Economy Trends: The Indian Rupee has pierced the psychological level of 40 per dollar

Perspectives Weekly reports on Indian economy and business

The Indian Rupee has pierced the psychological level of 40 per dollar, thanks to the massive capital inflows after the surprise rate cut of 50 basis points by the US Fed. Predictably, exporters are livid, and the RBI is worried about the impact of this gushing liquidity. However, the appreciating Rupee has also moderated domestic inflation to an extent, fuelling hopes about an easy credit policy and future growth.

- Chillibreeze Business Research Team

Government Policy & Infrastructure
Economy
Sector Specific – Telecom
Banking & Finance
International
Agriculture

Government policy & Infrastructure

Oil Ministry moots panel to monitor nomination blocks

The Ministry of Petroleum and Natural Gas has proposed constitution of a committee to monitor activities in blocks given on nomination basis to National Oil Companies (NOCs) — ONGC and Oil India Ltd (OIL).

This comes close on the heels of its modifying the monitoring mechanism for exploration and production activities of oil and gas blocks under the production sharing contract (PSC) regime.

Nomination blocks are those that have been awarded to the national oil companies before NELP and PSC regime.

Official sources said the Ministry has proposed that in line with the PSC regime, where petroleum operations are overseen by a management committee, for nomination blocks also such a committee may be constituted.

It has now been proposed that a management committee comprising Ministry representative; Director-General (DG), Directorate General of Hydrocarbons (DGH); and a director level representative from the NOCs concerned, be constituted for these blocks.

The Ministry has empowered the DGH to review and monitor the progress and performance of NOCs to the extent that optimal exploratory inputs are being provided in each of the petroleum exploratory licence (PEL) in accordance with international practice.

The guidelines also propose that the DGH may frame procedure for announcement of hydrocarbon discoveries and reporting of hydrocarbon similar to those for the PSC regime.

The DGH has also been given the responsibility of close monitoring of the development of hydrocarbon discoveries from these blocks. DGH has already been monitoring the reservoirs of major oil fields such as Mumbai High, Gujarat and Assam field of ONGC.

24th September 2007
Source: The Hindu Businessline

Fed cut to determine RBI policy: Reddy

The Reserve Bank of India (RBI) would consider last week's Fed rate cut as a “relevant input” in determining policy, Governor Y V Reddy told the BBC in an interview.
 
The Fed reduced its key rate for the first time since 2003 by a bigger-than-expected half point to 4.75 per cent on September 18. The RBI, which has raised borrowing costs nine times since October 2004 to curb inflation, left its overnight lending rate unchanged at 7.75 per cent at its last meeting on July 31.

“We are happy that inflation expectations are quite benign now. We are looking at a medium-term objective of 4-4.5 per cent, and ideally a rate toward 3 per cent,” Reddy said. The impact of a possible US economic slowdown following the sub-prime credit crisis may be less on India, compared with other emerging economies, according to Reddy.

24th September 2007
Source: The Business Standard

Plan panel for National Policy on Micro-finance

The Planning Commission has suggested the centre to come out with a national policy on micro-finance with a view to financially empower the BPL families and reduce overall poverty in the country.

In a report on strengthening the micro-finance sector, the plan panel pointed out that there is an urgent need for such a policy wherein efforts by various agencies and service providers are in unison and help evolve a coordinated strategy for a faster and smoother growth of the sector.

At present, both the government and the private agencies involved in micro-finance have devised their own individual strategies in furtherance of their goals. The absence of a comprehensive national level policy has hindered the orderly growth of the sector, the report said.

As such the government should prepare a model bill on money lending and direct state governments to enact similar legislations to facilitate the expansion of micro-finance. The centre could take inputs from the model bill prepared by a technical group for review of legislations on money lending, which was constituted by the reserve bank.

The bill should look at allowing micro-finance institutions (mfis) to mobilise savings from their members under a regulatory framework monitored by NABARD.

24th September 2007
Source: Economic Times

RBI wants a fix on bad loans in realty

The Reserve Bank of India (RBI) has kicked off an exercise to gauge the extent of bad loans of banks in the real estate segment. Ever since RBI started tightening rates from end-2004, which forced banks to raise home loan rates, there have been reports of rising defaults.

Some of the top local banks have reported a rise in the number of bad loans in the realty segment as higher monthly repayment schedules started biting many borrowers.

RBI now wants to have a fix on the level of bad loans in the banking industry, especially relating to home loans and commercial property. It has commissioned a survey on bad loans in both residential mortgages and commercial real estate loans. The regulator has sought details on standard advances in the sector from banks for three fiscals — 2001-02, 2002-03 and 2003-04. RBI wrote to some banks on September 14, directing them to respond to queries by September 28, bankers said.

Banks have been told to furnish details of bad loans generated during 2004-05, 2005-06 and 2006-07. The latest exercise seems to be a follow-up on the meeting that RBI had with banks during the second week of September to discuss the impact of the subprime crisis in the US and Europe on Indian banks.

During the last couple of years, RBI has clamped down excessive lending by banks to the real estate sector on fears of an asset price bubble.

22nd September 2007
Source: Business Standard

Govt to use IT for energy accounting, says Shinde

To meet the biggest challenge faced by the country’s power sector —aggregate technical and commercial (AT&C) losses of around 35 per cent — the government has decided to go high-tech

Low AT&C losses were a prerequisite for private sector investment and so the government had decided to make energy accounting systems automated, Power Minister Sushil Kumar Shinde said while inaugurating the India Electricity Conference and Exhibition .The aim is to make the systems more efficient, discourage power theft and bring down national AT&C losses to 15 per cent. These IT-enabled systems will keep tabs on the power being fed into the grid and its usage

21st September 2007
Source: Business Standard

Model Kandla SEZ struggles to get its due

Better facilities in upcoming SEZs may force companies to leave the zone.
 
The Kandla special economic zone (KSEZ), Asia’s first special economic zone (SEZ) and the country’s oldest, has not received the attention it deserves.
 
“KSEZ hasn’t got its due and hasn’t developed the way it should have been,” said Paras Jain, president, KSEZ Industries Association (KSEZIA). He added that this was despite the fact that the newer SEZs were following the KSEZ model.
 
Located about 9 km from Kandla port in Gujarat, KSEZ is spread over of 700 acres and houses about 150 units, including textiles, pharmaceuticals, chemicals, plastic recycling and ready-made garments. KSEZ rakes in over Rs 1,500 crore foreign exchange, besides giving employment to more than 10,000 people.
 
22nd September 2007
Source: Economic Times

States told to provide infrastructure support for more airports

The Union Ministry of Civil Aviation plans to have 500 airports across the country and has urged the State Governments for infrastructure support through public-private partnerships.

“There is a need to increase the number of airports in the country. We now have 80 operational airports compared to US where there are more than 5,000 airports. There should be at least 500 airports across India. Several airstrips in different parts of India are lying unused where we can develop smaller airports,” Mr Praful Patel, Union Minister for Civil Aviation, told newspersons on the sidelines of a ceremony to upgrade the Behala airstrip and inauguration of the Flying Institute of the Camellia Group.

According to him, Maharashtra, Karnataka, Gujarat, Chhattisgarh, Jharkhand, West Bengal and Uttar Pradesh have already approached the Ministry for development of airports in their States.

24th September 2007
Source: The Hindu Businessline

Private co to handle Delhi-Mumbai $90 bn corridor

The biggest ever infrastructure initiative in India, the $90-bn Delhi-Mumbai Industrial Corridor (DMIC) project, will be managed by a private company.

The Cabinet has said that DMIC Development Corporation will be a private entity, where the government will hold only 49% equity, allowing private infrastructure companies to participate in 51% equity of the company, sources close to the development told SundayET.

It will be the first such instance in India where such a large infrastructure project will be handled by a private company. According to the plan, the Central government would hold 26% of the equity of the company.

Six state governments, Uttar Pradesh, Maharashtra, Haryana, Rajasthan, Gujarat and Madhya Pradesh, through which the corridor will pass, would each hold 3.83% equity amounting to 23% stake in the company. The rest 51% will now be held by private Indian infrastructure companies.

24th September 2007
Source: Economic Times

DLF emerges highest bidder for Tidel-II

The Delhi-based real estate developer, DLF Ltd has emerged the highest bidder for setting up the Tidel-II, the second IT and ITES SEZ, in Chennai.

According to market sources, DLF’s bid was Rs 26.07 crore an acre for the 26-acre property at Taramani taking the total bid amount to about Rs 660 crore in the closed bids called by Tamil Nadu Industrial Development Corporation. DLF won the bids beating 13 firms of whom nine had pre-qualified to submit the price bids. The property is adjacent to American International School off the IT corridor. It is estimated that over 2.6 million sq ft of built up space would come up at the location.

It was considered an attractive investment as monthly IT space lease rents in the area were at around Rs 47-50 a sq ft. This could be well covered under the project with cost including the land cost estimated at about Rs 1,500 crore.

According to Mr Ramesh Nair, Local Director, Jones Lang LaSalle Meghraj, the project would firmly establish Chennai’s position as a hub for IT and ITES investments. Demand for IT space was bound to increase.

22nd September 2007
Source: The Hindu Businessline

Ports struggle to cope with economy's surge

A USD 12.4 billion plan to upgrade India's ports to keep pace with economic expansion promised much, but in three years there has been little progress beyond initial announcements and private firms are opting to build their own.

It takes India's state-run ports four times as long as rivals elsewhere in Asia to unload and reload container ships, and improvements are being held back by poor planning, red tape and bureaucracy.

Bids for an offshore container terminal for Mumbai Port, for example, were submitted in 2005 but the project only got the go-ahead in August.

India's ports are already at breaking point -- port officials say capacity needs to be increased by 130 percent to meet an expected doubling in shipments to 1.2 billion tonnes over the next five years -- and delays could put a brake on economic growth, which has averaged 8.6 per cent over the past three years.

Beyond the ports, road and rail systems are deficient. Poor links raise transport costs to 8-9 per cent of total shipping costs, compared with 3-4 per cent in developed countries. Shallow port drafts, antiquated coastal regulation laws, the complex process of getting expansion approval plus overlapping federal and state government responsibilities add to the difficulties.

The government knows it has a problem -- Finance Minister Palaniappan Chidambaram has said infrastructure spending needs to be raised sharply if economic growth of 9 percent is to be sustained. he National Maritime Development Programme listed 276 port projects in 2004, including more berths, modern dredging facilities and road and rail connections, but work has started on only a few.

To get round the delays, international and local firms are building their own port facilities -- sometimes adjacent to state-run ports, which could create even more problems if a number of ports compete for the same road and rail networks.

19th September 2007
Source: Indian Express

EGoM's price for K-G gas binding on all till 2012

The pricing formula approved by an empowered group of ministers (EGoM) for gas from Reliance Industries’ (RIL) block in the Krishna-Godavari basin will not be binding on all future gas from the country’s deep waters.

The EGoM decision has ensured that the country’s gas prices are in line with the market prices by approving a formula — which yields a price of $4.20 per million British thermal unit (mBtu) — for five years. “After the five-year period, a window for price escalation has been left open,” said a senior oil ministry official. Though this is being touted as a benchmark for all gas from the country’s deep waters, it is unlikely that any gas will flow from any of these blocks before 2012.

According to the EGoM’s decision, the price of $4.20 per million British thermal unit (mBtu) that the ministerial group approved for gas from the D6 block will be the ceiling price for the 32 mcmd gas from the RIL’s D6 block. For all additional gas from RIL’s K-G basin block, or gas produced by other companies, the $4.20 per mBtu will be the floor price

19th September 2007
Source: Business Standard

Board gives formal nod to 10 SEZs

The Board of Approval formally approved 10 special economic zones (SEZs) of the 19 it took up at a meeting here. So far, 386 SEZs have been granted formal approval, the last stage in the clearance process before an SEZ is notified. To date, 149 SEZs have been notified.

Among the zones granted formal approval are — Mukesh Ambani-promoted three information technology SEZs in Navi Mumbai and Adani group’s SEZ in Mundra. A Tata Consultancy Services SEZ in Gandhinagar has also been granted formal approval

The board also accorded in-principle approval to the SEZs that have not acquired land, including a Jindal Worldwide zone in Gujarat and an Arshhiya Technologies’ zone in Maharashtra. However, the board deferred proposals for four SEZs in Uttar Pradesh.

Meanwhile, the board is in the process of rejecting more than 100 proposals that have not got clearance from state governments. Pillai said the promoters of these SEZs could apply afresh. Pillai said over Rs 47,732 crore have been invested in 149 notified SEZs and the projects are providing direct employment to around 40,729 people.

19th September 2007
Source: Business Standard

Economy

Jobs in Indian insurance BPOs likely to double

The Indian insurance offshoring sector is expected to get a fillip in revenues and job opportunities in three years, according to a recent KPMG study.

The latest edition of its publication, ‘Frontiers in finance: For decision makers in financial services’, foresees revenues from offshore insurance BPO (business process outsourcing) services in India to rise to about $2 billion by 2010, from the current $790 million. Employment in this sector is also expected to more than double, from 41,600 to around a lakh over the same period.

“The Indian offshoring industry is particularly strong in the insurance sector,” avers Mr Sanjay Aggarwal, National Industry Director, Financial Services, KPMG.

This shift in the market dynamics is attributed to shrinking margins, higher claims disbursement and increasing competition, especially since 9/11.

To cash in on the growth potential, several niche providers with relevant expertise are encouraging insurance companies to outsource more value-added services, says Mr Pradeep Udhas, Global Head of Sourcing Advisory of KPMG. We may see, by 2010, a large number of Indian vendors evolving into ‘mature, end-to-end service providers, competing with multinational outsourcing companies’.

24th September 2007
Source: The Hindu Businessline

WHO works on cheaper R&D for India

Even as Indian pharmaceutical majors like Glenmark, Ranbaxy and Dr Reddys are hoping to come out with new drugs through in-house research and development (R&D), the World Health Organisation (WHO) is trying to find a cheaper R&D alternative through a collaboration involving public sector research firms and drug manufacturers from developing nations, including India.
 
The R&D plan, focused on diseases affecting poor nations, is expected to be ready by 2008 and may benefit Indian drug firms and contract research organisations in a big way.
 
The model, being discussed by the Inter-Governmental Working Group (IGWG) of the WHO, focuses on identifying potential drugs for diseases like malaria, TB and dengue and developing them with the assistance of public-funded research organisations.
 
The clinical trials will be carried out by collaborating with contract research organisations and manufacturing through partnerships with the drug firms that are interested in products that have a market value between $100 million and $500 million. Institutions like Indian Council of Medical Research (ICMR) will be the key link in such projects.
 
24th September 2007
Source: Business Standard

Re breaches 40 on Bernanke effect

The spot rupee breached the crucial barrier of 40 to a dollar following heavy inflows into the Indian equity market to close at a nine-year high of 39.88/89. Following the 50 basis point cut by the US Federal Reserve, the outlook for emerging markets, especially India, has turned bullish.

The rupee has been Asia’s best-performing currency this year, climbing 11 per cent against the dollar. In May 1998, the currency had closed at 39.22 to a dollar, which was actually depreciation from its 1991 levels of around 20.

The rupee appreciation was also aided by frantic selling of dollars by banks and exporters, who were caught off guard with the sharp appreciation.

21st September 2007
Source: Business Standard

Inflation drops to 3.32%

Inflation based on the wholesale-price-index dropped to 3.32% for the week ended September 8 as against 3.52% in the week before.

21st September 2007
Source: Business Standard

Sub-prime crisis may hit emerging economies

The US sub-prime mortgage turmoil could weigh heavily on the future stability of financial markets and is also likely to have a wider impact on global growth, with particular concerns centred on the prospects for emerging market economies, said Mr Rakesh Mohan, Deputy Governor, Reserve Bank of India.

“If credit conditions tighten, emerging market economies could become particularly vulnerable to reversals of capital flows with serious implications for their future prospects,” he said.

Referring to the situation in India, he recalled the RBI Governor, Dr Y.V. Reddy’s recent speech in Mexico, which said, “The recent gains in bringing down inflation and in stabilising inflation expectations should support the current expansionary phase of growth cycle.

21st September 2007
Source: The Hindu Businessline

Global warming may melt Indian economy

India may be a long way from melting polar ice caps, but its economy will be among the worst affect on account of climate change. According to a report by Lehman Brothers India’s GDP would dip by 5% for every two degree temperature rise.

Speaking to ET, John Llewellyn Lehman Brothers global economist, said, climate changes are likely to effect India in a host of ways. Both India and Bangladesh would face problems because of rising sea levels. Agricultural productivity would also be affected as monsoons will be short with intense bursts. Water supply would also suffer because of lesser snowfall in the Himalayas, which provide water for 40% of the world’s population.

The effect on GDP will be non-linear. Initially, every 2 degree rise in temperature would result in a 3% dip in global GDP. The next 2 degrees would do even more damage to the economy.

21st September 2007
Source: Economic Times

FDI inflow outpaces portfolio investment

Reversing the past trend, foreign direct investment (FDI) inflows into the country outpaced portfolio investment by almost $5.6 billion in 2006-07. The FDI inflows during the fiscal worked out to be $21.19 billion, while portfolio investments touched $15.62 billion, according to a report on the International Investment Position (IIP) of India released by the RBI on Thursday

21st September, 2007
Source: Economic Times

Sector Specific

Telecom

Wireless user base crosses 200mn

The total wireless subscribers in the country that inculdes users of GSM, CDMA & WLL(F) connections has crossed the 200 million mark at the end of August.

According to the Telecom Regulatory Authority of India (Trai)), the total wireless subscribers in the country stood at 201.29 million out of the 241.02 million telephone subscribers that were added in August.

According to Trai, 8.31 million subscribers have been added to the wireless segment in August while 8.06 million had subscribers joined the bandwagon in July. According to Trai, the tele-density in the country is now 21.2%, up from 20.52% in July. Tele-density means the number of people owning a telephone out of every 100 people.

22nd September 2007
Source: Economic Times

BSNL installs 40% of OFC network for defence forces

BSNL has completed nearly 40% of the work on optic fibre cable (OFC) network being set up for defence forces. The department of telecom (DoT) and the ministry of defence have decided to ink a memorandum of understanding (MoU) for phased vacation of spectrum frequencies by the forces, which will use the OFC network after closing microwave links

A top BSNL official told ET, “Around 30%-40% of the work has been completed and the network will be completed in the next six to eight months.” As per the draft MoU, defence forces will completely move to the new network by March 2009

Defence forces will take some time in migrating to the new network after its completion as it will be tested for its robustness and vacation will be a phased process, said sources.

21st September 2007
Source: Economic Times

DoT scan to identify promoters for telecom services

The department of telecom (DoT) is learnt to have constituted an agency consisting of members from different departments of the government to establish the actual identities of the promoters and shareholders behind the new applications for telecom services. However, when contacted over the issue, a top DoT official refused to confirm the development

The move comes as the exact shareholding pattern and the promoters behind some of the new applications with names such as Bycell, Swan, Cheetah, S Tel, Datacom Solutions as well as Alliance Infratech are not known. Over the last couple of weeks, over 160 applications have been filed for new universal access service licences and many more are expected to be filed.

Though these companies have provided the basic information in their license application, the agency will carry out a closer scrutiny to establish if any crossholding patterns exist. This is because, under the existing norms, a telecom company cannot hold more than 10% stake in a competing company. Another factor that could have lead to the DoT setting up this agency could be the demand from some of the existing operators themselves.

21st September 2007
Source: Economic Times

DoT seeks operators’ views on spectrum allocation, pricing

With the GSM-based operators issuing a legal notice to the Government expressing their concern over spectrum allocation, the Department of Telecom has thrown the ball back into the operator’s court by asking them to suggest a mechanism whereby, spectrum can be priced and allocated according to the demand.

DoT’s internal committee, set up for drafting policy for spectrum valuation and pricing, has issued a questionnaire to all the operators seeking response on how best the Government should value spectrum, considering numerous variables such as the spectrum bands involved, technology deployed, investments required, types of services offered and demanded and level of competition.

The move assumes significance in the light of the concerns expressed by GSM players that the Government and the telecom regulator were not taking into account the interest of existing players while deciding spectrum allocation policy.

19th September 2007
Source: The Hindu Businessline

Oil and Gas

RIL strikes oil in new KG Basin well

After striking gas in two exploration blocks, Reliance Industries Ltd (RIL) is understood to have found oil in its D4 block in the Krishna Godavari Basin.

The company has completed the technical testing in the block KG-DWN-98/1 (D4) on September 8 and is in the process of informing the Directorate General of Hydrocarbons (DGH).

The company officials, however, remained tight-lipped about their exploration activity and the subsequent success in the block.

According to sources, the well has flowed, and RIL is in the process of studying the exact quantum of find — whether it is marginal or as prolific as its D6 block.

21st September 2007
Source: The Hindu Businessline

Power

Govt re-invites bids for Tilaiya

Stung by the fallout of the Sasan ultra mega power project (UMPP)—where a qualified bidder was disqualified after putting in a winning bid—the government has decided to re-invite offers for the ultra mega project at Tilaiya in Jharkhand.

The existing RFQ (request for qualification) stands cancelled,” said a senior power ministry official. This has been done to accommodate the new tighter norms for eligibility introduced after the dispute over the Sasan project.

The government had already completed the first stage of the bidding process in April and declared 10 companies qualified bidders eligible to put in a price bid for the 4,000 Mw pithead-coal based project (see table). These bidders will have to apply again. Industry officials feel that the re-bidding would provide an opportunity to join the race again for those who lost out in the first round.

19th September 2007
Source: Business Standard

Banking & Finance

Banks split over rates: SBI against the rest

A pressure point is building in the world of Indian banks. The outcome will decide how much you get for deposits or pay for loans in the coming days. The interest rate uncertainty has split the bankers’ club into two: Big Daddy State Bank of India (SBI) versus the rest.

While most banks are inclined to cut interest rate on deposits, SBI, country’s largest bank in terms of assets and branches, is in no mood to do so. Having lost market share to aggressive private and foreign banks in the past few years, SBI now wants to regain lost ground at any cost. It is willing to pay a higher rate to mobilise more deposits and increase market share.

The pressure to cut rates may intensify, with the country’s biggest mortgage lender HDFC announcing its decision to cut lending rates this week. In fact, HDFC had plans to cut rates earlier in the year, but had to drop the idea after RBI hiked the cash reserve ratio.

24th September 2007
Source: Economic Times

Eight states to raise Rs 3,074 crore through bonds

The Reserve Bank said eight states, including Gujarat, Punjab and Jammu and Kashmir, would raise Rs 3,073.74 crore by auctioning 10-year government bonds. Through the auction, Punjab would raise Rs 1,000 crore, Tamil Nadu Rs 500 crore, Gujarat Rs 475 crore, Kerala Rs 435.99 crore, Himachal Pradesh Rs 300 crore, Jammu and Kashmir Rs 134.51 crore, Assam Rs 116.13 crore and Sikkim Rs 112.10 crore, the regulator said in a statement.

19th September2007
Source: Financial Express

International

Hong Kong sees scope for ties in IT, infrastructure development

Hong Kong sees scope for enhanced partnership with India in information technology and infrastructure development.

Information technology and infrastructure development are areas where both the countries could complement each other and by that extension also in China, Mr Alan Wong, Deputy Executive Director, Hong Kong Trade Development Council, said.

“India is well advanced in IT industry. China enjoys a little bit of cost factor in certain areas than Bangalore for example. We feel the IT industry could be complementary. Some of the work currently done in India could perhaps be outsourced through Hong Kong in China,” he said.

He also added that some of the exports of software could perhaps be modified in Hong Kong and then could get into the China market. “Hong Kong has some experience in infrastructure development, port management and development, energy development, logistic service development and development of shopping malls. These are the areas where we can be of service to Indian economy,” he added.

22nd September 2007
Source: The Hindu Businessline

Germany keen to help India in modernisation process

Germany has sought to enhance its economic ties with India by investing in the infrastructure field with its cross-sector expertise and modern technologies.

"We want to make use of the dynamism in the German-Indian economic relations and strengthen it further," said Mr Michael Glos, Federal Minister for Economics and Technology, while attending 16th session of German-Indian Economic Commission here last evening. The interests of German companies range from construction of express roads and power plants to the construction or reconstruction of ports and airports to setting up of a telecommunication network linking the entire subcontinent, he said.

The Indian Government and leading industrial associations - FICCI and CII - are also banking on further expansion of the German-Indian economic relations.

19th September 2007
Source: The Hindu Businessline

Agriculture

Experts see vast scope for organic farming

Speakers at an international seminar on organic products stressed the need for more efforts from the Centre and State governments for the promotion of organic culture in the country.

Organic farming is an excellent tool for enhancing the livelihoods of small and marginal farmers, who are resource poor and pursue agriculture in marginal lands not adequately rain-fed, Mr Gerald A. Hermann, Director of Organic Services, said at the 2-day seminar organised by Organic Services and Solutions India Pvt Ltd, a joint venture with Organic Services GmbH, Germany.

He pointed out that organic agriculture would be the most sustainable alternative to overcome poverty and bring about sustainable rural development.

24th September 2007
Source: The Hindu Businessline

Floods wreak havoc in Barak valley tea estates

Floods in Assam have devastated a large number of tea estates in the State’s Barak Valley. An estimated 20 per cent of the total of 103 tea estates in the valley are believed to be completely under waters. The damage caused to road and rail links has thrown up several problems. Essential items such as coal, petroleum products and other fuels cannot be transported to the affected gardens.

Particularly hit are those tea gardens which are located in remote areas as the supply line is totally cut off. Disruption in communication system caused by incessant rains has made the collection of information from these gardens even more difficult. Quick estimation of loss is not possible as one has to depend on the thin trickle of information.

The long-term effect of the floods, said Mr Shashank Prashad, President of Tea Association of India, too will be substantial because of the destruction of a large number of young as well as matured tea bushes. The damage to tea factories and buildings in the gardens too has been a matter of concern.

22nd September 2007
Source: The Hindu Businessline

Wheat bull run may affect global oilseed acreage

Wheat is having a major bull run in the market and for over 10 years it may continue to command high prices, said a top industry official, fearing that wheat may also globally affect the oilseed acreage.

Speaking at the AGM of the Solvent Extractor’s Association of India (SEAI) at Goa on Friday, Dorab Mistry said with wheat production so profitable and remunerative, one can have doubts whether there will be expansion in the oilseed acreage anywhere in the world next year. Mr Mistry added that currently, the per unit value of both soybean and wheat is almost equal while the yield in case of wheat is 2.5 times more than soybean. “Farmers are thus keen to grow wheat than soybean,” Mr Mistry said.

He said that for India, there is no option but to import edible oil and the country needs to focus on increasing the productivity through the use of genetically-modified seeds.

22nd September 2007
Source: The Hindu Businessline

Summer crops' output up with good rains

The government has estimated the total food grain production in the current summer season at 112.24 million. This marks an increase by 1.72 million over that in the previous year.

Maize production is estimated at 13.07 million tonne, that of soybean at 9.04 million tonne, that of cotton at 22.94 million bales (of 170 kg each) and that of sugarcane at 345.62 million tonne.Rice production is estimated at 80.15 million tonne as against 80.11 tonne in the previous year’s summer. The output of the coarse cereal, jowar is likely to dip from 3.68 million in previous year’s summer to 3.60 million tonne. However the jowar crop is also grown in winter and hence there is a scope for further production.

20th September 2007
Source: Financial Express

Wheat stocks in country adequate: Sharad Pawar

Agriculture Minister Sharad Pawar said on Wednesday the country had enough wheat to meet domestic demand and was not planning fresh imports immediately.

I think we will be able to manage. We have decided to go slow on imports and have no immediate plans to import," Pawar told reporters. "We are also watching global wheat prices," he added

19th September 2007
Source: Economic Times

India to exceed targets for oilseeds, grain output

India's output of summer-sown oilseeds and grains is expected to exceed targets set by the government, Farm Secretary PK Mishra told reporters on Tuesday

The government had set a target of 18.5 million tonnes of oilseeds production and 114.2 million tonnes of grains output for summer sown crops, which are planted during the monsoon from June and harvested from October.

19th September 2007
Source: Economic Times