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Indian Economy: Growth -3

[center]<b><span style='font-size:14pt;line-height:100%'>Car Sales on a High in February</span></b>[/center]

<b>Passenger car sales were on a roll in February with most carmakers recording double digit increase in sales.</b> Maruti Udyog said on Thursday it sold 62,999 vehicles in February, up 53 per cent from 41,095 units a year earlier. The company said it sold 59,095 units in the domestic market, up 61 per cent from 36,608 units a year earlier. Its exports fell 13 per cent to 3,904 units from 4,487 units a year earlier.

Hyundai Motor India on Thursday reported a 74 per cent increase in its domestic vehicle sales during February at 15,459 units compared to the same month last year. The company said its total vehicle sales (including exports) in the month stood at 25,026 units with 22,223 units in the compact segment (Santro and Getz).

Meanwhile Honda Siel Cars India (HSCI) recorded a 60 per cent increase in vehicle sales during February at 3,521 units. The company had sold 2,195 units in February last year, HSCI said in a statement.

General Motors reported an 81 per cent increase in domestic vehicle sales during February at 3,087 units as against 1,709 units in the same month a year ago. Ford India witnessed a record sale for February 2007 and sold 3,856 units as compared to 3,023 units last year, registering a 27.5 per cent year-on-year growth on total sales.

Cheers <!--emo&:beer--><img src='style_emoticons/<#EMO_DIR#>/cheers.gif' border='0' style='vertical-align:middle' alt='cheers.gif' /><!--endemo-->
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->However, we are all aware that simply by making available funds in the budget does not mean the schemes will get implemented well in time to have their desired effort on the target area.<!--QuoteEnd--><!--QuoteEEnd-->
The sucide-farmers of Vidharba, Maharashtra have yet to see any money coming to them despite PM Manmohan making grand promises about a year ago.

On Budget, anyone with tax knowledge on how the cut in benefits and ESOPs will have an impact on IT companies? Time to short them?
Rediff is running a series of interviews with aam-aadmi.


<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->The rising cost trend in daily expenditure to run one's family, has forced people to explore options to cut down expenditure on different heads. "I have been regularly taking out my family once a week to dine in one of those new restaurants and eateries mushrooming in the outskirts of the city. But, now I am thinking of making it a fortnightly affair instead of a weekly one. Can't help it, things have become costlier than last year," said Bhaskar Duarah, a company executive based in Guwahati.

"The best possible entertainment I can afford for my small family to take them out for a movie in the city cinemas at least two nights a month though the prices of tickets were raised to the range of Rs 50-70 recently. But given the latest inflationary trend in the market of essential commodities, I have decided to cut down on number of movie-outings for my family. My wife will be hurt, but life has to go on," said 28-year-old Abani Bora, an employee in a city-based private company.<!--QuoteEnd--><!--QuoteEEnd-->
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->"The best possible entertainment I can afford for my small family to take them out for a movie in the city cinemas at least two nights a month though the prices of tickets were raised to the range of Rs 50-70 recently. But given the latest inflationary trend in the market of essential commodities, I have decided to cut down on number of movie-outings for my family. My wife will be hurt, but life has to go on," said 28-year-old Abani Bora, an employee in a city-based private company.<!--QuoteEnd--><!--QuoteEEnd-->
He is doing a favor, now at least there is less chance that his family will catch TB from cinema theatre.



The Trouble With India

Crumbling roads, jammed airports, and power blackouts could hobble growth

When foreigners say Bangalore is India’s version of Silicon Valley, the high-tech office park called Electronics City is what they’re often thinking of. But however much Californians might hate traffic-clogged Route 101, the main drag though the Valley, it has nothing on Hosur Road. This potholed, four-lane stretch of gritty pavement—the primary access to Electronics City—is pure chaos. Cars, trucks, buses, motorcycles, taxis, rickshaws, cows, donkeys, and dogs jostle for every inch of the roadway as horns blare and brakes squeal. Drivers run red lights and jam their vehicles into any available space, paying no mind to pedestrians clustered desperately on median strips like shipwrecked sailors.

Pass through the six-foot-high concrete walls into Electronics City, though, and the loudest sounds you hear are the chirping of birds and the whirr of electric carts that whisk visitors from one steel-and-glass building to the next. Young men and women stroll the manicured pathways that wend their way through the leafy 80-acre spread or coast quietly on bicycles along the smooth asphalt roads.

With virtually no mass transit in Bangalore, Indian technology firm Infosys Technologies Ltd. spends $5 million a year on buses, minivans, and taxis to transport its 18,000 employees to and from Electronics City. And traffic jams mean workers can spend upwards of four hours commuting each day. "India has underinvested in infrastructure for 60 years, and we’re behind what we need by 10 to 12 years," says T.V. Mohandas Pai, director of human resources for Infosys.

India’s high-tech services industry has set the country’s economic flywheel spinning. Growth is running at 9%-plus this year. The likes of Wal-Mart (WMT ), Vodafone (VOD ), and Citigroup (C ) are placing multibillion-dollar bets on the country, lured by its 300 million-strong middle class. In spite of a recent drop, the Bombay stock exchange’s benchmark Sensex index is still up more than 40% since June. Real estate has shot through the roof, with some prices doubling in the past year.

But this economic boom is being built on the shakiest of foundations. Highways, modern bridges, world-class airports, reliable power, and clean water are in desperately short supply. And what’s already there is literally crumbling under the weight of progress. In December, a bridge in eastern India collapsed, killing 34 passengers in a train rumbling underneath. Economic losses from congestion and poor roads alone are as high as $6 billion a year, says Gajendra Haldea, an adviser to the federal Planning Commission.

For all its importance, the tech services sector employs just 1.6 million people, and it doesn’t rely on good roads and bridges to get its work done. India needs manufacturing to boom if it is to boost exports and create jobs for the 10 million young people who enter the workforce each year. Suddenly, good infrastructure matters a lot more. Yet industry is hobbled by overcrowded highways where speeds average just 20 miles per hour. Some ports rely on armies of laborers to unload cargo from trucks and lug it onto ships. Across the state of Maharashtra, major cities lose power one day a week to relieve pressure on the grid. In Pune, a city of 4.5 million, it’s lights out every Thursday—forcing factories to maintain expensive backup generators. Government officials were shocked last year when Intel Corp. (INTC ) chose Vietnam over India as the site for a new chip assembly plant. Although Intel declined to comment, industry insiders say the reason was largely the lack of reliable power and water in India.

Add up this litany of woes and you understand why India’s exports total less than 1% of global trade, compared with 7% for China. Says Infosys Chairman N.R. Narayana Murthy: "If our infrastructure gets delayed, our economic development, job creation, and foreign investment get delayed. Our economic agenda gets delayed—if not derailed."

The infrastructure deficit is so critical that it could prevent India from achieving the prosperity that finally seems to be within its grasp. Without reliable power and water and a modern transportation network, the chasm between India’s moneyed elite and its 800 million poor will continue to widen, potentially destabilizing the country. Jagdish N. Bhagwati, a professor at Columbia University, figures gross domestic product growth would run two percentage points higher if the country had decent roads, railways, and power. "We’re bursting at the seams," says Kamal Nath, India’s Commerce & Industry Minister. Without better infrastructure, "we can’t continue with the growth rates we have had."

The problems are even contributing to overheating in the economy. Inflation spiked in the first week of February to a two-year high of 6.7%, due in part to bottlenecks caused by the country’s lousy transport network. Up to 40% of farm produce is lost because it rots in the fields or spoils en route to consumers, which contributes to rising prices for staples such as lentils and onions.

India today is about where China was a decade ago. Back then, China’s economy was shifting into overdrive, but its roads and power grid weren’t up to the task. So Beijing launched a massive upgrade initiative, building more than 25,000 miles of expressways that now crisscross the country and are as good as the best roads in the U.S. or Europe. India, by contrast, has just 3,700 miles of such highways. It’s no wonder that when foreign companies weigh putting new plants in China vs. India to produce global exports, China more often wins out.

China’s lead in infrastructure is likely to grow, too. Beijing plows about 9% of its GDP into public works, compared with New Delhi’s 4%. And because of its authoritarian government, China gets faster results. "If you have to build a road in China, just a handful of people need to make a decision," says Daniel Vasella, chief executive of pharmaceutical giant Novartis (NVS ). "If you want to build a road in India, it’ll take 10 years of discussion before you get a decision."

Blame it partly on India’s revolving-door democracy. Political parties typically hold power for just one five-year term before disgruntled voters, swayed by populist promises from the opposition, kick them out of office. In elections last year in the state of Tamil Nadu, for instance, a new government was voted in after it pledged to give free color TVs to poor families. "In a sanely organized society you can get a lot done. Not here," says Jayaprakash Narayan, head of Lok Satta, or People Power, a national reform party.

Then there’s "leakage"—India’s euphemism for rampant corruption. Nearly all sectors of officialdom are riddled with graft, from neighborhood cops to district bureaucrats to state ministers. Indian truckers pay about $5 billion a year in bribes, according to the watchdog group Transparency International. Corruption delays infrastructure projects and raises costs for those that move ahead.

Fortunately, after decades of underinvestment and political inertia, India’s political leadership has awakened to the magnitude of the infrastructure crisis. A handful of major projects have been completed; others are moving forward. Work on the Golden Quadrilateral—a $12 billion initiative spanning more than 3,000 miles of four- and six-lane expressways connecting Mumbai, Delhi, Kolkata, and Chennai—is due to be completed this year. The first phase of a new subway in New Delhi finished in late 2005 on budget and ahead of schedule. And new airports are under construction in Bangalore and Hyderabad, with more planned elsewhere. "We have to improve the quality of our infrastructure," Prime Minister Manmohan Singh told a gathering of tech industry leaders in Mumbai on Feb. 9. "It’s a priority of our government."

Singh, in fact, is promising a Marshall Plan-scale effort. The government estimates public and private organizations will chip in $330 billion to $500 billion over the next five years for highways, power generation, ports, and airports. In addition, leading conglomerates have pledged to overhaul the retailing sector. That will require infrastructure upgrades along the entire food distribution chain, from farm fields to store shelves.

Envisioning a brand-new India is the easy part; paying for it is another matter. By necessity, since the country’s public debt stands at 82% of GDP, the 11th-worst ranking in the world, much of the money for these new projects will have to come from private sources. Yet India captured only $8 billion in foreign direct investment last year, compared with China’s $63 billion. "Having grandiose plans isn’t enough," says Yale University economics professor T.N. Srinivasan.

Just about every foreign company operating in India has a horror story of the hardships of doing business there. Nokia Corp. (NOK ) saw thousands of its cellular phones ruined last October when a shipment from its factory in Chennai was soaked by rain because there was no room to warehouse the crates of handsets at the local airport. Japan’s Maruti Suzuki says trucking its cars 900 miles from its factory in Gurgaon to the port in Mumbai can take up to 10 days. That’s partly due to delays at the three state borders along the way, where drivers are stalled as officials check their papers. But it’s also because big rigs are barred from India’s congested cities during the day, when they might bring dense traffic to a standstill. Once at the port, the Japanese company’s autos can wait weeks for the next outbound ship because there’s not enough dock space for cargo carriers to load and unload.

India’s summer monsoons wreak havoc, too. Even relatively light rains can choke sewers, flood streets, and paralyze a city, while downpours are devastating. Two years ago, Florida-based contract manufacturer Jabil Circuit Inc. saw shipments of computers and networking gear from its plant near Mumbai delayed for five days after an epic storm. "In our business, five days is a really long time," says William D. Muir Jr., who oversees Jabil’s Asian operations.

Companies often have no choice but to make the best of a bad situation. Cisco Systems Inc. (CSCO ), the American networking equipment giant, has had a research and development office in India since 1999 and already has 2,000 engineers in the country. To supply the country’s fast-growing telecommunications industry, Cisco decided last year to try its hand at making some parts locally. In December it contracted with another company to build Internet phones in the southeastern city of Chennai. Although Cisco says the quality of the workmanship is up to snuff, it has to fly parts in because the ports are so slow—and getting them to the factory right when they’re needed is proving nettlesome. "We believe in manufacturing in India, but we don’t believe in logistics in India—yet," says Wim Elfrink, Cisco’s chief globalization officer. Elfrink adds that unless the Chennai operation demonstrates it can run as efficiently as Cisco setups elsewhere, it won’t go into full production as planned this summer.

Even the world’s largest maker of infrastructure equipment is constrained by India’s feeble underpinnings. General Electric Co. (GE ) last year sold $1.2 billion worth of gear such as power generators and locomotives in India, more than double what it billed in 2005. To meet that surging demand, it is scrambling to find a location where it can manufacture locomotives in partnership with India Railways. But when GE dispatched three employees to survey a potential site the railway favored in the northern state of Bihar, the trio returned discouraged. It took five hours to drive the 50 miles from the airport to the site, and when they got there they found...nothing. "No roads, no power, no schools, no water, no hospitals, no housing," says Pratyush Kumar, president of GE Infrastructure in India. "We’d have to create everything from scratch," including many miles of railroad tracks to get the locomotives out to the main lines.

But there is a silver lining for GE and other international giants: India’s infrastructure deficit could yield huge opportunities. American executives who traveled to India last November on the largest U.S. trade mission ever were tantalized by the possibilities. Jennifer Thompson, director of international planning at Oshkosh Truck Corp. (OSK ), viewed construction projects where swarms of workers carried wet concrete in buckets to be poured. That told her there’s great potential in India for selling Oshkosh’s mixer trucks. "There are infrastructure challenges, but we see a lot of opportunities to help them meet those challenges," she says.

That explains why so many multinationals are flocking to India. Take hotel construction: In a country with only 25,000 tourist-class hotel rooms (compared with more than 140,000 in Las Vegas alone), companies including Hilton (HLT ), Wyndham (WYN ), and Ramada have plans for 75,000 rooms on their drawing boards. Or consider telecom. Because of deregulation and ferocious demand, India boasts the fastest growth in cell-phone service anywhere, with companies adding some 6 million new customers a month. No wonder Britain’s Vodafone Group PLC (VOD ) just ponied up $11 billion for a controlling interest in Hutchison Essar, India’s No. 4 mobile carrier. U.S. private equity outfits also want in on the action. On Feb. 15, Blackstone Group and Citigroup announced they are teaming up with the Indian government and the Infrastructure Development Finance Corp. to set up a $5 billion fund for infrastructure investments in India.

But while the laws of supply and demand would argue that India’s infrastructure gap can be filled, that logic ignores the corrosive effect of the country’s politics. To gain the favor of voters, Indian politicians have long subsidized electricity and water for farmers, a policy that has discouraged private investment in those areas. That’s what wrecked the now-infamous Dabhol Power plant. In the late 1990s, Enron, GE, and Bechtel spent a total of $2.8 billion building a huge complex near Mumbai capable of producing more than 2,000 megawatts of electricity. But a government power authority set prices so low that it was uneconomical for Dabhol to operate, and the whole deal fell apart. (The plant, taken over by an Indian organization, now runs only fitfully.) A 2001 law was supposed to create a framework to support private investment in power generation. But according to American construction company executives, it’s not working well. "Everybody knows what needs to be done, but they have great difficulty doing it," says one of the Americans. "If the party in opposition offers subsidized power, the party in power has to give subsidized power to get reelected."

Politicians who refuse to play the game pay a steep price. N. Chandrababu Naidu, the former chief minister of the state of Andhra Pradesh, transformed the state capital of Hyderabad from a backwater into a high-tech destination by building new roads, widening others, and aggressively carving out land for factories and office parks. Google (GOOG ), IBM (IBM ), Microsoft (MSFT ), and Motorola (MOT ) have all built R&D facilities there.

His reward? Voters tossed him out of office two years ago. During his decade in power, Naidu didn’t do enough for rural areas, and his challenger promised to channel state funds into irrigation projects and electricity subsidies. "Naidu thought economics were more important than politics. He was wrong," says V.S. Rao, director of the Birla Institute of Technology & Science in Hyderabad. Naidu, 56, is plotting a comeback in elections two years hence. This time, he’s preaching a new gospel. "You can’t just target growth," says a chastened Naidu. "You have to create policies that make the wealth trickle down to the common man."

But even when politicians say they’re beefing up infrastructure, it rarely helps the poorest Indians. Agriculture is stagnant in part because of a lack of the most rudimentary of roads to get to and from fields. N. Tarupthurai, for instance, scratches out a living from a five-acre plot in Jinnuru, a village in northeastern Andhra Pradesh. But his fields are more than a mile from the nearest paved road, so each day the 40-year-old Tarupthurai must carry his tools, seeds, fertilizer, and crops down a dirt path on his back or on his bicycle. "I have asked for a road, and the government says it’s under consideration," says the mustachioed, curly-haired farmer. Then he shrugs.

One reason little practical help makes it from the seats of power to India’s impoverished villages is that so much money gets siphoned off along the way. With corrupt officials skimming at every step, many public works projects either go over budget or are never completed. "You figure that 25% of the cost goes to corruption," says Verghese Jacob, head of the Byrraju Foundation, which promotes rural development. "And then they do such a bad job that the road falls apart in one year and has to be patched over again," Jacob says as he jostles along in a car on a potholed byway outside Hyderabad.

None of the solutions to India’s infrastructure challenges are simple, but business leaders, some enlightened government officials, and even ordinary citizens are chipping in to make things better. The most potent weapon India’s reformers have against corruption is transparency. Last October a new right-to-information law went into effect requiring both central and state governments to divulge information about contracts, hiring, and expenditures to any citizen who requests it. The country is also putting to work its vaunted technology prowess to police the government. Officials in 200 districts are using software from Tata Consultancy Services Ltd. to help monitor a government program that offers every rural household a guarantee of 100 days of work per year. Most of this labor goes into public works. To minimize "leakage," the TCS software tracks every expenditure—and makes all of the information available real-time on a Web site accessible to anyone.

Sometimes frustrated Indians take matters into their own hands. Tired of spending four-plus hours a day in traffic, Aruna Newton last fall helped organize something of a women’s crusade to speed up infrastructure improvements. Nearly 15,000 volunteers now monitor key road projects and meet with state officials to press for action. They even enlisted the state chief minister’s mother, who helped get his attention. "It’s about the collective power of the people," says Newton, a 40-year-old vice-president for Infosys. "I just wish building a road was as easy as writing a software program."

Increasingly, companies trying to expand in India have the government as a willing partner rather than a roadblock. The state of Andhra Pradesh rolled out the red carpet last year for MAS Holdings Ltd. of Sri Lanka, South Asia’s largest garment manufacturer. It promised subsidized electricity, new access roads, and even a deepwater port if the company would place a huge industrial park on the southern coast. Now MAS Holdings plans to build a cluster of factories that will eventually employ 30,000 production workers. And it chose India over China. "The government support was absolutely vital," says John Chiramel, India director for MAS Holdings. "If we can work together, there’s no stopping growth in this country."

A key to getting massive projects off the drawing boards is forming public-private partnerships where the government and companies share costs, risks, and rewards. In 2005, India passed a groundbreaking law permitting officials to tap such partnerships for infrastructure initiatives. Developers ante up most of the money, collect tolls or other usage fees, and eventually hand the facilities back to the government.

The first project to take advantage of the new law is the $430 million international airport scheduled to open next year in Bangalore. The facility is designed to handle 11.5 million passengers per year—nearly double the capacity of the overburdened existing airport. It will be owned by a private company, which will turn it over to the Karnataka state government after 60 years. Global engineering and equipment giant Siemens (SI ) is helping to build the facility, and Switzerland’s Unique Ltd. will manage it. These companies are also equity investors. The state had to contribute just 18% of the cost. Without such an arrangement, Karnataka wouldn’t be getting a new airport.

A lot of India’s hopes rest on the airport deal’s success. If it proves the viability of public-private partnerships, more such ventures could come pouring in. A visit to the site instills confidence. Project manager Sivaramakrishnan S. Iyer is a crusty veteran of mammoth infrastructure ventures throughout South Asia and the Mideast. Wearing a scuffed hardhat, with a two-day growth of white stubble on his face, he surveys the site from a 2.5-mile-long bed of crushed granite that will be the runway. Work goes on seven days a week, 18 hours a day. Iyer is intent on wrapping up on schedule in April, 2008. "We have the will to do it, and it will be done," he says.

Will the airport open on time? That’s not within Iyer’s control. Two government authorities are responsible for building the road that leads to the airport, and they’re locked in a dispute over how to do it. Work hasn’t started.

And so it goes in India. Unless the nation shakes off its legacy of bureaucracy, politics, and corruption, its ability to build adequate infrastructure will remain in doubt. So will its economic destiny.
<!--emo&:clapping--><img src='style_emoticons/<#EMO_DIR#>/clap.gif' border='0' style='vertical-align:middle' alt='clap.gif' /><!--endemo--> Sanjivani has immortality DNA
Kounteya Sinha
[ 15 Mar, 2007 0022hrs ISTTIMES NEWS NETWORK ]

RSS Feeds| SMS NEWS to 8888 for latest updates

NEW DELHI: Indian mythology's most famous medicinal herb, Sanjivani booti, is now being studied by scientists for its most gifted quality, being able to survive even without water.

The booti, that finds mention in the Ramayana for resurrecting Laxman, does not die, even without water. It just curls up and loses colour, becoming brown in the absence of moisture.

It, however, regains its original green colour within hours of coming in contact with water.

Unable to pinpoint what helped this four-inch fern to stay alive for the last 300 million years, scientists from the National Botanical Research Institute (NBRI) have embarked on a five-year programme to actually identify the gene responsible for the plant's drought tolerance property.

The five-member research team, led by senior scientist P V Khare, hopes to inject the same gene into the country's food crops to make them naturally resistant against famine, drought and snow.

Found in many parts of the country, the plant is exhaustively used by tribals to treat heat stroke, jaundice and menstrual irregularities.

Speaking to TOI, Khare said a 10-member NBRI team has collected a large number of Sanjivani plants from Mirzapur forests for use in the experiments.

"We want to identify the exact gene that gives the plant its survival and remarkable resurrection capabilities. The gene, once identified, will be injected into our food crops so that similar survival properties develop within crops like rice, which need large quantities of water," Khare said.

At present, the team is worried about the plant's over-exploitation. Another scientist added: "Because the plant is known for its tremendous medicinal uses, tribals in UP, Madhya Pradesh, Orissa, Tamil Nadu, Maharashtra and West Bengal soak a huge quantity of this plant in water overnight.

The plant is then discarded and the water drunk to cure burning sensation during urination, dysentery and venereal diseases.

'Sanjivani' (scientific name Selaginella Bryopteris) belongs to the Pteridophyta group of ferns.

Smartest move, Priceless, Enjoy till they last ---

<b>Scale back growth</b>
...Montek’s prescription to contain prices<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->In deep political trouble over rising prices, the economic think tank of Prime Minister Manmohan Singh on Monday advised him to 'slow down' growth target to work out an escape route from inflation.

At a high-level meeting on Monday evening, the Prime Minister was advised to go for slowing down the GDP growth target to contain the inflationary trends which, several <b>Congress men and UPA allies think, have led to the loss of Assembly elections in Punjab and Uttarakhand.</b>

<b>Grim scenario</b>

XI Five Year Plan describes agricultural scenario as depressing and bad
PM informed 4 per cent farm growth this fiscal not possible
Also advised to have a relook at SEZs on farm land policy
This will be a big setback for the Government
Plan would have to be toned down accordingly<!--QuoteEnd--><!--QuoteEEnd-->

We told you long time back.
Look at Moron Singh govt. grand solution. <!--emo&:blow--><img src='style_emoticons/<#EMO_DIR#>/blow.gif' border='0' style='vertical-align:middle' alt='blow.gif' /><!--endemo-->

That statement from Montek is very significant. Altho I still think money supply is the key. There are people who are taking loans from banks and then investing in stock mkt - that is unbelievable and reminds me of the dot-com bubble and the housing bubble here in the US.


Mudy, they dont have a choice, if the mkt crashes near a big elections or a major aam-aadmi incident happens near elections then UPA will be toast and nobody will buy their aam-aadmi-BS again. So they have to do something now to get out of this and hope their steps provide some sort of soft-landing. Ofcourse it can backfire which is why some folks in UPA will not want to disturb the bubble but then this might really backfire during elections time. It will be interesting to see what happens.
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Mudy, they dont have a choice, if the mkt crashes near a big elections or a major aam-aadmi incident happens near elections then UPA will be toast and nobody will buy their aam-aadmi-BS again. So they have to do something now to get out of this and hope their steps provide some sort of soft-landing. Ofcourse it can backfire which is why some folks in UPA will not want to disturb the bubble but then this might really backfire during elections time. It will be interesting to see what happens.<!--QuoteEnd--><!--QuoteEEnd-->
That is the main problem with this Govt. They don't have vision and since they came into power they are on election mode. Either worries about election or country. Sometimes one have to make tough choice for long lasting result.

Let me list some of missed opportunity.
Work on GQ is standstill.
Govt is not investing in infrastructure, the way they should.
Much needed labor reform is missing.
Tuning of Banking and loan system is missing.
Reduce subsidy.
Tax collection is still poor. Tax raid are still selective.
Supply based economy needed.
No check on corruption in Government department.
Lack of will everywhere.

All these need guts and long term vision.
Have you seen election candidates filing affidavits? Think this they have declared or just converted into white.

Country like USA can handle recession and all kind of bust. Country is back to normal after dot-com bust and 9/11. Housing slow down will effect very small percentage, and they will declare bankrupt and will go back to normal. In India there is no Social welfare system etc. I can tell you, short term recession and continuous inflation can bring near civil war situation in India. Coming summer power shortage will be worse than last year. Think what will happen in cities. Don't forget India is a volatile society and not surrounded by good neighbors.

Other biggest problem is Indians or media is very good in creating myth or halo around some person or I say tendency towards cult worship. They have done around Moron Singh and his buddies from World Bank. New Ideas are just tossed out on first instance.
<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>UPA squanders inheritance </b>
Swapan Dasgupta
As a community, economists tend to be only marginally less self-serving than NGO activists. Accustomed to speaking to each other in a language that combines hieroglyphics with linguistic obfuscation, the prescriptive wisdom of economists is about as prescient as India's meteorologists and soothsayers. In the annals of this voodoo "science", the Planning Commission finds a special place in the Chamber of Horrors. <b>If and when the "confidential" files of the Government are allowed to enter the archives, they will reveal the extent to which the disseminated wisdom from Yojana Bhavan was flawed. The Planning Commission, to cite a small example, is said to have underestimated the demand for colour TV sets in the early-1980s by as much as 6,000 per cent! </b> 

Last week, the <b>distinguished Deputy Chairman of the Planning Commission set the proverbial cat among the pigeons by warning against an "overheated" economy</b>. Bereft of the gobbledegook, Montek Singh Ahluwalia's observation amounted to an admission that the economy was entering a turbulent phase and high inflation was symptomatic of the difficulties ahead. What this stalwart of the "dream team" didn't elaborate was that the looming crisis is exclusively a creation of a Government that has literally squandered its inheritance. Overheating, as any mohalla electrician will tell you, happens when there is no avenue for the generated heat to disperse. <b>In short, the shifting of Government's focus away from building infrastructure to financing non-asset building programmes like Sonia Gandhi's pet Rural Employment Guarantee Scheme (devised by a barefoot economist of Belgian origin who glorifies poverty) has created thermostat bottlenecks for Indian entrepreneurs who are raring to go.</b>

The emerging voodoo wisdom that nine per cent growth is bad for India's soul marks the highest point of the UPA Government's creativity. Predictably, this intellectual innovation seems to have coincided with growing despondency in the Congress over the Government's mismanagement of the economy. In Delhi, to cite a small but revealing example, the Congress has more or less abdicated the field in a municipal election where price rise seems to be only issue. In Uttar Pradesh, the<b> Congress and its heir apparent are frantically ducking bread-and-butter questions and proceeding on the interesting assumption that only Muslims have the franchise.</b> Meanwhile, the air of Lutyens' Delhi is thick with salacious tales of the profits from dal export, the rationale behind Tamil Nadu's anger at the Centre's prevarication over SEZs, <b>the Italian gatecrashers at a private dinner in a Lebanese restaurant and the beneficiary of Government generosity towards digital films.</b>

According to the timetable there is still two years before the next general election is due. However, going by the body language of the rulers, the viciousness of the gossip and the frenzy of speculation, it almost seems that the Manmohan Singh Government is living out its final moments.

The disorientation and backbiting within the ruling coalition should have been the occasion for the Opposition to step up the intensity of its assault. The Budget, Ottavio Quattorocchi, the internal security mess and Nandigram provided the NDA enough ammunition to score goal after goal. Unfortunately, instead of showing its political finesse in Parliament, the NDA leadership fell back on mindless disruption. The bedlam in Parliament is becoming so dreadfully ritualised that it is impossible to escape the conclusion that the BJP leadership has fallen back on the lowest common denominator of politics.

In the mid-1990s, the last occasion it was on the cusp of winning power at the Centre, the BJP combined anti-incumbency with positive intellectual energy. This helped the party complement anti-Congressism with a significant positive mandate.

The quality of today's exuberance in the BJP seems, by comparison, to be base. First, all traces of idealism have been wilfully snuffed out by a leadership that seeks power without either a mission or ethical rectitude. Second, policy discussions have more or less ended under a dispensation that is looking more dall and durbari with each passing day.

These are gloomy times. The ineptitude of the Government seems to be matched by the cynicism of the Opposition.<!--QuoteEnd--><!--QuoteEEnd-->
<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>PM's growth dream aborted </b>
IANS | Manila
<b>Economy may slow down to 8 per cent, says ADB</b>
With signs of overheating, rising inflation and slowdown in construction business, the Indian economy is likely to see a slower growth of 8 per cent in 2007-08 against 9.1 per cent this fiscal, says the Asian Development Bank (ADB).
"But the correction will not be sharp in large measures because several drivers will continue to hold sway," says the bank's annual report - Asian Development Outlook: 2007 - that was released here on Tuesday.

According to the report, some of the key drivers for the Indian economy, albeit at a lower level of impact, include addition to industrial capacity, expanding demand for consumer durables and export growth.

"Thus despite a firm monetary position, momentum should ensure a soft landing," says the report, and adds that for fiscal 2008-09, the country's economy should expand by 8.3 per cent, even though inflation will remain at 5 per cent.

"Two years of above trend growth are causing inflation. Optimism over growth prospect has brought high capital inflow and currency appreciation pressure," says the report, adding agriculture stagnation remains a key challenge.

<b>The bank admits that its predictions may go slightly awry due of some reasons, such as excessive contraction of credit, failure of autumn harvest, exchange rate volatility, export slowdown and inflated real estate and share prices.</b>

The ADB report says among the developmental challenges facing India are lifting farm incomes, accommodating those who are shifted out of farmland, education and ensuring the continuation of fiscal consolidation process.

The report also devotes significant attention to an ongoing controversy in India over the acquisition of farmland for industry that even resulted in deaths in some parts of the country on account of protests and clashes.

"Given that large numbers of agricultural labourers who have no title to these lands nevertheless depend on them for sustenance, the issue is exceptionally emotive," the report says and also offers some solutions.

<b>"The Government is in a position to play a crucial role in alleviating these tensions," says the report, and suggests measures such as suitable compensation for the displaced, retraining schemes for jobs and infrastructure support.</b>

On the overall scenario for Asia, the report says the region will grow at 7.6 per cent in fiscal 2007 and 7.7 per cent in fiscal 2008, after the expansion of 8.3 per cent in 2006, the fastest rate in over a decade.

"Prudent macroeconomic management will ensure that developing Asia's economic outlook will remain favourable," said ADB chief economist Ifzal Ali, adding that China and India contributed 70 per cent of the region's economic growth in 2006.
<b>Major hurdles
Overheating of economy
Rising inflation
Slowdown in construction business
Farm stagnation big challenge</b><!--QuoteEnd--><!--QuoteEEnd-->
Here more : How they messed up economy and growth rate? Moron Singh working very hard to bring India back to old days of less than 2% growth rate.
I doubt it will be soft landing. They have the ability to create major disaster.

They have not even taken into account, Iran, Srilanka crisis and impact on oil price. UPA started Queen's dole scheme and shelved infrastructure projects was most foolish thing.
China has to do little work to bring down India’s economy.
<!--emo&:argue--><img src='style_emoticons/<#EMO_DIR#>/argue.gif' border='0' style='vertical-align:middle' alt='argue.gif' /><!--endemo--> 'India to have 200 m urban poor by 2020'
Himanshi Dhawan
[ 30 Mar, 2007 0215hrs ISTTIMES NEWS NETWORK ]

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NEW DELHI: India might be adding to its number of billionaires but slum population in urban cities is increasing rapidly with nearly one-third of the urban population being poor.

An independent study by NGO Urban Health Resource Centre (UHRC) has found that nearly 30% or 90 million people living in urban areas are poor and according to UNHABITAT, the number is likely to touch 200 million in 2020.

Experts believe that a major contributing factor is rapid urbanisation, and new states — like Jharkhand and Uttarakhand — or cities with SEZs are likely to be the worst affected in the coming years.

The study, that has analysed data collected by the National Family Health Survey-2, points out that development indices such as infant mortality and maternal health are also low in urban areas.

The study in association with Centre for Advocacy and Research cites a combination of causes for the gap in physical health and well-being in cities that have premium healthcare facilities.

One of the reasons for the lack of health, sanitation and awareness is the "hidden" settlement like workers living near construction sites.

"Services like drinking water and toilets do not reach this population," Siddharth Agarwal, UHRC executive director said.

Dollar a Day
How the world's poorest really spend their money.
By Tim Harford
Posted Saturday, March 31, 2007, at 8:33 AM ET
Guntur, southern India, is a city short of money but not of entrepreneurs. Stroll through the main thoroughfare of the largest slum at 9 in the morning, and outside every sixth house you will pass a woman sitting behind a kerosene stove, ready to prepare dosa—rice-and-bean pancakes—for passersby with a rupee to spare. An hour later, each woman will be onto her next job. One woman earns cash by sewing fancy beads onto cheap, plain saris. Others are laborers, rubbish collectors, or pickle-makers.

The scene is described by two MIT economics professors, Abhijit Banerjee and Esther Duflo, in their recent article, "The Economic Lives of the Poor." They set themselves the task of explaining how very poor people make money and how they spend it.

The "very poor" are those who live on less than $1 a day. That benchmark—a rare piece of brilliant marketing from the World Bank—is both more generous and more frugal than it seems. Generous, because the benchmark dates from 1985 and has since been adjusted to take account of inflation. But frugal because the dollar is adjusted for purchasing power. In other words, a Kenyan farmer might have 50 cents a day to spend but still not count as "very poor" because 50 cents in Kenya buys more than $1 would in the United States. However you look at it, a dollar a day is a tiny income.

Perhaps surprisingly, then, even the poorest find the resources to let their hair down. Duflo and Banerjee, looking at economic surveys of the very poor from 13 different countries, conclude that about one-third of household income is spent on stuff other than food. The alternatives to simply trying to consume more calories include shelter, of course, but even the poorest find some money to spend on things such as tobacco, alcohol, weddings, funerals, or religious festivals. Radios and televisions are also popular. Looking at food spending itself, although the very poor do focus on the cheapest grain—millet—they also spend on wheat, rice, and even sugar. This is expensive and offers little nutritional benefit, but it certainly makes lunch taste better.

The very poor even seem to have some consumer power. For example, in the countries where free public schools are especially bad, some parents scrape together the resources to send the children to private schools. The teachers may be largely unskilled themselves, but at least they show up.

The same is true for health care. A pair of World Bank economists, Jishnu Das and Jeffrey Hammer, examined the quality of public and private health care in Delhi, India. They found that while publicly employed doctors tended to be far better qualified than the private doctors, the private doctors tried much harder, spending more time, asking more questions, and examining patients more carefully. Competition works even for the poor.

It would work better yet if the poor were less destitute. One of the problems is that so much of this entrepreneurial activity is carried out on too tiny a scale to make much cash. Scaling up would be more efficient but requires capital equipment. That's hard to come by in a world where bank loans are scarce (this is why people, including the Norwegian Nobel committee, get so excited about microcredit), and cash savings are at risk from inflation and theft. It would be better, too, if it were easy to set up a legal business. According to the World Bank's "Doing Business" reports, the poorest countries often boast red tape that means it takes months and costs a small fortune to set up in business.

But do not despair entirely. In 1981, 40 percent of the world's people lived on less than $1 a day, according to Shaohua Chen and Martin Ravallion of the World Bank. The figure plummeted to 21 percent by 2001 and may be as low 15 percent by 2015. We can hope.

<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>RBI move backfires </b>
Pioneer News Service | New Delhi
Desperate bid to check prices fails, markets crash
Stock market is the latest casualty of the Government's desperate attempt to control inflation through the Reserve Bank of India's monetary intervention, which has sent borrowing rates soaring and taken away homes, cars and consumer durables out of the reach of the common man.

The mayhem at market will be a big setback for the UPA Government's attempt to paint a rosy picture of the economy. With the Planning Commission asking the Government to bring down the GDP rate of growth to contain inflation, further RBI intervention cannot be ruled out. More so because despite a series of measures, inflation still stands at 6.5 per cent, far above the RBI's target range of 5 to 5.5 per cent. 

Investors had to helplessly watch Rs 1.5 trillion going down the drain in a single day as the Sensex crashed under pressure from the RBI's move to limit money flow. The market lost 617 points and the Sensex ended at 12,455.37 points while Nifty lost 188 points and ended at 3,633 on Monday. More than half the loss was shouldered by invest-ors in the country's 30 biggest blue chip companies, which saw an erosion of over Rs 80,000 crore in market value.

The RBI on Friday had raised its short-term lending rate by 25 basis points to 7.75 per cent and also hiked CRR (the proportion of deposits that banks have to keep as cash) by half a percentage point to 6.5 per cent. The measures would squeeze liquidity and make credit costs rise sharply. The country's largest lender of consumer loans, ICICI Bank reacted accordingly and increased its consumer loan rates by 1 per cent to 12.75 per cent on Saturday itself.

Fears of a sharp rise in interest rates took a heavy toll of not only banking, but also auto, construction, consumer durables and capital goods stocks also. Information technology stocks also posted heavy losses. IT major Wipro's market cap was reduced by over Rs 4,000 crore while banking scrips like ICICI Bank, which suffered the brunt of the melting markets, lost close to Rs 4,000 crore and HDFC dropped by over Rs 1,000 crore. Car market leader Maruti plunged over eight per cent taking its market cap down by about Rs 1,500 crore.

Continuous rate hikes will have a stiffening impact on financial markets, say experts. Market observers say selling in banking stocks was mostly triggered on fears that sector's interest income would dip by nearly Rs 2,000 crore on account of the twin measures to hike CRR, coupled with reduction in the interest that the RBI will pay on cash reserve.

<b>Sensex plummets by 617 points
On first trading day of new fiscal
RBI move was targeted to curb money supply
It resulted in harder interest rates
Could shave off growth in economy
Real estate, automobile sectors set to suffer a hit
Biggest fall in over nine months
Already top lender ICICI Bank has announced hike in prime lending rate
This follows RBI's hike in key short-term lending rate and CRR
Fears of fall in auto sales influenced trading sentiment</b><!--QuoteEnd--><!--QuoteEEnd-->
Kalam wants a poverty-free SAARC by 2017
<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>Manic Monday </b>
The Pioneer Edit Desk
Government slaughters the economy
The sharpest sting to the 617 point fall in the Sensex on Monday comes in the fact that nobody - not the beleaguered retail investor, not the suddenly-quiet news channel analyst, not the investment banker - can confidently proclaim that the market has bottomed out. A precipitous decline from even the 12,400-point level the market has hit would seem on the cards, with a deflated business mood and possible electoral reverses for the Congress playing their part. The fall in stock prices has been the strongest for the banking and automobile sectors. Real estate is just about holding on but can expect to give way shortly. Small and mid-cap stocks, representing companies that cannot easily borrow overseas and need to turn to domestic banks for loans, are also under pressure. Common to all of these is the impact of the rise in interest rates, the latest coming this past Friday when the Reserve Bank of India moved up the overnight lending rate by a quarter of a percentage point to 7.75 per cent. This was the sixth interest rate rise in 14 months. It is expected to curb inflation - or so a desperate UPA Government hopes - by squeezing out as much as Rs 15,000 crore of liquidity from the market. More dangerously, it can kill growth. Home loans are today priced at 12.5 per cent, the highest level in six years and a far cry from the seven per cent deals being offered in 2004. For middle class buyers, automobile loans will also become dearer. For smaller companies, the interest burden on the capital needed for new projects or business expansion has risen rapidly over the past year.

It is important to recognise what the RBI and the Union Finance Ministry have done. India's economic boom that ran from, roughly, 2003-04 to 2006-07, was built on a cheapening of consumer credit and a spurt in consumer demand. More Indians came to buy homes and cars than ever before in history. This pushed up profit margins - and wages and employment - in a host of commodity industries, from aluminium to cement, which contribute inputs to construction or to car manufacture. Simultaneously, companies saw the low-cost borrowing option as attractive enough to retire older, expensive loans and go on a capacity enhancement binge. The underlying idea was that, with a low interest regime here to stay, demand was going to be healthy for years to come and the enhanced capacities would cater to this. With interest rates about 70 per cent above what they were three years ago - if housing loans are an indicator - that cosy equation is now history. <span style='font-size:14pt;line-height:100%'>The Congress has truly squandered the strong economic fundamentals it inherited from the NDA regime. In retrospect, India was indeed shining when the NDA was voted out; it is gathering gloom that we face today. Economic mismanagement is a mild expression. It is unlikely to satisfy the 30 million Indians - and their families - who pay EMIs on a variety of consumer loans every month and find the UPA Government, headed by a clueless Prime Minister who continues to be feted in certain quarters as an 'economist', has trapped them in a debt cycle.</span> Urban India's protest vote can be safely foretold. The Congress can expect the bad news to intensify, beginning perhaps with this week's municipal election in Delhi.

Now you know why I named not clueless but "Moron Singh". Moron Singh is good for World Bank Babu job who can work on files and just look for TA, DA and good retirement benefits and ofcourse Bend up and down in front of Queen and other Videshi masters.
<!--emo&:ind--><img src='style_emoticons/<#EMO_DIR#>/india.gif' border='0' style='vertical-align:middle' alt='india.gif' /><!--endemo--> Suddenly, it is sexy to fund the poor
Dinesh Narayanan & Baiju Kalesh
[ 7 Apr, 2007 0026hrs ISTTIMES NEWS NETWORK ]

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In my early days, I was eager to learn and to do things, and therefore I learned quickly"
— Sitting Bull (Red Indian chief)

Great ideas often spawn in the most terrible circumstances. One such idea is microfinance, often credited to last year's Nobel prize winner Mohammad Yunus, who founded the immensely successful Grameen Bank of Bangladesh.

Yunus began by giving a micro-loan of $27 to 42 impoverished families after witnessing the horrors of the great Bengal famine. But the idea, which was inspired by misery and depends on the poor, ironically, is attracting savvy, super-rich investors.

"Microfinance is now sexy," says Vikram Akula of SKS Microfinance, which has just received $11.5 million from private equity funds Sequoia Capital, Unitus Equity Fund, Odyssey Capital, SIDBI and venture capitalists Vinod Khosla and Ravi Reddy.

Khosla had earlier invested in Varanasi-based Cashpore. That profit-seeking capital is flowing towards microfinance institutions (MFIs) suggests that the sector is gradually growing out of its fledgling age.

"Capitalisation was the first bottleneck in the development of microfinance. Now it is not,"says Brahmanand Hegde, joint general manager, rural and micro banking group of ICICI Bank, which has lent Rs 4,500 crore to MFIs over the past three years.

Still, Hegde estimates that the sector needs about $5-6 billion of pure equity capital.

There is good reason why private pools of money, which are always on the lookout for ways to maximise returns, are showing interest in Indian MFIs. Many of them have built up a strong client base.

The big few have captive clientele of at least half a million. There are 49 MFIs that have a client base of over one lakh.

MFIs like SKS and Spandana, who follow the Grameen model to the T, are helping rural households to rise from grinding poverty by encouraging entrepreneurship. There repayment rates are near 100%, better than any bank in India. And they are slowly breaking even.

"We see microfinance firms generating huge cash flows from different channels. MFIs can create potential customers as they upgrade them into micro and small-scale entrepreneurs. That will generate demand for various financial and commercial products," says Mohit Bhatnagar of Sequoia Capital.

Akula says that some of the small businesses generate huge returns on capital invested. For example, micro diners SKS lent to made returns of as much as 246% and pottery as much as 236%.

Even vegetable vending generated returns of 57%. As the clients' financial condition improves, they become potential customers for other products such as insurance or a cell phone.

At that stage, MFIs can tie up with insurers or telephone companies to sell products to their loyal base, which in turn will earn the company commissions boosting profits.

"In the Grameen methodolgy, once you break even, you grow fast and become very profitable,"says Vijay Mahajan, who founded Basix, the country's first MFI born with a corporate structure. Basix was also the first to attract foreign investment when IFC, Washington, the private funding arm of the World Bank, Triodos Bank of Holland and Shore Bank of the US together invested $1.5 million in 2000.

"The investors in this sectors are typically patient investors — willing to wait for seven or 10 years. But they know that ultimately there will be profit,"says Mahajan.

1|2|Next >
Not sure if this would be the exact thread to post this, nevertheless..

Narayana Murthy's pretty disappointing when he states this:
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->"<i>We had arranged for five people to sing the anthem. But then we cancelled it as we have foreigners onboard here. They should not be embarrassed while we sing the anthem</i>," said Infosys chief mentor Narayana Murthy.

As per the protocol, the national anthem was played twice at Infosys campus here as President A P J Abdul Kalam stepped in and out -- the only difference being, it sounded like a bad arrangement of musical notes. In other words, the anthem, which should command the utmost respect from all true-blue Indians, did not get its due, from whoever was responsible -- the speakers at the do or the person who ‘orchestrated’ it.

Which made many wonder: Among the 5,000 employees, most of them Indians, wasn’t there a decent group of singers who could sing the anthem of the country without discomfiting its first citizen?

<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Somebody was heard, asking: “Was it too much to pay due attention to the revered symbols of the nation just so that a small percentage of foreign trainees don’t get fidgety”. <!--QuoteEnd--><!--QuoteEEnd-->

National anthem could make foreigners at Infy uneasy

At every American baseball game, national anthem is sung and respected despite some foreign players in the team or thousand others in audience. Since when's anyone else 'embarassed' by a host singing his national anthem in his own nation in presence of it's President?

<!--emo&<_<--><img src='style_emoticons/<#EMO_DIR#>/dry.gif' border='0' style='vertical-align:middle' alt='dry.gif' /><!--endemo--> INDIA towards 2020 – The countdown begins

Today’s Date Target Date Days Left Year

9-4-2007 1-1-2020 4680 12

Please visit our website: www.2020india.in
Though India has everything, it lags behind in various aspects. This made our Thinkers Forum analyze deeply about what could be done to achieve the goal of 2020.

The result: www.2020india.in
What are our goals?

1. Make India the best developed country before 2020
2. Start speaking English well - www.speakgoodenglish.in
3. Create more jobs in all sectors such as IT, Agriculture, Tourism, etc.
4. Improve our current educational system.
5. Develop Industry Institute Interface.
6. Improve the Standard of Living.
7. Stop Smoking, Stop Drinking and Start Living.
8. Catch our youth young.
9. Improve our legal system.
10. Permanent peace with our neighbours.

How do we achieve these goals? Please write us your valuable suggestions and feedbacks to:
admin@2020india.in, india2020thinkers@yahoo.com
Visit us at: www.2020india.in ; www.speakgoodenglish.in
Blog us at: www.2020indiablog.blogspot.com, www.Speakgoodenglishblog.blogspot.com
Sign our petition at: http://www.petitiononline.com/aimhigh/
Now let us know what you are going to do?

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