Books on India
Irdian Rupee (INR)
Update No: 007 - (01/09/04)
This last month witnessed a turbulent relationship between Prime Minister
Manmohan Singh and Human Resource Development Minister Arjun Singh, compelling
Congress chief Sonia Gandhi to step in.
Tension arose over the latter's demand to purge RSS elements from the
government. Sonia's intervention was fuelled by Singh's call for a saffron purge
and a continued campaign irrespective of the consequences.
In a thinly disguised reference to the PM's perceived disapproval, Arjun said,
"I am not anybody's puppet."
He also took a confrontational posture in response to the RSS threat to sue him.
In a statement addressed to the RSS bosses, he stated that "I have no
reason to change my conviction that the ideology and principles which the RSS
represents are totally alien to the ethos that permeates the vision of our
The Congress is trying to hold its fort on the PM-Arjun standoff. Statements
like "infiltration of the administration by the RSS men is a fact, but the
HRD minister's remarks are definitely not meant to embarrass the PM," made
by Congress secretary Tom Vadakkam is an effort to normalize the situation.
The BJP has been faced with intra party rivalry and in the last two weeks,
President Venkaiah Naidu expressed concerns about high levels of indiscipline in
Naidu urged the state unit in Uttar Pradesh to expel the five suspended
legislators for their alleged anti-party activities.
The BJP President warned that similar action would be taken against dissidents
As part of its strategy to return to power at the Centre, the party has decided
to revamp the party structure in the state of Uttar Pradesh where its strength
has come down from 59 MPs to 10 in the recent Lok Sabha polls.
Naidu has emphasized the importance of organizational discipline and encouraging
a strong work culture.
Besides Uttar Pradesh, the party lately faced dissidence in its Gujrat unit with
a legislator blatantly accusing Chief Minister Narendra Modi's "autocratic
style" of functioning.
The BJP is also playing an active role as the opposition party.
The BJP is planning to question the government on its handling of the
"unprecedented" inflation, corrupt ministers, EPF rate cut and changes
in and education.
Expressing grave concern over the inflation figure touching an
"unprecedented" 7.61 per cent, party General Secretary and spokesman
Arun Jaitley told reporters that the party would raise this and many other
issues of public interest during the second half of the Budget Session.
He declared that disregarding the fluctuations in international prices, the
newly adopted Budget with its high taxation policies was responsible for high
rates of inflation.
Separately, at the All India Congress Committee held recently, the Congress
moved two separate thanksgiving resolutions to acknowledge the contributions of
Rajiv and Sonia Gandhi at the first party session after its return to power.
The party passed two resolutions on Rajiv's initiatives as prime minister and
Sonia's struggle to bring the party back to power through a dismal electoral
Another resolution is expected to be adopted on Panchayati Raj, the structure of
administration at the village levels.
These sessions upheld the contributions made by Rajiv Gandhi and his efforts to
devolve power to the grassroots through Panchayati Raj institutions, lowering
the voting age to 18 and unleashing in the technological revolution.
A Pakistani delegation arrived in Delhi, the Indian capital for talks to promote
cross-border exchange visits and tourism links between the rival neighbours.
According to Pakistani embassy spokesman Lia Ullah Abbasi, the five-member
delegation discussed various issues like easing visa restrictions and increasing
cross-border visits to build confidence between the two countries.
Even though the Kashmir issue still remains disputed, the two countries have
been working towards improving cultural ties.
On the issue of Kashmir, Pakistan's prime minister-designate Aziz believes that
the dispute over Kashmir to be resolved according to the wishes of people living
in the region.
Both nations in recent months have taken steps to improve relations, with senior
Indian and Pakistani officials meeting to discuss contentious issues such as
The progress of these discussions will be reviewed by the foreign ministers of
the two countries at their talks to be held in New Delhi on September 5-6. Aziz
is expected to be sworn-in as Pakistan's premier next week, after winning a
by-election for a National Assembly seat. Aziz would succeed Zafarullah Khan
Jamali, who resigned in June over his differences with Pakistan's President
On the occasion of Pakistan's Independence Day, India's President A P J Kalam
exchanged greetings with Pakistani President Pervez Musharraf. Kalam said that
the peace process between the two countries needs to be strengthened in an
environment free of terrorism and violence.
In his message to President Musharraf, he stated that "India is firmly
committed to the establishment of a relationship of peace, friendship and
cooperation with Pakistan.
The recent interactions between our two countries, both at the level of
Government and people, augur well, and the ongoing process needs to be deepened
and intensified in an atmosphere free from terrorism and violence."
Relations between the two countries continue to go through periods of highs and
After the summit in Islamabad in January, the two countries are yet to find a
way out of the quagmire.
Prominent journalists on the Pakistani side like Najam Sethi argue that the
peace process appears to be stalling. India too has expressed concerns that were
made public by the Ministry of External Affairs last week.
According to Indian reports, Islamic militants were crossing from Pakistani
territory into Jammu and Kashmir once again and Islamabad was displaying utter
disregard to shut down militant bases on its soil.
For Indian officials, this constitutes a direct breach of a promise made by
Musharraf to former Prime Minister Atal Bihari Vajpayee when they launched the
peace process in January.
A week ago, India's current Prime Minister Manmohan Singh stated that "the
edifice of peace that we wish to build must stand on the twin pillars of mutual
trust and confidence. Trends of cross-border terrorism and violence make that
task more difficult."
Such statements reflect the lingering unhappiness in relations between the two
countries and the failure to move ahead in the desired direction.
The Oriental Insurance Company announced a five-fold rise in its net profit to
Rs 322 crore for the year 2003-04 compared to Rs 64 crore in the previous year,
mainly due to huge gain from equity investments.
The company has set a target of 12 per cent growth in business at Rs 3,233 crore
in the current fiscal compared to Rs 2,899.74 crore in 2003-04, chairman S L
"The net profit is at an all time high of Rs 322.06 crore since the
formation of the company in 1973," he said.
The gross profit has risen to Rs 454.33 crore last fiscal from Rs 175.89 crore
Gross premium income grew marginally by 1.1 per cent to Rs 2,899.74 crore in
2003-04 while net premium was up by 7.09 per cent at Rs 2,033.03 crore. Mohan
said the higher profits were mainly due to gains from equity sales at Rs 505
Income from dividends and other investment income was another Rs 437 crore last
fiscal. Oriental booked huge profits in trading of equity shares of active
blue-chip shares like ITC, Reliance, HLL, Telco, Tisco and BSES.
India has averted the threat of being forced to open its market for some 60-odd
farm products and created a window of opportunity for its farmers and service
professionals in the global market.
It has also managed to maintain its independence in pursuing policies for
development of its rural economy and food security.
After the negotiations in Geneva, India's WTO worries seem to have abated. The
agreement, laid out the basic principles which include India's key demands
including an end to export subsidies doled out by rich countries.
The commerce ministry on Sunday claimed a "major victory" and declared
that "India has secured significant gains and succeeded in fully protecting
its interests in agriculture as well as in other key areas." (Source: Times
In other economic related matters, India's crude oil imports jumped by 23.3 per
cent in July this year owing to the increasing demand in such products.
Crude oil imports in July were 8.452 million tonnes as opposed to 6.852 million
tonnes in the same month last year.
The country's oil product demand increased by 3.8 per cent in July to 9.339
million tonnes on back of a 13 per cent rise in diesel consumption to 3.411
India's biotechnology industry is also expected to grow over 40 per cent this
fiscal year and will touch revenues of $1 billion.
The sector is believed to witness a five fold growth at $5 billion by 2010,
according to the Association of Biotech Led Enterprises (ABLE).
"We are well on target of $1 billion biotech sector by year 2005,"
ABLE President Kiran Mazumdar Shaw told reporters after releasing the second
ABLE-Biotech industry survey here. The survey of 235 Biotech firms estimated
their revenues at Rs 3,265 crore ($705 million) during 2003-04, up from Rs 2,345
crore of 150 companies in 2002-03.
Iran Khodro starts negotiations with Indian car manufacturers
Iran Khodro Company (Ikco), the largest vehicle manufacturer in Iran, has
started off negotiations with Indian car manufacturers for outsourcing cars,
saying that the pace of its discussions with Tata Motors was not satisfactory.
According to the Business Standard, a New Delhi-based English daily, "We
are proceeding with our talks with Tata. But the pace of discussions is not
satisfactory," B Afshar, head of International Cooperation Division of Ikco,
said in response to a questionnaire sent by e-mail.
Ikco had started negotiations with Tata Motors to outsource cars in the A and B
segments. This would have meant Tata Motors shipping its Indica to Ikco in Iran.
"We believe that we can establish strategic cooperation with Indian car
manufacturers class to fulfil the demand of the Indian car market in the economy
segment," Afshar said.
Saying that the company had set a deadline to strike a deal with Indian
automakers by the end of this year, Afshar said the company is talking to other
"We believe that we can mutually cooperate with Indian car manufacturers.
So we are arranging discussions with other Indian car manufacturers since we do
not want to lose the opportunity of mutual cooperation with Indian car
manufacturers," he added.
When contacted, a Tata Motors spokesperson said: "Iran is definitely a
market of interest for Tata Motors. We are still in talks with Ikco."
Indian Airlines to expand Bangladesh operation
Amid growing competition in air travel market, the Indian Airlines has come
up with an expansion plan in Bangladesh offering special incentives for
The Indian state-run carrier has planned to increase flight frequency to five
flights a week from existing three on Kolkata-Dhaka route.
Indian Airlines has launched a Frequent Flyer Programme, which offers a set of
incentives to passengers including free ticket on mileage points, excess baggage
carrying, queue-free check-in and priority confirmation from the waiting list.
The package has come close on the heels of local private carrier GMG Airlines'
plan to start operation on Chittagong-Kolkata route and the possibility of two
Indian private airlines -- JetAir and Sahara -- operation in Bangladesh. The two
private airlines are now vetting the requirement list of the Civil Aviation
Authority of Bangladesh (Caab).
"The Frequent Flyer Programme will provide more convenience to passengers.
We have convenient connectivity flights from Kolkata to other Indian
destinations," said Indian Airlines Manager-Bangladesh KL Chandolia at a
press conference in Dhaka.
Indian Airlines connects 64 Indian cities and 16 international destinations.
RR Das, minister (Commerce and Economy) of the Indian High Commission in Dhaka,
said increased air travel would strengthen trade relations between India and
Trade between the two neighbouring countries has already witnessed an increasing
trend. "Export from Bangladesh to India is likely to cross US$100m mark
this fiscal year from US$84m in the previous year," Das said.
He mentioned that the Indian High Commission in Dhaka issues about four lakh
visas every year to Bangladeshi people who go to India for medical treatment,
travelling, business and other purposes.
Under the Frequent Flyer Programme, passengers will have to fill in a form to
become member of the programme. The passenger will earn mileage points for
travelling by any flight of Indian Airlines, Air India and Air France.
For getting a free Dhaka-New Delhi return ticket under the programme, a
passenger needs to travel through the airline three times on the route. The
passengers can check their mileage status through online.
However, the business of the Indian Airlines in Bangladesh witnessed a downtrend
last year. The airline's passenger volume plunged to 18,402 in 2003 from 25,500
in 2002 and 30,695 in 2001, according to Caab statistics.
Tata Consultancy shares soar after IPO
Shares of India's top software firm, Tata Consultancy Services, soared as
much as 41 per cent in their first day of trading recently, before closing 16
per cent higher than their offering price, the International Herald Tribune
reported on August 26th.
Tata Consultancy raised US$1.2bn by selling 55.4m shares in the Indian stock
market's biggest-ever initial public offering by a private company.
The stock rose as high as 1,080 rupees, from a sale price of 850 rupees, before
closing at 987.50 rupees, or US$21.33, on the Mumbai Stock Exchange.
"We underestimated the enthusiasm of investors and we hope that this issue
will give them great happiness in terms of growth," said Ratan Tata, the
chairman of Tata Consultancy.
Tata Consultancy became the third-largest Indian company by market value, after
the oil explorer Oil & Natural Gas and the refiner Reliance Industries. At
US$10.2bn, Tata Consultancy's market value is larger than its software services
rivals Infosys, at US$8.9bn, and Wipro, at US$8.5bn.
The company has been run for decades as a family business. It resisted the
temptation to enter the booming stock market in the 1990s and has finally opened
up to public ownership in the face of rising competition.
Tata Consultancy's clients include American Express, BT Groups, Boeing,
AT&T, IBM, General Motors and Microsoft.
The company, part of the US$13bn Tata group, exported software and related
services worth US$1.2bn in the year through March 31st. Total revenue including
domestic sales and other income, was US$1.55bn, company executives said.
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