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  2002 2001 2000 Ranking(2002)
Millions of US $ 515,000 481,400  460,616 11
GNI per capita
 US $ 480 470 450 159
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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 country."
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 the party. 
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 in future.
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 battle. 
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. 

India-Pakistan Relations 
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 Kashmir. 
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 Pervez Musharraf. 

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 lows.
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 Mohan said. 
"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 in 2002-03.
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 crore. 
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 of India) 

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 million tonnes. 
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. 

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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 companies also. 
"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." 

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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 passengers.
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 Bangladesh.
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.

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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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