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Update No: 056 - (01/09/08)

Musharraf’s Exit and Its Effects on India 
The threat of impeachment led General Musharraf to resign on August 18. Now, in Indian strategic circles, experts and pundits are examining the aftermath of his presidency. The most important consideration is whether Musharraf’s stepping down from power will impact India-US relations in significant ways. He remained a reliable ally of the US in America’s war on terror and had taken some steps to detect and capture Al-Qaida forces hiding in Pakistan. A second consideration for strategists is whether Pakistan will fall into the bracket of a “failed state” after Musharraf is gone. There is evidence that radical militant Islamists would be thrilled to fill the gap in the country’s leadership. Much would of course depend on who takes power after Musharraf. Responding to the resignation of Pakistani President Parvez Musharraf, former External Affairs Minister Yashwant Sinha said on Monday: “Musharraf has met the fate of all dictators. I can say he was not particularly friendly to India, many of the problems in our bilateral relationship with Pakistan are entirely because of him. So his quitting should be regarded as good news for India and South Asia”. Sinha’s view does not echo the views of his party which has shared a fairly cordial relationship with the former military chief. However Sinha also raised questions on the authority of a new democratic PPP led government and said that Pakistan has not changed under ‘democratic government’. Citing recent incidents of ceasefire violation on the LoC and attack on Indian embassy in Kabul and ongoing volatility in Jammu and Kashmir, Sinha said that India should watch the situation very close ly after the departure of Musharraf. 

Nepalese Premier to Visit India 
Despite facing criticisms of his visit to China first instead of India after assuming office, Nepal’s new Premier Prachanda is planning his first political trip to New Delhi. While the details of the trip are yet to be disclosed, the visit is expected in the next few weeks. Prachanda had attended the closing ceremony of the Beijing Olympics and was criticized for visiting China in a sharp departure from tradition where India has been the first port of call for most of the previous Nepalese prime ministers. 

Death of Noted Industrialist K.K. Birla 
Indian industry is mourning the demise of noted philanthropist and industrialist Dr. Krishna Kumar Birla. Birla made a tremendous contribution to Indian industry and the FICCI President Rajeev Chandrasekhar described him as a great Indian entrepreneur who had left an indelible mark on Indian society by upholding moral and spiritual values and creating landmark business enterprises. Birla built a number of reputable institutions including the Birla Institute of Technology and Science at Pilani in Rajasthan and the Hindustan Times, one of India's leading English dailies. Birla was also chairman of various companies in sectors such as textiles, sugar, engineering, shipping and information technology. He was also on the boards of State Bank of India and ICICI Bank. He was also a member of the Rajya Sabha for three successive terms from 1984 to 2002. Perhaps, his greatest achievement was recognized when he fearlessly stood for select liberalization of credit to boost industrial production in the aftermath of sharp inflation that affected the Indian economy in 1974.

Indian Growth Rate Weakest in Three Years 
India's first-quarter economic growth has dropped to 7.9 percent, a number that many are calling the weakest in three-and-a-half years due to high interest rates influencing supply and demand. Yet, others are optimistic about the long-term prospects. The figure for June was far below the previous quarter's growth of 8.8 percent and the 9.2 percent expansion logged by Asia's third-largest economy in the first quarter a year earlier. India's economy, which has drawn billions of dollars in foreign investment, has been steadily losing steam as the central bank has aggressively raised interest rates to curb inflation now at 13-year highs. It was the weakest quarterly expansion since the last quarter of calendar 2004 and below market expectations that the economy would grow by 8.1 percent. However, Indian20Finance Minister Palaniappan Chidambaram noted there were still "very few countries which are growing at near eight percent" and projected growth for the full year to March 2009 of "close to eight percent." However, some analysts have forecast growth this year as low as seven percent, dragged down by aggressive monetary tightening, a drop in farm output and global financial turmoil and say the economy will not start picking up until the second half of the next financial year. The economy is "unlikely to recover particularly quickly," said Prior-Wandesforde of HSBC. India's economy grew by nine percent last year and 9.6 percent the previous year. Inflation which has nearly tripled in the past year has been stoked by a surge in global oil and other commodity prices. The Congress-led government is anxious to tame prices to avert a voter backlash in general elections due by May 2009 but has said it also does not want to sacrifice growth needed to battle poverty. (AFP report). 

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