Major road projects coming up for bidding - Tracking India Business and Economy News

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In two different studies, India has emerged as a key driver to growth worldwide – spends in terms of banking and media & entertainment. Closer home however, the focus is on building the industrial corridor between Delhi and Mumbai, improving the condition of roads and unshackling blue-chip PSUs.

- Chillibreeze Business Research Team

Government policy & Infrastructure

Poor infrastructure can undo retail boom

Cautioning that infrastructure bottlenecks could play a spoilsport in an otherwise booming organised retail sector in India, industry experts on Friday said companies first need to concentrate on establishing supply chains and logistics before going ahead with expansion.

Speaking at a retail conference organised by the Indian Retail Forum (IRF), McDonalds' India Managing Director Vikram Bakshi said: "Retailers in India should first understand the local market dynamics before announcing big ticket investments."

Milagrow Chairman Rajeev Karwal said retail chains need to ensure vendor and contract management, contract manufacturing, supply chain management, early planning and proper execution for the success of their venture. "Early planning and proper execution of plans, supply chain management, good relations between retailers and vendors and proper networking and process flow hold the key to success in retail trade," Karwal said.

A study released by realty consulting firm Jones Lang Lasalle Meghraj earlier this week had warned of a shakeout in the retail industry due to problems faced by players in areas such as infrastructure, logistics and manpower.

Commenting on the concerns raised by small retailers, industry experts said that there is enough room for both big organised players and mom and pop store owners to co-exist.

"Small retailers and local shops are going to flourish as they have the knowledge of local business and the quality of services they could provide can never be matched by the big players," Bakshi said.

The three-day conference which began today would see participation from as many as 250 CEOs of major retail chains to discuss issues faced by industry players in the domestic market.

June 29, 2007
Source: The Economic Times

Govt to bring law to regulate clinics

The government on Thursday decided to bring a legislation in the forthcoming monsoon session of Parliament to register and regulate all clinical establishments and penalise units that fail to provide minimum standards of services.

"The Union Cabinet today gave its approval for introduction of the Clinical Establishments (Registration and Regulation) Bill, 2007 in Parliament," Information and Broadcasting Minister P R Dasmunsi told newspersons after the Cabinet meeting on Thursday.

All the clinical establishments including diagnostic centres will be registered and regulated by the National Council of Standards that will prescribe minimum standards for healthcare services and maintain national register of clinical establishments.

The council, which will have representatives from medical, dental, nursing and pharmacy councils and Indian Medical Association, will be headed by Director General of Health Services. The proposed legislation, Dasmunsi said, will cover all clinical organisations in different streams of medicine including homoeopathy, unani, siddha and ayurveda.

June 28, 2007
Source: The Economic Times

CEOs of sick PSUs to get more time for revival

To put the revival of sick PSU companies on a firm ground, the government has decided to give cash incentive of up to Rs 10 lakh and extend the date of retirement of chief executive or a functional director of a firm, who have contributed to the turnaround, to 65 years.

The decision of the Cabinet to give more time to the chief executive, who has worked out the revival package and implemented it with success, has been done on the basis of recommendations of Board for Reconstruction of Public Enterprises (BRPSE).

"The extension will be subject to the review of performance to be conducted by the secretary of the Administrative Ministry under which the PSU is functioning," Minister of Information and Broadcasting Priyaranjan Dasmunsi said after the Cabinet meeting.

June 28, 2007
Source: The Economic Times

'Govt mulls raising FDI cap in air cargo to 74 pc'

The government plans to raise the FDI cap in air cargo business to 74 per cent as part of efforts to further open up the sector for foreign investment, Civil Aviation Minister Praful Patel said on Wednesday.

Patel, who flagged-off Air India's first dedicated freighter aircraft to Europe, also said Air India and Indian, the two state-owned carriers that are being merged, plan to ramp up their cargo operations to tap the growing segment, owing to the upsurge in import-export demand combined with the open-sky policy and globalisation factors.

Air India has converted two A 310 passenger aircraft into freighters for dedicated cargo operations. It will have 7 flights a week from Mumbai, Bangalore to Dammam and Frankfurt. The freighter A 310 aircraft will also make four trips in a week via Bangalore and Chennai to Frankfurt and Paris. The weekly cargo capacity is estimated at 474 tonnes.

Highlighting the huge opportunity in the cargo business, Patel said the key constraints of aviation sector was lack of infrastructure facilities. "When UPS and Fedex own 700-800 cargo planes, we need at least 500 cargo planes in the next 10-15 years," he said.

Nagpur should be made cargo hub of the country because of its geographical advantages, he said, adding the government would provide all required help to make it a truly world-class cargo hub.

June 27, 2007
Source: The Economic Times

Major road projects coming up for bidding

After a slump last year, toll road operators can look forward to a host of projects over the next few months with the Road Transport and Highways Ministry aiming to award contracts for 6,273 km on a build-operate-transfer (BOT-toll) basis in 2007-08.

This is the highest ever annual target for highways development and is expected to cost an estimated Rs 40,955 crore.

Under BOT-toll system, road developers widen a road and are allowed to collect toll from the users of the road stretch for certain duration. In 2006-07, projects for about only 800 km were awarded on BOT-toll basis. Overall, only 1,734 km highways were awarded in 2006-07 compared to 4,740 km in 2005-06.

The Ministry, which has prepared a quarter-wise target for the projects to be awarded this fiscal, said that work has already started for the detailed project report preparation for these projects targeted for award in the second and third quarters.

June 26, 2007
Source: The Hindu

Blue-chip PSUs to be unshackled

Blue-chip PSUs are set to get more autonomy in asset transfers, raising fresh equity, divestment of shareholding in subsidiary companies and appointment of independent directors. The department of public enterprises (DPE) has written to economic ministries to work on the new guidelines in a bid to provide greater autonomy to the companies.

According to highly-placed sources in the government, the proposal on giving more autonomy to PSUs has been vetted by the finance ministry. It has also asked the administrative ministries to process the proposal of PSU listing on fast-track basis to capture good value at markets.

Once approved, the policy would set the road for more companies to hit the Street. Already, public offerings from PGCIL and Rites are being finalised, and other PSUs like CIL, SAIL, NTPC and NMDC are looking at IPOs or follow-on offers to raise resources for meeting expenditure requirements for expansion.

While the government would have a final say in approving market issues of PSUs, the process of formal Cabinet approval may be discontinued and the issue could be realised by approval of the regulators and the Cabinet secretariat.

A group of ministers (GoM) on PSU autonomy had earlier rejected the proposal to do away mandatory government approval for public issues of PSUs.

June 26, 2007
Source: The Economic TImes

PM lends ear to exporters, eye on Re

Prime Minister Manmohan Singh is in consultation with RBI governor YV Reddy on macro measures that might need to be taken if the rupee continues its northward movement. The PM has been bombarded with petitions from the exporting community on the need to check the rising rupee which, they claim, has affected their business. Government sources said the PM may form a high-level group to propose steps for minimising the adverse effects of rupee appreciation.

Senior officials from the commerce department held a meeting with exporters two days ago seeking details on the levels to which exports were affected and the markets and products particularly hit due to rupee appreciation. Details were also sought on the package for exporters announced by the government last week that was expected to provide relief to the community.

The package sought to increase the drawback and DEPB rates by 5% to neutralise the state and local duties not being refunded. Other measures including reducing interest rates on packing credits and premium for ECGC coverage and conversion of exchange earner’s foreign currency accounts to an interest-bearing instrument were also announced.

While the package has come as a relief for exporters claiming drawback and DEPB, those who do not claim such benefits would not profit from the move. Small exporters in sectors such as textile, leather and handicraft claim that stronger measures need to be taken to bail them out of the crisis.

June 26, 2007
Source: The Economic TImes

No move to regulate corporate salaries: Govt

The Ministry of Corporate Affairs on Monday said there is no move on the part of the government to regulate salaries and other benefits given to directors and chief executives of companies.

"There is no intention on the part of the government to regulate remuneration of directors and top executives of companies," Corporate Affairs Minister Prem Chand Gupta said at a seminar on corporate governance organised by Assocham here.

He said the comments of the Prime Minister Manmohan Singh at an industry function on remuneration of directors and CEOs in the private sector have not been understood properly.

"There is no need to regulate remuneration of directors and CEOs of companies and there is no intention to do so," Gupta said. He said that the decision on how much salaries top functionaries of the companies get is best left to their Board of Directors and shareholders.

June 25, 2007
Source: The Economic TImes

FII money in RE may face 3 yr lock-in

The Finance Ministry has proposed a three year lock-in for investments made by foreign institutional investors (FIIs) in real estate firms through pre-IPO placements to check speculation in the booming sector.

Such a regulation, which brings FIIs on par with foreign direct investments (FDI), would require a change in FII norms and market regulator SEBI is expected to amend regulations in this regard shortly. The regulator is expected to take up the issue of amending SEBI (FIIs) Regulations, 1995 at its next meeting scheduled in Mumbai on June 30, said official sources.

Finance Ministry has supported the views of Reserve Bank, which wanted a lock-in period for FIIs as part of its strategy to curb the rising speculations in the real estate sector, the sources said. The government may also have to amend Foreign Exchange Management Act to put in place the lock-in, they said.

June 24, 2007
Source: The Economic TImes

Now a bigger Delhi-Mumbai industrial corridor

The mother of all infrastructure projects in India just got bigger in scale and size. In a surprise development, the government has doubled the proposed investment on the Delhi-Mumbai industrial corridor to a whopping $90-100 billion.

According to estimates, the amount will be spent in four years beginning 2008 for infrastructure development along the 1483-km-long dedicated freight corridor between the two primary cities of the country, top sources close to the development told SundayET.

According to the proposal, the work on industrial corridor will be in two phases — 2008-2012 and 2012-2016. The phase I will witness setting up of one investment region (IR) of about 200 sq km and one industrial area (IA) of smaller sizes in each of the five states — Uttar Pradesh, Haryana, Rajasthan, Gujarat and Maharashtra. Though the corridor will pass through six states including Delhi, the national capital will not be able to reap any benefit because of paucity of land for industries.

In fact, potential users of the freight corridor may be involved in building infrastructure as well. As the government has indicated so far, most of the infrastructure work connected to the industrial corridor will be executed in public-private partnership (PPP) format.

Shailesh Pathak, head, PPP Initiative, Infrastructure Development Finance Company (IDFC), feels that there should be a proper implementation structure for such a mega venture. “The most significant challenge will be to have an implementation structure which should be outcome-driven rather than profit-driven,” he said.

June 24, 2007
Source: The Economic TImes

Economy

M&A deals in India till May worth $46.8 bn

The merger and acquisition deals in India in the first five months of 2007 were to the tune of $46.8 billion compared with $20.3 billion in the whole of 2006, Dun & Bradstreet president & CEO-India, Manoj Vaish, said. “Telecom, pharma, healthcare, energy and IT / ITeS were the primary contributing sectors,” Vaish said at a conference on the subject.

“Worldwide these figures were at $3.8 trillion with industries, energy & power, financial services, real estate and media & entertainment industries taking the lead both in value and volume. US alone accounted for 41% of the total worldwide volume of M&As,” he added.

The conference organized by Dun & Bradstreet, a leading provider of global business information, knowledge and insight, dwelled on the different aspects of M&As and role of the regulator, in the backdrop of Indian companies looking to evolve, transform and explore different markets.

June 29, 2007
Source: The Economic Times

Economy poised for soft landing: Analysts

A soft landing of the Indian economy seems to be underway, with various indicators pointing to a moderation in the overall growth trend, according to analysts.

The twin effects of aggressive monetary tightening and a sharp appreciation in the currency have begun to show their impact on domestic demand indicators and goods export growth. GDP growth will likely slow to 7.7% in fiscal 2008 from 9.4% in fiscal 2007, says Morgan Stanley.

After sustaining strong growth for about nine quarters, there are clear signs that the growth trend is moderating. Key cyclical growth indicators like auto sales, bank credit, goods exports and rail freight traffic are reflecting this.

The earliest indicator to reflect the slowdown has been auto sales growth. Growth in all three segments — cars, two wheelers and commercial vehicles — has decelerated significantly. Indeed, passenger two-wheeler sales growth has been declining on a year-on-year basis for the past two months now, while passenger car and commercial vehicle sales growth have dipped to single-digit levels, it says.

Bank credit growth has moderated to 26.3% as of end-May from 29.8% as of end-February and 30.1% as of end-December. The key driver of the slowdown has likely been mortgage and other retail credit growth.

Three month average goods export growth in rupee terms has slowed to an average of 9% in the four months ended April 2007 from 18.3% during quarter ended December 2006, reflecting slower growth in the US, stretched domestic capacity utilisation in select sectors and weakening competitiveness due to rupee appreciation. The full impact of rupee appreciation is yet to be reflected in exports growth due to the usual lag from the time orders are received to execution.

According to Morgan Stanley, the combined impact of weakening domestic demand and slowing exports is reflected in the deceleration in rail freight traffic growth. Railways freight traffic growth has slowed to an average of 5.8% in April-May, from 8.1% in quarter ended March 2007 and 9.4% in December 2006.

According to Yes Bank, the recent strength witnessed in industrial growth may be slightly misleading. A closer look at the IIP data for April 2007 reveals that growth has been skewed in favour of consumer non-durables with a share of 39% and sugar which contributed 23.6% to overall growth. Thus the buoyancy is not as broad-based as witnessed in FY07.

It says firm interest rates will continue to impact consumption demand in FY08. Some evidence of this has begun to manifest in consumer durables and auto segments which have witnessed softer growth. The robust growth in industry is likely to moderate from current high levels. GDP growth is likely to moderate to 8.5% in FY08 on the back of the lagged impact of hardening interest rates, moderating global growth and infrastructure sectors, especially emanating from the power sector, says Yes Bank.

June 28, 2007
Source: The Economic Times

India Inc less constrained by red tapism: Report

Indian industry seems to feel less constrained by factors such as red tapism, cost of financing, shortage of skilled labour and lack of business orders when it comes to its growth, in comparison to other BRIC countries.

While 37 per cent of Indian businesses consider red tape a major constraint for growth, 60 per cent in Brazil consider it the most vital factor. About 59 per cent of Russian businesses face problems due to red tape while expanding, followed by Poland at 55 per cent.

However, businesses experiencing the least restraints from red tapism were from Singapore (16 per cent), Spain (17 per cent) and Sweden (19 per cent), says Grant Thornton’s International Report released here on Wednesday.

June 28, 2007
Source: The Hindu Businessline

India's 2007-08 growth outlook brightens

India's economy should grow at a faster pace than previously expected in the fiscal year to March 2008 on buoyant manufacturing and services, but that pace will be slower than the strong 2006-07 expansion, a Reuters poll shows. The median forecast in the latest quarterly poll suggested 2007-08 growth would be 8.5 per cent, up from 8.0 per cent in a similar poll in March. It also matches the RBI forecast.

Robust industrial growth and strong economic momentum, reflected in an unexpectedly strong 9.4 per cent rise in GDP in 2006-07, reported late in May, prompted analysts to raise their forecasts.

June 27, 2007
Source: The Economic Times

Sector Specific

Telecom

Telcos asked to follow check norms in J&K, NE

The government on Thursday directed mobile operators offering pre-paid services in Jammu and Kashmir and North East to follow instructions on verification of particulars of new users.

After issuing the new instructions earlier this month, Department of Telecom today held a meeting with mobile operators and asked them to strictly follow them after the industry raised concern over its implementation.

Official sources said there were apprehensions by operators on the guidelines that an existing subscriber of minimum three month old should become a witness for a new connection of the same service provider. According to operators this would not be possible in case of new operators who are planning to roll out services.

Department of Telecom allowed pre-paid mobile services in these terrorist-infested states in February for a period of one year. However, with the rising number of fake addresses and identification given by the subscribers, government fears that terrorists could abuse pre-paid mobile service and walk away scot free.

June 28, 2007
Source: The Economic Times

Power

Govt targets 80,000 MW renewable energy capacity

The Centre is targeting up to 80,000 MW of power generation capacity through renewable sources by 2032, the Minister for New and Renewable Energy, Mr Vilas Muttemwar, said on Thursday.

Speaking at the inauguration of the “Green Power 2007” International Conference on renewable energy here, Mr Muttemwar said that India has among the largest Government-sponsored programmes in renewable energy in the world. The country’s installed capacity through renewable energy sources stood at 10,408 MW as on March 31, according to Government estimates.

Mr Muttemwar said wind energy has been one of the big successes, with India currently occupying the fourth position globally in terms of installed wind generation capacity. The country’s wind energy capacity stands at 7,094 MW, according to Government estimates.

June 29, 2007
Source: The Hindu Businessline

Steel

Focus on raw material security, steel industry told

To ensure sustainability of the domestic steel sector's expansion and investment plans, it would be imperative for the industry to focus on raw materials security in the long term, according to Mr R.S. Pandey, Secretary in the Union Ministry of Steel.

Mr Pandey told Business Line here today that iron ore and coking coal were the two important raw materials for the steel industry. While high-grade iron ore is available locally — albeit at international prices — the industry is greatly dependent upon imports for its coking coal requirements. "This dependence on coking coal imports is going to go up in the years to come and there is a need for the industry to focus on its raw materials security in the long term," he said.

Mr Pandey said it had been proposed to form a joint venture with public sector units such as Steel Authority of India Ltd (SAIL), Rashtriya Ispat Nigam Ltd (RINL), Coal India Ltd, National Thermal Power Corporation and National Mineral Development Corporation (NMDC) as partners for gaining access to raw material assets across other geographies in the world. "Without this, we cannot sustain our expansion programme. Without assured sources of raw material, we will be putting our investments to risk," he said.

According to him, the proposed joint venture would cater to the needs of the Government sector, at least for the time being. Private sector players, he said, were seized of the matter and were firming up long-term contracts with their raw material suppliers.

Asked if the demand projections justified the huge investments that were being made in the steel sector, Mr Pandey said that, contrary to what was expected when the National Steel Policy was announced in 2005, consumption of steel had outstripped its production.

June 26, 2007
Source: The Hindu Businessline

Banking & Finance

India may become third largest banking market by 2040: Survey

India is likely to emerge as the third largest domestic banking market in the world by 2040 and could grow faster than China in the long run, according to a report by PricewaterhouseCoopers called ‘Banking in 2050: How big will the emerging markets get?’

The report projects that the banking sector will grow significantly faster than GDP in the emerging economies of China, India, Brazil, Russia, Indonesia, Mexico and Turkey. Total profits from domestic banking in these countries could be around half of those in the G7 nations (US, Japan, Germany, UK, France, Italy and Canada) by 2025 and larger before 2050.

The study examines the possible changes in the scale of the banking sector between now and 2050 and highlights the pace of change, while providing some measure of the size of the opportunity and challenge for banks.

The projections are based on an analysis of developments in banking markets since the 50s, which highlights the tendency of the banking sector to grow faster than GDP as economies develop.

Mr Jairaj Purandare, Executive Director, PricewaterhouseCoopers India, said: “The analysis suggests that India is likely to be the fastest growing of the emerging economies in the long run.” He added: “The model also suggests that China will continue to grow somewhat faster than India over the next 5-10 years but after that, Chinese growth will be held back by its rapidly ageing population and diminishing returns. In contrast, India and other emerging economies have much younger populations with faster-growing labour forces.”

In a previous report called ‘The World in 2050,’ published in March 2006, PricewaterhouseCoopers economists predicted that by the year 2050, the emerging economies will have outstripped the G7 nations by around 25 per cent when comparing GDP using market exchange rates, and around 75 per cent when using purchasing power parity exchange rates.

The strategic implications of the rise of the banking markets in the emerging economies include strong growth in M&A activity both within and across borders. Restructuring of the economies should also create major opportunities for private equity firms, the report said.

June 30, 2007
Source: The Hindu Businessline

SBI plans holding co for insurance, asset management

The country’s largest bank, State Bank of India, plans to go the ICICI Bank way and set up a holding company to transfer its shareholding in its insurance and asset management subsidiaries.

The holding company will have SBI’s stake in SBI Life (a joint venture between SBI and Cardiff SA of France) and SBI Funds Management Ltd (a joint venture with Societe Generale Asset Management) and subsequently its stake in a proposed non-life venture.

The holding company, which will be an NBFC, will be set up in the next three to four months. The bank plans to list the holding company to meet the capital requirements of its insurance and asset management companies, said Mr O.P. Bhatt, Chairman, State Bank of India.

June 29, 2007
Source: The Hindu Businessline

Gemalto launches smart card for micro-banking

Gemalto’s ‘one-card-does-all-solution’ is expected to accelerate micro-banking deployment in India. The company has introduced a smart card with biometric authentication for adoption by Financial Information Network and Operations Ltd (FINO) in India. The solution, according to FINO sources, would simplify access to funds and facilitate trade amongst the under-banked.

FINO, incidentally, provides end-to-end banking solutions including smart cards to microfinance partners, banks and non-governmental organisations serving low-income households in urban and rural regions. Currently, an estimated 500 million people in these areas are either not served or are underserved by the finance sector.

According to a release, each FINO card (developed by Gemalto) would be able to hold up to 15 different types of secure applications that facilitate financial services such as deposit remittances, savings, loans, insurance and e-purses.

The card also acts as an electronic statement to log all transactions and can store the last 150 transactions (up to 10 transactions per service). Transactions are validated using biometric authentication.

“The biggest challenge in the microbanking industry is the huge amount of paperwork and human effort traditionally involved in supporting micro-transactions and credit-scoring potential customers.

June 28, 2007
Source: The Hindu Businessline

Insurance control on compensation rates goes

The Insurance Regulatory and Development Authority (IRDA) has issued a circular to all general insurance companies stating that the control rates on fire, engineering and workmen's compensation insurance classes shall be totally removed.

"This is effective from September 1 this year. However, the insurers shall not cancel policies that are in force on September 1 in order to revise the applicable premium rates; where the insured chooses to cancel such insurance, premium shall be retained on short-period scale," the IRDA said in the circular.

The regulator has said that a decision to this effect was taken following the meeting with companies on further relaxation of price controls.

June 27, 2007
Source: The Hindu Businessline

International

India, China to drive E&M biz to $2 t by '11

India has emerged as the fastest growing market in the world for spends in entertainment and media for the next five years, and along with China, the key driver to push the global entertainment and media industry to $2 trillion by 2011, finds a study by PricewaterhouseCoopers. Led by India and China, E&M spending in Bric will continue to grow at double-digit annual rates during the next five years and will account for 24% of global E&M growth during the next five years.

Economic expansion and a surging entertainment and media market are driving significant growth in Brazil, Russia, India and China (BRIC), finds PwC’s eighth annual global media and entertainment outlook and forecast released in New York recently.

Spending in the Bric countries will increase by a 14.7%, expanding from $127 billion in 2006 to $251.5 billion in 2011. That gain will be nearly three times the projected 5.5% compound annual increase for the rest of the world. Though the US still remains the largest market, it’s also one of the slowest growing. Worldwide, the industry is growing at an average rate of 6.4%, and is expected to touch $2 trillion in 2011.

June 25, 2007
Source: Economic Times

Agriculture

Kharif sowing picks up on good monsoon rains

With the South-West monsoon turning out to be more than normal in June, the Centre can hope for a further easing of inflationary pressures arising from a bumper kharif crop. According to the India Meteorological Department (IMD), the country as a whole has received an area-weighted rainfall of 148.7 millimetres (mm) during June 1-29, which is 7.4 per cent more than the normal (long period average) of 138.5 mm for this period.

The rains have been good in most parts, especially the South and North-West regions and also Maharashtra (barring Vidarbha), Chhattisgarh, Orissa and West Bengal. It is only Central India (Vidarbha, Madhya Pradesh, mainland Gujarat and eastern Rajasthan), Bihar and eastern Uttar Pradesh that has witnessed somewhat weak precipitation. But even that could change, with the IMD predicting enhanced rainfall activity in Vidarbha and Madhya Pradesh over the next week. In all, June has been a good month and this is reflected in a steady pick-up in kharif sowing operations.

June 30, 2007
Source: The Hindu Businessline

Monsoon spreads, rains 7% more in June

India's monsoon rains are above normal so far this month and have covered most parts of the country, likely spurring the sowing of crops such as rice, cotton and soybean.

Rainfall since June 1 has been 7 percent above the average recorded between 1941 and 1990, said M. Rajeevan, director at the India Meteorological Department's National Climate Centre.

The four-month rainy season is key to the health of India's $854 billion economy. A bigger harvest can help increase incomes among the 700 million Indians who live in the villages and spur demand for appliances. Higher farm output also reduces the need to import wheat, lentils and vegetable oils.

The country received an average 148.7 millimeters of rains between June 1 and 27, compared with 138.5 millimeters, a level considered normal for the period, the weather office said.

The bureau will update its April prediction of the four- month rainy season later today and provide a forecast for July, Rajeevan said. Rainfall in July makes up a third of the June to September season.

Rainfall in the monsoon season will be 95 percent of the average reported between 1941 and 1990, a level deemed normal, the weather office said April 19.

June 29, 2007
Source: The Economic Times

Organic farming of spices to start in Assam

The Spices Board of India plans to start organic cultivation of tumeric, ginger and chilli on 500 hectares (1,236 acres) jointly with local farmers in Assam.

“The board would have a 49 per cent stake in two companies each with local tribal farmers holding the rest,” a government statement said late on Sunday.

The move is to promote processing and exports of locally grown spices in a relatively less developed region of the country.

“Exports of all horticulture products would get air freight subsidy of 90 per cent to Kolkata and 50 per cent to New Delhi and Mumbai from the north east region,” Junior Commerce Minister Jairam Ramesh said in his statement.

World demand for organically produced foods is growing rapidly in countries like US, Japan, and Australia with an estimated share of about 1-1.5 per cent of the market, according to the data available on Spices Board Web site.

June 25, 2007
Source: The Economic Times

Swaminathan suggests special agri zone for Kuttanad

Eminent agricultural scientist Prof M S Swaminathan has suggested Kerala's rice bowl Kuttanad be made a Special Agricultural Zone (SAZ). Swaminathan made this recommendation in a report submitted to the state government for revival of agriculture and allied activities in Kuttanad by saving the water-logged farm zone from further environmental degradation.

In the draft report, submitted to Chief Minister V S Achuthanandan today, the M S Swaminathan Commission unveiled various schemes for Kuttanad at a total cost of Rs 1,750 crore.

An important recommendation of the report was converting vast stretches of paddy fields into smaller manageable units for intense paddy cultivation and enhancement of productivity.

June 25, 2007
Source: The Economic Times