Exporters, IT firms and BPOs are all reeling under the impact of a strengthening rupee.

Weekly reports on Indian economy and business

• Government Policy & Infrastructure
• SEZs
• Economy
• Sector Specific – Steel
• Banking & Finance
• Agriculture

Exporters, IT firms and BPOs are all reeling under the impact of a strengthening rupee. Meanwhile, in a bid to protect the small investors and create job opportunities to individuals as well as small partnership firms, the Government plans to regulate investment and valuation professionals.

- Chillibreeze Business Research Team

Government policy & Infrastructure

Invstmnt advisers: Get ready to disclose

Giving advise on investments? Get ready to adhere to stringent disclosure norms. The proposed regulatory framework for investment advisers, to be taken by the Sebi Board on July 18, will make disclosures by the entities mandatory.

For example, if an adviser sells products along with investment advise, he will have to make a disclosure about the benefits he receives such as commission from the company whose product he is selling to his customer.

The conditions would be enforced and monitored by the association that certifies him as an investment adviser. The organisation that certifies an adviser would have to be a recognised self-regulatory organisation, and the adviser would have to adhere to the practice norms established by it.

The regulation will be applicable for all the advisers who take compensation for their advise. It would also apply in case of advisers who get compensation from third parties and not direct customers. The Sebi Board had given in-principle go-ahead to the concept at its meeting on June 30. After that, regulations would be placed in public domain to elicit comments.

The UPA government’s National Common Minimum Programme had committed to protect the interest of small investors, and the creation of a regulatory framework for investment advisers is a step in the direction.

It may be pointed out that the US Securities & Exchange Commission also has in place such regulations. The regulation makes registration with the commission mandatory for investment advisers. Advisers are also required to have a certain level of qualification.

July 6, 2007
Source: The Economic Times

GoM clears new mining policy

A group of ministers on Friday cleared a new mining policy, which will now be sent to the cabinet for final approval, Junior Mines Minister T Subbarami Reddy said.

"The group of ministers has cleared the mining policy, now it will come up before the cabinet," Reddy told reporters. Only 10 per cent of India's land mass has been explored for its mineral wealth, and industry officials say this is largely due to the mounds of paperwork involved and bureaucratic delays.

Last July, a committee recommended changes to make it easier to grant permits for surveying, prospecting and leasing of mines, including to foreign firms.

Overseas prospecting companies rarely come to India because they cannot sell the data they map, and can only utilise the information if they mine themselves. The new policy is also expected to outline a policy on iron ore exports, following demands by domestic steel makers to ban overseas sales to preserve supplies for local firms.

July 6, 2007
Source: The Economic Times

FIEO for measures to counter Re growth

Expressing concern over the further strengthening of the rupee to the level of 40.35, Federation of Indian Export Organisations (FIEO) President Ganesh Kumar Gupta stated that it has hit all exporters.

He further stressed that the lifestyle segment exporters are the most affected since they are to finalise their contracts by July/August for the coming festive season abroad.

The FIEO Chief requests expeditious implementation of measures announced to counter the appreciation of the rupee.

While detailing the sectoral impact, Gupta stated that textiles and apparels export industry have witnessed a decline of 8 to 10 per cent in their net profit margins which would force them to cut down costs in terms of employment and capacity building affecting the sector adversely in the long term. Leather goods sector, handicrafts and giftware are also substantially affected. Latest official data shows that export growth has slowed down to 18.07 per cent in May 2007 from 23.06 per cent in April 2007. In value terms exports during May totalled $ 11.86 billion.

Gupta added that the hardening of the rupee is eroding the competitiveness and profitability of exporters who are losing orders to China, Thailand, Pakistan, Sri Lanka, Bangladesh, etc and the measures announced may be implemented in the right earnest to ensure that the market of the Indian exporter is not lost to these competitors forever.

July 5, 2007
Source: The Economic Times

India may win $2 bn FDIs after easing mining law

India expects to attract as much as $2 billion of foreign direct investment annually in metals and minerals sector after the government overhauls a 50-year-old mining law, Junior Mines Minister said.

A panel of ministers will meet July 6 to discuss the new policy, which may be approved by Parliament in the monsoon session scheduled to begin next month, T Subbarami Reddy said today in New Delhi.

Delays in securing mining licenses and land have undermined India's efforts to win more investments, leaving the South Asian country short of the raw materials required for an economy that expanded 9.2 per cent last year, the most in almost two decades.

”If all the obstacles are taken care off, we could invest up to $1 billion in a period of five years,'' said Christopher Rashleigh, director of Indo Gold Ltd, in an interview today in New Delhi. The Australian mining company has applied for rights to explore gold and copper in the northern Rajasthan state.

India's government wants to simplify procedures and reduce delays that have dissuades mining companies from investing in the country, which according to McKinsey & Co has the world's fourth largest bauxite deposit, and the fifth-largest of iron ore reserve.

Posco, Asia's third-biggest steelmaker, has faced delays in getting rights to mine iron ore for its 12 million tons-a-year plant. Construction work on the plant will start in October, six months later than planned, because of the hold up, the company said on May 15. The federal government and the ministry of mines has asked the Orissa state administration to hasten the process, Reddy told reporters today.

July 4, 2007
Source: The Economic Times

SEZs

Govt may allow use of second-hand machinery in SEZs

The Commerce Ministry plans to relax existing restriction on use of second-hand plant and machinery by SEZ units, a top Department Of Commerce official said.

To ensure that SEZs have only new investments and there is no shift of businesses from the domestic tariff area (DTA) into these zones, the Government had stipulated in the SEZ rules that second-hand plant and machinery cannot be used by SEZ units.

The Commerce Ministry now wants to relax this stipulation so as to remove the paradox between existing SEZ rules and the income-tax law on the use of second-hand plant and machinery. The intent is to allow use of second-hand plant and machinery to the level permitted in the income-tax law.

After Budget 2007-08, the income-tax law has been amended to specify that a SEZ unit would not lose tax breaks if the total value of used plant and machinery transferred to the unit does not exceed 20 per cent of the total value of plant and machinery used in the business. This implies that a SEZ unit would get tax breaks if at least 80 per cent of its investments in plant and machinery are out of fresh investments.

Mr Deepak Dhanak, Senior Manager, Tax & Regulatory Services, PricewaterhouseCoopers, said that the Government must address the dichotomy between the SEZ rules and the income-tax law on the issue of use of second-hand plant and machinery by SEZ units.

July 7, 2007
Source: The Hindu Businessline

SIR SEZ new success shortcut for small IT cos

IT special economic zones (SEZ) may find a new anchor. The government is considering setting up special investment regions (SIR) where the IT SEZs could be housed to enable small and medium IT companies avail benefits from both the schemes. Under the SIR scheme, the government would provide basic infrastructure such as roads and power while the SEZ scheme would provide for tax benefits.

While large companies such as Wipro, HCL and Satyam have proposed to set up SEZ projects, the government’s focus is now on the small and medium sectors. As an incentive to the sector, infrastructure facilities would be provided by the Centre and the concerned states. The companies would also be eligible under section 80 1(A) for tax holiday for infrastructure projects.

The SIRs would also encourage private investment in urban infrastructure by way of assured market and complement the concessions such as viability gap funding offered under the public-private partnership (PPP) policy.

The reason why the government is keen to make the SEZ scheme co-terminus with the SIR scheme is to prevent a trade-off between the advantages from both and to ensure the success of the SIR scheme. Already, 2,586-hectare area has been notified for IT SEZs.

As far as the integration with the software technology parks is concerned, the source confirmed that if the software technology parks of India (STPI) scheme is extended beyond 2009, then an STP in an SIR can avail benefits under both STPI and SIR schemes.

According to the proposed SIR policy, the Centre would provide external physical infrastructure linkages such as national highways, railways including mass rapid transport systems, airports and state-of-the art telecom network.

July 6, 2007
Source: The Economic Times

Wait may be over for new SEZ plans

The wait is over for developers of special economic zones (SEZ) who submitted their proposals to the government after April 6. After the temporary freeze on approvals was lifted, April 6 was the informal cut-off date for taking up pending proposals for consideration. Since there was a huge backlog of pending projects, the government was focusing on them rather than taking up new ones.

More than a 100 proposals have been approved after the freeze was lifted and the board of approvals (BoA) is ready to take up proposals submitted after the cut-off date.

Speaking to ET, commerce ministry officials said the backlog of pending proposals that have state government approvals have almost all been taken care of. Nothing was preventing the government from taking up new proposals, provided they was accompanied by state government certification. “There was never a ban on new applications. It was just felt that the older proposals should be dealt with first,” an official said.

July 2, 2007
Source: The Economic Times

Development projects offered salt land sweetener by Nath

At a time when India Inc is scrambling to acquire large tracts of land for industrial development, especially special economic zones (SEZ), commerce & industry minister Kamal Nath has offered more than 5,000-acre salt pan land for development projects. The move is of significance since there is no problem in using salt pan land for SEZs unlike multi-crop agricultural land the acquisition of which has been barred. Moreover, a large chunk salt land is located in Mumbai and Chennai where land prices are steep.

Among the major projects that could benefit from Mr Kamal Nath’s offer is the Mumbai airport. The Maharashtra government, the Centre and the GVK-led consortium which manages the airport are in consultation to rehabilitate slum-dwellers encroaching the airport on salt pan lands.

Some salt pan land in Tamil Nadu is being allotted to public sector companies like HPCL. This includes areas identified at Ennore near Chennai for port expansion and a power project. Tamil Nadu Industrial Development Corp (Tidco) is also in talks for using salt lands for a SEZ, the sources said.

Mr Kamal Nath feels use of salt lands for industrial development could make a significant impact in Mumbai. The hurdles that need to be overcome are litigation and encroachment so that these lands can be put to good use.

A key proposal under consideration is to use salt pan lands in Mumbai to relocate the slums that are encroaching airport land. If the slums are not relocated, expansion and modernisation of Mumbai airport would be impossible. The GVK-South African Airports consortium, which manages the airport, has not been able to get land for expansion since encroaching slums have not been cleared.

Salt pan lands could also come in handy for facilitating SEZ projects near Mumbai, the sources said. Once corporates acquire land in areas like Navi Mumbai, salt pan lands could be used for rehabilitation of oustees. These lands are fit for residential purposes except in the case of creek lands which are unsuitable for development, the sources said.

As the government has terminated the lease of several salt works, nearly 1,852 acres of land could be made available for development. However, some of the sat works have moved court against termination of licences. In the case of another 1,827 acres of land, officials have cited ownership disputes involving 21 salt works.

July 2, 2007
Source: The Economic Times

Navi Mumbai SEZ to come up before BoA on July 12

The much-delayed Navi Mumbai special economic zone promoted by Reliance Industries chairman Mukesh Ambani will come up for formal clearance before a central government panel on July 12 after getting a green signal from the Maharashtra government on the issues raised by Revenue Department.

Besides, the Board of Approval will be taking up for clearance of a multi-product SEZ at Chhindwara in Madhya Pradesh, the Lok Sabha constituency of Commerce and Industry Minister Kamal Nath.

In all, the Board will consider 38 proposals. If approved, this will take the overall SEZ approvals - formal as well as in-principle - to over 500 after the new SEZ Act came into force in 2006, government officials said.

The government has already approved Ambani and Anand Jain-led consortium's three single-product SEZs in the area where the 1.250 hectare Navi Mumbai multi-product zone is also proposed to be set up. The Navi Mumbai SEZ was given in-principle approval earlier.

July 1, 2007
Source: The Economic Times

Economy

Destination India shines on investors

India has emerged as one of the most attractive investment destination in the world. Merchant bankers and analysts feel this trend is likely to continue.

According to the Morgan Stanley Capital International (MSCI) Equity Indices, which compares the returns from various markets, India has given the second highest annual return at 38.36% among the BRIC (Brazil, Russia, India and China) countries in the last five years.

The best return was given by Brazil at 46.19%. This means, an investment of Rs 1 lakh in the Indian market, would have become Rs 5.07 lakh in the five years and Rs 6.68 lakh in Brazil. The Chinese market, which is the largest emerging market in the world, gave an annual return of 31.36% and Russia 33.32% in the last 5 years.

Similarly in the last three years and one year, the Indian stock market has given handsome return in the region of around 50% compounded annually. Against this, developed countries like US gave returns of 11% and 20% while Japan 13% and 9%.

The main reasons which have enable Indian market to attract investors are its strong fundamentals and good returns being earned by the companies. On top of this, appreciation in rupee has further increased the return in dollar term in the last six months.

The return from Indian stock market has gone up to over 57% in the last one year, resulting into foreign investors are rushing to invest. India has become a must destination in almost all foreign investors' portfolio. This has led creation of huge liquidity in the market and has provided further momentum to the upward movements of the stock prices.

July 7, 2007
Source: The Economic Times

Relief package for exporters on the way

Exporters battling the appreciating rupee can look forward to some immediate help from the government. The Prime Minister’s Office (PMO) will hold a meeting with finance minister P Chidambaram and RBI governor YV Reddy on Tuesday to clear a relief package for exporters. However, the final contours of the package are not yet clear. The commerce ministry has proposed a liberal package, which includes increasing the rates for popular duty reimbursement schemes by 5%, but the finance ministry could be in a less generous mood.

Commerce ministry sources told ET that the export package is expected to be announced soon after the meeting.

The package proposed by commerce minister Kamal Nath seeks to increase the drawback and DEPB rates by 5% to neutralise local duties and state levies that are currently not refunded. It also proposes to convert exchange earner's foreign currency accounts to an interest-bearing instrument and to reduce interest rates on packing credits.

The proposal to reduce insurance premium for exporters by 10% has already been carried out. Sources said the PMO, based on suggestions from Mr Reddy and Mr Chidambaram, will take a final call on the relief package for exporters.

With the rupee appreciating by approximately 12% against the dollar since March this year, exporters have been struggling to meet their orders since export realisation has come down substantially.

July 6, 2007
Source: The Economic Times

RBI's efforts for economy showing results

The spectre of overheating may turn less daunting in the days to come. Here are the first signs: the runaway growth in bank loans is finally losing some steam. For the first time in 6 years, banks have recorded an absolute dip in loans given to individuals and India Inc.

Latest RBI figures reveal that aggregate non-food credit extended by banks declined Rs 30,532 crore between April and June 22 to Rs 18,17,955 crore. Though a slow credit demand is normal in the first quarter which is lean season, for the first time in 24 quarters, banks are seeing their loan portfolio shrink. Significantly, it’s happening at a point when deposits parked in banks are recording the highest quarterly growth of over Rs 1,00,000 crore.

For long, the central bank has been uncomfortable with the fierce loan growth. Since last year, it has pushed through a series of rate hikes to cool down the economy and diffuse bubbles in various markets. The monetary actions may be finally showing results.

As far as borrowers are concerned, many are going slow on their home-buying plans waiting for the interest rate cycle to turn around.

July 6, 2007
Source: The Economic Times

Global prosperity list, India fairs poorly

Legatum Institute for Global Development has launched the first annual global prosperity index, which establishes a new measure for national prosperity. It defines the well-rounded prosperity of a nation as the combination of the material wealth and life satisfaction of its citizens.

The study reveals US, Norway and Sweden as the most prosperous nations on earth despite differing social models, while Zimbabwe, Pakistan and Egypt are the least prosperous.

Despite India’s strengths in democratic governance, it is rated poorly. India’s long-term economic growth has been impeded historically by very high costs of bureaucracy, poor education and an extreme deficiency in average health, the report says.

The 2007 Legatum Prosperity Index combines more than 70 variables into 20 key indicators in order to rank countries, based on the degree to which the actions of their people and governments drive or restrain prosperity.

Norway achieved high scores, not only due to its rapid economic growth via the successful management of its natural resource wealth, but also for its positive social conditions.

Sweden performs marginally less well economically, but scores better for social indicators such as political and civil liberties, community life, health, leisure time, and equality of opportunity.

US, similarly, has good scores in most areas, but is exceptional in the degree to which its citizens maintain strong social values, including religious beliefs and that they feel secure in their ability to make free choices and control their lives.

July 4, 2007
Source: The Economic Times

'India enters inflation comfort zone'

India's inflation rate has entered a "comfort zone" and fears of overheating in the economy are in the past, a top government official said on Monday, as he predicted minimum 8.5 per cent growth in the current fiscal year.

"I certainly feel that the fear of overheating is behind us," Montek Singh Ahluwalia, deputy chairman of the planning commission, told the media in an interview.

"I mean the rate of inflation has been steadily coming down in each of the last five weeks. "I would definitely say that we have entered the comfort zone as far as inflation is concerned." India's most-widely tracked inflation rate fell more than expected to a 14-month low of 4.03 per cent in mid-June. Ahluwalia, one of India's senior economic managers, said the economy should grow by at least 8.5 per cent in the fiscal year to March 2008.

An average of 9.0 per cent growth over the next five years was achievable. "Opinions vary but most people still think that the growth this year will be above 8.5 per cent. I mean 8.5 percent is the lowest number that I have seen."

July 02, 2007
Source: Reuters via The Economic Times

India indifferent to small businesses

India may have entered the top league of world economies on the back of robust economic growth and booming stock markets, but it ranks among the bottom 10 when it comes to promoting small businesses.

The country has been ranked 46 among 53 countries in a list compiled by global media conglomerate CNN-Time Warner group’s Fortune Small Business (FSB) magazine for their friendliness to small businesses. The less-friendly approach toward small businesses probably also reflected the performance of smallsized companies, whose financial progression pales in comparison to their blue-chip counterparts.

India, despite its move into the big leagues of global economies, lags far behind in entrepreneurship, FSB, whose sister publications include Fortune, Money, Business 2.0 magazines, said. In the FSB list, Indonesia, Greece, Philippines , Brazil, Ecuador, Uruguay and Jordan are the only seven countries doing worse than India in terms of friendliness to small businesses .

Besides, India is doing poorly than not only the giants like the US, UK, Singapore and Hong Kong, known for promoting businesses, but even countries like Iceland, Finland, Jamaica, Latvia, Peru and Uganda enjoy higher positions.

Singapore was named at the top of the league in terms of ease of doing business, followed by New Zealand, the US, Canada and Hong Kong in the best five. The list is based on the World Banks annual doing business report and the Global Entrepreneurship Monitor (GEM), an annual study produced by Babson College and the London Business School.

July 02, 2007
Source: The Economic Times

Sector Specific

Steel

Steel cos cutting prices to fight imports

Steel companies have started slashing prices of flat steel products, including HR and CR coils, to match import prices.

Taking the lead, SAIL has announced a cut in prices of flat products by Rs 500-1,000 a tonne with effect from July 1 in line with the prevailing market trend. In the past 2-3 months, the prices of imported steel have come down by over Rs 2,000 a tonne as a result of the rupee’s appreciation against the dollar.

A SAIL statement said though the demand for GP/GC sheets rises during the monsoon, as they are used in roofing, the prices have been slashed to make them more affordable. However, the company kept prices of steel products like TMT bars unchanged.

Other steel companies such as Tata Steel, JSW Steel, Essar Steel and Ispat Industries are yet to officially announce a price cut, which is expected to be more or less in the same range. Sources said that Essar Steel is expected to announce a price cut of Rs 700-750 a tonne of HR coils, which currently cost Rs 28,300 a tonne. JSW Steel is expected to come out with a Rs 700 cut.

An Ispat Industries spokesman said that the company’s board met on Monday to take a call on the issue. He indicated that the price reduction would be Rs 600-700 a tonne.

Domestic prices in China have been softening over the past one month as HR coil prices declined by $45-412 a tonne. In Western Europe, HR prices have witnessed their second price decline in the past six months. According to SteelBenchmarker, a metal bulletin, hot-rolled prices in Western Europe are down by $12 a tonne to $696.

Jul 03, 2007
Source: The Hindu Businessline

Banking & Finance

SBI stake transfer to help RBI lessen rupee pain

The secular rise in the value of the Indian currency has not only hurt exporters but also RBI. The strong rupee may well have eroded the balance sheet of RBI during the last accounting year. RBI, it may be noted, operates on a July-June accounting year unlike corporates and the government for whom the accounting year runs from April to March.

The impact of the rupee’s rise may be mitigated by the receipt of cash worth Rs 35,000 crore by the government to RBI’s books in lieu of transfer of RBI’s share in SBI, on the last day of its accounting year. This could help make good the valuation loss on account currency movements and help RBI end the financial year on a far better note.

RBI is expected to transfer the entire amount realised out of the SBI’s transaction to the government as part of the surplus. The government in turn will classify the amount realised from SBI stake sale as a one-time capital receipt. To that extent the government’s capital expenditure will be up by Rs 35,000 crore during this fiscal. In the normal course, the transfer of the amount realised from the stake sale would have been classified as revenue but then it would have skewed the fiscal deficit numbers this fiscal.

The surplus transfer to the government will be unique this time. The gains or losses in the valuation of foreign currency assets and gold on account of exchange rate changes are reported under the head “currency and gold revaluation account (CGRA), a part of the `liabilities’ of RBI’s balance sheet.

The impact on RBI’s profits and loss account will be felt only in its next accounting year which could see its income comprising interest, discount, exchange, commission, etc, moving up. The surplus after deducting the total expenditure is transferred to the government again. However, if the government had issued securities in lieu of cash, RBI could have used it for intervening in the currency markets and also in its day to day in liquidity management.

RBI’s stock of securities has been declining which has been used to intervene in the currency market to sterilise forex inflows. Moreover, due to FRBM compulsions, the government cannot participate in the primary market for purchasing government securities and will no longer be able to opt for private placements.

July 3, 2007
Source: The Economic Times

Govt plans bill for valuation professionals

The government is drafting a bill to regulate valuation professionals who analyse companies, shares, debt, assets, brands and intellectual property to arrive at a financial value.

"The government will soon introduce a new bill for valuation professionals, which would empower them to seek new opportunity of business," Corporate Affairs Minister Prem Chand Gupta said while giving ICWAI excellence award here.

For regulating such professionals, the government plans to form a council that will be governed by the Council of Valuation Professionals of India Bill. The Ministry has circulated a draft bill for comments from stakeholders.

The Bill seeks to restrict the valuation business to individuals and partnerships. No company, whether an Indian or a multinational would be allowed to engage in the business.

Apart from regulating practicing professionals, the council would also be responsible for training. The institutes of chartered accountants, company secretaries and cost and works accountants will be recognized for imparting education.

July 2, 2007
Source: The Economic Times

Agriculture

Kharif sowing in full swing; bumper crop likely

Acreages under most kharif crops have increased significantly on the back of excellent monsoon rains so far, boosting hopes of a further easing of inflationary pressures in the economy.

During the current south-west monsoon season (June-September), the country as a whole had received an average area-weighted rainfall of 237.6 millimeters (mm) till July 4. This is 20.3 per cent higher than the historical ‘normal’ or long period average (LPA) of 197.5 mm for this period.

The munificent rains have resulted in higher sowing rates of coarse cereals, cotton, oilseeds and pulses, with only rice somewhat lagging behind. The Agriculture Ministry’s Crop Weather Watch report, released here on Friday, shows an area of 60.778 lakh hectares (lh) to have been planted so far in the ongoing kharif season, as against 58.481 lh for the corresponding period of 2006.

In all, the country seems well set for a bumper kharif crop, provided the monsoon holds its current course.

July 7, 2007
Source: The Hindu Businessline

King Khan to pitch for Basmati

Upset over objections raised by the government on their Rs 21-crore proposal to launch a global Basmati promotion campaign featuring Bollywood star Shahrukh Khan, rice exporters will present their case before "higher-ups" in the Commerce Ministry.

"I will soon seek an appointment with higher officials in the Commerce Ministry and explain how this campaign, to be launched in Europe and Middle East, is important for the country's rice growers and the industry," All India Rice Exporters' Association (AIREA) Chairman Vijay Setia told media.

The AIREA along with the Agricultural and Processed Food Products Export Development Authority (APEDA) had finalised the campaign to be executed by Grey Worldwide and Crayon Advertising. It was to be financed by the Basmati Development Fund (BDF) which is created by contributions from exporters.

One of the objections raised by the government on a complaint from a Punjab-based association relates to the fact that the entire money lying with BDF would be spent on this high profile campaign.

The Rs 21-crore campaign was divided into two segments of Rs 10.50 crore each for the Middle East and Europe, which are the main markets for the Indian rice.

July 3, 2007
Source: The Economic Times

Gates's gift to Maharashtra: Agri kiosks

Microsoft chairman Bill Gates has offered to help the Maharasthra government set up agro-kiosks to serve farmers in the state, apart from setting up a research centre near Pune, Chief Minister Vilasrao Deshmukh has said.

"The agro kiosks will help farmers get the latest information on weather, cropping patterns and trends in agricultural produce prices very quickly and efficiently," Deshmukh told IANS in an interview here Monday.

The chief minister is visiting Chicago on the last leg of his eight-day US visit.

The project should improve the condition of farmers in the state that has witnessed mass suicides by agriculturists in last couple of years. Deshmukh noted that the suicides rate among farmers had come down drastically following steps taken by the government.

The central and state governments would be spending Rs.55 billion over the next three years on agriculture, 80 percent of which would be allocated to improving irrigation facilities, he said.

The chief minister added that his delegation and Microsoft had signed a memorandum of understanding to set up a Microsoft research centre in Hinjewadi near Pune. "We have allotted 25 acres of land for the project," he said, adding the location was ideal because Pune had well-established educational institutions.

Moreover, the Bill and Melinda Gates Foundation has already contributed $100 million for the spread of AIDS awareness, Deshmukh said, adding that Gates was especially interested in projects to bring down child mortality.

July 3, 2007
Source: The Economic Times

JK Group aims to triple market share of Bt cotton

Emboldened by the good response to its Bt cotton seeds from farmers and with the government approving five more of its hybrids, JK Agri Genetics aims to nearly triple its market share to eight per cent in this kharif season. "Our target is to have a market share of 7-8 per cent in Bt cotton seeds," JK Agri Genetics President P S Dravid said.

The current share of the company in the Bt cotton seed, dominated by multinational giant Monsanto and its associates, is around three per cent, Dravid said, adding JK Agri Genetics entered the market only last year.

He said the company, which had a turnover of about Rs 80 crore in 2006-07, aims to post a 50-60 per cent growth in the current year. However, it does not plan to reduce the prices of its Bt cotton seeds, he added. "Already prices of Bt cotton seeds are low following government's order. There is no plan to reduce the rates further now," he said.

The company received clearance of the Genetic Engineering Approval Committee (GEAC) a few days back for commercial sale of five hybrids of Bt cotton, taking its total genetically modified (GM) seeds to nine. GEAC is likely to clear by next year two more hybrids developed by the company, which are currently in the second year of the trial, he said, adding they would be released in the South.

Of the five Bt cotton seeds released in the this kharif season, three would be launched in Maharashtra and Gujarat while one each in the north and south zone, he said. The company's focus is now on the central zone, particularly Gujarat and Maharashtra where a total of four hybrids would be available this year.

Meanwhile, apart from cotton, JK Agri Genetics has been working on GM seeds in rice, mustard, jowar and bajra. As much as 15 Bt cotton varieties developed by it are in the process of experimentation and trials.

July 1, 2007
Source: The Economic Times