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Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 598,966 515,000  481,400 12
         
GNI per capita
 US $ 530 480 470 160
Ranking is given out of 208 nations - (data from the World Bank)

Books on India



Update No: 073 - (01/03/10)

India-Pakistan
After the Pune bomb blasts which claimed the lives of 9 innocent people, the relationship between India and Pakistan has been fraught with tension once again. Not only does India face rising attacks on her soil, even Pakistan seems to have become a victim to terrorist violence. This begs the question whether Pakistan’s internal structure is crumbling and whether the government has lost complete control over the ISI and other agencies who are allegedly linked to terrorist organizations. Currently, the Foreign Secretaries of both countries, India and Pakistan are holding the very first talks after the 2008 Mumbai blasts but the expectations have been rather low. Indian Foreign Secretary, Nirupama Rao said nothing more than the two countries would “be in touch.” Moreover, the recent attacks in Kabul which have claimed the lives of several Indians, many of whom were engaged in reconstruction projects in Afghanistan, may derail the chance for peace completely. It also appears that a serious debate is on within the Indian public about the type of response against Pakistan. Most Indians are frustrated with the way the government is handling the terror attacks. Not only are the attacks increasing in frequency but the question of bringing terrorists like Kasab to justice hangs in balance.

India and the Maoists
A senior Maoist rebel leader in India, Koteswara Rao has offered a ceasefire ahead of possible talks with the government. Rao conveyed this message to the BBC recently. The government, which recently launched a major offensive against the rebels, has yet to respond to the offer. The Maoist rebels want communist rule in a large part of India and more than 6,000 people have died over a period of 20 years. Koteswara Rao offered a 72 hour ceasefire over central and western India between 25 February and 7 May.

The offer came in response to Indian Home Minister P Chidambaram's recent statement that the Maoists had to give up violence in order to hold talks with the government.

"They don't have to surrender weapons or disband their army. They just have to stop the violence for negotiations to happen," Mr Chidambaram said. Earlier, Koteswara Rao had offered to hold talks only on the condition that four senior rebel leaders were freed from custody and a security offensive against them halted. Critics suspect that the change in Rao’s tone is a result of fraction within the rebel ranks over holding talks with the government. Rao been under pressure from other senior rebels to open talks with the government. The rebels also fear that continuing violence may lead to them losing support. For Home Minister, P. Chidambaram, the Maoists have "one last chance" to hold talks with the government, before the security forces step up an offensive against them. Nearly 50,000 federal paramilitary troops and an equal number of policemen, equipped with helicopters and unmanned aerial surveillance vehicles, are taking part in the assault on the rebels. In the words of Indian Prime Minister Manmohan Singh, the Maoists pose the biggest security challenge to the nation.

Budget 2010-2011
India's 2010-2011 budget might be a remarkable step in economic legislation as it marks the country's first steps towards fiscal consolidation after two years of deteriorating finances. According to a Reuters report, India's fiscal problems include widespread debt and a widening deficit over the last two years. The 2010-2011 budget aims to bring India's growth level back to 9% growth and address wealth distribution issues for low-income groups, particularly in rural areas. The central government plans to reduce the size of its fiscal deficits for 2010-2011 to 5.5% from a revised estimate of 6.7% in 2009-2010. On the revenue side, there will be no significant change in tax. However, the budget does include increases in some indirect tax rates, which were reduced to boost domestic demand in previous budgets. On the expenditure front, the budget includes an increase in capital spending in areas such as infrastructure investments, and gradual increases in the social security sector. The Indian government has also changed its fertilizer policy to implement a nutrient-based pricing policy and raise urea prices by 10% from April 2010. This is expected to decrease the total size of fertilizer subsidies, which amounted to approximately 1 trillion Indian rupees for the fiscal year 2008-2009. The Fiscal Responsibility and Budget Management Act (FRBM) will be a positive step forward for India's fiscal consolidation if most of the key recommendations by the commission are adopted. These include the full disclosure of contingent liabilities and the inclusion of off-budget debt-raising activities such as government-issued oil bonds or fertilizer bonds. The commission also recommends some flexibility in the implementation of the FRBM in the event of an unforeseen economic shock.

Defense
India has invested almost $32 billion dollars or 112 billion rupees for defense spending under its new 2010-2011 budget. The country has allocated about 2.4 per cent of its Gross Domestic Product (GDP) for military modernization, largely to counter the constant security threats within the country and along its borders. India’s Finance Minister, Pranab Mukherjee, has stated that, “secure borders and security of life and property fosters development.” India, which also boasts of the fourth largest military in the world, is developing its defense capabilities, indigenous missile technology and hi-tech weaponry systems. The country's premier space agency, the Indian Space Research Organisation (ISRO), also received a sum of about US$1 billion or 3.5 billion rupees in allocation under the new budget. Under this project, the government plans to build two rockets, the Polar Satellite Launch Vehicle (PSLV) and the Geosynchronous Satellite Launch Vehicle (GSLV). ISRO is also expected to improve India's space program that is in the process of planning the first moon mission and human space flight project.

Indian Railways Upgrade
According to a report in the Wall Street Journal, the Indian Railways, is going to invest $9 billion in rail upgrades in the financial year starting April 1. This can be a sign that the government is trying its best to improve the quality of transportation for the millions of passengers who rely on trains for daily and other commutes. But it could also be a sign that the railways are experiencing better business as a result of which the government is in a position to bring about these positive changes. Part of the investment deals with modernizing and expanding the rail network. The project to modernize the railways will be funded by increased earnings from freight and passenger traffic, fund-raising and support from the government. Although rising inflation is a major problem, Indian Railway Minister, Mamata Banerjee said that freight rates for kerosene would be reduced by 100 rupees ($2.16) a wagon. " Mamata Banerjee hopes to launch 54 new trains to help increase the railways’ gross traffic receipts to 948 billion rupees in the year starting April 1, up from the current fiscal year's estimated 884 billion rupees.
  

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