Business & Economy

• The Indian Finance Minister P. Chidambaram met with business leaders for a pre-budget consultations and hinted that the budget will have a strong rural bias and emphasis. The Government has been saying that investments in agriculture is required to achieve a 4% growth in that sector so that overall sustained economic growth of 8%. Therefore, this year's budget is expected to focus on farm, food processing, and social sectors with investment plans for irrigation projects and labor-intensive sectors such as food processing, textiles, pharmaceuticals, petrochemicals, and telecommunication. He is also expected to unveil funding for healthcare and education. Businesses in India want the Government to withdraw or simplify the controversial fringe-benefit tax (FBT), which taxes companies on business expenses. They also want a tax rationalization so that some sectors are not "punitively" taxed. Currently, the telecom sector faces an excessive licensing fee regime and agriculture-oriented sectors like food processing are treated as luxury goods. 

• Taking advantage of lower interest rates abroad, Indian corporations have replaced expensive local debt with cheaper foreign funds. In 2005, Indian businesses raised over USD 8 billion compared to USD 4.42 billion in 2004 and USD 1.99 billion in 2003. 

• Federal Commerce & Industry Minister Kamal Nath has called for a Board of Trade meeting to discuss the alarming decline in exports in November 2005. For the first time in two years, Indian exports of gems, jewelry, and textiles declined in November causing an overall decline of 11.38%. This could also be a transition where textile companies are focusing on quota countries thus yielding the non-quota country market to China. Indian exports registered a 40% growth in November 2004. A working group studied chemical, pharmaceuticals, and textile sectors and advocated a slew of measures to sustain export growth including export promotion schemes, trade facilitation, assisting specific sectors, and the creation of special economic zones (SEZs). 

• The Information Technology (IT) oriented association NASSCOM has estimated that India may have lost upto USD 8 billion in business opportunities because of concerns regarding data security among foreign clients. Insisting that clients are convinced about the delivery capabilities of Indian IT & business process outsourcing (BPO) companies, it unveiled plans measures that it has initiated with the Government to mitigate these concerns. Some of these measures include a national registry of skilled workers to monitor movement, training investigating officers in IT crimes, educating companies on security measures, and setting up of a self-regulatory body for IT & BPO companies. Despite this loss of opportunities, Karnataka reported that secondary cities in the state are clocking more than 70% growth in IT & BPO business. 

• The Indian Council of Agriculture Research (ICAR) is receiving a grant of USD 250 million from the World Bank to propel crops and farm products to the world market to achieve a second green revolution. This grant will also help to boost productivity, facilitate marketing, develop unexplored businesses such as inland aquaculture and meat production. "Conservation agriculture" techniques such as zero-tillage, laser land leveling, raised bed planting, crop residue management, and direct rice seeding will be used to save natural resources without compromising productivity. ICAR Director General Dr. Mangala Rai says that India has three million water bodies where productivity can be enhanced by 10-30% with improved and disease-free breeding stock..

Environment, Society & Health

• French authorities have said that the retired French warship "Clemenceau" on its way to the Gujarat junkyard for dismantling has less than .2% of the toxic asbestos. Techno pure, the company that performed the first stage of asbestos removal, estimates the asbestos content to be about 2%. French authorities have dismissed this claim as "sheer fantasy" and "gross exaggeration" and said that they have removed a vast amount of pre-existing of asbestos before sending the ship to India. They also say that additional removal will affect the structural integrity of the ship making it risky to sail to India. The Supreme Court Monitoring Committee (SCMC) has recommended that the ship not be allowed into India since it contains toxic material and that inter-state transfer of toxic material violates the Basel Convention. A French court had ruled that the Basel Convention does not cover warships. 

• World Health Organization (WHO) said that five more people have been infected by the dreaded H5N1 strain of bird-flu virus in Turkey indicating that the disease is spreading. Studying the genetic makeup of affected birds and the virus, they warned that this virus could mutate into a form that can be easily transmitted by humans and become a dangerous epidemic.