Indian Economy - News & Updates - Archive

[Bushroda]

India: retail institutes to create 2.2 m jobs
FreshPlaza, Netherlands
June 1, 2007

Manpower crunch in the retail sector has led to a massive jump in training institutes for the retail sector from just 6, two years ago, to 50 today. More importantly, some of the most prominent names in the business of education have jumped in with their own courses. According to industry estimates, retail alone will throw up 2.2 million jobs by 2011. Nearly 80% of these would be front-end jobs.

Presently there are around 50 institutes offering post-graduate courses in the country, including colleges like the Narsee Munjee Institute of Management, SP Jain Institute of Management and Research, Birla Institute of technology and recently NIFT as well as the National Institute of Design who have initiated PG courses in retail.

According to Gibson Vedamani, CEO, Retailers Association of India (Rai), at least 50 more institutes are expected to come up in another 2 years with specific retail programmes.

Rai itself has initiated PG as well as certificate courses in retail with over 12 institutes and 24 associates across the country in association with the Maharashtra government, Indira Gandhi National Open University and management schools like Mudra Institute of Communications.

National Retail Federation of US, a counterpart of the Rai, too offers retail courses With organised retail set to grow exponentially, new as well as established players are facing talent crunch given the mismatch between the available supply and growing demand, pressurised by entry of giants like Reliance, AV Birla, Bharti and Wadias who are spiralling retail salaries. Established retailers like RPG and The future group have started their retail institutes, given the rates of attrition in the industry.

Most certificate programmes are for front-end jobs requiring interaction with customers, support services, shop assistants for which there is no formal training imparted until now.

However, many of these courses not only impart these training but are also expected to help non-English speaking population which constitutes a large portion of the semi-skilled unemployed population of the country.

 

[Bushroda]

India's GDP growth gets a new engine

The importance of domestic consumption in the Indian economy has been slowly diminishing, with the slack being taken over by capital expenditure

Domestic consumption demand has always been the mainstay of the Indian economy. In recent years, however, its importance has been slowly diminishing, with the slack being taken over by capital expenditure. Private final consumption expenditure (PFCE, the main measure of domestic demand in the economy), which formed 60.3% of the gross domestic product (GDP) at market prices in 2004-05, now accounts for only 57.2%. The slack has been taken up by gross fixed capital formation (GFCF, the money spent on adding to the nation’s stock of capital, such as new factories, new machinery, new buildings). GFCF accounted for 27.9% of GDP at market prices in FY07, up from 25.3% in 2004-05.

In fact, of the growth in GDP during FY07, GFCF contributed Rs1,10,812 crore, more than the Rs1,03,672 crore contributed by PFCE. In FY07, capital expenditure replaced private consumption expenditure as the driver of GDP growth. That’s not surprising, considering that India Inc. has started increasing capacity and that the government has stepped up its investments in infrastructure.

The slowdown in PFCE growth is an indicator that higher interest rates are having an impact, a conclusion buttressed by the clear signs of a slowdown in retail credit and in sectors such as two-wheelers. PFCE growth was 6.2% in FY07, below FY06’s rate of 6.7%. The March quarter shows a further deceleration to 5.9%, compared with the year-ago period.

The slowdown is even clearer if we compare the year-on-year growth in the two halves of FY07. While PFCE growth was 6.4% in the first half, it fell to 5.9% in the second. In contrast, growth in capital expenditure was 14.7% in the second half of FY07. As Rob Subbaraman, senior vice-president and chief economist (Asia), Lehman Brothers, puts it, “Going forward, the sharp rise in capital goods imports and surging FDI (foreign direct investment) inflows indicate that investment is likely to remain the key growth driver.”

The key question for the markets is whether the 9.1% GDP growth rate in the March quarter will lead to more tightening by the Reserve Bank of India (RBI).

As the data shows, consumption growth has started to slow. Recent RBI numbers show that bank lending too is slowing. Additional capacity coming on stream will ease the pressure on prices. But while higher interest rates may have started to have an effect, the central bank may prefer to err on the side of caution.

RBI may also be forced to tighten if it buys dollars to prevent further appreciation of the rupee and has to mop up the resulting liquidity.

But the stock market showed no signs it was worried, with the interest-rate sensitive indices such as the BSE Bankex and BSE Auto both gaining 1.3% on Thursday.
The yield on the benchmark 10-year bond barely moved.

Apollo Hospitals

The stocks of Apollo Hospitals and Fortis Healthcare moved briefly in opposite directions as news broke of Dr Trehan’s move to Apollo, with several doctors likely to follow him. Apart from that, however, the Fortis stock has slowly been drifting down ever since its listing and Trehan’s exit is merely the latest blow. The market for doctors is highly competitive and attracting and retaining them is one of the key challenges.

But even the Apollo Hospitals stock has been a severe underperformer and it hasn’t moved at all since end-February. That seems strange, given that Apollo is in a sector with high entry barriers, is a play on the middle class’ increasing ability to pay for high-class medical services and seems to have got its act right. The problem seems to be twofold. One, it has an aggressive expansion plan that will increase interest and depreciation costs. More importantly, however, the trouble is that at a consensus EPS (earnings per share) of around 16.5 for FY08, the stock at around Rs500 continues to look expensive.

 

[Bushroda]

Go to India: get better in a jiffy
Jeremy Page: Delhi Notebook
The Times, 28 May 2007

Typhoid, Dr Gupta declared, with something of a flourish. As the sweat poured off my brow, I stared up from the hospital bed with relief and, to be honest, a hint of pride. Of all the lurgies he’d been testing for over the last three days, typhoid was by far the most glamorous.

“How Victorian!” commented one friend. I imagined myself lying under a mosquito net in a canvas tent, military uniform unbuttoned at the chest, Bible clasped to my heart. Fortunately – if less romantically – I found myself clutching an Indian Hello! magazine in an immaculate, air-conditioned private room at the Apollo Hospital in Delhi.

Many Westerners still wince at the thought of Indian medical care. But the Apollo is not just one of India’s best private hospitals: it is a leading centre for medical tourism, attracting patients from all around the world, not least Britain.

It’s easy to see why. For a start, most of the consultants are ex-NHS – you can tell where they worked from their English accents. The facilities make most British hospitals look Dickensian. And the prices are mind-bogglingly low. Excluding the room, my ten days’ intensive treatment, including X-rays, ultrasound, intravenous antibiotics and round-the-clock nursing cost £200.

But medical tourists beware: with Indian prices come Indian quirks. First, there are the crowds – not of patients, but their relatives. The entrance feels more like a railway station than a hospital. When I was admitted, I couldn’t understand why the nurses looked at me with such pity, muttering “all alone” under their breath. Then I peeked into some other rooms and saw entire extended families camped out.

Another quirk is the social hierarchy within the hospital, where caste and class become intertwined with formal rank. The consultants are at the top – English-speaking, Western-trained and with the easy charm of the upper castes and classes. “Don’t worry,” Dr Gupta would say. “We’ll have you shipshape and right as rain in a jiffy.” Next come the junior doctors – higher caste but middle-class, locally trained and unjustifiably arrogant, lording it over nurses and patients alike. “So, how’s your sickness?” one asked vaguely. “Got a fever?” “I don’t know,” I said. “Perhaps you should read my chart?”

The nurses, near the bottom of the pile, were dedicated and hard-working. But being mostly from poor, lower caste families, which have limited access to education, they had only a few words of English and rudimentary training.

I lost count of how often they missed veins giving injections. They would also rinse water glasses in unfiltered tap water – the likely source of the typhoid.

I cannot complain, though. Within two weeks, I’d recovered. And had I been in London, an army of medical students would have poked and prodded me around the Hospital for Tropical Diseases.

Glamorous typhoid is not. But if you must get it, the Apollo’s probably the best place in the world to be.

 

[Bushroda]

Study: India to invest $120b in infrastructure by 2010
MENAFN - 28/05/2007

(MENAFN) A study published by the Associated Chambers of Commerce and Industry of India (ASSOCHAM) estimated the country's expenditure on infrastructure development to reach $120 billion within the next three years, Khaleej Times reported.

According to the study, India's infrastructure needs massive investments in several sectors such as roads and water and electricity utilities. The country has been hosting foreign investments in the past few years, but the infrastructure still needs more investments from local resources.

The ASSOCHAM study, released by its President, pointed out that the massive investment in the construction industry will be driven by the growing requirements of sectors such as transportation, power, urban infrastructure, housing and irrigation to ensure that the industry grows at the projected level.

It said that the growth of this sector will triple the requirement of workers from the present 30 million to 90 million, and also propel the need for contractors and subcontractors.

 

[Bushroda]

Brazil's Lula in India to push business ties
WashingtonPost
By Y.P. Rajesh, Sunday, June 3, 2007; 4:22 AM

NEW DELHI (Reuters) - Brazilian President Luiz Inacio Lula da Silva arrived in India on Sunday, hoping to boost business and add more substance to the growing ties between two of the world's biggest developing nations.

The three-day state visit is the latest in a series of high-level exchanges between the distant countries, which have forged a common stand in recent years on global trade and strategic issues.

The two have been key partners within the G20 group of developing countries pushing rich nations for freer global farm trade and are also seeking a permanent seat in the UN Security Council along with Germany and Japan.

"The meaning of my visit to India is to reiterate our readiness to forge a strategic alliance between our countries," Lula wrote in an article published in India's Hindu newspaper on Sunday.

"The size of our respective populations, the economic vigor and the technological advances of both of our countries manifestly indicate how hard we still have to work in order to achieve our potential of cooperation and friendship," he said.

Trade and business are expected to be on top of the agenda when Indian Prime Minister Manmohan Singh holds talks with Lula, who arrived with a delegation of about 100 businessmen.

Lula is also due to address a conference of business leaders in the Indian capital on Monday.

Although bilateral trade has grown steadily it is seen to be nowhere near its true potential, with Brazil unhappy about New Delhi's hesitation to further open its markets to farm imports despite slowing Indian agricultural output.

While total trade touched $2.4 billion in 2006, Brazilian exports to India fell 15 percent to $937 million, and Lula's team is expected to push New Delhi for easing investment and trading norms.

The two countries aim to quadruple trade to $10 billion by 2010.

LARGER GLOBAL ROLE

Increasing the use of bio-fuels, an area in which Brazil is a world leader, would be a key area to push cooperation for India, whose energy needs are surging with its scorching economic growth, an Indian foreign ministry official said.

New Delhi would also seek Brazil's support at the Nuclear Suppliers Group, an organization that governs global nuclear trade, which it needs to buy nuclear fuel and reactors after the conclusion of a civilian nuclear cooperation agreement with the United States, he said.

In addition, the two sides would prepare to forge a common stance on issues such as climate change and global trade talks ahead of this week's G8 meeting in Germany, which both Lula and Singh are attending.

Analysts were optimistic Lula's India visit would help build stronger bonds between the two emerging market giants.

"I think both India and Brazil are beginning to recognize that distance should not matter and there should be greater trade between the two countries," said Rajiv Kumar, director of the Indian Council for Research in International Economic Relations.

"It is also the coming together of intermediate or medium-sized countries for a greater role in global governance and international financial architecture," he said.

 

[Neo]

Study: India to invest $120b in infrastructure by 2010
MENAFN - 28/05/2007

(MENAFN) A study published by the Associated Chambers of Commerce and Industry of India (ASSOCHAM) estimated the country's expenditure on infrastructure development to reach $120 billion within the next three years, Khaleej Times reported.

According to the study, India's infrastructure needs massive investments in several sectors such as roads and water and electricity utilities. The country has been hosting foreign investments in the past few years, but the infrastructure still needs more investments from local resources.

The ASSOCHAM study, released by its President, pointed out that the massive investment in the construction industry will be driven by the growing requirements of sectors such as transportation, power, urban infrastructure, housing and irrigation to ensure that the industry grows at the projected level.

It said that the growth of this sector will triple the requirement of workers from the present 30 million to 90 million, and also propel the need for contractors and subcontractors.

$120 billion in three years is huge investment, I assume the funds will be raised from private sector.
Whats your development budget btw?

 

[Bushroda]

$120 billion in three years is huge investment, I assume the funds will be raised from private sector.
Whats your development budget btw?

120 billion would be government expenditure. GoI has allocated $37billion for infrastructure spending in the current financial year. I couldn't find a link but here is a news article that can help explaining

https://defence.pk/forums/showpost.php?p=70287&postcount=788

Apart from this $120 bln government is expecting private investment between $180 - $200 billion. This is the reason why Infrastructure sector has been deregulated the most. Any foreign company willing to invest can go on its own w/o any partnership with an Indian company. That has irked some of the corporate honchos.

 

[Neo]

Thanks Happy Feet, do you also have the total figs of development budget, if $37 billion is allocated to infrastructure only the total budget must be somewhere near $100 billion.

To sustain high growth India will have to invest highly in infrastructure, she's already suffering from the negligence in this sector from previous governements. The rural sector will receive a boost from the betterment of roads and accessability thruout the region.

 

[Bushroda]

Thanks Happy Feet, do you also have the total figs of development budget, if $37 billion is allocated to infrastructure only the total budget must be somewhere near $100 billion.:

I am sorry Neo, I am trying to find the link but it is still eluding me. Unfortunately, I don't even know any rough figure to tell you. I'll post here once I find the link.

To sustain high growth India will have to invest highly in infrastructure, she's already suffering from the negligence in this sector from previous governements. The rural sector will receive a boost from the betterment of roads and accessability thruout the region.

In the next decade, India needs an investment of around $1.5 trillion dollars in various fields to keep up the existing growth rate, develop a sound industrial infrastructure & migration of farm workers into Industrial & manufacturing sector. A huge task indeed.

 

[Neo]

Okay, thanks happy Feet. I'll check with some sources in India.
Meanwhile I found this, its too big to post but must read it.:http://www.adb.org/Documents/books/ADO/2006/ind.asp


__________________________________________________________
Another report:

Budget 2007: Rural infrastructure gets 31% hike
The thrust on agriculture and India’s rural areas continues in India’s Union Budget 2007-2008, in keeping with the government’s plan to marry growth with equity and social justice

A 31% hike in allocation towards the Bharat Nirman programme for upgrading rural infrastructure, from Rs 18,696 crore to Rs 24,603 crore, and a proposed Rs 225,000 crore for farm credit are some of the main outlays for rural India in Budget 2007-08.

Presented by Finance Minister P Chidambaram to Parliament on February 28, the budget proposes that an additional irrigation potential of 2,400,000 hectares be created, including 900,000 hectares under the Accelerated Irrigation Benefit Programme (AIBP).

The outlay for the AIBP is to be increased from Rs 7,121 crore to Rs 11,000 crore including a grant component to state governments of Rs 3,580 crore, up from Rs 2,350 crore over the previous budget. In the current financial year, 35 projects will be completed under the AIBP.

In the year ending December 2006, 53,370,000 new farmers were brought into the institutionalised credit system. The target for 2007-08 is set at Rs 225,000 crore with an addition of 50,000,000 new farmers accessing credit.

The National Agricultural Insurance Scheme (NAIS) will be continued for the 2007-08 kharif and rabi season, with a budgetary provision of Rs 500 crore. A weather-based crop insurance scheme will be started by the Agricultural Insurance Corporation on a pilot basis as an alternative to the NAIS, with an allocation of Rs 100 crore for 2007-08.

Rs 1,800 crore has been allocated for a water recharging scheme that will offer a 100% subsidy to small farmers and 50% to other farmers to encourage them to recharge water by diverting rainwater into ‘dug wells’. The scheme will be finalised by the Ministry of Water Resources and will be transferred to NABARD, to be distributed through lead banks in the districts to the beneficiaries.

In March 2005, a pilot project was launched to restore and rejuvenate waterbodies in 13 states. The World Bank signed a loan agreement with Tamil Nadu for Rs 2,182 crore to restore 5,763 waterbodies with a command area of 400,000 hectares. An agreement with Andhra Pradesh is expected to be concluded in March 2007 to cover 3,000 water bodies with a command area of 250,000 hectares.

A special plan is being implemented over a period of three years in 31 suicide-prone districts in four states, involving a total amount of Rs 16,979 crore. Of this, around Rs 12,400 crore will be spent on water-related schemes. The plan includes a scheme for the induction of high-yielding milch animals and related activities in order to enhance livelihood options.

Other budgetary allocations and schemes for the farm sector are:

The 2% interest subvention scheme for short-term crop loans will continue with a provision of Rs 1,677 crore.

A Special Purpose Tea Fund to rejuvenate tea production. Financial mechanisms for replantation and rejuvenation will also be implemented for coffee, rubber, spice, cashew and coconut plantations.

To address the problem of poor availability and quality of certified seeds, the Integrated Oilseeds, Oilpalm, Pulses and Maize Development Programme will be expanded with sharper focus on scaling up the production of breeder, foundation and certified seeds. Government will fund the expansion of the Indian Institute of Pulses Research, Kanpur, and offer other producers a capital grant or concessional financing to double production of certified seeds within a period of three years.

Rs 100 crore allocated for the National Rainfed Area Authority set up under last year’s budget.

The Agriculture Technology Management Agency (ATMA), now in place in 262 districts, will be extended to another 300 districts. Provision for ATMA will be increased from Rs 50 crore to Rs 230 crore.

The amount of fertiliser subsidy has been increased from Rs 17,253 crore to Rs 22,452 crore. Based on a study, yet to be conducted, a pilot programme will be implemented in at least one district in each state to deliver subsidies directly to farmers.

The budget has also allotted Rs 12,000 to the National Rural Employment Guarantee Scheme. However, since it is a demand-driven scheme, the budget will be supplemented as required. One of the government’s most ambitious programmes is expected to be extended to 330 of India’s poorest districts in the financial year 2007-2008.

Additionally, an amount of Rs 2,800 crore has been provided for the Sampoorna Gramin Rozgar Yojana in districts not covered by the NREGS. Allocation for the Swaranjayanti Gram Swarozgar Yojana, promoting self -employment among the rural poor, has been increased from Rs 1,200 crore to Rs 1,800 crore.

To augment its resources for refinancing rural credit cooperatives, the National Bank for Agriculture and Rural Development (NABARD) will issue government-guaranteed rural bonds to the extent of Rs 5,000 crore with suitable tax exemptions.

The corpus of the Rural Infrastructure Development Fund, which sanctions and disburses funds to state governments, is to be raised to Rs 12,000 crore from Rs 10,000 crore in the previous budget. A separate window for rural roads will continue, with a corpus of Rs 4,000 crore.

Source: PTI, March 1, 2007
www.unionbudget.nic.in, February 28, 2007
The Hindu, February 28, 2007


Budget 2007: Rs 85 crore for child protection scheme
The Ministry of Women and Child Development will launch an Integrated Child Protection Scheme to address the issue of child protection and build a protective environment for children through government-civil society partnerships


With the safety of children becoming an issue of national concern, in the aftermath of the Nithari killings, India’s Union Budget 2007-2008 has earmarked Rs 85.5 crore for implementation of an Integrated Child Protection Scheme (ICPS).

Funds for child developmenton the whole have been increased to Rs 5,053.33 crore from last year’s Rs 4,255.51 crore, Finance Minister P Chidambaram announced as he presented the budget to Parliament on February 28.

The ICPS is being launched by the Ministry of Women and Child Development to address the issue of child protection and build a protective environment for children through government-civil society partnerships.

In addition to the budgetary provision of Rs 85.5 crore, an amount of Rs 9.50 crore will be made available for implementation of the scheme in the northeastern states.

Allocation for the Integrated Child Development Services (ICDS) has been increased to Rs 4,761 crore from last year’s Rs 4,087 crore. The government plans to expand the ICDS to cover all habitations during the Eleventh Five-Year Plan.

A conditional cash transfer scheme for girl-children, with insurance cover, is also being introduced during the current financial year as a central pilot project. Budgetary provision of Rs 13.50 crore has been made available for this scheme that aims to tackle the problem of discrimination against the girl-child.

The cash transfer will be provided to the family of the girl-child, preferably the mother, only after the claimant fulfils certain conditions such as providing the child’s birth registration certificate, immunisation records, enrolling the child in school, and agreeing not to marry her off until she is 18 years old.

Source: www.hindu.com, February 28, 2007


Budget 2007: Focus on education, health
Services like schooling, housing and nutrition have the largest claim (Rs 83,950.69 crore) on total plan allocation in India’s latest budget. Together with energy and transport, the social sector accounts for nearly 75% of the total allocation of Rs 319,992 crore


A 35% increase on education spending and a 22% hike in allocations for public health and family welfare are highlights of India’s Union Budget 2007-2008. Presented by the country’s Finance Minister P Chidambaram to Parliament on February 28, Budget 2007-08 also has new schemes for disadvantaged sections of the population like the physically challenged, the elderly and landless rural families.

Maintaining high priority for eight flagship programmes of the UPA government -- including the National Rural Employment Guarantee Scheme, Bharat Nirman, and the National Rural Health Mission -- the finance minister’s fourth budget pegs gross budgetary support for the coming fiscal at Rs 205,100 crore, of which the central plan will be Rs 154,939 crore.

Allocation to the education sector has been increased by 34.2%, to Rs 32,352 crore. An amount of Rs 23,142 crore has been allocated for school education programmes, as against Rs 17,133 crore in 2006-07.

The Sarva Shiksha Abhiyan (Universal Education Programme) gets Rs 10,671 crore and the mid-day meal scheme will be extended to upper primary classes in 3,427 educationally-backward blocks.

Two lakh more teachers are to be employed and 5 lakh more classrooms constructed in primary schools, the finance minister said.

The secondary education allowance will be doubled from Rs 1,837 crore to Rs 3,794 crore.

Chidambaram also proposed the implementation of national means-cum-merit scholarships with an allocation of Rs 6,000 to every child who completes Classes 9 to 12, to lessen school dropout rates.

Enhanced allocations for SC/ST scholarships from Rs 440 crore to Rs 611 crore and a scholarship programme for students from minority communities were also announced. The allocation for the latter is Rs 72 crore at the higher secondary school level, and Rs 48 crore for graduate and postgraduate students.

Besides education, allocations for health and family welfare have been hiked substantially by 21.9% to Rs 15,291 crore. The hike in allocations to these sectors is almost identical to those in the previous two budgets.

Prime Minister Dr Manmohan Singh reiterated that the prime focus of Union Budget 2007-08 was education and healthcare, in keeping with his government’s commitment to increase spending on the country’s social infrastructure. “Education and healthcare are the primary imperatives as far as this budget is concerned.” Dr Singh added that there was a need to improve the skill level of India’s population, and therefore special emphasis was being laid on secondary education.

The prime minister said the budgetary emphasis was also on improving access to social services and providing a social safety net. Therefore, 70 lakh households are to be covered under a social welfare scheme with the Life Insurance Corporation (LIC) and with support from state governments. Of this, 50% of the premium, at Rs 200 per household, will be given by the Centre. LIC will maintain a Rs 1,000 crore fund for the purpose.

In a scheme for economically weak sections of the population, the ceiling of loans under the differential rate of interest scheme would be raised from Rs 6,500 to Rs 15,000, and for housing loans from Rs 5,000 to Rs 20,000. Insurance companies will launch a senior citizens scheme in 2007-08.

Chidambaram also announced that the government would create 1 lakh jobs for the physically challenged.

The budgetary allocation for scheduled castes and scheduled tribes (SC/STs) is to be increased to Rs 3,271 crore in the coming financial year. And, finally, Rs 63 crore has been earmarked for share capital for the National Minorities Development Finance Corporation following the Sachar Committee recommendations.

The budget continues to focus on agriculture for the fourth consecutive year, with substantial increases in funds for farm credit, subsidies and extension of irrigation coverage. The rural infrastructure improvement programme, Bharat Nirman, has been given Rs 24,603 crore, an increase of 31.6% over the current year.

These, together with Rs 12,000 crore for expansion of the National Rural Employment Guarantee Scheme to 330 districts, from the current 200, are other key features of Budget 2007-08.

Source: Reuters, February 28, 2007
PTI, February 28, 2007
www.expressindia.com, February 28, 2007
www.business-standard.com, February 28, 2007

http://www.infochangeindia.org/GovernanceItop.jsp?section_idv=20#4820

 

[Bushroda]

Thanx Neo,

The ADB report speaks of the budget hike for Bharat Nirman Yojana(India development plan). This is different from National Developement Budget (or I am not sure)

 

[goldenword]

thanks. Very comprehensive coverage

 

[Bushroda]

Go east, GE: Investing in India
Posted Jun 4th 2007 11:00AM
by Michael Rainey

General Electric (NYSE: GE) has big plans in India. Speaking in New Delhi, GE CEO Jeffrey Immelt announced that the company plans to invest heavily in India, particularly in infrastructure. According to The New York Times, Immelt declared that "this is the era of the developing world and of emerging markets," and that GE can achieve higher growth by focusing on India and other high-growth economies.

Immelt was quoted, "If we can grow at the same pace as the Indian economy, we can be a great company." India's economy grew at a rate of 9.4% in the year ending March 2007, and is expected to grow at roughly the same rate this year. Given that the U.S. economy is barely growing at all right now, this strategy certainly makes sense.

Global demand for new infrastructure is staggering. Immelt claimed that over the next eight years, the global economy will require some $4 trillion in investment. GE plans to make India a central part of its global infrastructure strategy. In 2007, GE expects to generate $3 billion in revenue from India (out of $175 billion overall); by 2010, it expects $8 billion in revenue, based on $8 billion in Indian assets. Major projects include nuclear and conventional power plants, jet engines for Air India, health care facilities and real estate.

An article in Sunday's Times suggests that GE is a good international markets play. According to Michael Metz, the chief investment strategist of Oppenheimer & Company, "If you buy General Electric . . . you almost don't need a foreign stock fund." And if you are looking for a way to invest in the rapidly growing Indian economy, GE stock may be a good move.

 

[Bushroda]

Together with energy and transport, the social sector accounts for nearly 75% of the total allocation of Rs 319,992 crore

You are right Neo,

Rs. 3199.92 is nearly 80 billion dollars. This is from Central government. Apart from this amount respective State governments have their own development budget.

 

[Bushroda]

Immigration Bill Point System: More Indian Engineers, Fewer Hispanic Families
Posted by Jonathan Stein on 06/05/07 at 8:24 AM

The new immigration bill currently being hammered out by Congress has a point system to determine which potential immigrants get visas. The system awards points, which increase an applicant's chances of being let into the country, for being English proficient, having a college or graduate degree, and having a job in science, technology, or health. The plan drastically rewrites immigration policy in the United States, and if left in its current form, will fundamentally change the makeup of the country.

The first consequence of the point system is that the primary criteria for being offered a visa changes from family to profession, awarding points not for being related to a current resident of the U.S. but for having a highly skilled job. Individuals trying to bring their adult children, siblings, or parents to America will have a much harder time (spouses and minor children will still be allowed in without being subject to the point system), while engineers and scientists trying to be the first from their family to come to the States will have a much easier time. Dems are saying this breaks up families and contains an inherent class bias. Says Senator Robert Menendez, a Democrat from New Jersey, "The point system would have prevented my own parents, a carpenter and a seamstress, from coming to this country." (Note: If anti-immigration forces currently claim immigrants steal low-wage jobs from Americans, how long under the new plan until they start crying about the plight of the replaced American doctor of physicist?)

The second ramification is the corruption of the free market. Previously, companies decided what sort of employees they needed, found them from abroad or in American universities, and sponsored them for work visas, creating a perfect match between skills and available work. But the point system makes this sorting and decision-making the responsibility of the federal government. Naturally, big business hates the idea. Democrat Zoe Lofgren represents Silicon Valley, where, she says, no one is in favor. "The government is saying, in effect, 'We have a five-year plan for the economy, and we will decide with this point system what mix of skills is needed,'" she told the New York Times. "That is not the way a market-based capitalist economy works best."

The third problem is that the bill locks in the criteria for the point system for 14 years. The economy may not need engineers, mathematicians, and doctors in 14 years -- it might need unskilled labor or skilled labor of an entirely different kind.

Another effect -- and this one is neither good nor bad, I think -- is the changing racial demographics of the United States. The point system will reward characteristics already found in immigrants from Asia -- in the last 15 years, over 75 percent of immigrants from India, and over 50 percent of those from China, have had some form of college degree. And the English proficiency of immigrants from across Asia is usually high.

Indians in particular will do quite well under the point system, and immigrants from South America, Central America, and Mexico will do quite poorly. Currently over 40 percent of Indian immigrants are in science, technology, engineering, or health. That compares to less than five percent of Mexican immigrants. Over 40 percent of Indian immigrants come with a master's degree or higher. That compares with less than five percent of Mexican immigrants. Almost 70 percent of Indian immigrants come speaking English fluently or "very well." That compares to 20 percent of Mexican immigrants.

So in addition to looking at the immigration plan's plethora of other problems, senators need to take a long hard look at the point system. It has some problems, but more than that, it will have a tremendous impact on the composition of our country -- is that something they want to engineer? -- and deserves the utmost care.