Business & Economy

• In the largest ever rural sop, India plans to launch the National Rural Employment Guarantee Scheme in April. When legislation goes through, it guarantees rural residents Rs.62.5 per day that the Government pays directly for work in the rural areas. Residents who need to commute will be given an extra 10%. It is unclear how the Government plans to maintain accounts, ensure that money is not siphoned to party favorites, account for work done, or monitor execution. With a ballooning fiscal deficit and crumbling infrastructure, it is also unknown how the Government plans to fund this project. However, active support from all political parties is expected.

• The Federal Minister of State for Coal and Mines Dasari Narayana Rao said that a Group of Minister (GoM) has recommended allowing 100% Foreign Direct Investment in mining. Anticipating that the demand for coal is expected to triple this year to 1260 metric tons (mts), the Government has allocated 35 coal blocks to about 60 private companies for captive consumption and another 10 for Government companies. These allocations amount to about 15 billion tons of coal and equivalent to 15 years of India's current production. He disclosed that India has also recently allocated 20 new blocks for private captive consumption with 2.5 billion mts of reserves and 8 lignite blocks with 800 mts of reserve. The main beneficiaries for these allocations will be power, steel, and cement sectors. He did not disclose any environmental or labor protection and monitoring plans to cover such active mining by private companies.

• To get a fair share of India's growing global trade engagement, Britain has mooted a plan to create a Free Trade Agreement between India and the European Union. The sticking points for the EU are access to banking segment and reduction of customs levies on wines and spirits. India pointed out non-tariff barriers such as treating Indian whisky as gin, non-recognition of Indian law, accountancy, and medical degrees. The UK is India's the largest trading partner within the EU which is worth USD 7 billion. The second round of Indo-UK joint economic and trade negotiations will happen in London later in January 2006 and will focus on substantive measures to increase trade.

• The Federal Power Ministry unveiled ambitious plans to create several ultra mega power plants that can generate 4000 mega watts (mw) at the cost of Rs.150 billion each. These plants are expected to generate power between Rs.1.50 to Rs.1.80 per unit. Two plants located in Chhattisgarh and Madhya Pradesh will use domestic coal. Two others located in coastal Karnataka and Gujarat will use imported and domestic coal. A fifth project at Ratnagiri in Maharashtra is also being considered. These plants are expected to use the efficient 800 mw supercritical boilers which Bharat Heavy Electricals Ltd will import through foreign collaborations. Boilers from French Alstom, turbines from German Siemens will provide the technology. Other companies from Russia and South Korea are also being considered. Leading financial institution, PFC will invite "expressions of interest" for these plants by February 2005. The plan is to parallelize the process by getting independent clearances for these companies and make the deal open to investors by end of 2006. PFC will also initiate company registration, invitation of bids, and complete all necessary studies by end of next month. Pre-qualification of potential investors is expected to be out by March.

Democracy, Politics and Judiciary

• The Supreme Court has issued notice to the Parliament Speaker Somnath Chatterjee seeking clarification on the Constitutionality of the expulsion of several Members of Parliament after a TV sting operation caught them on camera taking bribes. The speaker had already said that he will not respond to court summons and risks contempt proceedings if he follows through. The Legislature under Chatterjee has been on a collision course with the Judiciary over the last year when controversial ordinances from the Government have been struck down for breach of Constitution.

Environment and Health, Science & Technology

• The Supreme Court on Monday instructed the company that owns Clemenceau, the condemned aircraft carrier with tons of asbestos, not to include the exclusive economic zone of 220 nautical miles. Counsels appearing for the Clemenceau accepted that 150 tons of asbestos is still present on the ship. The French Government has been saying that only 45tons was left on the ship and that all ships have this level of hazardous waste. The SC asked the customs department to submit its views on the subject before taking a final decision on the ship meant for the Alang ship waste yard in Gujarat. It disempowered the high-level committee on hazardous waste management from reversing its verdict. India has previously accepted a Dutch ship "Ricky" for dismantling and the Basel Convention was not invoked at that time. India allows the import, manufacture, and use of asbestos and most often used by the poor for roofing. Netting Rs.20 billion and growing at 12% annually, the industry gets various benefits from the Government such as massive reduction of import duty of this cancerous substance. A Hindustan Composites study says that 6000 directly and 100,000 workers indirectly are exposed in India every year although only 30 cases received compensation. 13 Indian companies and 650 small operations employing 100,000 workers produce all of India's asbestos. The World Health Organization says that it takes 15 to 40 years for cancer to manifest.