SEZ policy

To boost up the FDI in India and with a view to provide internationally competitive and hassle free environment for export, Indian government had introduced SEZs in India on lines of SEZs in China, where it had been a good success (Shenzhen).SEZs are the geographical area which is treated as the privileged area provided with incentives in taxes and other favorable conditions to bolster the exports and industrialization. The SEZ units may be set up for trading, export, manufacturing, reconditioning and repair and for services activities. There are around 14 SEZs established in India which are either multipurpose or specific SEZ. These are established either in partnership with public or private sectors or state govt. With announcement of SEZ policy in 2005 around 150 more units have been given go ahead. According to a survey these SEZs may create around 5 lacs more jobs and may attract the FDI in tune of 6 billion USD.Besides there benefits SEZs have been a matter of contention due to vague acquisition policy and inadequate compensation payed to the land owners. After the Nandi gram incidence, in which 12 protestors have been killed and several injured, the Govt. is under pressure to relook the policy. We should not forget that unlike China we are world's largest Democracy and what is successful in China may not be the same story here. If a SEZ boosts FDI why don't we convert whole India into a SEZ. Nandi gram incidence is a caveat for Govt. There had been statements in both favour and against of SEZs, after the unfortunate Nandi gram incidence as Mr. Narayan Murthy, chief mentor said "we should not acquire the lands of farmers without their will " and Mr Kamal Nath said "Govt. is committed for SEZs" , but the UPA govt and their left allies are in constant pressure of relook on the policy. Hitherto flourishing SEZs announcements are now feeling a halt for time being and the SEZ cannot be set up without taking landowners into confidence which seems to be hard nut to crack as voices against SEZ are raising now from other parts of the country like Kerala too after WB.

8.2/10 AMIT

NAXAL ATTACKS

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Previous week, there were two different incidence (in fact accident) occurred within time span of 12 hrs, The Nandi gram Police firing incidence and the Naxalite attack on police quarter in Chhattisgarh. The former gathered heavy response across the length and breadth of India, and the later sounded a routine activity of Naxalites. Both incidents were very severe former claimed 16 lives however later claimed more than triple lives than the former.
The premeditated and cold blooded massacre of policemen and villagers by left extremists was a deplorable and heinous crime. This is just reverse of what naxal ideology say. Moving towards violent direction, naxalites are uprooting their own base and the sympathy they have gathered. This kind of violent protest against system and state will end up terming them terrorists at par with Kashmir separatists.
Naxalites or left-wing extremists, especially in the 165 districts characterized as ‘Naxal-affected’ are most severe presence in Jharkhand and Chhattisgarh, however they had make their presence felt in parts of MH, AP and Orissa also. The constituents of Naxal mercenaries are tribal, Dalits and other oppressed caste people who feel that violence is the only way to get their right as they believe that the state is in hands of rich people who are enjoying the success, growth and resources of India depriving them with their share. But they are ending up with robbing and killing their own people as the rich may bye security. Recent trend shows that they have started killing common villagers after the formation of SALWA JUDAM, an SPO.
The severity of attacks shows that they are getting assistance from somewhere else probably from their counterparts in Nepal, if not monetary then atleast morally after their success in Nepal. The ease with which they killed JMM leader mahto , and the well researched new petrol bomb they used, shows the severity of the problem.As Prime minister said in his speech, Naxal violence is the biggest threat to India now. He is rightly said as it’s the internal threat and can be overcome only once we will develop a system in which every Indian have their share of participation in every area. And then only we will be real democratic

" China Offers express Visa to Indians"

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As the Indian economy roaring, seems the another Asian economic power house, China, has realized that there's no permanent friend, no permanent foes, only permanent interests. The Launch of Indo-China business Alliance can be termed as the extension of yeteryear's visit of Hu Jintao and reopening of Nathu- la pass at the border of the two countries. Under the aegis of india's economic chamber ASSOCHAM, the ICBA will work to facilitate the business men from both sides. In the launching Mr. Yuxi announced that in a bid to closely knit business synergies of China and India, the Chinese Embassy would be issuing `Express Visas' that are recommended by the ICBA to Indian businessmen. The express visa will help both side as both are the fastest growing economies and to sustain the growth of same its better to cooperate against to vie. The cooperation will facilitate bilateral retail trade to grow upto$50 billion from the current level of around $20 billion in the next few years,This move can be seen as good Confidence building measure and of high importance in the way of PM manmohan Singh's forthcoming visit to China, which may give us some more exciting and good business announcements.

7.1/10 AMIT

TATA wins CORUS

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When Ratan Tata, Chairman of Tata house, announced the bid to acquire Anglo-Dutch steel maker CORUS during 2006 Diwali, Indian media was gung-ho about the deal and it was hailed as the biggest blitzkrieg of all time in the Indian corporate world. Tata has estimated the deal to be of 8billion USD, but as the time changed a new rival came into the picture in the name of Steinbruch’s Companhia siderugica nacional, or CSN and it challenged TATA and questioned his estimated deal. The battle was set up and TATA Steel was also ready to clinch the deal. So one fine day Tata beat his Brazilian rival steinbruch in a closely contested auction. In 8 round bidding Tata finally clinched the deal with 12 billion USD at 608 pence per share against CSN’s offer of 603 pence per share.
In one go Tata steel leapfrogged from 30 to 5th rank in the biggest steel makers’ list.
Several analysts are suggesting that TATA has gone overboard in trying to best CSN. But given TATA’s previous record it would be a matter of argument. Tata is known for his splendid comeback after each slide down due to acquisition of some big company or some landmark announcement. Also Tata has did rightly so as the acquiring a established firm was easier than establishing and expanding the new business in India specially in steel industry as acquiring land in steel rich states is hard nut to crack. However Tata steel’s share has fallen considerably just after the announcement of deal.
Acquiring CORUS will give Tata the new market in the name of Europe and it will be the leading steel making company and why not as the latest trend in the steel making industry is consolidation (Mittal- Arcelor).
The market reaction was a short term reflection as Ratan Tata said in a call with journalist "Hopefully, in the future somebody will look back and say we did the right thing."
Being an Indian i hope so…Do you?

Budget 2007 - A NOTE

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As P Chidambram was unfolding the Budget 2007 on 28th feb. , industries, corporate and academicians were keen to analyze the SWOT for their interest. It’s really a tough job to comment on annual budget of second largest growing economy of the world, that too in very brief and succinct manner. For corporate crunchers, here’s the news - E&Y has come up with 87 pages analysis report whereas their counterparts from KPMG, ICRA and CRISIL have tried to concise the report but couldn’t help and end up with 50, 17 and 8 pages report. But I am going to give you the hint and mood of the budget in extremely brief and terse way.
The Annual budget looks to have struck balance between fiscal consolidation and the need to spend, especially in key areas such as agriculture, the rural economy and social services.
Fiscal and revenue deficit, both come down from the previous FY and are 3.3 and 1.5 % of GDP respectively. Total spending in 2007/08 seen at 6.81 trillion rupees ($154.6 billion); non-plan expenditure next year seen at 4.35 trillion rupees.
Its matter of irony that just before the budget day the results of Punjab, UT and Mizoram legislative elections were declared and INC tasted defeat in the same. INC supremo blamed it to inflation rise and so the effect of this is clearly visible in the budget as she asked the Govt. to rein in the spiraling inflation. Leading the way is a reduction in customs and excise duties for a number of commodities. Notably the Agriculture sector is a key focus reflecting the sector’s central role and socio-economic-politco importance . Reforms have also got slow down because of Sonia influence. Tax exemption for some sectors have cut down too especially for IT and ITES sector.
On the other hand Govt. has increased the budget allocation for farm credit and education to name a few among other rural and social issues.
Bottom-line is policy making and budget allocation is good to priorities for key sector to maximize sustain growth, but effective implementation of policy and efficient use of allocated budget for the growth is the area to stress upon. Eleventh five year plan is to be start from this year and achieving the target is a challenge for the country.

"India has maximum number of Billonaries in Asia"

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Forbes magazine's 2007 rankings of the world's richest people is out and India dethroned Japan from second spot which has 24 billionaires against that of 36 from India. India is second in terms of total no. billionaires in top 20 with 3 second only to US which has 4 candidates in top 20. Indias bandwagon of billionaires is headed by LN mittal who is on 5th spot followed by ambani brothers, Mukesh and Anil on 14 and 18 spot respectively. Wipro head Azim Premji is on 21 spot , who once had been the only Indian to make in the list.Though India snatched second spot from Japan in terms of Billiaonaires but its still way behind in per capita income. This fact unfolds the ground reality behind the curtains. This shows that the chasm between rich and poor is insreasing in India. Rising no. of billionaires will stimulate big companies to launch their niche products in India, which are meant for supoer richs only in this way Bentley have already announced to launch his premium multicrore cost car, Some real estate companies are planning to offer homes with all the luxuries of world.If we see positive side of the story, its the result of growing Indian economy or may be former is the result of later.Although the list make Indians proud but not happy. It will be happy and proud both if the no. will rise further and the effect of this will be visible in growth of common Indian .

Amit 7.7/10

Merger of IA and AI

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Much awaited and touted megamerger of two state owned carriers Air India And Indian (formerly Indian Airlines) has received cabinet nod on 2nd of march. This maha merger will bringforth a globaly and domestically competitive edge to the airlines. Civil aviation minister said this will take another 4 month to practically exist the merger and he promised not to cut jobs.This merger will allow state to reap up benefit of 6 billion INR in next 4 years and It will be one of the biggest airlines of Asia with 122 carriers in his kitty. On the other hand workers and employees of AI and IA are apprehensive and worried about their future inspite of MR. Patel's promise.The Govt should try to allay this feeling in the days to come and the time should be utilised by reducing the lazyness of employees and boboodome.Given that seven new carriers have sprung up in the past four years in India's liberalised skies, once dominated by the state-run airlines, and another five have applied to take off, it will be interesting to see how this merger will reap up profits in the highly competitive indian aviation sector.

A 7.9/10

" Indian Team for World Cup "

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Sixteen teams, forty seven days, fifty-one matches and one CUP, welcome to the 2007 world cup cricket in Caribbean. Sixteen members squad of India, riding high on the hopes and prayers of millions Indian cricket fans is confident enough to win the World Cup, thanks to the recent series win of Indian team over Sri Lanka..Selectors have tried to chose the best from what the good they had. In fact they have nothing much to chose from. Selectors lead by Dileep vegsharkar has shown their confidence in experience over the young blood this is pretty averred with the inclusion of Kumble, Zaheer and sehwag. There has been some question raised over noninclusion of kaif , who could have been an asset at the fierce newlymade pitches of west Indies.India has indeed a best batting lineup in the world and the very experienced one. Undoubtedly the maestros like Tendulkar, Ganguly and Dravid can turn the outcome of any match. In addition to this If Dhoni and yuvrajhas cracked, it's the doomed situation for opponents. In fact Dhoni and Yuvraj are turning out to be a good finishers.Bowling, the recent form of Zaheer is looking promising with the add of aggressiveness of Srisanth can be good combination of pacers. Whereas the spinners like Kumble and harbhajan has proven their wirth at many occasions. However the bowling attack of India has some loopholes and fifth bowler will be problem. It will be interesting to see how Skipper overcome this problem and how judiciously he use the options available.Come to fielding, this is the area where Indian team seems to be vulnerable. There is dearth of young blood in Team and only few are world class fielders. Kaif is not in the team and Yuvraj is coming out of injury. So it will be loophole again.Bottomline is India can win the cup provided the batsmen have to click and score high. And prayer of millions of cricket fans can work what a eleven players' team cannot, so destiny and toss can play a vital role too. If the ace three members of the team to be believed, India is going to win the cup second time. Wait and watch .

Amit 8/10

ICICI Bank raises retail lending rates

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ICICI Bank, India's largest private sector bank and second-largest lender overall, has hiked its retail lending rates, including home loan rates by 50 basis point (100 basis points = 1%). This move is obviously come up after announcement of RBI's hike of CRR by 50 basis point which in turn has done so to curb the northward movement of inflation. Although the new rates will be applicable to the new customers but the impact on burgeoning middle class will be twofold. First, the rising inflation and skyrocketing prices of essential commodities are cause to worry and now the hike in retail lending rates both fixed and floating will ccause double trouble for consumers. The recent unrealistic spurt in the real state and stock market led the RBI to take monetary measures like hiking standard asset provisioning on retail loans. But it has abstained in hiking rates however the private players has gone a step ahead and they increased the PLR.Analyst have their own arguments in for and against the move , as the hike may slow down the growth in the housing market but the real impact is remain to be seen as the India's economy is growing like never before and this obviously prompts the more spurt in real state and housing market.