FOREIGN EXCHANGE RESERVES CROSES US $135.65 BILLION
The Indian foreign exchange reserve position continues to be buoyant with reserves standing at US $1,35,658 million in the week ending Feb 25, 2005.
Foreign currency assets were US $ 129844 million, US $ 2,692 higher than previous week's figure. Compared to their last year figure this variation is of the amount US $ 22,699 million, RBI weekly statement reported. Exchange reserves have continued to rise for over some months except for week ended Feb 5, 2005, when it fell marginally to Us $ 1,28, 914 million from previous week's US $ 1,29,720 million.
CONFUSION OVER TAX ON BRANDED JEWELRY MADE CLEAR
The Government has issued instructions about the scope of levy on branded jewellery, which has created some confusion among the people. The Budget 2005-06 had proposed a levy of an excise duty of 2% on branded articles of jewellery of heading 7113 of the Central Excise Tariff.
According to the clarifications made by the government, the duty is leviable only if the brand name or the trade name, as defined, is indelibly affixed or embossed on the article of jewellery itself. For e.g., generally, a jeweler gets the jewellery made by gold smiths/job-workers who put a mark/sign/initials, etc. on the article of jewellery. This marking is only to identify that the article of jewellery was received from a particular goldsmith, etc. Such jewellery cannot be considered as branded jewellery, and no tax is leviable thereon.
However, if a jeweller advertises and sells its products under a brand name and also puts the same brand name or an abbreviation thereof or a mark , which has a connection with such brand name on the article of jewellery, such jewellery will be branded jewellery and will be liable to the tax.
As regards 'hallmarked' gold jewellery, 'hallmarking' is in the context of accurate determination and official recording of the proportionate content of precious metal in gold. Hallmarks are thus only official marks used as a guarantee of purity or fineness of gold jewellery, and cannot be treated as 'branding' for the purposes of the excise levy
INFLATION DIPS TO 4.83
The official Wholesale Price Index for 'All Commodities' (Base: 1993-94 = 100) for the week ended 19th February, 2005 remained unchanged at its previous week's level of 188.8 (Provisional), according to the government data.
The annual rate of inflation, calculated on point to point basis, stood at 4.83 percent (Provisional) for the week ended 19/02/2005 as against 5.01 percent (Provisional) for the previous week and 6.00 percent during the corresponding week of the previous year.
POOR COUNTRIES DEMAND SLASHING FARM SUBSIDIES AFTER A LANDMARK COTTON RULING AT WTO
During the second day of the trade talks meeting in Kenya, developing countries have demanded the developed countries take tangible action to cut subsidies for farm goods. This was held up by Brazil's victory over the United States in a row over cotton.
"We shall be much more demanding on them to meet the deadlines to end subsidies and to tell us by how much," Rwandan Trade Minister Manasse Nshuti told Reuters at the Indian Ocean resort hosting the talks.
"It is not just to say 'okay, we'll remove subsidies,' we need to go beyond that and say by how much and when will they be removed," said Nshuti, currently chairing the trade committee of the 53-member African Union.
A World Trade Organisation (WTO) appeals body on Thursday upheld an earlier ruling ordering the US to stop the payments to its farmers.
The organisation had found in its initial September ruling that the subsidies violated global trade rules.
Brazil said the US practice depressed world prices and hurt cotton producers both in Brazil and other countries. Cotton growers in West Africa say that they have been especially hard hit by subsidies for US cotton farmers.
The US will now have to bring its cotton subsidies, which wrongly include export credits for producers, in line with global trade rules.
WTO officials are not expecting big breakthroughs but hope the talks -- which have also covered trade in services and industrial tariffs -- will provide impetus for negotiations in Geneva ahead of a July deadline for a draft deal on new trade rules.
The European Union promised in July to stop directly subsidising agricultural exports to give poor farmers a better chance in world markets, although the offer is conditional on other rich nations making comparable concessions.
India's chief WTO negotiator Gopal Pillai welcomed the organisation's decision against the US's cotton policy. "The cotton subsidies which the US gives to its farmers distort trade in the market. "Both subsistence farmers in Africa and Asia are not able to get a good price for their cotton." he said.
Pillai further added that if the message is applied across the board, there will be much better terms of trade for the millions of farmers in developing countries.
Although the US has lost its appeal, it remains to be seen how long it will take Washington to end its illegal subsidies. The US has said that any change would need to be included in any overall Doha agreement.
The WTO wants initial pacts by the end of July in pivotal areas, including farm and industrial goods trade, services and development issues, which could clear the way for a ministerial conference to approve a draft deal in Hong Kong in December. Under that plan, the round could be finished in 2006.
GOVERNMENT SPECIFIES GUIDELINES FOR FDI IN CONSTRUCTION
The Ministry of Commerce & Industry (Department of Industrial Policy & Promotion), Government of India, has issued the guidelines for foreign direct investment (FDI) under the automatic route in townships, housing, built-up infrastructure and construction-development projects . The decision to allow 100% FDI under the automatic route in this important sector was announced by Shri Kamal Nath, Union Minister of Commerce & industry, on 24th February, 2005.
The government has specified the following guidelines in a press note dated 3rd March, 2005:
- Minimum area to be developed under each project would be as under:
- In case of development of serviced housing plots, a minimum land area of 10 hectares
- In case of construction-development projects, a minimum built-up area of 50,000 sq. mts
- In case of a combination project, any one of the above two conditions would suffice
- The investment would further be subject to the following conditions:
- Minimum capitalization of US$10 million for wholly owned subsidiaries and US$ 5 million for joint ventures with Indian partners. The funds would have to be brought in within six months of commencement of business of the Company.
- Original investment cannot be repatriated before a period of three years from completion of minimum capitalization. However, the investor may be permitted to exit earlier with prior approval of the Government through the FIPB.
- At least 50% of the project must be developed within a period of five years from the date of obtaining all statutory clearances. The investor would not be permitted to sell undeveloped plots.
For the purpose of these guidelines, "undeveloped plots" will mean where roads, water supply, street lighting, drainage, sewerage, and other conveniences, as applicable under prescribed regulations, have not been made available. It will be necessary that the investor provides this infrastructure and obtains the completion certificate from the concerned local body/service agency before he would be allowed to dispose of serviced housing plots.
- The project shall conform to the norms and standards, including land use requirements and provision of community amenities and common facilities, as laid down in the applicable building control regulations, bye-laws, rules, and other regulations of the State Government/ Municipal/ Local Body concerned.
- The investor shall be responsible for obtaining all necessary approvals, including those of the building/layout plans, developing internal and peripheral areas and other infrastructure facilities, payment of development, external development and other charges and complying with all other requirements as prescribed under applicable rules/bye-laws/regulations of the State Government/ Municipal/Local Body concerned.
- The State Government/ Municipal/ Local Body concerned, which approves the building / development plans, would monitor compliance of the above conditions by the developer.
PARTY OVER FOR SERVICE PROVIDERS EARNING FOREX
Service providers enjoying a service tax exemption on payments received in foreign exchange will be upset because they will have to start paying service tax from March 15.
The finance ministry has finally defined what constitutes export of services. An exemption from service tax will be given only where services are actually exported. Broadly, export is defined based on the location of the buyer. The recipient has to be outside the country.
Tourism industry will feel the burden now. Service tax will have to be paid if, say, a foreign tourist rents a cab in India and pays in foreign exchange. An exemption will be given only if the recipient is outside India when such services are received, according to the rules notified today.
Four services - real estate consultancy, architecture, interior decoration and construction - relating to immovable property will be treated as export only if such property is located outside India.
This means services rendered by a real estate consultant for a property in, say, London will be treated as export. General insurance services will also be covered under this category if the property is located outside India.
FRINGE BENEFIT, TAX ON WITHDRAWALS CAUSE UNREST; FM MAY CONSIDER RELAXATION
A day after welcoming Finance Minister P Chidambaram's Budget 2005, India Inc woke up to a loom called Fringe Benefit Tax (FBT), a sweeping 30 per cent tax payable by all employers - and not employees - on expenditure that gives a 'fringe benefit' to employees.
So it means from April 1, when an employee travels on work, stay at a hotel and take a client out to dinner, his company will have to pay tax.
The tax will be on the fringe benefits provided by a company on 17 key heads-including sales promotion, conveyance, travel, entertainment, and even contribution to superannuation fund. The following will be deemed as fringe benefits.
- Employer-funded private journeys, Scholarship to staff children. The taxable amount is 100% and the effective rate is 30%
- Conveyance/Tour/ Travels, Hotel/ Boarding/ Lodging, Maintenance of motor cars, Maintenance of aircraft will be placed under category two with 50% taxable amount while effective rate on them would be 15%
- Entertainment, Festival celebrations, Gifts, Use of Club facilities, Provision of hospitality, Guest House, conference etc., Employee Welfare, Health Club etc., Sales Promotion/Publicity have a taxable amount of 20%, the real effective rate will boils down to 6%
- For use of Telephone in office the taxable amount will be 10% and 3% as the effective rate.
Many of the major names in the corporate sector have expressed their concern and urged PM to re-look the tax.
According to some, IT and call centres - who are spending a lot in employee welfare to save themselves from 20 per cent annual attrition rates - will be big losers.
HR consultants, however, say the tax will create transparency in accounting for employee costs and benefits. The impact of fringe benefit tax proposal was also reflected in Bombay stock exchange as the jittery Sensex fell 62.78 points closing at 6651 on March 1, 2005.
Another step that has agitated many, was the 0.1% tax on cash withdrawals. Adding to the misery the tax, would cover other kinds of banking transactions also, which exceeds Rs 10,000 namely enchasing fixed deposits and purchases of bank drafts, banker's cheques or travelers cheques.
Meanwhile, Finance minister P Chidambaram has repeated his readiness to consider changes in the budget proposals relating to the tax on cash withdrawal and the fringe benefit tax even as he firmly supported the two measures.
"These are our proposals and suggestions, which are broadly accepted. We will go into them one by one. But if you point out that there are some things to be cleaned, we will certainly look into them," he said in an interaction with economists on Tuesday. He specifically referred to sales promotion, including publicity, which has been included in the FBT, and said, "We will find out why it is there, what is the rationale."
"I will go by what Parliament decides," he said while indicating he might be open to "cleaning up" some provisions. He has been under mounting pressure from all around to at least partially roll back the controversial proposals. He had told the post-budget press conference on Monday that he was ready to consider suggestions to raise the limit of cash withdrawal of Rs 10,000 in a single day that triggers the tax of 0.01%.
US HIKES H1-B, L-1 VISA FEES
The US embassy has announced new visa fees for a variety of consular services at its mission here and at the consulates in Chennai, Mumbai and Kolkata from March 8.
A new US law has created$500 fraud prevention and detection fee, the proceeds of which will be used to assist in detecting and deterring fraud in H-1B and L visas, the embassy said in a statement.
The Department of Homeland Security will collect the new fraud prevention and detection fee from employers in the US who file a petition to grant H-1B and L visas, or to obtain authorisation for an alien changing his employer.
Visa sections at US embassies and consulates will collect a similar $500 fee for L-1 visas as employers in the US would not have been charged this fee, the embassy statement said.
The new legislation - Consolidated Appropriations Act - has also created two other fees - a surcharge of $12 to be added to the current pass application fee and surcharge of $45 to be added to immigration visas.
The $12 surcharge will be used to increase border security and support the issuance of the newly designed passport containing new security features, embedded with a chip on the cover.
The surcharge of $45 for strengthening the security of visa adjudication process and the physical visa document itself, takes the total fee to $380, the embassy message added.
SENSEX GAINS FOLLOWINMG PC's SPEECH
The investors have applauded Budget measures aimed at increasing spending on infrastructure and cutting corporate taxes. This was reflected in the Sensex as the Indian share prices closed 2.19 per cent higher on Monday at a record level. Sensex rose 144.14 points to 6,713.86, a record closing high, crossing the previous peak of 6,679.33 set on February 14.Total volume on the Bombay Stock Exchange was Rs 29.40 billion ($674 million).
Share prices had gone up in the afternoon as many foreign investors who had kept funds out of the market ahead of the Budget, invested again once the measures had been announced, manager at Cholamandalam Securities Vijay Tilakraj said.
Tilakraj has rated the budget 7/10 as it has dealt with the growth boosting policies that addresses the key issues of infrastructure, health care, taxes and education.
Tilakraj said the index was now seen further rising in the near term to around the 6,850 level.
Analysts said the Budget for the financial year starting April 1 focused on developing infrastructure and agriculture -- key areas that would trigger consumer demand in Asia's fourth largest economy.
"There has been no tinkering around with capital gains (tax), it provides a stable tax regime, it correctly emphasises the importance of the financial system," vice-chairman of Kotak Mahindra Finance Uday Kotak said.
Finance Minister P Chidambaram said that "nearly all engines of the economy were running at full speed" with growth forecast at 6.9 per cent for the current financial year.
Because of patchy monsoon rains, growth was slower than the previous year's 8.5 per cent, but better-than-expected at the start of the current financial year.
Among the gainers, were country's largest scooter and motorcycle maker Hero Honda rose Rs 23.75 to Rs 544.25.
Shares of software giant Infosys gained Rs 57.20 to Rs 2,237.15, while Wipro rose Rs 24.70 to Rs 699.15.
Banking shares also rose ahead of new policy guidelines allowing greater freedom for financial transactions by the Reserve Bank of India.Government-owned State Bank of India, the country's largest bank, gained Rs 29.45 to Rs 714.40
KAMAL NATH LEAVES FOR WTO MINI MINISTERIAL MEET IN KENYA
Union Minister of commerce & Industry, Kamal Nath is going to Kenya to participate in the meeting of the Trade Ministers of the World Trade Organisation (WTO) - mini-Ministerial - scheduled to be held in Mombasa on 2nd - 4th March, 2005. He will be leading the Indian delegation to the meeting, which is expected to be attended by Trade Ministers of 30 leading WTO member countries.
Shri Kamal Nath had earlier participated in the mini-Ministerial meeting of 33 Trade Ministers in Davos, Switzerland, in January 2005, when it was decided by the Ministers to accelerate the process of negotiations through a series of meetings at the ministerial level so as to speed up finalisation of modalities for negotiations within the WTO Framework Agreement of July 2004 and resolve outstanding issues in the run-up to the Hong Kong Ministerial Conference scheduled to be held later this year.
The Davos meeting had repeated its commitment to the Doha Development Agenda and the July Framework. It emphasized the need for intense ministerial involvement and political directions to the negotiations throughout the year in order to ensure positive outcome of the Hong Kong Ministerial as also the Doha Round.
Modalities for negotiations in agriculture and non-agricultural market access (NAMA) are expected to be finalized by the Hong Kong Ministerial. It was also stressed that there should be a critical mass offer on Services as well as significant progress on rules and trade facilitation by then.
The Kenya meeting is of particular importance since it is the first in a proposed series of meetings leading up to Hong Kong, that would be exclusively devoted to WTO matters, unlike in Davos, where only such Ministers who attended the World Economic Forum, participated.
The Kenya meeting is also significant, because a fortnight later, India is hosting the G-20 countries for a Conference in New Delhi.
DOMESTIC TOURISM GIVEN IMPETUS IN THE BUDGET
The Union Budget for 2005-06 has given high priority to the domestic tourism sector in view of its huge socio-economic development potential. Allocation for domestic tourism campaign has been increased five times - from Rs. 14 crore (2004-05) to Rs. 70 crore in new budget.
Additionally, noteworthy increases have also been made in the allocation for tourism infrastructure creation, which include Yatri Niwas, Wayside Amenities, Forest Lodges and Tourist Transport etc. A sum of Rs. 415.75 crore has been proposed for the year 2005-06 for the said infrastructure while the earlier budget had the allocation of Rs. 279 crore for the same.
Tourism schemes for the North East Region and Sikkim will now have allocation of Rs. 79 crore while in the budget of 2004-05 it was Rs. 50 crore. The Ministry of tourism is making all-out efforts to promote India globally so that it turns into a favorite destination on the World Tourism Map. The 'Incredible India' campaign launched by the Ministry has borne fruits and the country witnessed a significant rise of 23.5% in 2004-05 in the Overseas Tourist Traffic. An equally encouraging trend was seen in the Domestic Sector also.
The total budget allocation for the tourism has been increased to Rs. 786 crore from Rs. 500 crore in 2004-05.
INDIA INC. CONTENT WITH BUDGET
Leaders of India Inc on Monday welcomed the Union Budget 2005-06 describing it as growth-oriented.
CII's (Confederation of Indian Industry) chief mentor Tarun Das said, "We are on a good wicket as far as the economy is concerned," and reforms are on track.
"There are several positives it is difficult to find negatives," he said.
Maruti Udyog's Managing Director Jagdish Khattar said, "It is a good budget and a forward looking one."
"Focus on employment is a welcome step. Bharat Nirman is a step in the right direction," Bharti Televenture head Sunil Mittal said.
Rajiv Karwal of Electrolux India said reduction of excise duty on air-conditioners from 24 to 16 per cent will help bring down the prices of the product between Rs 500 and Rs 1500.This will also help imports.
PRESIDENT STRESSES ON RURAL INDIA DEVELOPMENT, HEALTH AND EDUCATION IN HIS PRE BUDGET SPEECH
During his speech, which marked the inauguration of budget session, the president APJ Abdul Kalam promised a New deal for rural India. He assured that the government will take appropriate measures to ensure pacing of Investment in agriculture, public investment in irrigation, and provision of single market for agri-produce. He further stated that government has taken procedures which has steeply increased flow of credit in agriculture. The UPA Government's commitment to protect farmers from adversaries of nature has given rise to farm insurance scheme. Covering only rabi crops initially it now covers kharif crops also, the President said. Besides, the government will take measures for the modernization of meteorological department so that more accurate information can be made available to the farmers.
Horticulture is another area on the government's priority list and government will launch a National Horticulture mission soon. The president emphasized upon the crucial issue of water availability and urged people to adopt a holistic and nationalistic view in managing water resources. He said that the investment under wage employment programme will provide more funds for the irrigation programme and the existing policies will complement it. New schemes to promote micro irrigation will be started. The president stressed that private-public partnership is of utmost importance in order to develop rural infrastructure.
Another key area is the research in agriculture, for which Kalam said, funding has considerably increased in the past few years. New deal requires revitalization of rural India. UPA government has formed a new ministry for panchayati raj, which has its 150-point action plan for the development of rural India. National committee on rural infrastructure promises to provide electricity to all villages by 2009. This will substantially reduce distress migration to urban areas. Another priority the president outlined wass rural health care and education
He said the employment opportunities will grow simultaneously with the growth in agriculture, industry service and infrastructure. National employment guarantee bill, which gives guarantee to rural poor for 100 days of employment, will be further improved to cover all rural areas. Food for work scheme has successfully covered 50 lakh additional families from its commencement raising the total to 2 crores families in rural India.
India needs investment in education at all levels from elementary primary education to world class research institutes. Sarv shiksha abhiyaan, nutrition for adolescent girls and launch of DD direct home technology has been successful in imparting education to SCs and STs and other backward communities of India. University of Allahabad and University of Manipur have already been given national university status. Government will set up a National Knowledge Commission to develop science and technology. Kalam pointed out at the need of public-private partnership in this regard.
In the sphere of health care, the government has decided to augment the expenditure from 0.9% of GDP to 2% of GDP. This increase will be primarily in the realm of primary health service esp. in the rural areas.
Further, emphasizing on the need for stepping up progress made in core sectors, he said the government has recognized the need to boost urban infrastructure as 1/3 of the population lives in urban areas. For economy to grow at 7-8% massive investment in infrastructure such as roadways, waterways, aviation, housing is needed. The president pointed out that India needs at least $150 billion to catch up with its East Asian counterparts. He said the new civil aviation policy would draft measures for modernization of the aviation sector and offering consumers a wider choice. Also there is a need for granting greater autonomy to National Highway authority of India. Golden quadrilateral has speeded up and the focus is on improving railroad network in north east. In telecom sector, the Broadband policy announced in November 2004 aims at increasing more Internet connectivity with higher speed, the president emphasized on bridging the digital divide between rural and urban population. He further stated the urgent need for an access to energy security. India must give priority to harnessing alternative sources of energy.
Modernization and development of manufacturing and service sector is crucial for growth. The president expressed his concern over the decline in manufacturing growth rate. In this regard he said, priority must be given to industries at home like pharma, leather and textiles.
End of MFA open a new opportunity in the Indian textile sector and the government will take all the steps to increase investment and textile, Kalam Said. Handloom sector modernization is among the key priorities of the government with special attention to the Indian weavers. The government has promised of making the coming two years as the years for weavers, with special attention given to access to technology, credit and market.
The biggest challenge in manufacturing sector is to promote 'Brand India' label. Recognizing the fact that 90% of the country's labour force is employed in informal sector, he said that the government will appoint a national commission for small and tiny enterprises and self employed persons so that informal sectors blossoms.
For rebuilding rural India 'Bharat Nirmaan' programme would be set up which would serve as a platform for electricity, water and telecom connectivity for viallges. "Until our citizens living in rural India, especially the farmers and the weaker sections, are economically and socially empowered, India cannot shine," Kalam said adding, "my government wants India to shine, but it must shine for all."
My government is committed to reining in the rate of inflation as it hurts the poor the most," he said adding the economy is once again poised to record close to seven per cent in 2004-05 despite a weaker monsoon and higher oil prices.
FDI IN REAL ESTATE GETS CABINET'S APPROVAL
The Cabinet Committee on Economic Affairs eases up rules for foreign investment in the real estate and construction sector, a senior industry ministry official said on Thursday 24th Feb.
This will boost the reform process in India's financial sector and deepen the liberalization process, which kicked off in 1991 when the country embraced free market reforms.
Construction stocks poured as the Cabinet gave in-principle clearance to foreign direct investment in real estate, reported TV channels. To start with, the 100-acre criterion for FDI in realty has been removed.
The government will soon announce its decision on modifying FDI norms in construction sector to make them more construction-centric rather than land-centric.
GOVERNMENT PONDERS OVER FDI IN RETAIL
Commerce and Industry Minister Kamal Nath has said that the cabinet will discuss in detail the issue of allowing foreign direct investment (FDI) in retailing before taking any such decision. Nath said this while addressing a seminar organised by the Federation of Indian Chambers of Commerce and Industry (Ficci) on Thursday,Feb 24.
"The nature of the retail sector is too complex for a hasty decision.... Only 2 per cent of the business is in the organised sector and of the remaining 98 per cent, 50 per cent is subsistence retailing," the minister said
The turnover of the retail sector was estimated at Rs 400,000 crore. He also said that experience had suggested that large retail chains had created monopolies in the sourcing business.
Nath further said that Wal Mart had proposed assured sourcing of billions from India in return for setting up chains in the country but he had turned down the idea.
"We are very clear that if at all FDI is permitted in retail trade, it should lead to incremental economic benefits and not substitute the on-going activities. There is no question of replacing or displacing what we already have. It must add to economic activity," Nath said.
"This whole fixation of permitting or not permitting FDI in the retail sector is, in my opinion misplaced. FDI is not an end in itself but a means towards the end," he added.
He also outlined the advantages of allowing foreign investment in the sector saying the focus should be on sectors like food processing where it can fuel growth and bring technology.
"We are looking at it with a great sense of urgency. If we look at the food sector, it is the most compelling reason as 40 per cent of our fruits and vegetables rot due to lack of processing facilities. Should we not give this priority," he said.
Nath, however, did not give a timeframe as to when the views would be firmed up.
TELE DENSITY PICKS UP AS PHONE USERS CROSSES 95 MILLION
About 185 lakh telephones have been added during April-January of the current year according to a recent press release by ministry of communications and information technology. Of these, in the month of January alone, more than 21 lakh phones were provided. With this addition, the total number of phones has crossed a level of 950 lakh, taking the tele-density from 7% in March 2004 to 8.79% at the end of January 2005.
About 87% of the additional phones during the current year are accounted for by the mobile phones. The number of mobile phones (including WLL (M)) as on January 31, 2005 is about 498 lakh. Private Sector has played a major role by accounting for 77.28% of the expansion during these ten months. The private sector has so far provided 443.41 lakh phones as on January 31, 2005, which is 47% of the total phones in the country.
However, in the rural areas, only Bharat Sanchar Nigam Limited (BSNL) has provided Direct Exchange Lines and VPTs. As against 5.83 lakh additional telephones provided in rural areas during April-January 2004, BSNL has provided 7.65 lakh telephones during the current year (i.e. April-December 2004). 4773 VPTs have also been provided by BSNL during the past ten months. Rs. 1200 crore disbursed during 2004-05 through USOF to the operators for rural telephony.
INDO-AFRICAN TRADE TO RISE
Shri EVKS Elangovan, Minister of State for Commerce and Industry has said that India was keen to increase its trade and economic cooperation with Africa. He was addressing the Conclave on Indo-Africa Project Partnership meet organized by the Ministry of Commerce the Confederation of Indian Industry (CII) and the Export Import Bank (EXIM Bank) on Thursday March 3,2005.
Stating that Africa is the continent of the future, the Minister said that the 'Focus Africa' programme that has been launched by the Ministry to give increased thrust to trade in the region. He said that Africa, with its tremendous natural resources possesses immense potentials for growth and the conclave helps to showcase Indian capabilities to provide technology and services at affordable cost to the continent.
Shri Elangovan called upon the Indian companies to be more pro-active in tendering for projects and services in the region. Noting that trade is not just the flow of goods and services, but a mechanism for people to people contact, and Indian traders being well known in the area, they enjoy a comparative advantage. Indian Companies, both in the public and private sectors, have shown keen interest in participating in African Development Bank funded projects, he said.
Noting that technology is the key to development in the 21st century, the minister said that with Indian competence in the areas of software, engineering, telecommunications, and construction, Africa could achieve its development aspirations. The competence of our consultants, corporations, and companies engaged in these sectors can be taken advantage of by our African partners. "Further the banking sector in India is undergoing major changes and our new generation banks are comparable with top international banks. We have now, state of the art technology in banking services and management. India is keen to share its technology and experience with the African Region," he added.
SENSEX RISES AGAIN VOLATILITY CONTINUES
India's key share market BSE index staged a smart renaissance on Wednesday, after giving up to its previous session's loss, as foreign funds returned into the trading ring to pick up heavyweight equities. The stock market saw a boost of 35.81 points representing a gain of 0.54 percent over its previous session's close after closing at 6686.89.
The benchmark market index had rallied over two percent on Monday to 6,713.86, bettering its previous record high of 6,679.33 touched Feb 14. Dealers said the stock market opened for the day on a sharply positive note after closing nearly one percent lower in the previous session following profit taking at higher levels.
The market index rallied sharply higher in the early trade on reports that a hold of foreign funds has picked up more than one percent equity of public sector energy giant Oil and Natural Gas Corp. Sources say 26 foreign institutional investors have brought 8.6 million shares in ONGC.
In the old economy sector, shares of private banking major ICICI Bank gained 4.6 percent to reach Rs.389.45 and State Bank of India, the country's largest commercial bank, touched 1.6 percent to Rs.706.15. Shares of cement companies such as ACC ended 1.6 percent higher at Rs.367.90, Grasim Industries was up nearly one percent at Rs.1,343, and Gujarat Ambuja Cements closed with a gain of 0.6 percent at Rs.442.60.
MEMBERS BEGIN TALKS IN KENYA MINI WTO MEET
Trade ministers from around the world gathered at a beach resort on Kenya's Indian Ocean coast on Thursday to inject fresh momentum into global free trade talks ahead of a looming deadline for a deal.
The World Trade Organisation's (WTO) 148 member states are working to reach an outline accord by July on the current Doha round of talks -- which could spur global economic growth and lift millions out of poverty if successful.
Few delegates expect major breakthroughs at the talks in Kenya, but negotiators at the Geneva-based WTO are hoping for guidance from their political leaders to help them start striking deals as talks progress.
The WTO wants initial pacts by the end of July in pivotal areas, including farm and industrial goods trade, services and development issues, which could clear the way for a ministerial conference to approve a draft deal in Hong Kong in December.
According to that plan, the round could be finished in 2006.
Disputes between rich and poor countries over farm subsidies and market protection had threatened to derail the round, launched in late 2001, but a blueprint approved in Geneva last July set out broad principles for continuing work.
WTO officials hope countries will start to produce concrete plans in Kenya to comply with an end-May deadline to improve their initial concessions on trade in services -- which account for 60 percent of global economic activity and include areas as diverse as health, education and construction.
Rich countries are also pressing for sharp reductions in tariffs on industrial goods -- referred to as Non-Agricultural Market Access (NAMA) -- in part to compensate them for concessions they may have to make in agriculture.
Poor countries represented by the more than 30 ministers expected to attend the meeting are anxious to preserve preferential access to rich-world markets that they fear may be eroded by general reductions in tariffs.
They also want the European Union to make good a promise made in July to stop directly subsidising farm exports so as to give poor farmers a better chance in world markets, although the offer is conditional on other rich nations making concessions.