represents past sins. The government is now too financially constricted to be spending much on development. And this situation is worse in West Bengal than in almost any other large state in the country. The debt swaps arranged by the Centre and the award of the 12th Finance Commission may have provided some relief in 2005-06, <b>but if the state does not get its act together, West Bengal is certain to slip in the national rankings on almost any developmental parameter you can name, and irrespective of which party is returned to power by voters</b> <!--QuoteEnd--><!--QuoteEEnd-->

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