Indian Economy - News & Updates - Archive

[Janbaz]

Indian eyes Scottish whisky giant

An Indian businessman could be the owner of one of the UK's most famous whisky firms within two weeks, according to press reports.
Vijay Mallya has been linked with Glasgow-based Whyte & Mackay since last year but is set to clinch a deal.

Mr Mallya's UB Group is reportedly scrutinising the firm's books ahead of a £550m takeover.

Whyte & Mackay's brands include the Jura and Dalmore single malt whiskies, Vladivar Vodka and Glayva liqueur.

Mr Mallya also owns the Kingfisher beer labels, an airline and a fashion label.

Dominates

Whyte & Mackay said in October 2006 that it had received an unsolicited offer from UB Group.

Now newspaper reports say a deal is believed to have been agreed and that "the formalities would be completed within a fortnight".

P.A. Murali, chief financial officer of UB Spirits confirmed that the process of looking at Whyte & Mackay's books, known as due diligence, is underway.

But he said it would be "speculative" to comment on when an agreement would be signed.

A statement from Whyte & Mackay's chairman and chief executive said "We remain the owners of Whyte & Mackay and are still considering all of our options. The value of the business increases all the time."

UB Group dominates the Indian spirits market, which is the world's largest for whisky.

But Scotch whisky has only a 1% foothold in the Indian market, because of the tariffs imposed by national and state governments there.

BBC News.
http://news.bbc.co.uk/2/hi/business/6381339.stm

 

[Neo]

India sets out to become microchip manufacturing hub

BANGALORE: India is to offer microchip makers incentives including tax breaks and subsidies to set up factories, a policy the industry welcomed on Friday to lure global giants and turn the country into a chip manufacturing hub.

“The policy will go a long way in making India an attractive destination for global semiconductor and hi-tech companies,” said Poornima Shenoy, president of the Bangalore-based India Semiconductor Association.

The blueprint, unveiled in New Delhi on Thursday by Information Technology and Communications Minister Dayanidhi Maran who estimated it will attract up to nine billion dollars of investment, will spur rapid growth of India’s entire electronics industry, said Shenoy.

She estimated India’s electronics market will expand to $363 billion by 2015, from $28 billion last year. Demand for chips that go into products ranging from mobile phones, liquid crystal displays and smart cards to personal computers and automobiles will reach $36 billion by 2015, a compelling case for chip manufacturers to set up factories in the country to tap the local market, Shenoy said.

“There are at least two major multinationals looking to invest in India as well as local manufacturers,” she said.

“We see investment not just in chip manufacturing but also in the entire electronics eco-system.” The policy is aimed at turning the country from a designer of chips into a manufacturing base in competition with the likes of China, Singapore, and Taiwan that have long promoted the industry. “This will pave the way for high-end capital intensive IT manufacturing,” said Vinnie Mehta, executive director of the Manufacturers Association of Information Technology, in a statement.

The policy will enable the “industry to graduate from the current assembly-oriented operations to deep and competitive manufacturing capabilities.” Globally, the microchip industry is worth an annual $240 billion, according to the India Semiconductor Association. India has 11 non-commercial chip fabrication units, focussed on defence and aerospace.

India is already a software powerhouse, with exports set to climb 32 per cent in the year ending March to $32 billion. But the country’s hi-tech manufacturing hasn’t kept pace. Microchips “form the heart of hardware and soul of software in any electronic system,” said Rajendra Kumar Khare, an electrical and electronics engineer who heads technology start-up firm Indus edge. “Cultivation of a robust and scalable semiconductor industry is the key to making the great electron revolution happen,” he added. Besides chipmakers, manufacturers of such products as liquid crystal and plasma display panels, storage devices, solar cells and photo voltaics will be eligible for the incentives, valid for the first 10 years of operations.

As part of the policy to push microchip manufacturing, the government also promised interest-free loans for subsidising capital expenditure incurred in setting up chip manufacturing units.

The incentives will be valid for the first 10 years of operations. The incentives may prove to be a magnet for giants such as Intel, AMD, Infineon, IBM and Toshiba, according to the Economic Times.

Intel has already invested $1.7 billion in India, where it is engaged mainly in research and development and has no manufacturing base.

http://www.thenews.com.pk/daily_detail.asp?id=44184

 

[Contrarian]

That is good news. The government is VERY VERY keen to have semiconductor/chip fab(rication) plants here in India. They are in the process of setting up a fab city.

AMD has a tie up with another company run by an NRI and they have announced to make a chip fab plant in India. I hope this succeeds. Semiconductor fab plants may well easily turn out to be another IT style success story helping the economy IMMENSELY, as its labour intensive as well compared to IT services.

 

[Contrarian]

Nath braves PMO's caution on retailAdd to Clippings

NEW DELHI: The policy spat in the government over allowing large players in the retailing arena has escalated, with the commerce and industry ministry digging in its heels over the move even in the face of a fresh caution sign hoisted by PMO.

"There is no review of cash-and-carry (wholesale) business," commerce minister Kamal Nath said after meeting Wal-Mart Stores Inc vice-chairman Mike Duke and its Indian partner, Bharti Group chairman Sunil Mittal.

Nath was responding to a flurry of queries after a fortuitous leak of a PMO letter to the department of industrial policy and promotion (DIPP), reiterating concerns about the repercussions of the entry into retail of transnational supermarkets and large Indian corporate houses on small-scale retailers, vendors, farmers, consumers and on prices.

The letter stressed that the February 7 response from the industry department had failed to address the issues raised by Congress chief Sonia Gandhi.

Importantly, concerns about the proposed Wal-Mart-Bharti tie-up have been widely seen as the trigger for the sudden resistance to a policy measure which has been in place for years. Sonia, in her letter in early January, had expressly mentioned Wal-Mart’s plans for India.
http://timesofindia.indiatimes.com/...MOs_caution_on_retail/articleshow/1670324.cms

 

[Contrarian]

Nissan, Renault, M&M to make cars in Chennai

CHENNAI: In a significant development, Nissan, Renault and Mahindra & Mahindra have zeroed in on Chennai for setting up a four lakh cars a year plant near Chennai.

The three companies and the state of Tamil Nadu will make an announcement on the project on Monday.

According to sources, the plant will have a total capacity to make eight lakh cars a years in two phases.

The first phase will see half of that capacity and cars are expected to roll out by end 2008. The quantum of investment and the models that are planned were not immediately available, while it is believed that the no-frills Renault Logan will be the first of the cars to be rolled out.

The factory is likely to build derivatives of Renault's no-frills Logan car. A decision on other products, including those under the Nissan badge, will be made later, the sources said.

A Reuters report said, “The three automakers will jointly own the facility in Chennai, with initial output capacity of four lakh units.....M&M will own 50% while the other partners will hold 25% each.” It is also learnt that it would be fully integrated plant which will house all facets of car making, including transmission and power trains.

Nissan is a latecomer to India, where passenger car sales are projected to double to two million units by 2010. The automaker sells only the imported X-Trail SUV in Asia's fourth-biggest economy.

Besides this plant, Nissan already has a MoU with Maruti wherein the latter will build 50,000 cars under Nissan badge primarily for the European market.

 

[Contrarian]

41% of urban Indians borrow from friends

MUMBAI: If you thought urban Indians borrowed money for various needs primarily from financial institutions, think again.

According to a survey conducted by Max New York Life Insurance and the National Council for Applied Economic Research (NCAER), more urban households borrow money from friends and relatives compared to their rural counterparts.

The survey findings, with a sample size of 63,000 households in India, state that 41% urban Indians borrow from friends and relatives to meet social expenses while 45% borrow to pay for medical treatment.

This is a far cry from the assumption that financial services have deep penetration in urban cities. In fact, in recent times most banks and insurance companies have turned their attention to tier II and tier III centres in a bid to build business there.

In comparison, only 38% rural households depend on friends and relatives as a source of funds for meeting expenses for social functions. The trend of borrowing from unorganised moneylenders, however, is far higher in rural India (20.7%) against 7.4% of urban households, the survey revealed.

The survey also highlights that there are high levels of awareness about insurance72.9% of rural India is aware of insurance as a means of investment compared to 90.2% of urban Indian households.

However, despite this level of awareness, only 38.11% of urban Indian households have some kind of insurance protection while 18.59% of rural households have bought insurance.

There is also a huge difference in the average household incomes per annum between the people who buy insurance and those who dont. In urban households, while the average household income per annum of people who have insurance is Rs 1,33,832, this falls to Rs 72,424 in households that dont own any insurance. The same trend is seen in rural households as well.

 

[Contrarian]

PMO wants commerce ministry to speed up impact assessment

NEW DELHI: Commerce minister Kamal Nath stressed that FDI is only allowed in single brand retailing and there was no proposal to extend this to stores dealing in more than one brand. But there was no doubting the insistence to carry the process forward.

The minister appeared to make light of PMO's suggestion to commission a study "by a reputed research institution" on the possible impact.

"There are concerns and many have written to us. It (study) is an ongoing exercise... We have a huge expansion taking place in retail sector. So the study is going on," he said.

Further, Nath stood by his ministry's earlier stand that it was not possible for his department to study the impact of the Bharti-Wal-Mart tie-up since they had not submitted an application to set up shop.

In response to Sonia's letter, the industry department had informed the PMO on February 7 that Bharti's proposal - which involves setting up a 50:50 joint venture with Wal-Mart providing infrastructure and technology for the Indian company's retail venture - did not need prior government approval.

The new-found concern over FDI in retail and SEZs are emblematic of the worry that seems to be fast gripping the government that it is not being seen as having lived up to its "Congress ka haath, aam aadmi ke saath" plank.

Protests against the twin measures have got fused with indignation over the failure to stem farmer suicides, as well as discontent over rising prices, triggering fears in Congress that they may have to deal with a combustible cocktail of angst.

Nath, however, took care to dispel the perception that he was out of sync with the fresh priorities of the governemnt. Saying that interests of small retailers was paramount, Nath said the government did not intend to review the FDI norms for wholesale cash-and-carry business. "Small retailers must be protected," he said.

Congress contested the suggestion that the party leadership was stapling all the blame on one ministry when there was a consensus on allowing limited FDI in retail. "To exhort somebody to get things done does not necessarily mean fault finding," said party spokesperson Abhishek Manu Singhvi.

PMO's letter to the industry department, however, made it clear that PM Manmohan Singh was not satisfied with the response from Nath's ministry.

"After perusal of the comments sent by DIPP, the PM has observed that the president, AICC, had raised a specific issue in her letter, referring to the need for a careful study of the likely impact of the entry into retail trade of transnational supermarkets on the livelihood security of small-scale retailers," the letter said.

"The ToRs (terms of reference) should lead to results which could be a guide to policy-making in this sector. The timeframe for completion of the study should be reasonable so that it can feed into policy making in the near future," the letter said.

 

[Contrarian]

FM may slash import duty on edible oils, metals

NEW DELHI: The government appears set to slash import duty on base metals, soya oil and palm oil in the budget in a bid to tame inflation, which dipped marginally to 6.63% during the week-ended February 10.

With pulses, wheat and onions raising political uproar, the government is also likely to extend the ban on wheat and pulses export till March 2008, besides allowing zero duty import of the commodities as part of the strategy to augment domestic supply and check further price rise.

Sources said the move to extend the ban on export of pulses and allowing zero duty import of wheat was discussed by the cabinet committee on prices, while a reduction in the import duty on soya oil by 10% and that on crude and refined palm oil by 5% each has been endorsed by a committee of secretaries (CoS) earlier this month.

The government is also likely to import 2 lakh tonnes of pulses to augment supplies. Between April and December 2006, India, which is a net importer of pulses, has already imported 16.6 lakh tonnes of pulses estimated to be worth Rs 2,600 crore, 19% higher than the 14.05 lakh tonnes imported during the corresponding period last year.

The CoS has also recommended canalising the export of maize for six months, besides initiating more steps to check the export of onions since there is large demand from Pakistan, Sri Lanka and Bangaldesh. According to government's estimates, onion exports are expected to rise nearly 50% to 11.5 lakh tonnes and steps like more stringent norms for a government clearance to export consignments are in the offing.

But it is not just household consumption items which has got the government worried. The CoS has also asked the petroleum ministry to look into the steep increase in prices of naphtha, furnace oil and aviation fuel, which the government fears is resulting in higher cost for the manufacturing sector.

In recent weeks, manufactured goods prices has emerged as the major driver of inflation as companies are unable to absorb any more increase in input costs and have passed it on to consumers.

The steps, which are expected in the budget, are in addition to the host of duty cuts which have been announced in last few weeks.

But what has got government worried is the limited impact that the measures have had on inflation. At 6.63%, inflation was only marginally lower than last week's 6.73%, but was much higher than the 3.81% registered during the corresponding period last year.

The steps on pulses and wheat are the result of the government's estimates that the domestic crop may not be sufficient to meet local demand and the only way out was to free imports to keep prices under control.

 

[Contrarian]

Service tax net to cover lawyers, nursing homes

MUMBAI: The finance ministry is likely to cast the service tax net wider to capture lawyers, nursing homes and amusement parks when he presents the budget on February 28.

FM P Chidambaram is also likely to redefine certain services to plug loopholes through which some service providers such as bus fleet owners were escaping without paying tax, sources told TOI.

They said the minister is likely to add more number of services to the list of taxable ones than he did last year. In his previous budget, Chidambaram had added 15 new services and also withdrawn exemption to six more. Now altogether 98 services are taxed at the rate of 12.2%.

The Finance Bill is likely to propose amendments to expand the scope of some services such as tour operators, minor port services and certain banking and financial services.

Currently, for example, the definition of a tour operator service is borrowed from that of a tourist vehicle under the Motor Vehicles Act, 1888, which calls a tourist vehicle a 'contract carriage'.

That has brought most tour operators under the tax net, but allowed bus owners who run only their fleet of vehicles for touring to avoid paying it.

The service tax department wants this loophole to be plugged by inserting an explanation to include all 'contract carriage' permit holders under the tour operator definition in the Finance Act.

However, such a change could also compel state-owned transport corporations to pay the tax. State transport corporations may then be forced to take the unpopular decision of raising fares.

At minor ports where ships cannot dock, cargo is unloaded to barges to transfer them to the terminal. The barge operators do not pay tax on the revenue from transporting goods from ships to the terminal arguing that it is movement by sea and should be considered freight.

"As water transportation is not covered under service tax, this leg of service automatically is taken out of the ambit," said Vikram Nankani, partner with Mumbai-based Economic Laws Practice.

The tax department now wants the government to include all minor port services to be taxed.

The scope of services that are called "transfer of information and data processing" may also be widened.

This is in addition to some amendments to be made on service tax on depository participants, consideration earned by the contractors appointed for toll collection, liability of money changers and underwriting services.

Service tax has become one of the major money spinners for the government. In 2006-07, service tax collections are expected to touch Rs 40,000 crore against the targeted Rs 34,500 crore.

In 2005-06, the centre had collected over Rs 21,000 crore against its target of Rs 17,500 crore.

 

[Contrarian]

Trans fat on food labels may become mandatory

MUMBAI: India has woken up to the heart-risk of trans fat, found in fast food products such as burgers, dairy products, cakes, biscuits, cookies, chips and namkeens made with hydrogenated oil. Trans fat is an unhealthy fat that forms when liquid oils are converted into solid fats, using hydrogen.

According to a source in the ministry of health and family welfare, from August, manufacturers will have to compulsorily mention the the presence, if any, and level of trans fat and saturated fat (also, unhealthy for the heart) on product labels. The US made such a listing mandatory from January 2006.

Currently, food products sold in India have to mention only ingredients and preservatives used on labels, says Amitabh Chandra, commissioner at Maharashtra Food and Drug Administration.

Other than lack of awareness about trans fat content in products, consumers face an additional handicap-absence of information on the subject on government websites.

Says Pritee Shah of Ahmedabad's Consumer Education & Research Centre (CERC), "In the US, everything (information) is available on the FDA website. Here, there is nothing. There should be credible information from the government's side."

The USFDA site, for instance, advises that though restaurants do not have to provide the fat content in prepared food, customers can ask about the kind of oil used in cooking.

The biggest source of trans fat in India, says a source at Hyderabad's National Institute of Nutrition (NIN), is vanaspati, which is a hydrogenated fat.

But so far, the institute's studies on vanaspati have been conducted only on animals. NIN is a part of the Indian Council of Medical Research and recognised by the World Health Organisation as a centre for advanced training in nutrition.

On the ministry of health's instructions, the institute will soon conduct a regionwise study on trans fat content in vanaspati, throughout the country. "The issue is being discussed with the ministry,"says the source.

In a move that highlights the issue's seriousness, CERC has also independently started testing for trans fat content in processed food. "The study will take a minimum of three-four months,"says Shah.

The NIN source says trans fat content in vanaspati manufactured by reputed companies is being controlled below the acceptable 10% of its total fatty acids content.

In local products, though, the content varies from 15% to as high as 40%. This happens is because, "for preparing vanaspati, manufacturers use cheap and unconventional oils found in bulk such as cottonseed oil and sometimes rice bran."

This is where fixing a maximum limit for trans fat content gains its relevance, as, at present, there are no regulations on the subject.

A source, though, says it may be a couple of years before the limits are actually fixed.

 

[Contrarian]

Bharti, Wal-Mart finalise retail JV

NEW DELHI: Despite the controversy on retail, Bharti Enterprises announced that its proposed joint venture with Wal-Mart was on track and well within the country's regulatory framework.

"The JV on retail has been finalised and legal agreements are being worked out... We expect to sign an agreement in the coming weeks," Bharti Enterprises chairman Sunil Bharti Mittal said after meeting planning commission deputy chairman Montek Singh Ahluwalia, along with visiting Wal-Mart vice chairman Mike Duke.

Significantly, minister of commerce and industry Kamal Nath said after meeting Duke on Friday that there was no plan to allow foreign direct investment in multi-brand retailing.

He added there would no review of existing FDI policy regarding wholesale cash-and-carry sectors.

The development comes close on the heels of UPA chairperson Sonia Gandhi writing to the PM expressing concern about "the Wal-Mart effect" on domestic retailers, and the need to study the impact of transnational supermarkets on the "livelihood security" of small-store owners.

Foreign direct investment (FDI) in multi-brand retail is not allowed as per government policy, but 100% overseas investment is allowed in cash-and-carry (wholesale) business.

Mittal added Bharti's JV agreement with Wal-Mart would be for cash-and-carry and back-end linkages and asserted that it was within policy guidelines.

"Wal-Mart is going to apply for a joint venture, only in the area where policy exists," he said. Bharti, which recently announced an investment of $2.5 billion in the front-end of retail operations, announced that it would partner the small store-owners through a franchise route.

He said: "Bharti Retail will not get a preferential treatment from the JV, as it will supply to the kirana stores".

Moreover, after meeting Wal-mart executives, Union agriculture minister, Sharad Pawar said the expertise of Wal-Mart in the area of supply chain will definitely be useful for Bharti to set up their own network.

Pawar said, on the face of it, it looked like that under the contract with Bharti, farmers would be able to sell their produce at a better remunerative price.

Replying to a query, Pawar made it clear that differences among political parties were limited to permitting FDI in the retail sector and not in outsourcing of agricultural produce.

 

[Contrarian]

Black Friday at Dalal Street

NEW DELHI: Ahead of the budget next week, for the fifth straight day in running, the markets slid without support from any major quarter. It was a free fall in most counters on the back of sustained selling pressure.

Sensex nosedived below 13,600 and Nifty slipped to 3950 mark in intra-day trade. All the BSE sector indices closed in the red. Cement, pharma and banking stocks were the worst hit.

Most market analysts attributed this fall to pre-budget jitters, inflation concerns, stretched valuations, rising interest rates and profit booking across the bourses and equities. UPA Government’s assurance that more steps would be taken to tackle inflation and price rise had no positive impact on the markets.

President’s address to both houses of parliament has hinted at Finance Minister P.Chidambaram announcing these measures in the union budget later next week.

Sensex finally closed 388.78 points below at 13,632.53. It had opened firm, at 14,071.27 but began its southward journey immediately thereafter. The benchmark index kept on touching one low after another, 13, 568.08 being the last one.

The S&P CNX Nifty lost 101.05 points to 3,938.95. The total turnover on BSE amounted to Rs 4039 crore.

The market-breadth, which reflects the overall health of the broader market, was very weak. There were 5.4 losers for every gainer on BSE. A host of stocks from the small-cap and mid-cap space were being heavily sold. Against 2,207 shares declining on BSE, just 411 advanced. Only 36 scrips remained unchanged.

Among the 30-Sensex pack, only 1 advanced while the rest declined. In NSE, there were 102 advances and 944 declines.

Among the sectoral indices, banking stocks plunged 3.42 per cent, FMCG stocks plunged 3.35 per cent, telecom stocks fell 3.22 per cent and pharma stocks were down 2.65 per cent.

The major market movers on NSE were Gail which gained 1.80 per cent to Rs 277; Tata Steel rose 0.95 per cent to Rs 459, Suzlon Energy advanced 0.75 per cent to Rs 1,048, Reliance rose 0.53 per cent to Rs 1,419.50 and GSK Pharma rose 0.53 per cent to Rs 1,165.

 

[Contrarian]

Inflation declines to 6.63 per cent

NEW DELHI: Tight monetary and fiscal measures taken by the Government put some brake on rising prices as inflation declined to 6.63 per cent during the week ended February 10 from 6.73 a week earlier, though it was still much higher than the RBI's projection for this fiscal.

Lower prices of food products, including vegetables, egg, mutton, poultry chicken, condiments, spices, fish-inland, sooji, gur, atta , sugar and some manufactured products led the fall in inflation, which still was the second highest this fiscal.

Wholesale prices-based inflation stood at 3.81 per cent a year ago.

The Government drew flak from various quarters as inflation continued to rise over the past many weeks despite tight monetary polices and concessionary fiscal measures.

The Government, in fact, has decided to set up a special monitoring cell to keep a daily watch on price situation and provide support to states. Prime Minister Manmohan Singh had on Wednesday asked states to approach the cell for removing bottlenecks in the availability of essential commodities.

This comes in the wake of Congress Working Committee expressing displeasure over the rising prices.

Many of the measures taken like hiking Cash Reserve Ratio by the Reserve Bank and cut in petroleum prices would be reflected in inflation data to be released in the weeks to come, analysts said.

Also, pressure on commodities like wheat, pulses would ease with the arrival of fresh crop, Finance Minister P Chidambaram had said on Thursday.

 

[Contrarian]

Piped gas could be reality soon in Karnataka


BANGALORE: Bangalore and a number of towns in Karnataka may soon get piped gas supplied directly to their homes if Mukesh Ambani were to have his way. The state government has just given the green signal to Reliance Industries for investments worth Rs 14,000 crore in Karnataka.

Of this, Rs 12,000 crore is for the gas project by Reliance Industries (RIL) and another, worth Rs 2,000 crore, is for the retail by the Reliance Retail Ltd, the retail arm of RIL. Industries minister Katta Subramanya Naidu made the announcement after a meeting of the high-level clearance committee, chaired by CM H D Kumaraswamy, on Friday.

The committee has cleared 30 projects, worth a total investment of Rs 28,202.05 crore. The new projects are expected to generate employment for 1.43 lakh people in the state. Naidu said RIL's investment will be for transportation and distribution of natural gas that will cover Bangalore and 60 towns and cities across 27 districts in the state.

The project proposes to explore the concept of straight-to-home supply or piped supply of natural gas. This project alone is expected to generate close to 46,000 jobs. This is also likely to bring down the cost of cooking gas considerably.

Reliance Retail will establish an integrated agricultural retail business chain consisting of three food processing and distribution centres, 51 retail outlets or hypermarkets and 75 rural business hubs in the state. This venture is worth Rs 2,000 crore and is expected to create employment opportunities for 30,000 people.

Other manufacturing sector projects will see fresh investments to the tune of Rs 7,678.45 crore with jobs for close to 6,750 people. Naidu said,"We are seeing a new trend in the manufacturing sector. It is slowly improving in terms of development and is now attracting more investments."

Investments of Rs 1,379.5 crore in Special Economic Zones were also approved. An electronics hardware SEZ has been approved near Mysore with an investment of Rs 445 crore. The minister also said since Feb 2006, the government has approved investment proposals worth Rs 1,07,548 crore.
-----------------------------------

I did not know that Karnatake did not have piped gas. The service is available in Delhi.

 

[Contrarian]

Strategies to propel growth

HUBLI: The City Development Strategy draft report, commissioned by HDMC, has recommended setting up of a Greater Hubli Dharwad Development Authority to draw up an integrated plan for the twin cities and surrounding towns as one urban metropolitan sprawl in the coming decades.

A consortium of Administrative Staff College of India and Ernst & Young has prepared the report to address the longterm infrastructure and service delivery gaps in Hubli-Dharwad to make the second largest city in the state well-governed, livable, competitive and urban poorfriendly.

Washington-based Cities Alliance, a World Bank affiliate, has funded the preparation of the report. The exercise has also the support of City Managers Association of Karnataka. It will form the basis for the City Development Plan required to get central assistance under Jawaharlal Nehru National Urban Renewal Mission.

The report will be placed for discussion before the polling booth-level citizen committees formed by HDMC from next month to prioritise strategies suggested in it to arrive at a common development vision at the ward level upwards for the entire corporation area for the next 5 to 20 years.

It noted that the existing railway line from Dharwad to Hubli and further towards Kundgol, and also the planned Hubli-Ankola new line up to Kalghatgi, will aid the emergence of the suburban taluk towns Kundgol and Kalghatgi as integral part of the Greater Hubli Dharwad Urban Area.

Similarly, a large number of major district roads as well as village roads on the outskirts of Hubli-Dharwad have, in the recent past, witnessed considerable improvement under Central Road Fund and NABARD grants to PWD and Pradhan Mantri Gram Sadak Yojna grants to zilla panchayats.

Both these factors are most likely to spur the urban sprawl along these roads and rail route towns. The report suggested that HDMC should insist on early completion of the first phase of the Hubli-Ankola line up to Kalghatgi for the railways to become a viable mode of urban transport within the proposed metro area.

The report also recommended designating district and village roads in the metro area as urban roads and creation of a unified transport authority to ensure institutional coordination among the railway, PWD, panchayat and roadways authorities for development of link roads and bus service facilities to and from the existing railway stations up to the emerging towns.