Contents Index : PART 1 Page No.

INTRODUCTION
An interview Finance Minister Palaniappan Chidambaram....... An Interview with Union Minister of State for Industry: Ashwani Kumar...

4
4 6

PART 2
Meanings and definitions 8

PART 3
Activities for development.........
The role of Education in development.. The role of Government in development.
National Common Minimum Program of India........ Active part of Women in Indian Politics 26 49

13
15 26

The role of Financial Institutions in development..

Interaction and Assistance from World Bank Group.............. International Monetary Fund(IMF)... Report on Currency and Finance- 2005-06 Theme: Development of Financial Markets and Role of the Central Bank. Private Sector Participation

51
57 64 68 88

The role of Communication in development......

91

Public Private Partnership in Information and communication Technology....... 91 The role that the government plays. 97 Analyzing E-Commerce for Development.. 105 3G Reforms: Policy and Regulatory Implications.. 113 Communication Development : Role of UNSCO in India...................................................................... 117

The role of Infrastructure in development.

Infrastructure and India's rich... The boom in construction in India........ 130 134

130

Part 4
Comparison between Worlds Fastest growing Country.
India versus China 147

149

Part - 5
Conclusion...
India GDP (2000 to 2040)...

152
152

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RECRUITMENT, TRAINING AND DEVELOPMENT IN INDIA. Part -1

Introduction :
India has come a long way from its inward-looking economic strategy of over 50 years ago. Economic liberalisation and the gradual opening up to the world have boosted growth and lifted millions of people out of poverty. This paper argues that the continuation of the reform process will allow India to stay on a high growth path of roughly 6% per year on average over the next 10 to 15 years. If reforms were pursued more aggressively, real GDP growth could reach 7%-8% per year. The Indian economy grew unexpectedly at its fastest pace in more than two years, according to the year-on- year data for the first three months, as the pace of agricultural expansion nearly doubled to 5.5 percent from 2.9 percent a year earlier. The growth rate of farm output jumped almost six fold in the year that ended March 31, to 3.9 percent from 0.7 percent the year before.

An interview Finance Minister Palaniappan Chidambaram

Mr. Palaniappan Chidambaram said - that according to provisional data, the farm growth came from diversification into

exports

of

fruits

and

vegetables,

as

state

governments

and

companies seek to persuade farmers to abandon wheat and rice for mangoes and okra. "Agriculture, I think, has done well last year because the non-cereal production has been very good, especially horticulture," Chidambaram said in his office here. ..."Double-digit growth is simply a function of three numbers," Chidambaram said. "Agriculture must grow at 4, services at 12, manufacturing at 12, in order to achieve 10 percent growth." In recent months, manufacturing, too, has shown a turnaround after years of sluggishness. Industrial growth hovered around 6 percent annually from 1991 to 2004. But signs of a turnaround have been apparent in recent data, and the figures released showed manufacturing increasing 8.9 percent in the first three months of this year. Another important source of growth for the economy is increasing spending by a rising consumer class of call-center workers, software writers, offshore researchers and other new-economy workers. Their spending on hotels, mobile- phone subscriptions and other services grew 12.9 percent, the fastest pace in more than two years and up from 10.2 percent growth last year. "Optimism stems from very strong domestic demand, high export growth and the entrepreneurial skills of our manufacturers and service providers," Chidambaram said. Together, the unexpected successes in manufacturing and now in agriculture suggest that more than a decade of economic liberalization is

beginning to spread beyond the cloistered domains of malls and corporate parks.

An Interview with Union Minister of State for Industry: Ashwani Kumar

Stressing that India provides the best possible environment for investment among developing economies, Union Minister of State for Industry Ashwani Kumar has asked investors to grab the opportunities in the fast expanding infrastructure, manufacturing and consumer goods sectors in the country. Pointing out that corporations and investors who have invested in India after the country opened up its markets have made consistent profits and expanded their businesses, he said their money is safe as the economic policies are consensus driven. Releasing a report 'The India Factor'-- by Societe Generale, one of the largest financial service groups in Europe, in New York on Monday, he listed intellectual capital, increasing population in the working age group and rising urchasing power as important parameters in India's high economic growth. India has proved its capability to provide quality goods and services for export at lowest possible prices among the developing and emerging economies, he said. Since India began economic reforms in 1991, governments have changed but not the policies. That in itself should give confidence to the investors, Kumar said. Speaking about infrastructure expansion, he said $500 to $600 billion are needed in this sector, adding he expects around 25 per cent to be contributed by foreign direct investment.

In power sector alone, the country plans to add 90,000 MW over next five years and in this context, he stressed the importance of the Indo-US civilian nuclear deal. The country plans a mix of power production sources, including renewable, hydro, alternative, bio and nuclear. Referring product and to the manufacturing wants to sector, its Kumar said currently it contributed around 16 per cent to the gross domestic government increase contribution progressively to between 30 and 33 per cent. It is a realistic target, considering the manufacturing sector grew by 11 per cent last year, he said. It has strong potential for growth, he said while explaining steps the government taking this direction. Pointing to the rapid growth of information technology sector, he said the government aims at making India a major player in the electronic hardware. In any case, he said, India would not have it any other way as it cannot compromise the freedoms of the individual. Though India is ready to assume responsibilities to reduce emission along with other counties, he asserted it would not accept disproportionate responsibilities.

PART 2
Meanings and definitions :
Recruitment :

The meaning in dictionary:

Recruitment :- The act or process of recruiting; especially, the

enlistment of men for an army. The meaning in business :Recruitment:- Act of seeking prospective new employees or members for an organization. Recruitment is a vital function for an organization to maintain its personnel.

Definition :Recruitment :Recruitment refers to the process of finding possible candidates for a job or function, usually undertaken by recruiters. It also may be undertaken by an employment agency or a member of staff at the business or organization looking for recruits. Advertising is commonly part of the recruiting process, and can occur through several means: through online, newspapers, using newspaper dedicated to job advertisement, through professional publication, using advertisements placed in windows, through a job center, through campus interviews, etc. The follow-up process may be referred to as part of the recruitment process: inveigling the selected candidate or candidates to take up the target job or function. This applies particularly in filling positions in the military or in expanding the human resource base of a cult. Headhunting is a frequently used name when referring to third party recruiters, but there are significant differences. In general, a company would employ a head-hunter when the normal recruitment efforts have failed to provide a viable candidate for the job. Head-

hunters are generally more aggressive than in-house recruiters and will use, advanced sales techniques such as initially posing as clients to gather names of employees and their positions, personal visits to the candidates office and will purchase expensives lists of names and job titles. They also prepare a candidate for the interview, negotiate salary, and conduct closure to the search. In general, in house recruiters will do their best to attract candidates for specific jobs while head-hunters will actively seek them out, utilizing large databases, internet strategies, purchasing company directories or lists of candidates, networking, and often cold calling. Many companies go to great efforts to make it difficult for head-hunters to locate their employees. Third party recruitment firms are usually distinguished by the method in which they bill a company. Outside recruitment agencies charge a placement fee when the candidate they recruited has accepted a job with the company that has agreed to pay the fee. Fees of these agencies generally range from a straight contingency fee to a fully retained service which is similar to placing an attorney on retainer. All recruitment agencies are defined by the placement of a candidate to a particular job within a company. The recruitment of an employee or a workforce for an organization is to done by the management of the company or an organization. To specify what is management, the definition of management is depicted bellow >

Management :-

Some would define management as an art, while others would define it as a science. Whether management is an art or a science isn't what is most important. Management is a process that is used to accomplish organizational goals; that is, a process that is used to achieve what an organization wants to achieve. An organization could be a business, a school, a city, a group of volunteers, or any governmental entity. Managers are the people to whom this management task is assigned, and it is generally thought that they achieve the desired goals through the key functions of (1) planning, (2) organizing, (3) directing, and (4) controlling. Some would include leading as a managing function, but for the purposes of this discussion, leading is included as a part of directing. The four key functions of management are applied throughout an organization regardless of whether it is a business, a government agency, or a church group. In a business, which will be the focus here, many different activities take place. For example, in a retail store there are people who buy merchandise to sell, people to sell the merchandise, people who prepare the merchandise for display, people who are responsible for advertising and promotion, people who do the accounting work, people who hire and train employees, and several other types of workers. There might be one manager for the entire store, but there are other managers at different levels who are more directly responsible for the people who perform all the other jobs. At each level of management, the four key functions of planning, organizing, directing, and controlling are included. The emphasis changes with each different level of manager, as will be explained later.

A Combined fields of policy and administration and the people who provide the decisions and supervision necessary to implement the owners' business objectives and achieve stability and growth. The formulation of policy requires analysis of all factors having an effect on short- and long-term profits. The administration of policies is carried out by the Chief Executive Officer, his or her immediate staff, and everybody else who possesses authority delegated by people with supervisory responsibility. Thus the size of management can range from one person in a small organization to multilayered management hierarchies in large, complex organizations. The top members of management, called senior management, report to the owners of a firm; in large corporations, the Chairman of the Board the President , and sometimes other key senior officers report to the Board of Directors, comprising elected representatives of the owning stockholders. The application of scientific principles to decision-making is called management science. 1. Collective administrative heads of a company, institution, business, etc., who are responsible for conducting the affairs of the company (institution, business, etc.) for meeting its short-range and long-range objectives, and for maintaining it as a profit-making organization and/or an ongoing enterprise. 2. Leading or supervising of an organization, business operation, or the like. 3. Wise use of means to accomplish a purpose. Throughout the years, the role of a manager has changed. Years ago, managers were thought of as people who were "the boss."

While that might still be true today, many managers view themselves as leaders rather than as people who tell subordinates what to do. The role of a manager is comprehensive and often very complex. Not everyone wants to be a manager, nor should everyone consider being a manager.

PART - 3
To achieve all the above (PART -1) said growth and potential in the growth of India their should be come important roles are to be performed by the level of Government and along with the

private sector in the country. Some of the such important roles to be performed are as considered :

The The

role role

of of

Education Government

in in

development. development. The role of Financial Institutions The role of Communication in The role of Infrastructure in in development. development. development. The role of Education in development
The Child Education In India :
The National University of Educational Planning and Administration (NUEPA) has recently developed School Report Cards of more than one million Primary and Upper Primary schools. Covering 11,24,033 schools, the publication updates more than 400 variables for 604 districts across 35 states and union territories on all aspects of universalisation of education, and shows that Kerala, Delhi, Tamil Nadu, Karnataka and Himachal Pradesh are the top five while Bihar, Jharkhand, West Bengal, Uttar Pradesh and Assam are the five bottom-ranked states.

Whatever may be the reflection through the ranks in education development index, the number of children joining education system and subsequently the number of out-of-school children show a declining trend in the report. The student retention rate is still remained low. With such low retention and high drop-out rates, it seems India is affected by the 'give another decade' syndrome to realise the goal of universal primary education. Kerala, the southern Indian state, once again has emerged as the top performing state while Bihar finds itself in the last spot in a recent official survey on the status of elementary education in India in 2005-06. The coefficient of efficiency reveals that the primary education system is efficient to the tune of only 62 percent.

EDUCATION DEVELOPMENT INDEX

ALL STATES TOGATGER PRIMARY UPPER PRIMARY BOTH PRIMARY & UPPER PRIMARY Kerala Kerala Delhi Tamil Nadu Pondicherry Bihar Jharkhand Arunanchal Padesh

BEST

1 2 3 4

Delhi

Tamil Nadu Pondicherry Kerala Pondicherr y Bihar Arunanchal Padesh Jharkhand Chandigarh Tamil Nadu Bihar Jharkhand West Bengal

WORS 1 T 2 3

West Uttar Pradesh Bengal NORTH EASTERN STATES BEST 1 2 WORS 1 T 2 Mizoram Sikkim Arunachal Assam Mizoram Sikkim Arunachal Assam

West Bengal

Mizoram Sikkim Arunachal Assam

Government of India's plans and projections at various points of time says, 'all children complete 5years of education by 2007. All children complete 8 years of education by 2010. In 1950, government claimed to provide free and compulsory education till age of 14 in next 10 years. In 1992, they claimed they would implement the same by 2000. In 2004, the claim is that they will achieve Universal Elementary Education by 2015. The whole syndrome never leaves us in a correct situation of where we are. Are we really getting closer to the target of UEE? What takes the country towards a more time taking syndrome? Less motivation towards enrolment? Schools receiving lesser amount of development grant? Average teachers available per school or high pupil-teacher ratio? Schools having less computer in schools? Or the low retention rate?

The Supreme Court of India in its judgement in 1993 has held that all citizens have a fundamental right to education upto the age of 14 years.

The 86th Constitutional Amendment Act was passed by the parliament to make the Right to Elementary Education a fundamental right and a fundamental duty. Education is the primary vehicle for children to drive towards economic and social upliftment. NUEPA, the professional wing of Government of India, with specialisation in policy, planning and management in education, has created a comprehensive database on elementary education in India under one of its flagship project, District Information System of Education (DISE), supported by the Ministry of Human Resources Development and UNICEF. The project covers both primary and upper primary schools of all districts of the country. The survey not only presents the million plus school report cards but also makes a strong case for the state to care about education and to shift our focus from inputs like the money spent upon education, to outputs, that are the real educational outcomes. There is no doubt that the average drop-out rate in primary classes suggests a consistent decline; but the same is still too high to attain the status of universal retention at the primary level of education. Universalisation comprises four components- universal access, universal enrolment, universal retention and universal quality of education. The flagship Sarva Shiksha Abhiyan (SSA) programme of the Government of India launched in 2001 in this direction has also this objective of universal retention by 2010. The drop-out rate indicates an average rate of 9.96 percent in primary grades. In many states, drop-out rate in Grade I is noticed to be alarmingly high. The very few exceptions, however, are visible in states like Tamil Nadu, where retention rate is 100 %; it is more than 95 per cent in Kerala as well.

If resources are available, child-tracking is the only way through which drop-out, retention, survival and completion rates should be analysed. A few states have designed their own formats and even developed monitoring software for the purpose 69,353 schools in the country have enrolment less than 25, out of which 94% are located in rural areas. One in three primary schools have enrolment less than 50. The enrolment of students in classes I to VIII in 2005-06 was 168.29 million, an increase of 12.28 million from the previous year, according to the DISE data. However, about 180 of the 581 districts reported decline in primary enrolment. The average of all the districts has shown a consistent improvement in both the gender parity index (GPI) and girls' share in enrolment, but the share, both in primary and upper primary, is found to be slightly lower at rural areas. The report shows the GPI in primary enrolment is a little low in states like Bihar and Rajasthan and goal of universalisation of primary education in such states may not be realised unless all girls are brought under the education system. The percent. The DISE report suggests that if resources are available, child-tracking is the only way through which drop-out, retention, survival and completion rates should be analysed. A few states have designed their own formats and even developed monitoring software for the purpose. Information and Communication Technology (ICT), like in the above instance, plays always a role of a driving tool to gear up the drive towards achieving Universal Elementary Education. coefficient of efficiency presented reveals that

the primary education system is efficient to the tune of only 62.40

Teacher information 4.69 million teachers: 78% rural areas, 22% urban areas Of 4.69 Mn, 2.06 million (44%) in primary schools 86% primary teachers in rural and urban areas As many as 1.70 million teachers imparted in-service training The DISE figures also show the percentage of all schools having computer, an exponential growth over the years- from 7.02 per cent in 2002-2003 to 10.73 per cent in 2005-2006. The tool can be harnessed further not to miss out the rest 40% of efficiency that can actually help speeding up of our march towards UEE, although many states show a not so encouraging figure.

Though

the

percentage

of

Primary

schools

having

computer facility is much lower than percentage of other types of schools, more than 1,20,591 schools imparting elementary education in the

country in 2005 had computers in place in school. The number of schools having provided computers during the previous year 2005 was ninety three thousand (8.99 per cent) and seventy two thousand (7.68 per cent) in 2004. A significant difference is noticed in percentage of schools having computer in rural areas and urban areas.

Globally, some progress has been achieved over the past 15 years, with net enrolment for primary education in developing countries increasing from 79 per cent in 1990 to 86 per cent in 2004. Yet the number of children out of school remains high. In the 2001-2002 school year, some 115 million children of primaryschool age were not in school - two thirds of them girls, and

according to current estimates, 77 million eligible children are not enrolled in school and many of those enrolled do not attend. In sub-Saharan Africa, only 63 per cent of boys and 59 per cent of girls go to school the lowest rates worldwide.
Of the total (1,20,591) schools that have computers, 74 per cent are located in rural areas. In the previous year, of the total 93,249 schools, 63 per cent (58,746 schools) are located in rural areas and only 34,502 schools (37 per cent) in urban areas. Compared to 5.14 per cent Government schools having computers, the percentage in case of schools under private managements is much higher at 30.52 per cent. Considering some of the constraints in the usage of ICTs in elementary education, about 99 percent schools that impart elementary education in Delhi and about 93 percent in Kerala had the electricity connection in school. Where as, the percentage of Primary schools having electricity connection remained as low as 0.91 percent in Bihar. Scenarios like this delimit the scope of making education truly universal. A large number of states have not been able to make much headway in the area of computer-aided learning and the necessary investments and therefore end up reaching far behind the target of achievements. In states like Bihar (51.50 percent), Uttar Pradesh (44.78 percent) and Rajasthan (53.18 percent), the coefficient of efficiency obtained is much lower than the average of all states. However, in others like Kerala and a few smaller states, primary education system seems to be an efficient one, indicating that there is still much scope for improvement.

The reasons as well strategies vary from location to location. Adopting reasons and area-specific strategies can possibly be the best guiding factors, without which no improvement can be expected. We still have three years to optimally and rigorously utilise provisions made under Sarva Shiksha Abhiyan to work towards achieving universal elementary education in general and primary education in particular,and to grab the efficiency tune of percent.
All the statistics and graphs are sourced from DISE District Report Cards: 2005-06. The DISE publications are available online at www.schoolreportcards.in

100

Higher education :Education, especially higher education, seems to be in focus in the Eleventh Five Year Plan. Rightly so. The approach paper to the plan document says: Only about 8 per cent of the relevant age group (of Indians) go to university whereas in many developing countries, the figure is between 20 and 25 per cent. There is a need to undertake major expansion... New institutions must be set up, to provide easier access to students in educationally backward districts. Similar sentiments were recently expressed by the Planning Commission Deputy Chairman Montek Singh Ahluwalia when he agreed with Shekhar Gupta (Walk the Talk, IE, December 4) that higher education is a problem and went on to say, What has happened is we suddenly realised that if the economy is now growing at 8 per cent, and could grow at 9 per cent, the skills the economy needs will become a constraint. Against this backdrop, there have been reports that HRD Minister Arjun Singh has proposed the setting up of three new IITs,

five IIMs, 20 Indian Institutes of Information Technology (IIITs), three Indian Institutes of Science Educational and Research (IISERs) and four Schools of Planning and Architecture (SPAs). Even if some of these get through to the Eleventh Plan, where will they be located? Currently the distribution of existing, centrally funded institutes is skewed. In the past, decisions regarding the location of these institutions seem to have been based on whether the state was politically influential or not. Just refer to the list of such institutions in the Moily Committee report for confirmation of this: AP (NIT, Hyderabad University (U), Maulana Azad Urdu U), Arunachal (none), Assam (NIT, IIT, Assam U, Tezpur U), Bihar (NIT), Chhattisgarh (NIT), Delhi (IIT, JNU, U Delhi, Jamia Millia Islamia, SPA), Goa (none), Gujarat (IIM, NIT), Haryana (NIT), HP (NIT), J&K (NIT), Jharkhand (NIT, NITTR, ISM), Karnataka (NIT, IISc, IIM), Kerala (NIT, IIM), MP (IIM, NIT, NITTR, two IIITs), Maharashtra (NIT, NITIE, IIT, MG Hindi U), Manipur (Manipur U), Meghalaya (NEHU), Mizoram (Mizoram U), Nagaland (Nagaland U), Orissa (NIT), Punjab (NIT, SLIET), Rajasthan (NIT), Sikkim (none), TN (NIT, IIT, NITTR), Tripura (NIT), Uttaranchal (IIT), UP (NIT, IIM, IIT, IIIT, BHU, Allahabad U, Ambedkar U), West Bengal (NIT, IIT, IIM, Viswa Bharati, NITTR), Andaman and Nicobar Islands (none), Chandigarh (NITTR), Dadra and Nagar Haveli (none), Daman and Diu (none), Lakshadweep (none) and Puducherry (Pondicherry U). The sizes of the above states and UTs vary and institutions in some of them are local to a significant urban population in neighbouring states. For instance, institutions in Delhi are local to the people of UP and Haryana, and institutions in and around Chandigarh are local to a large populace of both Punjab and Haryana. The

different institutes mentioned above have different budgets, with the IITs/IISc having the highest budgets. But the exact budget details are not easily available to make an accurate calculation of how much money the HRD ministry spends in various states. A rough calculation cited at http://equitableindia.org, based on the 2006-07 budget, shows Delhi (Rs 183.08), West Bengal (Rs 41.20) and Karnataka (Rs 33.4) at the top with Orissa (Rs 4.07), Rajasthan (Rs 2.59), and Bihar (Rs 1.87) at the bottom among the larger states. Not surprisingly as per the NSSO study of 2004-2005 Orissa is also at the bottom of most higher education parameters. When this inequity is pointed out, some respond that locations of national institutes do not matter as any Indian is entitled to study anywhere in the country. Whats forgotten is that institutions like IITs are drivers of growth in the region where they are located and have programmes that benefit local people. It is very important, therefore, that centrally funded institutions be distributed in an equitable manner. But whether this will be done is the big question. Given the dismal past record, there is need to be alertt. There may be an attempt to give an appearance of balance while some of the bigticket items are once again located in the powerful states. The Planning Commission and HRD ministry must know the citizens, especially from the poorer states are watching.
The writer is professor, Arizona State University

Educating the women :Women and Knowledge :-

The isolation of women from the mainstream economy and their lack of access to information because of societal, cultural and market constraints have led to their distancing from the global pool of information and knowledge. This distance is reflected in the low levels of empowerment and equality of women and men, and has enormously contributed to the slow pace of development in the South. It is now a well understood fact that without progress towards the empowerment of women, any attempt to raise the quality of lives of people in DCs would be incomplete. There is an increasing amount of evidence substantiating the truth that societies, which discriminate by gender, pay a high price in terms of their stunted ability to develop and to reduce poverty. Ironically, the importance of bringing a gender perspective to policy analysis and design of development tools and interventions is still not widely understood, and the lessons for development still need to be fully ingrained by the donors and national policy makers. In the context of knowledge sphere, the issues of gender equality, equity and empowerment of women become even more significant as women have a strategic role in the incubation and transfer of critical knowledge. This knowledge often forms the blueprint of survival for communities to adapt and minimize their risks in adverse circumstances. Women, because of their biological and social roles, are generally more rooted than men in the confines of their locality. They are therefore more aware of the social, economic and environmental needs of their own communities (Mitter, 2000). Women have been the traditional incubators and transfer media of knowledge relating to seed preservation and storage, food processing, indigenous health practices etc. Such forms of knowledge

are often contextual, rooted in experience and experiments, but are non-codified. Therefore it is essential that any knowledge sharing mechanism recognizes the value of knowledge possessed by women and provides space for value-addition and the amalgamation of womens knowledge in the global knowledge pool.

The role of Government in development

The Government of INDIA is aware about the welfare of country and it taking all sorts of steps for making INDIA a well developed country for the people living here. Considering this Indian Government is coming forward for this and provides and implements the new programs time to time for the welfare of the country. The following program is presented by the UPA government.

* NATIONAL COMMON MINIMUM PROGRAMME OF THE GOVERNMENT OF INDIA * (May 2004)

Introduction : The people of India have voted decisively in the 14th Lok Sabha elections for secular, progressive forces, for parties wedded to the welfare of farmers, agricultural labour, weavers, workers and weaker sections of society, for parties irrevocably committed to the daily well-being of the common man across the country. In keeping with this mandate, the Congress, its pre-poll allies that include the RJD, DMK, NCP, PMK, TRS, JMM, LJP, MDMK, AIMIM, PDP, IUML, RPI (A), RPI (G) and KC(J) have come together to form a United Progressive Alliance (UPA). The UPA government supported by the Left Parties will have six basic principles for governance. to preserve, protect and promote social harmony and to

enforce the law without fear or favour to deal with all obscurantist and fundamentalist elements who seek to disturb social amity and peace. to ensure that the economy grows at least 7-8% per year in a sustained manner over a decade and more and in a manner that generates employment so that each family is assured of a safe and viable livelihood. to enhance the welfare and well-being of farmers, farm labour and workers, particularly those in the unorganized sector and assure a secure future for their families in every respect. to fully empower women politically, educationally, economically and legally. To provide for full equality of opportunity, particularly in education and employment for scheduled castes, scheduled tribes, OBCs and religious minorities. To unleash the creative energies of our entrepreneurs, businessmen, scientists, engineers and all other professionals and productive forces of society. The UPA makes a solemn pledge to the people of our country: to provide a government that is corruption-free, transparent and accountable at all times, to provide an administration that is responsible and responsive at all times. Employment :The UPA government will immediately enact a National Employment Guarantee Act. This will provide a legal guarantee for at least 100 days of employment to begin with on asset-creating public works programmes every year at minimum wages for at least one able-bodied person in every rural, urban poor and lower middle-class household. In the interim, a massive food-for-work programme will be started. The UPA government will establish a National Commission to examine the problems facing enterprises in the unorganized,

informal sector. The Commission will be asked to make appropriate recommendations to provide technical, marketing and credit support to these enterprises. A National Fund will be created for this purpose. The UPA administration will revamp the functioning of the Khadi and Village Industries Commission (KVIC) and launch new programmes for the modernization of coir, handlooms, powerlooms, garments, rubber, cashew, handicrafts, food processing, sericulture, wool development, leather, pottery and other cottage industries. The UPA government will give the highest investment, credit and technological horticulture, priority to the continued growth of agriculture, aquaculture, floriculture, afforestation,

dairying and agro-processing that will significantly add to the creation of new jobs. Along with vastly expanding credit facilities for smallscale industry and self-employment, the UPA government will ensure that the services industry will be given all support to fulfill its true growth and employment potential. This includes software and all ITenabled services, trade, distribution, transport, telecommunications, finance and tourism. The textile industry will be enabled to meet new challenges imposed by the abolition of quotas under the international multi-fibre agreement in January 2005. Given its special ecological importance world-wide and within the country, the jute industry will receive a fresh impetus in all respects. Agriculture :The UPA government will ensure that public investment in agricultural research and extension, rural infrastructure and irrigation is stepped up in a significant manner at the very earliest. Irrigation

will receive the highest investment priority and all on-going projects will be completed according to a strict time schedule. The rural cooperative credit system will be nursed back to health. The UPA government will ensure that the flow of rural credit is doubled in the next three years and that the coverage of small and marginal farmers by institutional lending is expanded substantially. The delivery system for rural credit will be reviewed. Immediate steps will be taken to ease the burden of debt and high interest rates on farm loans. Crop and livestock insurance schemes will be made more effective. The UPA government will introduce a special programme for dryland farming in the arid and semi-arid regions of the country. Watershed and wasteland development programmes will be taken up on a massive scale. Water management in all its aspects, both for irrigation and drinking purposes, will received urgent attention. The implementation Comprehensive UPA of administration minimum wage legislation will laws will ensure for be the farm fullest labour. for all

protective

enacted

agricultural workers. Revenue administration will be thoroughly modernized and clear land titles will be established. The UPA government will bring forward a Constitutional Amendment to ensure the democratic, autonomous and professional functioning of cooperatives. Controls that depress the incomes of farmers will be systematically removed. Farmers will be given greater say in the organizations that supply inputs to them. The UPA government will ensure that adequate protection is provided to all farmers from imports, particularly when international prices fall sharply.

The UPA government will ensure that government agencies entrusted with the responsibility for procurement and marketing will pay special attention to farmers in poor and backward states and districts. Farmers all over the country will receive fair and remunerative prices. The terms of trade will be maintained in favour of agriculture. The UPA government will take steps to ensure that dues to all farmers including sugarcane farmers will be cleared at the earliest. Education, Health :The UPA government pledges to raise public spending in education to least 6% of GDP with at least half this amount being spent of primary and secondary sectors. This will be done in a phased manner, The UPA government will introduce a cess on all central taxes to finance the commitment to universalize access to quality basic education. A National Commission on Education will be set up to allocate resources and monitor programmes. The UPA government will take immediate steps to reverse the trend of communalization of education that had set in the past five years. It will also ensure that all institutions of higher learning and professional education retain their autonomy. The UPA will ensure that nobody is denied professional education because he or she is poor. Academic excellence and professional competence will be the sole criteria for all appointments to bodies like the Indian Council for Historical Research, Indian Council for Social Science Research, University Grants Commission, National Council for Educational Research and Training, etc. Steps will be taken to remove the communalization of

the school syllabus that has taken place in the past five years. A review committee of experts will be set up for this purpose. A national cooked nutritious mid-day meal scheme funded mainly by the central government, will be introduced in primary and secondary schools. An appropriate mechanism for quality checks will also set up. The UPA will also universalize the Integrated Child Development Services (ICDS) scheme to provide a functional anganwadi in every settlement and ensure full coverage for all children. The UPA government will fully back and support all NGO efforts in the area of primary education. Proper infrastructure will be created in schools for NCC. NSS, physical development, sports and cultural development of all students. The UPA government will raise public spending on health to at least 2-3% of GDP over the next five years with focus on primary health care. A national scheme for health insurance for poor families will be introduced. The UPA will step up public investment in programmes to control all communicable diseases and also provide leadership to the national AIDS control effort. The UPA government will take all steps to ensure availability of life-savings drugs at reasonable prices. Special attention will be paid to the poorer sections in the matter of health care. The feasibility of reviving public sector units set up for the manufacture of critical bulk drugs will be re-examined so as to bring down and keep a check on prices of drugs. Women and Children :-

The UPA government will take the lead to introduce legislation for one-third reservations for women in vidhan sabhas and in the Lok Sabha. Legislation on domestic violence and against gender discrimination will be enacted. The UPA government will ensure that at least one-third of all funds flowing into panchayats will be earmarked for programmes for the development of women and children. Village women and their associations will be encouraged to assume responsibility for all development schemes relating to drinking water, sanitation, primary education, health and nutrition. Complete legal equality for women in all spheres will be made a practical reality, especially by removing discriminatory legislation and by enacting new legislation that gives women, for instance, equal rights of ownership of assets like houses and land. The UPA government will bring about a major expansion in schemes for micro-finance based on self-help groups, particularly in the backward and ecologically fragile areas of the country. The UPA government is committed to replicating all over the country the success that some southern and other states have had in family planning. A sharply targeted population control programme will be launched in the 150-odd high-fertility districts. The UPA government recognizes that states that achieve success in family planning cannot be penalized. The UPA government will protect the rights of children, strive for the elimination of child labour, ensure facilities for schooling and extend

special care to the girl child. Food and Nutrition Security :The UPA will work out, in the next three months, a comprehensive medium-term strategy for food and nutrition security. The objective will be to move towards universal food security over time, if found feasible. The UPA government will strengthen the public distribution system (PDS) particularly in the poorest and backward blocks of the country and also involve womens and ex-servicemens cooperatives in its management. Special schemes to reach foodgrains to the most destitute and infirm will be launched. Grain banks in chronically foodscarce areas will be established. Antyodaya cards for all households at risk of hunger will be introduced. The UPA government will bring about major improvements in the functioning of the Food Corporation of India (FCI) to control inefficiencies that increase the food subsidy burden. Nutrition programmes, particularly for the girl child will be expanded on a significant scale. Panchayati Raj :The UPA government will ensure that all funds given to states for implementation of poverty alleviation and rural development schemes by Panchayats are neither delayed nor diverted. Monitoring will be strict. In addition, after consultations with states, the UPA government will consider crediting elected Panchayats with such funds directly. Devolution of funds will be accompanied by similar devolution of functions and functionaries as well. Regular elections to panchayat bodies will be ensured and the

amended Act is respect of the Fifth and Sixth Schedule Areas will be implemented. The UPA government will ensure that the Gram Sabha is empowered to emerge as the foundation of panchayati raj. Scheduled Castes, Scheduled Tribes :The UPA will urge the states to make legislation for conferring ownership rights in respect of minor forest produce, including tendu patta, on all those people from the weaker sections who work in the forests. All reservation quotas, including those relating to promotions, will be fulfilled in a time-bound manner. To codify all reservations, a Reservation Act will be enacted. The UPA government will launch a comprehensive national programme for minor irrigation of all lands owned by dalits and adivasis. Landless families will be endowed with land through implementation of land ceiling and land redistribution legislation. No reversal of ceilings legislation will be permitted. The UPA administration will take all measures to reconcile the objectives of economic growth and environmental conservation, particularly as far as tribal communities dependent on forests are concerned. The UPA is concerned with the growth of extremist violence and other forms of terrorist activity in different states. This is not merely a law-and-order problem, but a far deeper socio-economic issue which will be addressed more meaningfully than has been the case so far. False encounters will not be permitted.

The UPA government will immediately review the overall strategy and programmes for the development of tribal areas to plug loopholes and to work out more viable livelihood strategies. In addition, more effective systems of relief and rehabilitation will be put in place for tribal and other groups displaced by development projects. Tribal people alienated from land will be rehabilitated. The UPA government is very sensitive to the issue of affirmative action, including reservations, in the private sector. It will immediately initiate a national dialogue with all political parties, industry and other organizations to see how best the private sector can fulfill the aspirations of scheduled caste and scheduled tribe youth. Eviction of tribal communities and other forest-dwelling communities from forest areas will be discontinued. Cooperation of these communities will be sought for protecting forests and for undertaking social afforestation. The rights of tribal communities over mineral resources, water sources, etc as laid down by law will be fully safeguarded. Social Harmony, Welfare of Minorities :The UPA is committed to the implementation of the Places of Worship (Special Provisions) Act, 1992. On Ayodhya, it will await the verdict of the courts, while encouraging negotiations between parties to the dispute for an amicable settlement which must, in turn, receive legal sanction. The UPA government will enact a model comprehensive law to deal with communal violence and encourage each state to adopt that law to generate faith and confidence in minority communities.

The UPA government will amend the Constitution to establish a Commission for Minority Educational Institutions that will provide direct affiliation for minority professional institutions to central universities. The UPA will promote modern and technical education among all minority communities. Social and economic empowerment of minorities through more systematic attention to education and employment will be a priority concern for the UPA. The UPA will establish a National Commission to see how best the welfare of socially and economically backward sections among religious and linguistic minorities, including reservations in education and employment, is enhanced. The Commission will be given six months to submit its report. Adequate funds will be provided to the National Minorities Development Corporation to ensure its effective functioning. The UPA government will examine the question of providing Constitutional status to the Minorities Commission and will also strive for recognition and promotion of Urdu language under Article 345 and 347 of the Constitution. The National Integration Council will be restructured and revived so as to fulfill its original objectives. It will meet at least twice a year. Infrastructure :The UPA attaches the highest priority to the development and expansion of physical infrastructure like roads, highways, ports, power, railways, water supply, sewage treatment and sanitation. Public investment in infrastructure will be enhanced, even as the role of the private sector is expanded. Subsidies will be made explicit and provided through the budget.

The review of the Electricity Act, 2003 will be undertaken in view of the concern expressed by a number of states. The mandatory date of June 10, 2004 for unbundling and replacing the state electricity boards will be extended. The UPA government also reiterates its commitment to an increased role for private generation of power and more importantly power distribution. Railways constitute the core of our infrastructure. Public investment for its modernization, track renewal and safety will be substantially increased. Railways reforms will be pursued. The UPA government commits itself to a comprehensive programme of urban renewal and to a massive expansion of social housing in towns and cities, paying particular attention to the needs of slum dwellers. Housing for the weaker sections in rural areas will be expanded on a large scale. Forced eviction and demolition of slums will be stopped and while undertaking urban renewal, care will be taken to see that the urban and semi-urban poor are provided housing near their place of occupation. The UPA will pay special attention to augmenting and modernizing rural infrastructure consisting of roads, irrigation, electrification, cold-chain and marketing outlets. All existing irrigation projects will be completed with three to four years. Household electrification will be completed in five years.

Water Resources :The UPA government will make a comprehensive assessment of the feasibility of linking the rivers of the country starting with the south-bound rivers. This assessment will be done in

a fully consultative manner. It will also explore the feasibility of linking sub-basins of rivers in states like Bihar. The UPA will take all steps to ensure that long-pending inter-state disputes on rivers and water-sharing like the Cauvery Waters dispute are settled amicably at the earliest keeping in mind the interests of all parties to the dispute. To put an end to the acute drinking water shortage in cities, especially in southern states, desalination plants will be installed all along the Coromandel Coast starting with Chennai. Special problems of habitations in hilly terrains will be addressed immediately. Providing drinking water to all sections in urban and rural areas and augmenting availability of drinking water sources is an issue of the topmost priority. Harvesting rain water, desilting existing ponds and other innovative mechanisms will be adopted. Regional Development, Centre-State Relations :The UPA government is committed to redressing growing regional imbalances both among states as well as within states, through fiscal, administrative, investment and other means. It is a matter of concern that regional imbalances have been accentuated by not just historical neglect but also by distortions in Plan allocations and central government assistance. Even in the Tenth Five Year Plan , states like Bihar, Assam and UP have received per capita allocations that are much below the national average. The UPA government will consider the creation of a Backward States Grant Fund that will be used to create productive assets in these states. The central government will also take proactive measures to speed up the industrialization of the eastern and northeastern region.

A structured and transparent approach to alleviate the burden of debt on states will be adopted at the earliest, so as to enable them to increase social sector investments. Interest rates on loans to states will be reduced and the share of states in the single, divisible pool of taxes enhanced. All non-statutory resource transfers from the central government will be weighted in favour of poor and backward states but with performance parameters as well. A special programme for social and physical infrastructure development in the poorest and most backward districts of the country will be taken up on a priority basis. The UPA government will take special measures to ensure that regions of India like in the east where the credit:deposit ratio is lagging, is improved substantially. The UPA government will review the issue of payment of royalties to states in the area of minerals. From time to time, previous governments have announced special economic packages as, for example, for the northeast, for Bihar and for J&K. For Bihar, Shri Rajiv Gandhi had announced a special development package in 1989 and subsequently another package was announced at the time of its division in 1999 to make up for the loss of revenue. These packages will be implemented expeditiously. The UPA government will make the National Development Council (NDC) a more effective instrument of cooperative federalism. The NDC will meet at least twice a year and in different states. Immediately, the NDC will take up the issue of the financial health of states and arrive at a national consensus on specific steps to be taken in this regard. The Inter-State Council will also be activated. All

centrally-sponsored schemes except in national priority areas like family planning will be transferred to states. The UPA government will consider the demand for the formation of a Telangana state at an appropriate time after due consultations and consensus. The Sarkaria Commission had last looked at the issue of Centre-State relations over two decades ago. The UPA government will set up a new Commission for this purpose keeping in view the sea-changes that have taken place in the polity and economy of India since then. Long-pending schemes in specific states that have national significance, like the Sethu Samuthuiram project, flood control and drainage in North Bihar (that requires cooperation with Nepal as well) and Prevention of Erosion in PadmaGanga and Bhagirithi flood control in West Bengal will be completed expeditiously. A Flood-prone Area Development Programme will be started and the central government will fully support flood control works in inter-state and international rivers. All existing schemes for drought-prone area development will be reviewed and a single major national programme launched. Jammu and Kashmir, Northeast :The UPA government is pledged to respecting the letter and spirit of Article 370 of the Constitution that accords a special status to J&K. Dialogue with all groups and with different shades of opinion in J&K will be pursued on a sustained basis, in consultation with the democratically-elected state government. The healing touch policy pursued by the state government will be fully supported and an economic and humanitarian thrust provided to it. The state will be given every assistance to rebuild its infrastructure quickly. New

efforts will be launched to bring investments in areas like power, tourism, handicrafts and sericulture. The UPA government is determined to tackle terrorism, militancy and insurgency in the northeast as a matter of urgent national priority. All northeastern states will be given special assistance to upgrade and expand infrastructure. The Northeastern Council will be strengthened and given adequate professional support. The territorial integrity of existing states will be maintained. Administrative Reforms :The UPA will set up an Administrative Reforms Commission to prepare a detailed blueprint for revamping the public administration system. E-governance will be promoted on a massive scale. The Right to Information Act will be made more progressive, participatory and meaningful. The Lok Pal Bill will be enacted into law. The UPA government will take the leadership role to drastically cut delays in High Courts and lower levels of the judiciary. Legal aid services will be expanded. Judicial reforms will be given a fresh momentum. As part of its commitment to electoral reforms, the UPA will initiate steps to introduce state funding of elections at the earliest. Industry :The UPA will take all necessary steps to revive industrial growth and put it on a robust footing, through a range of policies including deregulation, where necessary Incentives to boost private investment will be introduced. FDI will continue to be encouraged and actively sought particularly in areas of infrastructure, high-technology and exports and where local assets and employment are created on a significant scale. The country needs and can easily absorb at least

two to three times the present level of FDI inflows. Indian industry will be given every support to become productive and competitive. All regulatory institutions will be strengthened to ensure that competition is free and fair. These institutions will be run professionally. The UPA government will set up a National Manufacturing Competitiveness Council to provide a continuing forum for policy dialogue to energise and sustain the growth of manufacturing industry like food processing, textiles and garments, engineering, consumer goods, pharmaceuticals, capital goods, leather, and IT hardware. Household and artisanal manufacturing will be given greater technological, investment and marketing support. In the past few years, the most employment-intensive segment of small-scale industry (SSI) has suffered extensively. A major promotional package for the SSI sector will be announced soon. It will be freed from the Inspector Raj and given full credit, technological and marketing support. Infrastructure upgradation in major industrial clusters will receive urgent attention. Competition in the financial sector will be expanded. savers, Public sector banks will and be given full managerial The UPA autonomy. Interest rates will provide incentives both to investors and particularly pensioners senior citizens. government will never take decisions on the Employers Provident Fund (EPF) without consultations with and approval of the EPF Board. Regulation of urban cooperative banks in particular and of banks in general will be made more effective. LIC and GIC will continue to be in the public sector and will continue to play their social role. In addition, the social obligations imposed by regulatory bodies on private banks

and private insurance companies will be monitored and enforced strictly. Labour :The UPA government is firmly committed to ensure the welfare and well-being of all workers, particularly those in the unorganized sector who constitute 93% of our workforce. Social security, health insurance and other schemes for such workers like weavers, handloom workers, fishermen and fisherwomen, toddy tappers, leather workers, plantation labour, beedi workers, etc will be expanded. The UPA rejects the idea of automatic hire and fire. It recognizes that some changes in labour laws may be required but such changes must fully protect the interests of workers and families and must take place after full consultation with trade unions. The UPA will pursue a dialogue with industry and trade unions on this issue before coming up with specific proposals. However, labour laws other than the Industrial Disputes Act that create an Inspector Raj will be re-examined and procedures harmonized and streamlined. The management consultations, UPA government in our and firmly country believes must be not that labourby relations marked

cooperation

consensus,

confrontation.

Tripartite consultations with trade unions and industry on all proposals concerning them will be actively pursued. Rights and benefits earned by workers, including the right to strike according to law, will not be taken away or curtailed. Public sector :The UPA government is committed to a strong and effective public sector whose social objectives are met by its

commercial functioning. But for this, there is need for selectivity and a strategic focus. The UPA is pledged to devolve full managerial and commercial autonomy to successful, profitmaking companies operating in a competitive environment. Generally profit-making companies will not be privatized. All privatizations will be considered on a transparent and consultative case-by-case basis. The UPA will retain existing navaratna companies in the public sector while these companies raise resources from the capital market. While every effort will be made to modernize and restructure sick public sector companies and revive sick industry, chronically loss-making companies will either be sold-off, or closed, after all workers have got their legitimate dues and compensation. The UPA will induct private industry to turn around companies that have potential for revival. The UPA government believes that privatization should increase competition, not decrease it. It will not support the emergence of any monopoly that only restrict competition. It also believes that there must be a direct link between privatization and social needs---like, for example, the use of privatization revenues for designated social sector schemes. Public sector companies and nationalized banks will be encouraged to enter the capital market to raise resources and offer new investment avenues to retail investors. Fiscal Policy :The UPA government commits itself to eliminating the revenue deficit of the centre by 2009, so as to release more resources for investments in social and physical infrastructure. All subsidies will be targeted sharply at the poor and the truly needy like

small and marginal farmers, farm labour and the urban poor. A detailed roadmap for accomplishing this will be unveiled in Parliament within 90 days. The UPA government will not cut deficits by reducing or curtailing growth of investment and development outlays. The UPA government is pledged to the early introduction of VAT after all the necessary technical and administrative homework has been completed, particularly on issues like the integration of service sector taxation and compensation to states. It will initiate measures to increase the tax: GDP ratio by undertaking major tax reforms that expand the base of taxpayers, increase tax compliance and make the tax administration more efficient. Tax rates will be stable and conducive to growth, compliance and investment. Special schemes to unearth black money and assets will be introduced. The UPA government will take effective and strong measures to control the price hike of essential commodities. Provisions to deal with peculators, hoarders and black- marketeers under the Essential Commodities Act will not be diluted in any way. Capital Markets :The UPA government is deeply committed, through tax and other policies, to the orderly development and functioning of capital markets that reflect the true fundamentals of the economy. Financial markets will be deepened. FIIs will continue to be encouraged while the vulnerability of the financial system to the flow of speculative capital will be reduced. Misuse of double taxation agreements will be stopped. Interests of small investors will be protected and they will be given new avenues for safe investment of their savings. SEBI will be further strengthened. Strictest action will be taken against market

manipulators and those who try to deliberately engineer market panic. Economic Reforms :The UPA reiterates its abiding commitment to economic reforms with a human face, that stimulates growth, investment and employment. Further reforms are needed and will be carried out in agriculture, industry and services. The UPAs economic reforms will be oriented primarily to spreading and deepening rural prosperity, to significantly improving the quality of public systems and delivery of public services, to bringing about a visible and tangible difference in the quality of life of ordinary citizens of our country. Defence, Internal Security :The UPA government will ensure that all delays in the modernization of the armed forces are eliminated and that all funds earmarked for modernization are spent fully at the earliest. The UPA will set up a new Department of Ex-Servicemens Welfare in the Ministry of Defence. The long pending issue of one-rank, one-pension will be re-examined. The UPA government will make the National Security Council a professional and effective institution. The UPA government is committed to maintaining a credible nuclear weapons programme while at the same time it will evolve demonstrable and verifiable confidence-building measures with its nuclear neighbours. It will take a leadership role in promoting universal, nuclear disarmament and working for a nuclear weapons-free world. The UPA has been concerned with the manner in which POTA has been grossly misused in the past two years. There will be

no compromise in the fight against terrorism. But given the abuse of POTA that has taken place, the UPA government will repeal it, while existing laws are enforced strictly. The UPA government will take the strictest possible action, without fear or favour, against all those individuals and organizations who spread social discord, disturb social amity, propagate religious bigotry and communal hatred. The law of the land will be enforced effectively. Science and Technology :The UPA government will follow policies and introduce programmes that strengthen Indias vast science and technology infrastructure. Science and technology development and application missions will be launched in key areas, covering both global leadership and local transformation. The UPA government will mobilize the skills and expertise of Indian scientists, technologists and other professionals working abroad for institution-building and other projects in the country. Energy Security :The UPA government will immediately put in place policies to enhance the countrys energy security particularly in the area of oil. Overseas investments in the hydrocarbon industry will be actively encouraged. An integrated energy policy linked with sustainable development will be put in place. Foreign Policy, International Organisations :The UPA government will pursue an independent foreign policy

keeping in mind its past traditions. This policy will seek to promote multi-polarity unilateralism. The UPA government will give the highest priority to building closer political, economic and other ties with its neighbours in South Asia and to strengthening SAARC. Particular attention will be paid to regional projects in the area of water resources, power and ecological conservation. Dialogue with Pakistan on all issues will be pursued systematically and on a sustained basis. The UPA will support peace talks in Sri Lanka that fulfill the legitimate aspirations of Tamils and religious minorities within the territorial integrity and solidarity of Sri Lanka. Outstanding issues with Bangladesh will be resolved. Intensive dialogue will be initiate with Nepal for developing water resources to mutual advantage. Trade and investment with China will be expanded further and talks on the border issue pursued seriously. Relationships with East Asian countries will be intensified. Traditional ties with West Asia will be given a fresh thrust. The UPA government reiterates Indias decades-old commitment to the cause of the Palestinian people for a homeland of their own. Steps will be taken to withdraw Indian mercenaries from Iraq while further recruitment for this purpose will be banned. Even as it pursues closer engagement and relations with the USA, the UPA government will maintain the independence of Indias foreign policy position on all regional and global issues. The UPA is committed to deepening ties with Russia and Europe as well. In keeping with the stance adopted by the late Shri Murasoli Maran at Doha, the UPA government will fully protect the in world relations and oppose all attempts at

national interest, particularly of farmers, in all WTO negotiations. Commitments made earlier will be adhered to, even as efforts are mounted to ensure that all agreements reflect our concerns fully particularly in the area of intellectual property and agriculture. The UPA government will use the flexibility afforded in existing WTO agreements to fully protect Indian agriculture and industry. The UPA government will play a proactive role in strengthening the emerging solidarity of developing countries in the shape of G-20 in the WTO. Official Language :The UPA government will set up a committee to examine the question of declaring all languages in the Eighth Schedule of the Constitution as official languages. In addition, Tamil will be declared as a classical language. A Final Word :This is a common minimum programme (CMP) for the UPA government. It is, by no means, a comprehensive agenda. It is a starting point that highlights the main priorities, policies and programmes. The UPA is committed to the implementation of the CMP. This CMP is the foundation for another CMPcollective maximum performance.

Active part of Women in Indian Politics :

For this purpose I collected a unique and detailed dataset on politicians in India who contested in elections between 1967-2001 and I matched them to individuals by district of residence. These data allows me to identify close elections between women and men, which yield quasi-experimental election outcomes used to estimate the causal effect of a politician's gender.

I find that increasing female political representation by 10 percentage points increases the probability that an individual attains primary education in urban areas by 6 percentage points, which is 21% of the difference in primary education attainment between the richest and the poorest Indian states. That seems like a remarkably strong effect. Clots-Figueras concludes her paper by noting that her findings "may have policy implications". The issue of female political representation has been increasingly important in India and there have been growing pressures for female political reservation. In September 1996, the Government introduced a Bill in Parliament, proposing the reservation of one third of the seats for women in the Central Government and the State Assemblies. Since then, this proposal has been widely discussed in several parliamentary sessions, without an agreement being reached. Those in favour argue that increasing female political representation will ensure a better representation of their needs. Even those who oppose the reservation acknowledge the fact that female politicians behave differently than male politicians. This paper corroborates these views with empirical

evidence and may shed some light on these issues, by looking at the effect of the politicians gender on education. Clearly, reservation would increase female representation, but it would as well change the nature of political competition, either by changing the set of candidates available for each seat, by altering voters preferences or by changing the candidates quality.
(Irma Clots-Figueras at the LSE)

The role of Financial Institutions in development

Finance of any country plays a very vital role in the development of any country. So in India financial sector, policies and their implementations are very effective to make the country financially strong. To justify this some of the reports are presented in front you.

Historical perspective :India is amongst the founder members of IBRD, IDA and IFC. IBRD assistance to India started from 1948 when funding for Agricultural Machinery Project was approved. World Bank resident mission was established in India in 1957. In August 1958, the first meeting of the Aid India Consortium (now called India Development Forum) was held at Washington DC under the aegis of the World Bank. First investment in IFC in India took place in 1959 with US $ 1.5 million financing for Republic Forge. IDA lending commenced for India in the very first year of IDA in 1961 with Highway Construction Roads project financed with a credit of US $ 71.6 million. India became a member of MIGA in January 1994.

Capital Share :India holds 44,795 shares in IBRD, each being valued at US$ 120,635. India's total committed subscription to IBRD is US $ 5403.8 million. India's paid subscription (including securities) is US $

333.7 million. India's voting power in IBRD is 2.79%. Indian constituency, which includes Sri Lanka, Bangladesh and Bhutan, holds 3.41%voting power. India's voting power in IDA is 3.06 %. India's total committed subscription to IDA is US $ 55.8 million. India participated in the IDA-13 replenishment process, as borrowers representative for South Asia. IDA-13 process concluded with the last meeting held in London, UK on 1st July 2002. India's commitment to IDA-13 is to the tune of Rs.3.93 crores. India's share in IFC's capital is 3.45% with 81,342 shares of US $ 1000 each. In MIGA, India holds 1.73% voting power with total commitment of US $ 58.1 million. Finance Minister of India is the Governor on the Board of Governors representing the constituencies of India, Bangladesh, Bhutan and Sri Lanka. Finance Secretary is India's Deputy. India nominates an Executive Director for the Indian constituency, who is formally elected.

Borrowing/Guarantees:IBRD/IDA lending is in broadly two categories namely, investment lending and adjustment lending (sectoral /structural). Investment lending is project based and constitutes about 9/10th of India's borrowing. Adjustment lending addresses the borrowers medium term program of policy and institutional reforms either on a sectoral basis or on countrywide basis.

IBRD loans, though non-concessional, are available at relatively more favorable term than commercial sources. The repayment period for India is at present 20 years, inclusive of 5 years grace period. The Bank offers three types of loans presently - single currency variable spread loans, single currency fixed spread loans & local currency loans. India was earlier borrowing under currency pool loans. Presently India is borrowing under variable spread single currency loans (VSLs). The current rate of interest on VSLs ranges between 1.60 to 1.90% depending upon year of negotiation. IDA commitments, known as "credits" carry no interest charge but a service charge of 0.75% is levied on the disbursed portion of the credit. Commitment charges on undisbursed balances are fixed every year upto a maximum of 0.5%. However, Commitment Charges are being waived fully since 1989-90. The credits to India approved upto 30th June, 1987 are repayable in 50 years, inclusive of a grace period of 10 years and those approved from 1st July 1987 are repayable in 35 years inclusive of a grace period of 10 years. IFC does not finance government projects. Nor does it seek Government guarantee for private projects. MIGA provides political risk guarantees. Investors willing to invest in Indian projects or Indian companies intending to make investment in other MIGA member country projects can avail MIGA guarantees. World Bank procurement guidelines for projects, applicable for Indian projects as well are accessible at:
http://www.worldbank.org/html/opr/procure/

World Bank project status :-

Department programmes for Bank

of

Economic

Affairs due

poses

projects/ with

Assistance

after

consultation

concerned Line Ministries. A proposal posed to the Bank is classified as pipeline project. Following rojects are currently under pipeline: 1.TamiNaduStateHighway Project 2. Rural Roads Project 3. Rajasthan Health Systems development project 4. Tamil Nadu Sate Health System Development Project 5. Assam State Health System Development Project 6. Integrated Disease Surveillance Project 7. Reproductive and Child Development Phase-II 8. Food and Drugs Capacity Building Project 9. Kerala State Health System Development Project 10. Maharashtra Rural Water Supply and Sanitation Project (2) 11. Madhya Pradesh Community Forest Management project 12. Karnataka Urban Services and Municipal Strengthening Project 13. Second Maharashtra Rural Water Supply & Sanitation Project 14. Tamil Nadu Water Supply & Sanitation Project for Rural Areas 15. Uttar Pradesh Rural Water Supply & Sanitation Project-Follow on 16. Uttaranchal Rural Water Supply & Sanitation Project-II 17. Assam Rural Water Supply & Sanitation (Watsan) Project 18. M.P. Rural Water Supply & Sanitation Project 19. Arunachal Pradesh Forestry Project 20. Assam Forestry Project 21. West Bengal Forestry Project-II 22. Chhatishgarg/M.P. Forestry Phase-II Project 23. Maharashtra Forestry Project 24. Gujarat Forestry Project

25. Manipur Forestry Project 26. Jharkhand Forestry Project 27. Tripura Forestry Project 28. Gujarat Urban Reform Project 29. Chhattisgarh Community Forest Management project 30. Andhra Pradesh Rural Poverty Reduction Project 31. Allahabad Bypass Project 32. Agricultural Higher Education Reforms Project 33. Integrated Rural Dev. Support Programme in Gujarat 34. Tamil Nadu Empowerment and Poverty Reduction Project 35. Tripura Agricultural Development Project 36. Chattisgarh District Rural Poverty Project 37. Assam Rural Infrastructure & Agricultural Services Project-Phase II 38. 'CHETANA' (Community Heralded Empowerment, Transformation and New Awakening) 39. Integrated New and Sustainable Technologies for Elimination of Poverty Project (INSTEP) Global The Technical Education Quality Improvement Programme was negotiated in September, 2002. The Agreement was signed on 4.2.2003 and it has become effective on 12.03.2003. Department of Economic Affairs egotiates projects with the Bank. The projects negotiated and signed in the current ear are:

Sl

Name of the Project

Amount in US $ million Date of

No . 1. Karnataka Community Based Tank Management Project 2. Gujarat Emergency Recon. Programme (Phase-II) 3. Kerala State Transport Project 4. Mizoram State Road Project 5. Mumbai Urban Transport Project 6. 2nd Karnataka Rural Water Supply Project 7. A.P. Community Forestry Management

IBRD IDA Total

Signing

---------

98.9

98.9

4.6.2002

--------

442.8

442.8

4.6.2002

255.0

---------

255.0

6.5.2002

---------

60.0

60.0

6.5.2002

463.0

79.0

542.0

16.7.2002

--------

151.6

151.6

8.3.2002

--------

108.0

108.0

8.10.2002

Project 8. Uttar Pradesh State Roads Project 9. Andhra Pradesh Rural Poverty Reduction Project 10. Chhatisgarh District Rural Poverty Project -------107.00 107.00 To be signed -------150.00 150.00 3.4.2003 488.00 ------488.00 19.02.2003

INTERACTION AND ASSISTANCE FROM WORLD BANK GROUP :The Fund Bank Division is responsible for conducting policy interaction with World Bank, contracting loans/ credits/ grants from International Bank for Reconstruction and Development (IBRD) and International Development Association (IDA), providing country clearance for International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency (MIGA) financing and guarantees for private sector projects in India.

ACTS / RULES BEING ADMINISTERED :

International Monetary Fund and Bank Act, 1945 International Finance Corporation (Status Immunities and Privileges) Act, 1958

International Development Association (Status, Immunities and Privileges Act) 1960

World bank projects under implementation :World bank projects under implementation: Project-wise, sector-wise, state-wise details of World Bank projects under implementation in India can be seen at: http://www.finmin.nic.in/the_ministry/dept_eco_affairs/_ aids_accounts_audit/caaa/mainframe.html

Annual Meetings :Each autumn (Sept.- Oct.) the Boards of Governors of the World Bank Group and International Monetary Fund (IMF) hold their Annual Meetings to discuss a range of issues related to poverty reduction, international economic development and finance. The Annual Meetings provide a forum for international cooperation and enable the Bank and Fund to better serve their member countries. In addition to the meetings of the the Boards of Governors, Monetary the and Development Committee and International

Financial Committee are also convened. The last Annual Meetings of the IMF and World Bank and G24 Meetings were held in Washington DC during 26-29th September 2002. Shri Jaswant Singh, Finance and Company Affairs' Minister led the Indian delegation while other members of the delegation were Dr. Bimal Jalan, Governor, RBI, Dr. S. Narayan, Finance Secretary, Dr Adarsh Kishore, Additonal Secretary (FB), Shri D. Swarup, Additional Secretary (Budget), Shri S. C. Garg, Director (FB) and Shri V. Sriniwas, Private Secretary to F&CAM. The delegation attended the G-24 Deputies and Ministers meetings held on 26th and 27th September 2002 followed by the International Monetary and Financial Committee

(IMFC) Meeting and Development Committee (DC) Meeting on 28th September 2002 and the Annual Meetings on 29th September 2002. The Development Committee meeting mainly focussed on (i) Implementing the Monterrey Consensus which included discussions on (a) development Effectiveness and Scaling Up; Policy Conclusions of Case Studies on Education for All; HIV/ AIDS/ Communicable Diseases and Water in the Community; (b) Better Measuring, Monitoring and Managing for Development Results, and (ii) HIPC Joint Bank-Fund Progress Report.

Spring Meetings :Each Spring, the joint Bank-IMF Development Committee (DC) and the IMF's International Monetary and Financial Committee (IMFC) hold meetings to discuss progress on the work of the Bank and Fund. Last Spring Meetings of the IMF and World Bank were held during 10-13 April 2003 in Washington DC, USA. Due to preoccupation of Finance Minister Governor, RBI led Indian delegation in IMFC whereas Finance Secretary led the same in Development Committee. Other members of the delegation were Dr. Ashok Lahiri, Chief Economic Advisor, Dr. Adarsh Kishore, Additional Secretary (FB) and Shri S. C. Garg, Director (FB). The Development Committee meeting mainly focused on Implementing and Monitoring Monterrey Consensus and scaling up initiatives in four key areas of Education for All, Water and Sanitation, Health and HIV Aides and the voice and representation of Developing Countries. IMFC devoted its attention on

global economic outlook, vulnerabilities in the financial sector, sovereign debt restructuring mechanism.
FM's speeches at DC Meetings and DC Communiqus HTTP://WBLN0018.WORLDBANK.ORG/DCS/DEVCOM.NSF

GLOBAL ENVIRONMENT FACILITY (GEF) :The Global Environment Facility (GEF) is financial mechanism that provides grants funds to developing countries for projects and activities that aim to protect the global environment. GEF resources are available for projects and other activities that address the four designated focal areas - global warming, loss of biological diversity, pollution of international waters, and depletion of the ozone layer - and those that combat land degradation, desertification, and deforestation as they relate to the focal areas. India has been a leading developing country participant in the GEF since its inception in 1991 and has played a major role in shaping the restructuring of the GEF. India is both a donor and a recipient of GEF. It had contributed US $ 6.0 m. to a core fund of US $ 1.3 billion of GEF Pilot Phase. The first replenishment of the GEF had over US $ 2.0 billion to its core fund. India had pledged an amount of US $ 9.0 million towards the resources of first GEF replenishment. The second replenishment of GEF have over US $ 2.75 billion to its core fund and India has pledged and paid an amount of US $ 9.0 m. (equivalent to Rs.32.283 crores) towards its resources. For the IIIrd Replenishment of GEF an amount of US $ 3 billion has been pledged out of which India's contribution will be US$ 9 million.

So far GEF funds of US $ 193.388 m. (approx.) have been committed/obtained for different projects of India since its inception 1991 till date. India has formed a permanent Constituency in the Executive Council of the GEF together with the Bangladesh, Sri Lanka, Bhutan, Nepal and Maldives. The Council meetings are held semiannually or as frequently as necessary. At each meeting the Council elect a chairperson from among its members for the duration of that meeting. AS(FB) represents the GEF Council from our Constituency.
For more on GEF please refer to DGF website www.gef.org

INTERNATIONAL FUND FOR AGRICULTURAL DEVELOPMENT (IFAD) :India is one of the original members of the IFAD. Following are the contributions made by India towards the resources of IFAD : -

Initial First replenishment Second replenishment Third replenishment Fourth replenishment Fifth replenishment

US $ 5.0 million US $ 6.5 million US $ 6.5 million US $ 8.0 million US $ 9.0 million *US$ 12.0 million

*So far only US$ 8 million has been paid to the IFAD's resources. Since inception, India has contributed US$ 43 million towards the resources of IFAD till August, 2002. The process for finalizing our contribution to the 6th Replenishment is in progress. Currently, India is a member of Executive Board of IFAD and elections to the Executive Board of IFAD would be held in February, 2003. Mr. Phrang Roy, an Indian has been appointed as Assistant President of IFAD w.e.f. 18th February, 2002 at the initiative taken by Govt. of India with IFAD. IFAD has so far assisted in 16 projects in the Agriculture and Rural Development with a commitment of US$ 405 million on highly concessional terms. Recently Orissa Tribal Empowerment and Livelihood Programme has been signed on 18th December, 2002. Currently IFAD is implementing 7 projects in India.

Department programmes for IFAD

of

Economic

Affairs due

poses

projects/ with

Assistance

after

consultation

concerned Line Ministries. A proposal posed to the Bank is classified as pipeline project. Following projects are currently under pipeline: 1. Maharashtra Rural Credit Project Phase-II 2. Livelihood Improvement Project for the Himalayas
For further details on IFAD operations & orocedures, please refer to IFAD's website at http://www.ifad.org

IFAD projects under implementation in India Project wise & State wise details of IFAD projects under implementation in India can be seen at http:/www.finmin.nic.in/the ministry/dept_eco affairs/aids-accountsaudit/caaa/main frame.html

DEVELOPMENT GATEWAY FOUNDATION :The Development Gateway Foundation Inc. (DGF) is a nonprofit corporation based at Washington D.C., USA. The Foundation plans to promote the use of Information and Communication Technologies(ICT) for poverty reduction and sustainable development. India is a founder member of DGF. The following countries apart from World Bank are on its Board viz., Germany, Japan, Australia, Mali(Netherlands), India, South Korea and Pakistan. Govt. of India has agreed to contribute a total of US $ 5 million over 3 years. DGF has set up a Research and Training Centre (RTC) in India in 2002. National Centre for Software Technology (NCST), Bangalore is the implementing agency (NCST has merged with Centre for Development of Advanced Computing (C-DAC) with effect from December 16, 2002).

INDIA and the INTERNATIONAL MONETARY FUND (IMF):BRIEF HISTORY OF THE IMF :The International Monetary Fund (IMF) was established along with the International Bank for Reconstruction and Development (also known as World Bank) at the Conference of 44 nations held at Bretton Woods, New Hampshire, USA in July 1944. It was created to promote international monetary cooperation; to facilitate the expansion and balanced growth of international trade; to promote exchange stability; to assist in the establishment of a multilateral system of payments; to make its general resources temporarily available to its members experiencing balance of payments difficulties under adequate safeguards; and to shorten the duration and lessen the degree of disequilibria in the international balances of payments of members. The Articles of Agreement of IMF came into force on December 27, 1945. IMF is the Principal International Monetary Institution established to promote a cooperative and stable global monetary framework. At present, 184 nations are members of the IMF. East Timor became the newest member in July 2002.

Operations- Lending / Portfolio :As on March 28, 2003 the IMF's was providing assistance to 17 countries with a total commitment of SDR 55.078 billion.

Board of Governors :-

The Board of Governors of the IMF, consisting of one Governor and one Alternate Governor from each member country, usually meets once a year - at the time of Annual Meetings (generally held in September/October). India is a founder member of the IMF and the Finance Minister is the ex-officio Governor on the Board of Governors of the IMF. Governor, RBI is India's Alternate Governor (alternate to the Finance Minister) on the Board of Governors.

Board of Executive Directors :The day-to-day management of the IMF is carried out by the Managing Director. The Board of Executive Directors, consisting of 24 Directors appointed/elected by member countries/group of countries, is the executive body of the IMF, of which the Managing Director is the Chairman. Mr. Horst Kohler, a German national is the Managing Director since May 2000. There are three Deputy Managing Directors. India is represented in this institution by an Executive Director (currently Mr. B.P. Misra) who also represents three other countries, viz. Bangladesh, Sri Lanka and Bhutan.

I.M.F.C. :The International Monetary and Financial Committee (IMFC) of the Board of Governors (formerly Interim Committee of the International Monetary System) is an advisory body made up of 24 IMF Governors, Ministers, or other officials of comparable rank, representing the same constituencies as in the IMF's Executive Board. The last meeting of the International Monetary & Financial Committee

(IMFC) of the Board of Governors of the IMF was held on September 28, 2002 at Washington DC. Finance Minister, Finance Secretary and Additional Secretary (FB), Additional Secretary (Budget), Governor (RBI), Director (Fund Bank) and PS to FM participated in the meeting.

India's Quotas and ranking :India's current quota in the IMF is SDR (Special Drawing Rights) 4,158.2 million in the total quota of SDR 212 billion, giving it a share holding of 1.961%. India's relative position based on quotas is 13th. However, based on voting share, India (together with its constituency countries viz. Bangladesh, Bhutan and Sri Lanka ) is ranked 21st. 12th review of quotas are to be completed on 31st January, 2003 with no increase in quota.

Article IV consultations :As a part of its mandate for international surveillance under the Articles of Agreement, the IMF conducts what is known as Article IV consultations to review the economies of the member countries, normally, once a year. The 2002 Article IV Consultations with India were held in two phases in November 2001 and April 2002. During this exercise the IMF mission holds discussions with RBI and various ministries/departments of Central Government. The Article IV consultations are concluded with a meeting of IMF Executive Board at Washington DC.

Borrowings by India :India has always had excellent relations with the IMF. We have borrowed from the IMF under its various facilities from time to time. India borrowed SDR 3.9 billion during the period 1981-84. Again during 1991 to 1993, India borrowed an amount of SDR 3.56 billion (SDR 1351.98 million under the Compensatory and Contingency

Financing

Facility

and

SDR

2207.925

million

under

Standby

Arrangement). Repayment of all the loans taken from International Monetary Fund has been completed.

Report on Currency and Finance- 2005-06 Theme: Development of Financial Markets and Role of the Central Bank (Date : 31 May 2007)

Alpana Killawala Chief General Manager

The Reserve Bank of India today released its Report on Currency and Finance 2005-06. The theme of the Report is "Development of Financial Markets and Role of the Central Bank". This report can be seen as continuation of several themes addressed in the previous years, the theme in last years report being 'The Evolution of Central Banking in India.' The Report for 2005-06 comprises nine chapters. Chapter I introduces the theme of the report. As a prelude to the substantive theme based discussions, Chapter II of the Report titled as `Recent Economic Developments provides an analytical account of macroeconomic developments in the Indian economy during 2005-06, 2006-07 and 2007-08 so far (wherever data are available). Chapter III - `Money Market covers the role of the money market, international experience in operating procedures, evolution of the Reserve Banks liquidity management operations and money market developments in India. As a way forward, it also makes suggestions for further developing the money market. Chapter IV titled as `Credit Market deals with the significance of the credit market, institutional structure and policy developments relating to the credit market in India and trends in credit in India. India. The chapter also makes suggestions for further strengthening the role of the credit market in Chapter V titled as `Government Securities Market after discussing the role of the government securities market and international experiences relating to the government securities market, deals with the policy developments and an assessment of government securities market in India. Chapter VI - `Foreign Exchange Market delineates the various aspects of the foreign exchange market in India. Chapter VII - `Equity and Corporate Debt

Market deals with the developments and key issues relating to the equity market and the private corporate debt market in India. Chapter VIII titled as `Financial Market Integration covers concept and dimensions of financial market integration, policy measures enabling market integration in India and domestic financial markets integration in India. The final Chapter of the Report - `Overall Assessment presents some final reflections on the key issues for further developing the various segments of the financial market in India.

Theme of the Report :Although financial markets in India have existed for a long time, they remained relatively underdeveloped for a variety of reasons until the early 1990s. Financial markets in India before the early 1990s were marked by administered interest rates, quantitative ceilings, statutory pre-emptions, captive market for government securities, excessive reliance on central bank financing, pegged exchange rate, and current and capital account restrictions. As a part of structural reforms in the early 1990s, wide-ranging reforms were introduced in the Indian financial sector, including in financial markets. Reforms in the financial markets encompassed all segments - the money market, the credit market, the government securities market, the foreign exchange market, the equity market and the private corporate debt market. The development of financial markets in India has been pursued to bring about a transformation in the structure, efficiency and stability of markets as also to facilitate integration of markets. The emphasis has been on strengthening price discovery, easing of restrictions on flows or transactions,

lowering of transaction costs, and enhancing liquidity and efficiency. As a result of various reform measures, the structure of financial markets has witnessed a remarkable change in terms of financial instruments traded in various segments of the financial market, and market participants. Although various segments of the financial market, in general, have certainly become deeper and more liquid, there is still some way to go before all the segments of the financial market are fully developed. Whereas it has always been the endeavour of the authorities to develop financial markets, the need for developed financial markets has never been felt as strongly as at this point of time. The need for sustaining higher economic growth, improving the transmission mechanism of monetary policy, developing a diversified financial system, maximising the gains from financial integration and minimising its costs, and preparing for smooth capital account convertibility, all point to the need for continuing sustained and perhaps accelerated efforts at developing financial markets in India. In order to strengthen the understanding of the structure of the Indian financial markets and to identify the substantive issues that need to be addressed, the theme of this Report for 2005-06 has been selected as Development of Financial Markets and Role of the Central Bank. The Report undertakes an in-depth analysis of various segments of the financial market in India in terms of inter-temporal development, cross-country comparison, highlighting the current major issues and the policy initiatives. The thrust of the Report is to assess the outcome of various policy measures and to explore the way forward for developing the financial markets in India further.

Various measures suggested in this Report set out only the broad direction in which reforms in the financial markets could move in future. Their implementation would need careful sequencing in tune with the evolving domestic and global developments. The implementation of measures suggested would also be contingent upon the development of appropriate market infrastructure and market players. Participants in financial markets are exposed to various risks. These risks, therefore, need to be managed carefully. In view of this, it would be necessary to develop market players who understand the risks and have the wherewithal to manage them. The transferring of risks to those market participants who do not understand them and do not have the capacity to manage them could have serious implications for the financial system. The pace and sequencing of measures could, therefore, be calibrated keeping in view the degree of comfort in moving forward in a credible way.

Recent Economic Developments :The Indian economy continued to exhibit robust

macroeconomic performance during 2006-07. Industrial production maintained its momentum with growth accelerating to double digit during 2006-07, propelled by strong growth in manufacturing. A significant feature of the industrial sector performance has been the continued high growth rate of the capital goods sector. The growth in the services sector accelerated during the first three quarters of

2006-07 mainly led by the sub-sectorstrade, hotel, transport and communication and financing, insurance, real estate and business services. Notwithstanding the delayed start, the overall performance of the South-West Monsoon turned out to be close to normal. On the whole, the Indian Economy is expected to grow at a robust pace. Headline inflation remained at an elevated level from November 2006, driven mainly by primary food articles and manufactured products. Consumer price inflation remained above the WPI inflation throughout the year, mainly reflecting the higher impact of higher food prices in the consumer basket. During 2006-07, the Reserve Bank managed liquidity with a judicious mix of the available tools, viz., liquidity adjustment facility (LAF) and issuance of securities under the market stabilisation scheme (MSS). In order to ensure `effective liquidity management, the Reserve Bank in March 2007 modified and put in place an augmented programme of issuance under the MSS with a mix of Treasury Bills and dated securities in a more flexible manner. however, continued to The approach to liquidity management, ensure that appropriate liquidity was

maintained in the system to meet the legitimate requirements of credit for productive purposes, consistent with the objective of price and financial stability. Financial markets remained orderly, barring brief spells in November and mid-December 2006 and in mid-March 2007, when call money rates moved up to high levels due to liquidity frictions. The equity market also encountered brief spells of volatility during MayJune 2006 and February/March 2007. Barring these episodes, financial markets were stable. Financial institutions, especially

scheduled commercial banks, witnessed improved business and financial performance during 2005-06, underpinned by robust macroeconomic fundamentals. Public finances of both the Centre and the States as per revised estimates showed improvement on the back of buoyancy in both tax and non-tax revenue, which more than offset the higher expenditure. The external sector continued to reflect dynamism with strong growth in merchandise exports of goods and services. The balance of payments position remained comfortable, despite high and volatile international crude oil prices during the most part of the year. Large capital flows continued much in excess of the current account deficit, resulting in substantial net accretion to foreign exchange reserves. The Reserve Bank in its Annual Policy Statement for 200708 placed real GDP growth at around 8.5 per cent. Headline WPI inflation was 5.4 per cent y-o-y, as on May 5, 2007 as compared with 5.7 per cent at end-March 2007.

Money Market :The money market is a key component of the financial system as it is the fulcrum of monetary operations conducted by the central bank in its pursuit of monetary policy objectives. Money markets in India have evolved over time spawning new instruments and participants with varying risk profiles in line with the changes in the operating procedures of monetary policy. Along with the shifts in the operating procedures of monetary policy, the liquidity management operations of the Reserve Bank have also been fine-

tuned to enhance the effectiveness of monetary policy signalling. The increasing financial innovations in the wake of greater openness of the economy necessitated the transition from monetary targeting to a multiple indicator approach with greater emphasis on rate channels for monetary policy formulation. Accordingly, short-term interest rates have emerged as a key instrument of monetary policy since the introduction of LAF, which has become the principal mechanism of modulating liquidity conditions on a daily basis. As a result of various policy initiatives, there has been a significant transformation of the money market, in terms of instruments, participants and technological infrastructure. Various reform measures have resulted in a relatively deep, liquid and vibrant money market. The changes in the money market structure and monetary policy operating procedures in India have been broadly in step with international experience and best practices. Notwithstanding the considerable progress made so far, further development of the money market calls for more measures. Direct regulation in the form of prudential limits on borrowing and lending in the call money market would need to graduate to a system, where such limits are taken care of by banks own internal system of ALM framework. Greater efforts would be required to expedite development of the term money market. Furthermore, there is a need to consider broad-basing the pool of underlying collateral securities for repo transactions. This would not only facilitate liquidity management but also promote the development of underlying debt instruments. The requirement of rating for issuing CP could potentially be made more flexible. Finally, liquidity forecasting

techniques need to be further refined for proper assessment of liquidity conditions by the Reserve Bank.

Credit Market :In India, credit markets have, historically, played a key role in allocating savings towards productive purposes. There has been a profound transformation of the credit market since the early 1990s. Prior to initiation of financial sector reforms, credit institutions operated under a regulatory framework characterised by barriers to entry, administered interest rates, pre-emption of resources through high statutory liquidity ratio (SLR) and cash reserve ratio (CRR), and allocation of resources through mechanisms such as maximum permissible bank finance (MPBF) and selective credit controls. Credit institutions suffered from several inefficiencies such as high intermediation cost, low profitability and high non-performing assets (NPAs). Against this backdrop, financial sector reforms were initiated in the early 1990s in a phased manner to move away from a financially repressed regime to a liberalised regime through measures such as deregulation of interest rates, entry of new private sector banks, enhanced presence of foreign banks, reduction in statutory pre-emptions, introduction of prudential norms, strengthening of accounting standards and disclosure norms, and permitting banks to raise capital from the market. These measures have subjected the financial institutions to market discipline, enhanced competition, and provided productivity and efficiency gains. The reforms have also strengthened the banks risk assessment techniques, thereby increasing the role of interest rates in allocating the resources while simultaneously enhancing the transmission of monetary impulses.

Although a wide range of credit institutions operate in the country, the relative significance of banks, already the predominant players in the credit market, has increased further due to the conversion of two major development finance institutions (DFIs) into banks. It is noteworthy that, after witnessing some deceleration in the late 1990s, credit extended by banks has expanded rapidly beginning 2002-03. Robust macroeconomic performance, revival of investment demand, moderation in interest rates and decline in NPAs appear to have contributed to rapid credit expansion. A welcome development has been large credit expansion to the agriculture sector in the last few years, reflecting the impact of various policy measures. As a result, credit intensity of the agriculture sector (credit to agriculture as percentage of sectoral GDP) has increased in recent years. On the other hand, growth in credit to industry during the 1990s and the current decade so far has been somewhat lower than that in the 1980s. This could be attributed partly to alternative avenues of financing available to industry such as external commercial borrowings and domestic and international capital markets. Internal generation of funds, facilitated by strong corporate profitability, has also improved significantly in recent years. There has been a sharp increase in medium and long-term bank credit to industry, which is largely for the project related activity. This suggests that banks are filling the gap created by conversion/merger of two DFIs into banks. Credit growth to the SSI sector, which decelerated sharply during 1999-2004, also picked up from 2004-05. Credit intensity of the industrial sector, on the whole, has increased in the current decade so far (up to 2005-06). A key factor underlying the rapid expansion of credit since 2002-03 has been the emergence of demand for housing

and personal loans, facilitated by benign interest rate environment, fiscal benefits, increase in income levels and growing competition in the banking sector. Total household credit now constitutes almost one-fourth of total bank credit. In view of growing volume of retail credit, the interest rate channel of monetary policy is likely to have a greater influence on private consumption and economic activity in the country. While credit flows to agriculture and the SME sector have increased in recent years, the need is to further increase the flow of credit to these sectors. To facilitate increased access to formal channels of credit and to enable the credit market to play an important role to sustain the growth process, several issues need to be addressed. The Self-Help Group-Bank linkage programme, which has become quite popular in recent years, is expected to gain further ground with the NABARD taking up a programme for intensification of these activities in 13 identified states. Although micro-finance activities should be commercially viable, it is reported that some micro-finance institutions (MFIs) are charging very high interest rates, which could prove to be counter-productive in the long run. While informality of micro-finance structure is important, NABARD and banks need to build appropriate indigenous/local safeguards against such practices and in their relationship with MFIs. An important issue facing the SME sector is that it is perceived as more risky and hence banks charge relatively high rate of interest and insist on collateral. The Credit Information Act, 2005 has been enacted and the rules and regulations there under have also been notified. This will facilitate the formation of credit

information companies in the country. This, in turn, will improve the quality of credit, reduce the transaction cost and improve the flow of credit to the SME sector. Independent rating of borrowers will also help to avoid the collateral requirement. Concerted efforts therefore need to be made to popularise rating. Credit penetration in the country also needs to be increased. A major issue in increasing credit penetration is the collateral that banks insist on for extending loans. Banks need to consider alternative ways to reduce the dependence on collaterals. Another major issue is the high transaction cost in rural areas. Banks need to look into low cost delivery alternatives offered by IT. However, while introducing IT based products, banks need to keep in view low level of literacy and technology orientation and awareness about IT based products in rural areas. Banks have been introducing complex products in recent years. Some households might also be availing credit beyond what they can easily service. It would, therefore, be very useful to establish credit counseling institutions for educating individuals to assess their credit demand and credit management in order to mitigate the bankruptcy risk. Although banks have been given the freedom to determine their lending rates, the principles followed by banks in fixing their Benchmark Prime Lending Rate (BPLR) are viewed as opaque. The concept of arriving at the BPLR needs to be looked into with a view to making it very transparent.

Government Securities Market :-

The government securities market has gained importance in most countries in the overall financial system in recent years. The government securities market in India has evolved over the years. Several measures have been initiated since the early 1990s to develop a deep and liquid government securities market for reducing the costs of government market borrowings, to provide appropriate benchmarks for pricing other financial instruments and to conduct monetary policy in a flexible manner. The switchover to auction based system of issuance of government securities in the early 1990s was a major step towards development of the government securities market. The investor base has become more voluntary and diversified. Taking into account market preferences, new instruments with innovative features have been introduced from time to time. Technological developments have enabled the introduction of screenbased anonymous trading and reporting platform. This has enabled dissemination of (a) trading information with a minimum time lag, (b) electronic bidding in primary auctions and (c) efficient order matching. Furthermore, operationalisation of the CCIL has ensured guaranteed settlement of trades, imparting considerable stability to the government securities market. The strategy of consolidation of government securities mainly through re-issuances has led to the build-up of critical mass in key maturities, facilitating the emergence of market benchmarks. The operation of a system of market intermediaries in the form of PDs has facilitated the Reserve Banks smooth withdrawal from the primary market from April 1, 2006 as per the FRBM stipulations. The size of the government securities market during the post-reform period has grown in tandem with the growth in market

borrowings of both the Central and the State Governments. The weighted average cost of market borrowings declined consistently, which enabled elongation of weighted average maturity of primary issuances. The Government has been raising progressively higher share of market borrowings through re-issuances under the strategy of passive consolidation of debt. Reflecting the effectiveness of various measures to develop the market, turnover in the secondary market has increased manifold over the years before declining in 2004-05 and 2005-06. The holding pattern of government debt shows some shift from banks to non-banks, reflecting a progressive diversification of investor base. Notwithstanding for its further the substantial While the progress strategy of in the

government securities market, certain issues need to be addressed development. passive consolidation has improved liquidity, there is a need to pursue the strategy of active consolidation by way of buyback of illiquid securities and issuances of liquid securities, as has already been announced. The investor base needs to be widened to counter the possible reduction in the captive investor base. Illiquidity in State Government securities affects the cost of borrowing for the State Governments. Therefore, there is a need to extend measures taken for enhancing liquidity in Central Government securities to State Government securities as well. Foreign Exchange Market :The Indian foreign exchange market has operated in a liberalised environment for more than a decade after the introduction of reforms initiated in the early 1990s. A cautious and well-calibrated

approach was followed while liberalising the foreign exchange market with an emphasis on the need to safeguard against potential financial instability that could arise due to excessive speculation. The approach to liberalisation adopted by the Reserve Bank has been characterised information management by of greater foreign transparency, and to exchange data monitoring from to and micro macro dissemination move away

transactions

management of foreign exchange flows. The emphasis has been to ensure that procedural formalities are minimised so that individuals are able to conduct hassle free current account transactions and exporters and other users of the market are able to concentrate on their core activities rather than engage in avoidable paper work. Banks have significant autonomy to undertake foreign exchange operations. In order to deepen the foreign exchange market, several products have been introduced and new players have entered the market. Full convertibility on the current account and extensive liberalisation of capital account transactions have resulted in a large increase in transactions in the foreign exchange market. They have also enabled the corporates to hedge various types of risks associated with foreign currency transactions. The impact of reform initiatives is clearly discernible in terms of improved depth and efficiency of the market. Moving forward, further initiatives towards developing the Indian foreign exchange market need to be aligned with the external sector reforms, particularly the move towards further liberalisation of capital controls, for which a fresh roadmap has been provided by the

Committee on Fuller Capital Account Convertibility (FCAC). The agenda for the future should, therefore, include introduction of more instruments, particularly derivative products, widening of participants base, further relaxations in the criteria of `underlying to include economic exposures (i.e., exposures which may not relate directly to foreign exchange transactions but are affected by movements in exchange rates), commensurate regulations along with the entrenchment of modern risk management systems and improved customer service. Reforms in the foreign exchange market will also have to be harmonised with the evolving macroeconomic environment as well as the development of other segments of the financial market, particularly the money, the equity and the government securities markets. They will also have to be harmonised with the evolving needs of the real economy.

Equity and Corporate Debt Market :The Indian equity market has witnessed a significant improvement since the reform process began in the early 1990s and is now comparable with the international best markets. There has been a visible improvement in trading and settlement infrastructure, risk management systems, efficiency and levels of transparency in the equity market. The transaction cost has declined and volatility has also been contained. Nevertheless, the role of the Indian capital market, equity as well as debt, in the domestic economic activity continues to be relatively less significant. Savings of the household sector in the form of shares and debentures and units of mutual funds

remain at relatively low levels, reflecting households preference for safe and contractual instruments as opposed to capital market-based instruments. The size of the public issues segment has remained small as corporates have tended to prefer the international capital market and the private placement market, apart from relying on internal sources and bank credit. The corporate bond market, in particular, has remained underdeveloped, reflecting a variety of factors such as absence of a reliable and liquid yield curve, high cost of issuance and lack of liquidity in the secondary market. A growing economy like India requires risk capital and long-term resources for enabling the corporates to choose an appropriate mix of debt and equity. Long-term resources are particularly important for financing infrastructure projects. A wellfunctioning domestic capital market is also necessary to enable the banking sector to raise necessary capital from the market to sustain its growing operations. Furthermore, a well-functioning bond market can also enhance the effectiveness of the monetary transmission mechanism. On the supply side too, rising income levels and savings would require alternative investment options, including equity and corporate debt. Reforms in the equity market need to focus on developing strong domestic institutional investors, adherence to international best practices in corporate governance and reduction in time and cost for floating public issues. Mutual funds penetration in the country also needs to increase to attract a larger share of household savings in financial assets. Promoters continue to hold a large portion of equity in the companies. Concentrated ownership prevents the broad

distribution of gains from the equity market development, with implications for the functioning of the corporate governance framework and protection of rights of minority shareholders. The market development process for bonds in India is likely to be a gradual process as has been experienced in other countries. The corporate debt market would require a large number of investors and large sized issues to function effectively. As in the case of government securities market, the problem of small size of issues will have to be addressed by bringing about more discipline in issuances and consolidation through re-issuances. The role played by market players such as primary dealers in developing the government securities market may need to be replicated through an appropriate institutional framework in the corporate bond market. Counterparty guarantee for settlement of trades to reduce counterparty and settlement corporate risks bonds. would promote secondary of market activity in Increased availability structured financial

products such as mortgage and asset-backed securities can also encourage the development of the corporate bond market.

Financial Market Integration :Domestic financial market integration in India has been largely facilitated by wide-ranging financial sector reforms introduced since the early 1990s. Financial markets in India have acquired greater depth and liquidity. In the process, various market segments have also become better integrated over the years. Sharp improvement in correlations between the reverse repo rate and money market rates in recent years implies enhanced effectiveness of monetary policy transmission mechanism. A high degree of

correlation between long-term government bond yield and short-term Treasury Bills rate indicates the significance of term-structure of interest rates in the financial markets. The integration of the foreign exchange market with the money and the government securities markets has facilitated liquidity management by the Reserve Bank. However, the equity market has relatively low correlation with other market segments. Evidence suggests that growing integration amongst various financial market segments in India has been accompanied by lower volatility of interest rates. There is evidence of Indias growing international

integration through trade and cross border capital flows. Indias trade and financial links with Asia are also growing amidst recent initiatives taken to promote regional cooperation. Emerging Asia has become the growth centre of the world due to shifting of production base to the region. This is likely to stimulate greater financial integration in the region. Indias financial integration within the region and with the international financial markets is likely to increase in future in view of its robust growth prospects. In order to strengthen the process of integration across various segments, some further measures may be needed. These relate to development of the term money, the corporate debt markets and the secondary markets in CDs and CP. It is to be recognised that the international financial integration involves several benefits as well as risks, especially, the contagion. This underlines the need for appropriate risk management strategies as also greater coordination and information sharing among central banks to prevent the transmission of adverse developments abroad to the domestic economy and markets.

Overall Assessment :The Reserve Bank, like other central banks, has taken a keen interest in the development of the money, the credit, the government securities and the foreign exchange markets in view of their critical role in the transmission mechanism of monetary policy. The approach has been one of simultaneous movement on several fronts, graduated and calibrated, with an emphasis on institutional and infrastructural development and improvements in market microstructure. The pace of the reform was contingent upon putting in place appropriate systems and procedures, technologies and market practices. There has been close co-ordination between the Reserve Bank and the Government, as also with other regulators, which helped in orderly and smooth development of the financial markets in India. Initiatives taken by the Reserve Bank and other regulatory authorities have brought about a significant transformation in the working of the various segments of the financial market. Domestic financial markets have transited from a highly administered system marked by administered interest rates, credit controls, and exchange control to a system dominated by market-determined interest rates and exchange rate and price based instruments of monetary policy. These developments, by improving the depth and liquidity in the domestic financial markets, have contributed to better price discovery of interest rates and exchange rates. Markets have grown in size and depth over the years, paving the way for flexible use of indirect instruments. Greater depth and liquidity and freedom to

market participants have also increased the integration amongst the various segments of the financial market. Increased integration not only leads to more efficient dispersal of risks across the spectrum but also increases the efficacy of monetary policy impulses. In a world of integrated financial markets, monetary policy operates not only through the conventional interest rate channel but also through the exchange the real rate and other and asset price channels of with monetary growing transmission, thereby strengthening the impact of monetary policy on economy inflation. Concomitantly, liberalisation, deregulation and integration with global financial markets, policy initiatives have ensured that domestic financial markets and market participants are in a position to absorb unanticipated and large shocks that can emanate from global developments so that financial stability is maintained in the country while supporting the growth. The Indian experience demonstrates that the development of markets is an arduous and time-consuming task that requires conscious policy actions and effective implementation. In the development of Indian economy and for the welfare of the country the firm steps are also taken by the private players in the country, some of them are mentioned bellow.

Private Sector Participation :The Tata Steel weighing bid for Corus :India's Tata Steel on Thursday confirmed it was considering a bid for Corus, the Anglo-Dutch steel producer, in the latest illustration of the wave of consolidation sweeping the industry. Tata

Steel said it was "reviewing a number of global opportunities", including Corus. But there was no certainty an approach would be made, or that it would result in an offer for Corus. ...Corus produces about 20m tonnes of steel and is the world's eighth-biggest producer. It has long been rumoured as a takeover target and has been searching for six months for a merger partner. Tata Steel is a subsidiary of Tata Group, India's biggest privately owned company. It produced 5m tonnes last year. Although a minnow in the steel industry, it has ambitious plans to quadruple its metal output in India and has expanded into Singapore and Thailand. B. Muthuraman, Tata Steel's managing director, refused to comment in an interview with the Financial Times earlier this week on whether it was interested in a deal with Corus. But the 26.9bn takeover in June of Luxembourg-based Arcelor by Lakshmi Mittal's Mittal Steel has prompted expectations of more consolidation in the industry. ...A Tata Steel bid for Corus would be the biggest Indian takeover of a foreign company. "A transaction of this size would be a transformational deal from an Indian perspective," said Rohit Kapur, head of corporate finance India at KPMG, the professional services firm, in Mumbai. Indian companies have increasingly been on the hunt for overseas acquisitions to build scale, acquire technology and gain access to markets. The biggest Indian overseas acquisition to date was Oil & Natural Gas Corp's takeover in January of some Brazilian oil and natural gas assets for $1.4bn, according to figures from Dealogic, the data company.

Analysts in Mumbai questioned Tata Steel's ability to digest Corus through a conventional takeover because of the UK company's bigger market capitalisation. Unless its done through a merger like Arcelor-Mittal, it wont work out, said an analyst with a foreign brokerage in Mumbai who declined to be named.
The Financial Times

India moves to attract more FDI :India attracted $5.5bn in FDI in 2004-5, an increase of 18 per cent, but less than a tenth of the inflows into China. The government estimates that $150bn needs to be invested in upgrading the countrys infrastructure over the next 10 years. If the new rules are approved, they will also allow foreign investment to come in by the so-called automatic route, circumventing a cumbersome approvals process overseen by the Ministry of Finances Foreign Investment Promotion Board. Allowing 100 per cent foreign direct investment in airport construction would be a big boost to the ongoing privatisation process. High-profile groups such as Singapores Changi have withdrawn from bidding because of constraints on foreign operators. Permitting foreign groups to invest freely in Indias oil and gas infrastructure would be aimed at harnessing international capital for complex undertakings such as the laying of a proposed gas pipelines to Iran via Pakistan. The measures will disappoint the US and UK government, however, who have been lobbying aggressively for foreign direct

investment thresholds to be allowed in the Indian retail sector and for the ownership ceiling to be raised in insurance.
Jo Johnson reported in the Financial Times

The role of Communication in development

The communication is also takes a vital part in the growth of economy for the country. It plays a role of livewire for the individual to be connected by outside world while the person is living in any part of the country. Some of main sources for an individual be connected by the world are : telephone, televisions, radios and the most important, fastest and effective way of communication is the Internet, etc.

PUBLIC PRIVATE PARTNERSHIP IN INFORMATION AND COMMUNICATION TECHNOLOGY :One of the significant features of the Information Communication Technology isconvergence. Audio, video and text technologies are coming together thanks to the unifyingpower digital technology which is the underlying technology for all the three. It is Information Communication Technology which has made the world a global village. It is also thistechnology which has made the world

borderless. While so many special aspects of this Information Communication Technology are recognized an equally important aspect which is a cause for concern is the emerging digital divide. While information technology opens up new horizons in terms of opportunities for development. Will all the nations and all members of society be able to access its benefits equally and benefit from it? This is the underlying anxiety about the emerging digital divide which is already divided between the rich and the poor, the developed and the least developed, the North and South. Will there be a new division amongst the peoples of the world between those who are information rich and those who are information poor? Incidentally, one of the issues being considered (among the economists) is, whether the collapse of the cold war, acceptance of the market dynamics as the agency for economic decision making has led to an increased divide between the rich and the poor. In a recent article in the Economist (dated 28.4.2001) Dr. Robert Wade raised this issue. He argued that the global distribution income is becoming even more unequal. In this session we are concerned with the issue of bridging the digital divide. Bridging the digital divide is a desirable objective because greater the divide, greater is bound to be the tension between people and in the society. The one impact of the information technology and the world becoming the global village is that both the haves and the have nots are equally exposed to the life styles with a better quality of life, better consumer goods and so on and consumerism is emerging as an universal trend. In other words

aspirations are kindled thanks to the satellite broadcasts . If those aspirations are not fulfilled it may lead to frustration and possibly anti social behaviour. Hence the urgent need for bridging the digital divide. In the post cold war era, this task has to be shaved by both the government and the private sector. What are the models available today for public / private cooperation in bridging the digital divide? So long as the state was controlling the commanding heights of the economy, one could have taken the stand that it is the responsibility of the state to bridge the divide but the basic assumption in the post cold war scenario and in India after 1991is that the state will increasingly act as a regulator rather than a controller and private sector initiative has to play a significant role. In this context, how do we approach the issue of digital divide?. The most important aspect in bridging the digital divide is access. Access means access to the wealth of information and consequently the services that accrue from such access which go to improve the quality of life. We are in the knowledge economy and access to knowledge and learning is perhaps the first step. It is this access to knowledge and learning which makes a person employable in the digital world. While everybody realizes that the lifetime employment may not be possible, lifetime employability is going to be the emerging model. So even in the economic concept, access to learning to get perhaps entry level employment and subsequently opportunity to continuously upgrade ones skills to improve oneself in

career is the process by which perhaps the digital divide can be overcome. Equally important would be the access to vital information within economic diary. If the producers especially in the rural areas or artisans who have marketable skills in the rural areas can somehow access the market through the information technology or information and communication technology , they would be able to improve their quality of life, income and in the process the rich/poor divide also will become narrower. In other words we find that bridging the digital divide can also shape in bridging the economic rich/poor divide. Prof. CK Prahalad has pointed out In the age of the knowledge economy, ownership is not so important as access. To bridge the digital divide therefore we should look at the access to the benefits of the information communication technology to the digitally deprived should be the focus. We can look at three different models. Perhaps the best model is the Gyandoot model in Madhya Pradesh where 31 villages have been linked by the highly cost effective manner. It is worth looking at the highlights of the Gyandoot model. This year, 2001, is being observed by Government of India, as the year of e-governance. E-governance means application of information technology for all government functions. In other words, ensure that the government becomes itself an IT enabled service. Different states are in the race to get on to the egovernance bandwagon. States like Andhra Pradesh, Karnataka, Tamil Nadu, Kerala, Gujarat, Maharashtra are hitting the headlines more frequently than some other states especially the BIMARU states.

However, a quiet revolution is apparently taking place in Dhar district of Madhya Pradesh where the Gyandoot programme, a community owned, self-sustainable and low-cost rural intranet model has been eminently successful and had also attracted worldwide attention. It won the Stockholm Challenge Award 2000. The Gyandoot experiment holds an important lesson to achieve success in e-governance. The lesson is that it is not tactical automation of government function but strategic innovation that is the secret of success. Tactical automation would mean computerising the existing government functions and improve the quality of service. Strategic innovation calls for a lot of imagination and overcoming constraints like lack of infrastructure, financial resources, illiteracy, poverty etc. In our country where many people are below the poverty line and resources are limited, access to services is more important than owning the instrument for services. One need not have computers and one can have access to computers, just as in the case of telephones. The STD booths, which provided access throughout the country, have been a remarkable success and have become a model for the rest of the developing world. The Gyandoot programme implemented in the tribal district of Dhar operates on this principle. Computers in 31 village centres have been wired through an Intranet network. Local rural youth act as entrepreneurs for running cyber cafes-cum-cyber offices on commercial lines without salary or stipend. The computers in the network have been established in Gram Panchayats. They have been called Soochnalayas (information kiosks). The Soochnalayas provide user-charge-based services to the rural people. The person operating the Soochnalaya is

a local matriculate operator and is called Soochak. He needs only maintenance and numeric data entry skills. He needs very limited typing skills since most of the Intranet software is menu-driven. The entire expenditure for the Gyandoot network has been borne by Panchayats and the community with no expenditure burden on the government. The network has been set up at a total cost of Rs. 25 lacs. The average cost incurred by the village committee and community in establishing a single kiosk was Rs.75000. The services of the network cover wide-ranging information needs of the villages like Agriculture produce auction centre rates Copies of land records Online registration of applications Online public grievance redressal Rural e-mail facility Village auction site Online matrimonial site Information regarding government programmes Sawaliram se puchiye programme in which the school children can ask interesting questions regarding career counseling. Ask the expert programme in which farmers and villagers can inquire about the latest techniques, new technologies etc. regarding agriculture, animal husbandry, health and related to legal opinion Free e-mail facility on social issues Avedan Patra online application formats required by local administration.

Out of the present 31 kiosks, the village committee and the community started the first 20 centres. Private entrepreneurs started the rest 11. The policy adopted at the inception of the project to expand only when local youths start new centres as private enterprise has paid rich dividends. In the 11 centres started as private enterprise, the Soochak is the owner of the establishment who pays Rs.5000 as a licence fee for one year to district council. Each Soochak is expected to earn a net income of at least Rs.36000 per annum at conservative projections. The Gyandoot Samiti, a registered society to support the project, has developed software to run the intranet and various services. It is very simple and menu-driven software, which requires minimum data entry at the client end. The software is in Hindi. Strategic innovation in Gyandoot thus includes use of the local entrepreneurship overcoming the finance problem and of course the language problem. Gyandoot has brought tangible benefits to the villages. For example, the farmers in Bagadi village were getting rate of Rs.300 per quintal from local traders for their potato crop. On knowing that the prevailing market rate at the Indore mandi was Rs.400 per quintal from the Soochanalaya, they took their potato produce to Indore mandi and earned better profits. In any discussion about e-governance, invariably the issue of infrastructure facilitiesand the perennial non-availability of power figure prominently. Shri Kanti Shroff of Excel Industries has shown a few years ago in Kalali village of Baroda in Gujarat how by using four bullocks that go round an oil press type mechanism, power can be

generated to charge batteries. If we can develop such systems, these batteries can be used to run computers and other related systems. Innovation is therefore the key for e-governance, but a fundamental problem remains. How can we build a culture of innovation in a bureaucracy, which is rigid and unimaginative? This calls for a change in culture. One such area for change is the sacred area of seniority. Government goes by seniority because seniority is a matter of fact like maternity and cannot be challenged. On the other hand, merit is an issue, which can be disputed like paternity. In the context of developing e-governance in India, we will have to give priority to merit. Fortunately, in IAS and other services a lot of technocrats, IIT, IIM qualified youngsters are entering in recent years. Government should focus on this pool of talent, which is available with it, and let them loose on the system so that with their innovative approach the young officers can make e-governance in India a reality. All that is expected of the seniors is not to interfere with new initiatives but play a supporting nurturing role. After all, Gyandoot has been realised, thanks to the initiatives of the young local district officers. The main feature of the Gyandoot model about is the cooperation between the public and private sector. The state took the initiative in providing the basic infrastructure and gave an opportunity of the private entrepreneurship in form of the soochaks to built on this initiative. This is being done at the lowest possible level of the village. This may be true for other developing countries. The Gyandoot model can be an ideal for the private/public private partnership to bridge the digital divide at the gross root level.

The second model of the public/private partnership would be in building the access in the form of connectivity. So far as the communication systems are concerned generally public telecommunication systems have been state owned it is only in recent times that the private sector has entered the scene. One of the problems faced by the private sectors when they entered the market is the need for connectivity and especially in the case for telecommunication between the local area, the short distance charging area, The state, national with and the international public sector telephone telephone connectivity. interface

network(PSTV) therefore is an important issue. It will be necessary for the public and private sector to come to an understanding and strike a deal which is in the interest of the both. Generally the public sector telecommunication network will be the 900 pound guerilla in the scene. It therefore becomes necessary for the regulator to ensure that the private sector interests are taken care of. At least this is the model we have seen in Britain, where Oftel perhaps ensured that Mercury emerged as a viable competitor to BT. The third model is making available the public sector facilities to be used by the private sector in a mutually beneficial fashion. In biology we have seen this concept of symbiosis. Perhaps we have to bring in the concept of symbiosis in the area of information and communication technology also in the context of the public/private partnership. For example the right of the way whether through the highways or through the networks like the railways or the electricity boards networks or the power grid are very important in

the context of the building connectivity but at the same time the right of way can be a contentious issue. There should be a symbiosis between the public and private sector so that the reasonable balance is achieved between the both. In the context of access to bridge the digital divide, ensuring connectivity especially when building new and large bandwidth especially using optic fiber is imminent, the issue becomes significant.

The role that the government plays :The first role the govt. has to play is instead of being an active player rowing the boat, it must become the regulator steering the boat. If the govt. itself is going to be still a player in the form of a corporate entity, then it has to be ensured that the regulator is independent of the govt. In the Indian context for example we have seen that the Department of Telecommunications getting corporatised into Bharat Sanchar Nigam Ltd. Earlier one part of DOT became the MTNL and another part VSNL. All these corporations therefore have to be treated as on same footing as the private sector companies in telecommunication. The Telecom Regulatory Authority of India and the tribunal and TDSAT should therefore be strengthened. I would suggest the following 4 C mantra in order to ensure the rapid development of private sector in ICT. The Indian telecom scene today is exciting. Policies are changing and technologies are exploding. The presence of new players and old players with their own corresponding vested interests lead to pulls and pressures on the policy makers. Is it possible for the regulatory authority, TRAI to evolve a set of core principles which can

be used as a reference point for effective and meaningful telecom regulation in India? I would suggest a 4C mantra for telecom regulation in India. The 4 Cs are: i.Customer's interest ii.Competition in a level paying field iii.Convergence of technologies, and iv.Commitments both financial and legal, involving regulators, licensers, and licensees. The pole star for policy making and regulation in the emerging telecom scene must be the interest of the customer of telecom services. He must be able to get world class services at the most competitive rates. Every policy decision or tariff decision must be put to the acid test to see whether it benefits or hurts the customer. Brought up in a regulated economy for five decades after independence, our Indian industrialists, businessmen and service producers are accustomed to pass on all the financial burden to the customer who did not have much of a choice anyway. In the emerging scene of globalisation which encourages competition, we should not artificially create a situation wherein the customer is forced to pay a higher tariff for telecom services especially when technology and competition provide a possibility of the same services being provided more cheaply. The second 'C' of the regulation mantra must be fair competition. In any competition all the players may not be having the same capabilities. It is the competitive strengths of the different players, which ultimately decides their market share and success in the market place. This market dynamics must be fully allowed to

prevail. The only care which TRAI will have to take is to ensure that there is a level playing field. The presence of BSNL, the 900 pound guerrilla in the telecom scene makes it all the more necessary that TRAI will have to play a role similar to that of Oftel in Britain where Mercury by policy was supported to take on British Telecom so that the British customer of telecom services had a real choice. A similar role has to be played by the Indian regulatory authorities in ensuring that there is a level playing field. This raises the next issue of convergence, the third "C' of the 4C mantra. Convergence, thanks to digital technology and explosive growth in other communication technologies, is already taking place. There may be a tendency on the part of the regulators to limit the choice of technologies or sometimes restrict the inflow of technology. A classic example of the resistance to the on rush of technology is the present policy ban on the use of Internet telephony even though perhaps many are de facto enjoying the facility. It is not clear who stands to benefit by the present ban on Internet telephony. The situation is similar to that prevailed some years back when the DOT tried to regulate the use of fax machines and failed miserably. The basic point to be remembered in the context of convergence is that whatever decisions the regulatory authorities take should be able to encourage competition. When it comes to competition, the critical word is pluralism. Pluralism would mean that when it comes to service providers, there could be a multiplicity of service providers. Further, pluralism should also be encouraged when it comes to the quality of service. There was a time when the entire telecom system was a monolith, the state controlled the sector totally. What the technological revolution in telecom has achieved is

to unbundle the telecom sector and create different types of service providers with different levels of investment and the quality of service. This must be encouraged. It will be necessary to countenance the presence of more than one type of service and leave it to the customer to choose to pay what he can to the quality of service that he desires. This does not mean that there will be an endless spectrum of services of different quality. At least, broadly perhaps two or three levels can be identified. After all, in our country we may have the latest Mercedes cars on our roads in the cities but the bullock cart still has a role to play in the village. The Mercedes cars will not go into places where the bullock cart can go. Pluralism of players and technologies will ensure that there is healthy competition. That brings us to the last of the Cs in the 4C mantra for telecom regulation namely, commitments both legal and financial. After all, telecom is a sector which attracts a lot of heavy investments and depending upon the policy parameters, investments have been made in different sectors. Now, because of the pressure of convergence and the emerging opportunities when the Telecom Regulatory Authority has to continuously fine-tune the rules of the game. It cannot also afford to take decisions in such a way that the entire operation gets entangled in endless litigation. There are four factors namely:(i)

licensing conditions, fees for access, tariff rates, and spectrum charges

(ii) (iii) (iv)

which the regulatory authorities can fine tune so that there is a level playing field created for the different players in the scene. This is really going to be the main challenge for TRAI. It will not be possible for TRAI to so accurately fine-tune the parameters so that those who made wrong investment decisions are propped up artificially. There was a lot of excitement recently in Europe about the spectrum auctions for the 3G, third generation mobile services. Already doubts are being raised whether the bids have been very high and investors will be able to recover the charges. This is, of course, part of the normal risks involved in a highly competitive, technology intensive and at the same time potentially profitable market. If the telecom regulation in India goes by the 4C mantra, probably we are likely to ensure that the Indian telecom scene emerges as an example of a win-win exercise. The customer will never be losing and the players will have a level playing ground and, of course, will have to bear the risks and rewards that go with a healthy competitive environment. That brings us to the third issue How can private sector initiative be encouraged and channelized for achieving the maximum benefit from ICT?. The govt. can only lay the basic policy framework and ensure that there is level playing field for competition. If the 4Cmantra is effectively followed then automatically the consumer will benefit. The investors will also find that they have a fair chance of making a successful business. Telecom and the progress in ICT is going to depend upon four engines. These are technology, political will, regulatory activism and market dynamics. Technology will be in the driving seat. We do

not know what new technologies will be developed in the ICT area. They in turn will have to be welcomed and promoted. Political must ensure that there is free flow of technology. The regulatory activism will ensure that there is a level playing field especially the 4 C mantra is adopted and that will bring us ultimately to the fair field for market dynamics to operate and automatically this will achieve the objective of the maximum benefits from the ICT. We then come to the final question. How can private sector companies collaborate with each other to achieve win-win situation in the context of the ICT? The win-win formula will depend upon what has been called the strategic fit. Many a time the players can be in the different areas. Somebody could be content provider and somebody else may be provider for the local area and yet another group can be providing the basic pipeline or the bandwidth. As the market competition becomes intense there will be greater urge towards mergers and alliances. One of the major fact in the emerging, global scene is that, ultimately there will be a few large companies left dominating the scene. At the same time we should not lose time. As The Economist pointed out in an article of 4th December 1999 that the continuous thrust for ecological innovation and imagination is going to come from small companies. In short, we will find that the emerging ICT scene will be dominated by the presence of a small number of large players which grow based on alliances or strategic fate or win-win combinations. Nevertheless because market dynamics, they will be looking behind their shoulder for small start ups who can come up with new technologies and lead the entire industry towards the next phase of development. It is therefore going to be a very exciting scene in

which public / private partnership will become not one of the options but the very condition for survival.

Analyzing E-Commerce for Development : E-commerce is spreading rapidly. Worldwide, more than US$1 trillion worth of goods and services are likely to be traded electronically by 2003, covering b2c (business to consumer) and the far larger b2b (business to business). In the North, impacts on both business and trade have been uneven but rapid, particularly in certain sectors. Possibilities exist for both existing enterprises and new entrants: new supply-chain models are emerging around both disintermediation and reintermediation of existing firms (Markus 2000). In the South also e-commerce is present and expanding, albeit from a far smaller base. In the short-term, international trade will be the main locus for development of e-commerce, with a model as shown in Figure 1. Figure 1: Conceptual Model of E-Commerce and International Trade

Northern model key growth areas; potential disintermediation

opportunities

Note: South exchanges/flows can be local, national or international (South-South) Identifiable opportunities already present include:

sb2nc (Southern business to Northern consumer): for

example in tourism and in social trading portals (such as PEOPLink).

sb2nb (Southern business to Northern business): for

example the multi-billion dollar trade in software from India that is increasingly ICT-mediated, and other intermediated trade (e.g. UNCTAD Global Trade Point). South-South e-commerce links are also emerging which may present a key opportunity growth area. Existing intra-country opportunities include:

sb2sc (Southern business to Southern consumer): for

example, rediff.com in India It must be recognized that the principal opportunities lie for large, established enterprises and for b2b models. Nevertheless, there will be some opportunities for Southern small and medium enterprises as producers. These enterprises can accrue the eHowever opportunities for the commerce benefits of reduced costs and increased revenues particularly around b2b models. majority of poor women and men to directly use e-commerce as consumers are currently limited (Networked Intelligence 2000). In analyzing the impact of e-commerce on development, these potential opportunities and benefits must be gauged against a considerable threat posed by e-commerce. The threat exists in two

forms, the first being that barriers to e-commerce entry are considerable for Southern businesses and are found at the micro-level of individual enterprises and and at the macro-level support of national and infrastructure policy. Enterprise activities

national/global policy making in the South must become better informed of the new capacities that are required (Singh 1999). The second threat is that e-commerce will reverse import substitution (e.g. replacing sb2sc with nb2sc) more than it will open export opportunities. Poor countries must be alive to this threat just as to the opportunities it provides for Southern consumers. Opportunities also exist for Southern business for sales and distribution. There are already suggestions from India that e-commerce to Southern consumers may be less disintermediated than Northern models would suggest. E-commerce presents a new model for trade and business. Diffusion of this new model will not be as instantaneous as the 'hypesters' predict. Nevertheless, entrepreneurs, enterprise support practitioners and policy makers in the South must be made aware of the implications of this new model. They must understand how to encourage development of e-commerce in ways that will optimize beneficial effects and minimize adverse ones. Some of the key questions that remain to be answered about e-commerce for development include the following:

What is the likely impact of e-commerce on DCs? What are the main beneficial opportunities for application of ecommerce for DCs?

Which enterprises and which sectors will be best placed to take advantage of e-commerce? What package of policy and enterprise pre-conditions must be in place for this beneficial application of e-commerce? How can this 'e-commerce package' best be put in place in DCs? What are the main threats and negative effects relating to application of e-commerce in DCs? How can these best be addressed or mitigated?

From these questions, three stands of analysis can be drawn.

i.

Impact Strand: Impact Analysis of E-commerce :E-commerce is generally presented in very positive terms

but, along with the potential benefits, come potential problems for DCs. Understanding the impact of e-commerce means viewing impacts from two perspectives: Top-down, from an economic analysis of global trade and the alterations to models of global trade that e-commerce is likely to bring throughreductions in transaction and other costs. Bottom-up, from the experiences of individual enterprises using SWOT analysis of e-commerce in relation to Southern enterprises, and business analysis of those enterprises pointing to relevant business models, strategies and trajectories.
ii.

Capacity Strand: Support for E-commerce in Enterprises :-

If e-commerce is to be taken up by enterprises in DCs, it will require a number of underlying capacities to be present. An understanding of these capacities is therefore required. It may be so that enterprises themselves and also the market can supply some of these capacities. However in other cases, there may be a case for promotional interventions at a national or support agency level. Likely areas for support include skill development, facilitation of market access, infrastructure deployment (e.g. telecentres), and promotion of e-procurement within the local NGO, government and business community. It is important that capacity building efforts recognize and support the 'stepping stones' to e-commerce. From this, it emerges that behind the limited picture of full e-commerce activity, there is a much broader picture of precursor e-commerce activity in the South, as shown in Figure 2. Figure 2: Stepping-Stones to E-commerce in Development

iii. Policy Strand: National/International e-commerce policy :Concept papers and the UN Commission on International Trade Laws model law on e-commerce provide a generic understanding of some of the policy issues raised by e-commerce. Relevant areas include trade (tariffs, intellectual property rights, market access), infrastructure (telecom, human, transport), and business (contract law, enterprise development). Policy makers in the South do not face the issue of whether or not to support e-commerce: if e-commerce is not supported, ecommerce-based foreign businesses will poach markets at home and overseas. The issue is how best to support e-commerce. References :Markus, L. (2000) E-markets and E-commerce, paper presented for Manchester Information Systems Seminar series, University of Manchester, 12 July. Networked Intelligence (2000) Briefing Kit on E-commerce for Micro and Small Enterprises in Africa, Toronto, Canada. Singh, D. (1999) Electronic Commerce: Issues for the South, South Centre, Geneva, Switzerland.
Richard Heeks IDPM, University of Manchester, UK

3G Reforms: Policy and Regulatory Implications :-

Centre for Telecom Policy Studies (CTPS) Indian Institute of Management (IIM), Ahmedabad October 13-14, 2000

The annual workshop of the CTPS provides a forum for policy makers, academicians and industry professionals to meet, reflect and deliberate on anticipated developments. Like the previous annual workshops, this workshop on 3rd Generation (3G) Reforms: Policy and Regulatory Implications provided an opportunity to discuss policy issues that had emerged during the last year, and plan future policy options. This Secretary, year's workshop of began with Shyamal Ghosh, an

Department

Telecommunications,

presenting

overview of the telecom industry dynamics and the issues confronting the policy makers. The key issues brought out by him were technological convergence and universal service. N. Vittal, Central Vigilance Commissioner, Government of India outlined the shortcomings in the current policy regarding various technology options and also put forth some suggestions for expanding rural telecommunication services. Suggestions included use of Railway property and a policy tailored for rural India, much different from the policy for urban India. R. R. N. Prasad, Member, Telecom Regulatory Authority of India (TRAI), analyzed the issues confronting the regulator in the convergence era. The issues included costing of long distance calls in data networks, interconnection between different networks and ensuring quality of service.

N. R. Mokhariwale, Member, Telecom Commission, India described the services provided by the erstwhile Department of Telecom Services in India now the Bharat Sanchar Nigam Ltd. He presented a chronological index of various developments in the Indian telecom sector including opening up of various services to competition. The presentation also highlighted the problems faced by the former monopoly in this competitive era. In the session titled Organizational Transformation:

Responding to Policy and Regulatory Changes; Rakesh Basant and Pankaj Chandra of IIMA shared the results of their survey on organizational practices adopted by various telecom equipment manufacturers to face the challenge of competition. The data presented included nature of alliances and spending on Research and Development. K. N. Gupta, Executive Director, Centre for Development of Telematics (C-DOT), summarized the role played by C-DOT in expanding telecom services in India. He also highlighted the effect of C-DOT technology deployment in development of electronic manufacturing capability in India. The achievements conveyed by him include annual deployment of 4.5 million C-DOT lines per year and also development of 7000 vendors to produce various components for which no capability existed previously. Bhaskar Ramamurthi of the Indian Institute of Technology, Chennai, put across the difficulties in commercializing new telecom technologies developed by Indian laboratories: new products not being the priority for companies; lack of interest on the part of

licensees to do additional work to commercialize technologies; and lack of vendor financing provided by multinational companies. In the same session, Air Commodore Motial, former Chairman of the ITI Ltd. traced the steps taken to transform the former monopoly player into a competitive organization. Some of the measures implemented by ITI include re-training of manpower, improving manufacturing skills, and re-focussing the company as a total solution provider and turnkey solution implementer. G Venkatesh of Silicon Automation Services (SAS) Ltd. showcased the role of small technology boutiques in the changing technological environment. The work done by SAS includes commercializing technologies and representing India in various standard setting bodies. Rekha Jain and Pinaki Das of IIMA shared results of their study on costing of rural telecom services and the effect of cost of rural telecom services on Universal Service Obligation funding. The costing results presented included the variations in cost per line for various exchange sizes, and cost of local loop for various subscriber densities. Policy suggestions were also made. Sidharth Sinha of IIMA, looked into the ongoing controversy regarding the 'calling party pays' (CPP) regime in cellular mobile telephony and its possible effects on traffic. The paper also presented the history of the role played by Telecom Regulatory Authority of India (TRAI) in implementing the CPP. He also touched upon the guiding principles adopted by the TRAI in fixing the tariffs for the calling party pays regime.

S. D. Saxena of Department of Telecommunications pinpointed the effect of tariff rationalization on the current universal service provider, Bharat Sanchar Nigam Limited (BSNL). The main problems confronted by BSNL are declining revenue and stagnant long distance calling revenue despite a considerable reduction in long distance tariff. Anurag Agarwal of ICICI Ltd. discussed issues confronting the financier while lending to telecom service companies under the current policy environment. He outlined the risks involved in lending to a typical telecommunication project and outlined the process of a telecom project attaining financial closure. R. L. Bharadwaj of Enkay Telecom discussed issues regarding IP Telephony. Richard Janda, Guy Lachapelle, Joseph Wilson (all from McGIll University) and Manikutty of IIMA did a cross-country analysis of telecom policy making. The countries studied were Brazil, Argentina and Mexico. Rakesh Basant and Ramadesikan G. R. of IIMA discussed feasibility of competition in the broadband access markets and its implications for policy making. The key result presented was that broadband access is going to be through a cable monopoly. The implication of this market failure was analyzed. Rakesh Basant discussed the various institutional options for regulation in the converged era. His main suggestion was to do away with the Telecom Dispute Appellate body as all the functions of

the appellate body can then be taken care of by the proposed competition commission. Dann Donnes of McGill University spoke on effects on media due to convergence. The issues that affect the media are the scope and diversity of corporate holdings, the tensions between telecommunications and broadcasting paradigms in regulation and the confusion about the importance of content. The workshop concluded with Richard Janda presenting a seminal India and work titled Gaps to in Global the Governance in the in Telecommunications. Shortcomings in the process of regulation in suggestions overcome gaps global telecommunication governance using Indian values were discussed.
Ramadesikan G. R. Indian Institute of Management, Ahmedabad

"COMMUNICATION DEVELOPMENT : ROLE OF UNESCO IN INDIA :Information empowering people. is knowledge, and knowledge we is power. willing Communication is the process of information dissemination and Through communication seek cooperation of others and build social organisations of varied complexities. It is through communication that fire of hatred and conflict is fanned and so are done the tender feelings of love, cooperation and peace. It is in this context, perhaps, that the United Nations Educational Scientific and Cultural Organisation (UNESCO) pro-claimed that "since wars begin in the minds of men, it is in the 'minds of men that defences of peace must be constructed" as its preamble and emphasised the need to collaborate in the work of

advancing the mutual knowledge and understanding of the peoples, through all means of mass communication in Article 2 of its Constitution.1 As such, information and communication development has been one of the major concerns of the United Nations in general and UNESCO in particular since their inception. The United Nations Conference on Freedom of Information, in 1948, called freedom of information, one of the basic freedoms, and free and adequate information, the touchstone of all freedoms to which the United Nations is dedicated. It was generally believed that for free and adequate information in any country there must be adequate development of mass 'Fernando Valderrama, A History of UNESCO, UNESCO Reference Books, (Paris: UNESCO, 1995). communication in that country. Therefore, all countries were and are concerned about development of their communication systems. In India, such a concern for development of communication system was clearly reflected in the country's first Five Year Plan itself. Internationally, efforts were made to facilitate the growth and development of communication facilities, especially in new and emerging countries. In 1958 the UN General Assembly called for a "programme of concrete action" to build up press, radio broadcasting, film and television facilities in these countries as part of economic and social development. To draw up a suitable programme and assess the resources required, the General Assembly requested UNESCO to carry out a fact finding survey. Based upon the UNESCO report submitted to UN, the General Assembly, in 1962, unanimously adopted a resolution "expressing its concern that the survey disclosed 70 per cent of the population of the world lack in adequate

information facilities and are thus denied effective enjoyment of the right to freedom". The UN General Assembly also emphasised that information media have an important part to play in education and in economic and social progress generally and that new techniques of communication offer special opportunities for acceleration of the education process. Consequently, governments, especially of newly emerged developing countries, were urged to include in their economic development plans adequate provision for development of national information media. UNESCO was specially called upon to play active role and support programmes and activities leading to development of communication systems in the developing countries. Development and growth of communication facilities is a complex process and their consequences and impact on society are multiple. However, the question of communication and the role of UNESCO in India could be examined from three distinct, though related, stand points of view: viz. (i) (ii) (iii) as a means of bringing about desired social change, the issues and concerns relating to free flow of information, institution building.

SOCIAL CHANGE:The part that information communication can play, if used wisely, to speed and smooth what Julius Nyerere called the `terrible ascent' of the developing nations towards social and economic change, has been of special interest to all developing countries, including India. The contribution that effective communication can make to social and economic development is of vital importance to

developing countries. Free and adequate information which the UN and UNESCO have emphasised is not only a goal in itself, it is also a means of bringing about the desired social change.2 It is strongly believed and rightly so, that the goal of economic and social development, an agenda high on the most developing countries' priorities, can be facilitated by adequate adequate and and effective effective communication. Conversely, without

communication, efforts for economic and social development would be seriously hampered. In India the significance of communication in equipping people with new information and skills and mobilising them for their willing participation in various development programmes and activities has been well recognised and emphasised in various Five Year Plans, the blue print of country's development strategies. In the first Five Year Plan itself, 2 Wilbur Schramm, Mass Media and National Development, The Role of Information in the Developing Countries, (Paris: UNESCO, 1964). the need for In understanding the and appreciation plans, the of the various about development programmes and schemes by the people was clearly underlined. subsequent concern communication with the people even in remote villages has been voiced with increasingly greater emphasis and force. Consequently, all available methods of communication have been developed and strengthened manifold over the years. Responding to the UN General Assembly's call to

strengthen and develop information and communication facilities,

UNESCO and the Government of India, launched in 1956 a pilot project "Radio Rural. Forum' covering 150 villages in Pune region of Maharashtra. Learning from the Canadian experience of Farm Radio Forum (1940s) India started radio rural forums on pilot basis with the help of UNESCO. It was an experiment in utilising broadcasting to create greater awareness among rural people about various improved techniques of agriculture production, health and hygiene, and other community development programmes. The project followed innovative approaches in the form of programme planning and presentation, organised listening and discussion and evolving a mechanism of feedback from the audiences to ensure greater involvement and participation of people as well as making more relevant the programme contents of the radio broadcasts. The pilot project was a great success and was extended to many other areas. In 1969, about 0.2 million radio rural forums were operating community 3 J. C. Mathur, and Paul Neurath, An Indian Experiment in Farm Radio Forum (Paris: UNESCO, 1959). radio-sets and radio rural forums declined, even so these are still operative in many parts of the country as "Charcha mandals" (discussion groups) etc. Furthermore, the basic concept and philosophy of radio rural forums was adapted and adopted in a decade long programme in 1980s on use of radio in support of mother- child health care. Similarly, beginning from Literacy Mission, Lucknow in 1960s radio has been extensively used in promotion of adult literacy in the country.4 Thus, in different states and union territories. Although, subsequently with the advent of transistor revolution the relevance of

deriving inspiration from UNESCO-supported pilot project in radio rural forum, broadcasting in India, first radio and later television, has been playing important role in disseminating information and creating awareness about topics and issues relevant to the needs of rural masses thereby contributing to the process of development and social change in India. FREE FLOW OF INFORMATION :The sanctity of freedom of expression and its importance to mankind is enshrined in Article 19 of the "Universal Declaration of Human Rights" and was reiterated by the UN Conference on Freedom of Information in 1948. As early as 1952, the UN General Assembly resolved that "it is essential for a proper development of public opinion in under-developed countries that independent domestic information enterprises should be given facilities and assistance in order that they may be enabled to contribute to the spread of information, to the development of native culture and international understanding". The UN General Assembly invested UNESCO with the responsibility for matters pertaining ID information and freedom 4 J.S. Yadava, Media and Adult Education: Indian Experience. A study conducted for UNESCO (New Delhi: Indian Institute of Mass Communication, 1984). of expression and urged UNESCO to evolve a concrete plan of action in this respect. As stated earlier, this led to undertaking of a survey of communication infrastructural facilities available in different countries so that appropriate policy initiative and support could be provided to ensure adequate development of communication facilities so as to achieve the objective of free flow of information.

Consequently UNESCO and various U.N. bodies supported many programmes in developing countries to build mass media infrastructure and institutions. "Freedom" and "Freedom of Information" are. one of those terms that cast a spell on peoples' mind. People seldom pause to ask whose freedom of information to be true, has to be equitable and reciprocal.5 However, freedom of information as obtaining, is largely freedom of western developed countries. Similarly free flow of information is largely one way from western developed countries to developing countries. Against this inequitable and largely one way flow of information, many developing countries started protesting in various international fora as it was being increasingly realised that such a situation is detrimental to their economic, political and cultural interests. At the 1974 general conference of UNESCO, the third world developing countries maintained that the concept of free flow would have little meaning until action has been taken to put all nations on a free and equal footing in their ability to communicate. There was growing realisation among many developing countries that the political freedom which they have acquired in recent years through great struggle and turmoil would 5 D. R. Mankekar, Whose Freedom? Whose Order?, (New Delhi: Clarion, Delhi, 1981)have little meaning in the absence of economic freedom, which is consequently related to information and communication situation prevailing in these countries. They realised that though they have become free, the economic structure and information communication flow structure continue to be broadlyalong the patterns set up during the colonial period. As such there

was a. growing demand from the third world countries for a "new international economic order" and also "new world information and communication order". Consequently there were fierce debates at various levels. The Nonaligned Movement was spearheading the demand for a new world information and communication order which was vehemently opposed by the western developed countries in the garb of freedom of expression and desirability of free flow of information. UNESCO became the focal point of this great debate during 1970s and 1980s. An intense series of professional, scientific and diplomatic activities involving communication in general and international communication in particular were initiated at various levels.5 A number of scientific research studies were undertaken to marshal facts in support of their respective positions. UNESCO appointed McBride Commission to find out facts and report. Many "national media policy" documents were prepared. The great debate on issue of freedom of expression and free flow of information versus equitable and balanced flow of information became, at times, so intense as to acquire confrontational postures threatening the very existence of UNESCO. It may be recalled that it is in this context that the United States and the Great Britain (along with Singapore) 6 Kaarle Nordenstreng, The Mass Media Declaration of UNESCO (Norwood, N.J.: Ablex Publishing Corporation, 1986). withdrew from the UNESCO in 1984. Some of the highlights of this debate can be summarised as follows:

News and views circulated through mass media have significant bearing upon attitudes and actions relating to international relations. With the revolution in communication technologies the world is shrinking into a global village, making interdependence of nationstates imperative for the very survival of human race on this planet. Relentless battles for minds are fought through mass media. Today, not only sophisticated technologies like satellites and computers are utilised to generate enormous news and information but subtle techniques are put into operation to colour such news and information. In the information game the western developed societies have tremendous advantage over the developing third world AfroAsian countries. The international flow of news and information is largely one way; from developed west to the developing South. The imbalance in news flow not only portrays the world realities in a distorted fashion but also creates geopolitical environment detrimental to the third world's political, economic and cultural, interests, There is an increasing realisation that political freedom from colonial rule, if not meaningless, is not enough in the. context of prevailing world economic and information orders. The conduits of western influence and domination established during the colonial period are still operational and are even strengthened with the advancement of communication revolution. 7 J. S. Yadava, Politics of News: Third World Perspective (New Delhi: Concept Publishing Co., 1984). As such, the developing countries in general and the nonaligned in particular have been demanding restructuring of the existing patterns of international relations. There

is some progress as a consequence of the decade-long debates and discussions in international fora. The concept of `new world information order' finds wider acceptance today.8 `News Pool' and many other third world initiatives and bilateral arrangements have come into existence to facilitate the process of greater exchange of news and views about and among themselves. It was the nonaligned countries, at their summit in 1973 at Algiers, which first asked for a change in the monopoly of information by the western media.9 UNESCO gave a call for a New Information Order in 1978, five years after the Algiers summit. Then onward, of course, UNESCO extended strong support to the concept and formulation of the new information and communication order. The MacBride Commission,10 appointed by UNESCO in 1977, underlined the imbalance in the information flow, and the formulation of the resolution on the New Order was completed at the General Conference in Belgrade in 1980. Some of the western countries have taken the view that the New Order is an attempt at legitimising government control of the media. Even though there is no reference in any of UNESCO's documents justifying, directly or indirectly, a code of conduct or censorship. 8 Hamid Mowlana, Global Information and World Communication, New Frontier in International Relations (New York: Longman, 1986). 9 Indian Institute of Mass Communication, News Agencies Pool of Non- aligned Countries: A Perspective (New Delhi, 1983).

10 UNESCO, Many %ices: One World: S. McBride Commission Report (Paris, 1982).government control of the media, the campaign against UNESCO on this account has continued unabated. However, despite all difficulties, UNESCO succeeded in adopting by acclamation a declaration on Mass Media which is of great importance. This UNESCO declaration called Declaration. On Fundamental Principles concerning the contribution of mass media to strengthening the peace and international understanding, to the promotion of human rights, and to countering racialism and apartheid and incitement to war, is perhaps the most painstakingly negotiated text about journalism, mass communication ever adopted in UNESCO. By adopting the Mass Media Declaration in which UNESCO played a pivotal role, the international community laid down for the first time overall guidelines for the mass media. In the words of AmadouMahtar M'Bow, the then Director-General of UNESCO, the Mass Media Declaration is, "a new set of principles which all creators and distributors of information. would be able to endorse", "since for the first time the international community has at its disposal a body of principles and ideals such as can provide guidance for action and practice of all those whose hearts are set on justice and peace".*11 It also led to the setting up of a special programme, IPDC,-International Programme for Development of Communication -- at UNESCO. In this great debate on free flow of information India played a very significant role, and UNESCO India office made valuable contribution by supporting some studies of the issue and facilitating a number. of debates and seminars that were organised to put the whole issue into proper perspective.

11*The Mass Media Declaration of UNESCO.

INSTITUTION BUILDING :Right from the beginning UNESCO has been extending support to programmes leading to the development of mass communication infrastructure and institutions in India. In 1960, the UNESCO India Office extended its support by inviting a team of international experts to study communication and development scene in India, which led to recommendation and setting up of the National Institute - the Indian Institute of Mass Communication (IIMC) at Delhi. In the initial stages, UNESCO also provided for two consultants to start the training programmes at. the Institute. It also provided funding of some equipment for journalism/mass communication at the Institute. The objective of the IIMC is to train media personnel from India and third world countries. Over the years UNESCO has supported several training and research programmes at the Institute. To build infrastructure facilities, UNESCO also started National Institute of Audio Visual Education, which later developed and merged with the National Council for Educational Research and Training (NCERT). UNESCO also helped to some extent development of facilities for news agency journalism, and setting up of the news pool at Press Trust of India. Of late there has been greater emphasis on informatics and library science. UNESCO has supported many programmes and activities relating to development of skills and facilities in computers and information science. The IPDC has been supporting a number of activities in support of developing communication infrastructure in developing countries, including India. The Centre for Mass Communication Research at Jamia Milia Islamia

got some grants from IPDC. India has also been making financial contribution to IPDC, beside supporting strongly its philosophy and plan of action.
:- J.S.Yadava

The role of Infrastructure in development

The Infrastructure provides the base for all the developments to be done in the country. Therefore it plays the significant role in the development and prosperity of the country, in this sector many of the private construction companies are also taking the active part in the growth in India.

Infrastructure and India's rich :It's easy, perhaps too easy, to become pessimistic about India's deficient infrastructure. Everything from potholed roads and clogged airports to frequent power blackouts and creaking urban transportation would appear to be daunting, if not intractable, shortcomings. Sure, the challenges are humongous, and the pace of their resolution is slow. The highly indebted Indian government hasn't the wherewithal to make a decisive improvement, which is estimated to require additional spending equal to 3.4 percent of gross domestic product. That's almost three-quarters of what India is spending on transportation, power, water, irrigation, communications and storage capacity in a year.

The case for glumness is probably overstated. Private enterprise is playing an increasingly important role. Inadequate public spending is still a huge constraint, yet domestic non-state companies are slowly taking the lead in allocating muchneeded capital to some of India's most overlooked requirements. A glance at the latest Forbes magazine list of 40 richest Indians should prove that point. Except for the ``knowledgeeconomy'' czars -- the computer-software and generic-drug exporters who are mostly sticking to what they know -- almost everyone else on that list is investing in infrastructure. To cite a few examples: -- Mukesh Ambani, the second-richest Indian after steel baron Lakshmi Mittal, is building a whole new port city near Mumbai. Ambani, the chairman of Reliance Industries Ltd., is also setting up a badly needed farm-to-store supply chain in agricultural commodities. -- Estranged younger brother Anil Ambani, No. 3 on the Forbes list, is building a 7,480 megawatt electricity plant in the northern state of Uttar Pradesh. If he can find the gas to fire his plant, he can bring cheer to a power-starved New Delhi. The younger Ambani is also partnering the city of Mumbai on the first phase of a $4 billion suburban railway system. -- Three places below Anil Ambani on the wealth list is Sunil Mittal, the founder of India's largest mobile-phone service provider. Mittal may soon announce a tie-up with a global retailer. Like Mukesh Ambani, he has serious plans to create a robust food-supply system in the country.

-- Tulsi Tanti, the eighth-richest Indian, has made all his money in wind energy. As much as 45 percent of the 100,000 megawatts of power that India is expected to need in the next five years may be supplied by windmills, he says. Another Indian billionaire, Jaiprakash Gaur, has similar hopes from hydropower. -- Grandhi Rao's GMR Infrastructure Ltd. is modernizing the New Delhi airport and constructing a new one in the southern city of Hyderabad. Rao is No. 18 on the Forbes list, just ahead of Baba Kalyani, whose Nandi Infrastructure Corridor Enterprises Ltd. is building a $500 million Bangalore-Mysore expressway that will ease the congestion in India's software capital. The government's biggest headache is acquiring land; Mukesh Ambani's plan to build a new city a third as big as Mumbai is already dogged by the protests of farmers who feel they are being compensated too little for their land. For the developer, the political risk is also intimidating. The Bangalore-Mysore corridor, approved in 1995, has been stuck in a political and legal quagmire. The Indian Supreme Court recently threw out the objections of the Karnataka state government, giving the final go-ahead to India's first privately built expressway; the politicians may yet find a way to torpedo the project. Already, the state government has hit back by withdrawing a pollution clearance. Setbacks such as these would have been very dispiriting 10 years ago. Now, they are being shrugged off. The private sector in India is awash with money and has a huge appetite for risk. Infrastructure-related work is already so brisk

that it's creating capacity bottlenecks for machinery suppliers, says Ved Prakash Chaturvedi, managing director of Tata Asset Management Ltd. in Mumbai. ...Supply-side bottlenecks, across a range of capital-goods businesses, may become a short-term impediment, especially if the economy continues to grow at about 8 percent, the pace at which it has expanded the past three years. "An economy growing 8 percent annually becomes almost 1 1/2 times its original size in five years,'' Chaturvedi says. ``When this growth is domestic-demand-driven, as it is in India, the strain on infrastructure from the increase in the sheer number of transactions is stupendous.'' ...Give it a few years. The private sector in India will build and operate substantial amounts of physical infrastructure. Quality public-sector projects will remain limited to rare successes such as Delhi Metro Rail Corp. because of the sheer paucity of management skills within the government. Adequate power supply and tolerable transportation

networks are within India's reach, and sooner than people realize. Yet the key is with India's entrepreneurs, not its government. Above-average economic growth in India. Strong population growth, a large pool of highly-skilled workers, greater integration with the world economy and increasing domestic and foreign investment are expected to drive Indias real GDP by 6% p.a. over the next 10 to 15 years.

Services outsourcing revving up office demand. India is the prime destination for IT services outsourcing. In the coming five years, at least 55 million m of extra office space must be completed in the premium office segment alone. 600 new shopping centres by 2010. Indias burgeoning middle class will drive up nominal retail sales through 2010 by 10% p.a. At the same time, organised retail is becoming more important. At present organised retail accounts for a mere 3% of the total; by 2010 this share will already have reached 10%. By 2030 India will need up to 10 million new housing units per year. Rapid population growth, rising incomes, decreasing household sizes and a housing shortage of currently 20 million units will call for extensive residential construction. The financing of owner-occupied housing in particular holds out enormous market potential. Capital market still underdeveloped. The total stock of

commercial property is estimated at over USD 300 bn. So far the invested market accounts for only USD 4 bn of this. Capital market products, such as commercial mortgage-backed securities or listed property vehicles are still almost entirely lacking. Heed risks. Property investments in India are not risk-free. Market transparency is far behind European or US standards. It is therefore vital for foreign investors to have a professional local partner. The lack of liquidity and upward pressure of pricing remain the main concern within the market.
:- Bloomberg's Andy Mukherjees report

The boom in construction in India :-

It was a tiny construction company founded in 1986 with the modest goal of developing farmland in Sohna, 30 km from Gurgaon. Today the Vatika Group's flagship project is the multi-crore Vatika City, a sprawling township of more than 2,500 apartments surrounded by parks and well-laid pavements, that's scheduled to be ready by 2005. The mini-city has been designed by a firm of British architects which designed London's ambitious Canary Wharf. Travel southwards to Bangalore and Hyderabad. It has been a year of breakneck growth for IDEB Construction which is breaking new ground in both the southern cities. IDEB is building almost 2 million sq ft of malls, residential apartments and a software park. If that isn't enough it's about to start developing another 1.6 million sq ft in the next few months.

Mid-sized companies like Vatika, Senior Builders, Omaxe and Ambience in Delhi or IDEB in Bangalore are taking on giant projects to cash in on the real estate boom. To stand out in the crowd builders are coming out with ambitious projects like an auto mall in Gurgaon, a furniture mall in Bangalore and India's first exclusive jewellery mart. Many smaller companies have grown by 100 per cent annually for the last two or three years. The riskiest element of the building boom is that it's almost completely dependent on infotech and IT-enabled services. If anything goes wrong the smaller companies would be badly hit.

Its most unusual project: a mall in Bangalore in which over 100,000 sq ft will be devoted only to furniture. The building boom sweeping metropolitan India is coming as manna from heaven for a group of mid-sized construction companies. A few years ago they were the relative minnows of the construction business following in the footsteps of giants like DLF, the Hiranandanis and the Ansals. Today companies like Vatika, Senior Builders, and

Ambience in Delhi or IDEB in Bangalore are taking on giant projects of their own and hoping to cash in on the real estate boom that's sweeping the country. Even in Mumbai the construction boom has pushed smaller companies into the limelight. Take the 43-year-old Evershine Builders which is involved in two mega projects in suburbs like Vasai and Kandivli. It's currently building 1,000 flats in Vasai and about 500 in Kandivli -- both projects are being developed in phases. Says J S Augustine, CEO, Evershine Builders: "You could say our growth has been 100 per cent year on year. This year we'll grow at 50 per cent, because we're a large company now and obviously growth rates can't be that high now."

Figures

in

the

construction

industry

are

notoriously

unreliable. But there's no question that smaller builders are making the leap into the big time. Nevertheless, they are still far behind industry's giants. DLF, for instance, is building about 4 million sq ft of residential property and 2.5 million sq ft of office space. Besides that it's also building about 500,000 sq ft of shopping complexes. Similarly, the giant Ansal Group has just signed a deal to build a new township on 500 acres of land in Kundli adjoining north Delhi. The new township which will be called Sushant City will house 50,000 people. The Ansals are taking care to move away from the herd of builders heading for places like Gurgaon. But the smaller companies certainly aren't short on ambition. Travel along the outskirts of Delhi to Noida and Greater Noida where the Omaxe Group has called in the cranes and bulldozers to turn its ambitious projects into reality. Most ambitiously, there's the 1.4 million sq ft Omaxe Connaught Place billed as the largest shopping complex in India. Equally ambitiously, it's building a mini-township called NRI City on 85 acres of land in Greater Noida. NRI City will have 2,500 apartments with a slew of modern facilities thrown in.

Move back to Gurgaon where the Ambience Group is building a 150-acre luxury township called Ambi Island. In the first phase about 325 luxury dwellings are being built in the township. To service the township the Rs 250 crore group is also building the hi-tech Ambi Mall in Gurgaon scheduled to be ready by 2006. Ambi Mall will offer the usual food courts and theatres. But there'll also be a 225-room deluxe hotel, which will be a joint venture with the Marriott chain. In addition, the shopping mall will have an only by invitation Platinum Floor for VIP shoppers. Ambience currently has projects worth over Rs 850 crore (Rs 8.50 billion) in hand in Delhi and Gurgaon. All the newcomers are facing one problem: how do they make their presence felt when scores of new glass-and-concrete projects are already dotting the landscape? Many builders are scouring the world for new concepts that can be transplanted on Indian soil. IDEB, for instance, is hoping that a giant furniture section at its proposed Outlet Mall on the outskirts of Bangalore will bring in customers. Most ambitiously, there's the Senior Auto Mall to be constructed in Gurgaon by Senior Builders. What's an auto mall?

The Senior Auto Mall will be a 10-storeys of auto showrooms complete with a test track where would-be owners can try out new vehicles. To make the transaction smoother there'll be banks and insurance companies vying to offer the best terms. And, there'll be food court so that a car buying expedition can be turned into a family outing. "When a family is planning to buy a car, everyone is interested in seeing it," says Vijay Dixit, managing director, Senior Builders. The company says it is handling projects worth around Rs 1,600 crore (Rs 16 billion). If that's not exotic enough, how about the Gold Souk in Gurgaon billed as India's first exclusive jewellery mart. The Souk will be ready next March and it has room for 70 showrooms spread out over 100,000 sq ft. Aerens is also constructing a Rs 60-crore (Rs 600 million) entertainment complex that will be ready by June and it hopes to start an IMAX theatre by 2006. "Our focus is on entertainment, since we believe that is where the future of this industry is," says Sanjay Kakkar, project director, Aerens Group. Is there enough demand to sustain this building boom of epic proportions? The builders certainly think they are constructing on firm foundations.

Vatika executive director Gaurav Bhalla reckons that about, "40 families are moving into Gurgaon each week, and a new company comes in every 10 days or so." But these companies are being forced to try harder and make their properties more attractive for potential buyers. Take Neelkanth Builders which has been constructing at a furious pace in Mumbai. One of its projects Neelkanth Heights in Thane has a lake on the property. There are even two natural hillocks inside the property which, the company says, adds to its charm. The fact is that developers today -- especially the smaller ones -- have to throw in all kinds of features which they wouldn't have bothered with a few years ago. Evershine Builders, for instance, is providing a range of facilities from modular kitchens to piped gas and Internet connections. Some of its flats are even fully furnished. "You just have to shift in with your family and clothes," says Augustine. Certainly, buyers today expect more. Closed-circuit

television, and earthquake proofing are expected as standard features in most upmarket blocks these days. "The level of featuring offered today has definitely gone up. Today swimming pools, clubhouses and such are the norm," says Mofatraj Munot, vice chairman, Kalpataru Group in Mumbai. The

Kalpataru Group in involved in projects all the way from south Mumbai to Mira Road in the west and Thane in the east. Is this a real estate bubble that's about to burst? Ansal Group Chairman Sushil Ansal is sceptical about the future and the gold rush mentality that is building up. He's taking care to build in areas like Kundli, which is on the Chandigarh highway where others haven't started looking (most building in Delhi, borders the affluent south Delhi area). Ansal reckons there'll be a double bonus in building in the area. Land will be cheaper allowing for escalation. And there will be strong demand from the affluent traders who live in north Delhi. Says Ansal: "Our strategy is to go to areas where the market is not already congested." Of course, it should be noted that despite his scepticism Ansal is putting up 1,200 residential units in Gurgaon. Also, he has built a 700,000 sq ft multiplex and shopping complex called Ansal Plaza in Greater Noida of which 80 per cent has already been sold. But the others are more confident about the future. Pradeep Jain, chairman, Parsvnath Developers, points out that his firm has grown by 154 per cent in the last year, "It's common knowledge that Delhi is bursting at its seams. But the opportunities available in other parts of the NCR are boundless," he says.

Jain doesn't believe that the construction boom is on shaky foundations. He cites factors ranging from cheap homes loans, to family fragmentation and improved connectivity across the NCR. Similarly, Raj Singh Gehlot, chairman, Ambience Group, points to the changing consumer attitudes. "Earlier, there was the conservative culture of

accumulating one's savings and sacrificing the present to the future," he says. "But now people are spending a lot more." The key to success in the real estate business, of course, depends on the price at which the land has been bought. That's where many mid-sized companies are at a disadvantage compared to the bigger groups. DLF, for instance, bought up large tracts of land in Gurgaon several decades ago. This put them in a particularly happy position and it means that many builders are also forced to buy from them. Inevitably, a lot depends on infotech and IT-enabled services. Front-running companies like Wipro Spectramind and Daksh e-Services have been booming and hiring in the thousands in the last few months. "The boom in commercial activity is being driven by IT and IT-enabled services. So both commercial demand and residential demand, which is generated from the former, will continue to

increase," says Sanjay Verma, executive director India, Cushman and Wakefield. Verma reckons that building activity won't slow down yet. "There should definitely be adequate demand in areas like Gurgaon and Noida for at least the next two years," he says. Others are equally confident about Bangalore and Mumbai. In Bangalore, of course, the boom is almost entirely dependent on the infotech boom. Is this a building boom that will go on forever or is the music about to stop? Will Bangalore be the Silicon Valley of the east and the scene of unstoppable growth? And will Gurgaon be for India what Pudong, the giant suburb of Shanghai is for China? Pudong didn't exist in 1990 and today it's a sprawling twin city to Shanghai. The builders certainly believe they are building cities for the 21st century and they will keep pushing the pile drivers into the earth.
Jai Arjun Singh | December 13, 2003 Additional reporting: Raghavendra Rao and Arti Sharma Business Standard

Part 4 :

Comparison between Worlds Fastest growing Country :India versus China

Amit Varma's post China v India points us to a very interesting piece by Shankar Acharya:

Acharya, a former Chief Economic Adviser to the Government of India, does not pull his punches: "Let me put this bluntly: as an economy, we are simply not in China's league." His table shows the stark differences:

INDIA versus CHINA

ECONOMY/SCAL Units E
Population GDP (PPP) Million $ billion 2003 2003 1288 6090 1064 2908 3.7 16 Year China India China to India ratio 1.2 2.1 2.2 2.4

Per capita GDP growth % Share of manufacturing % in GDP Living standards Per capita GNP (PPP) Life expectancy Female adult literacy $ Years %

1980-2004 8.2 2003 39

2003 2002 2003

4980 71 87

2880 63 45

1.7 1.1 1.9

rate Under 5 mortality Under 5 malnutrition Poverty ratio (% below $1 a day) INFRASTRUCTURE Electricity production Goods hauled (Railways) Billion kwh 2002 Ton-km billions 2003 2003 61.62 5650.6 3.9 580.0 15.7 9.7 2002 1640.5 1508.7 596.5 333.2 2.7 4.5 Per 1000 % 2003 37 87 45.8 34.7 0.4 0.3 0.5

1995-2003 12.1 2001 & 2000 16.6

Container traffic (ports) Millions Air freight Ton-km millions Telephones (land + Mobile) Per 1000

2003

424

71

6.0

EXTERNAL SECTOR
Merchandise exports Service exports FDI inflow Tourist arrivals Forex reserves $ billion $ billion $ billion Millions $ billion 2004 2004 2004 2003 2004 593.4 62.4 60.6 33.0 614.5 81.0 51.3 5.5 2.4 135.2 7.3 1.2 11.0 13.8 4.5

Sources: World Development Indicators (2005); Institute of International Finance, RBI and CSO. 2004 data for India refer to the fiscal year 2004-05.

Comparison on GDP :-

Comparison between the performing management of Governance:-

Part -5 :Conclusion :-

India will thus become the fastest growing economy out of 34 developed and emerging markets during that period and the worlds third largest economy by 2020. Moreover, its GDP per capita will double, from roughly USD 2,500 today (at purchasing power parity) to almost USD 5,000 in 2020. Favourable demographics, increasing investment in education and infrastructure and further integration with the world economy are the factors behind our projections.

India finally regained full investment-grade status on Tuesday after a hiatus of more than 15 years, as Standard & Poors followed the lead of Moodys and Fitch in removing the speculative tag from its sovereign credit rating. The upgrade is symbolic for reformers in the

government. S&P had downgraded Indias sovereign rating to junk status in May 1991, during the balance of payments crisis that triggered the start of the reform era. ...Fitch raised Indias rating to investment grade in August 2006, while Moody did so for its foreign currency borrowings cautious. The upgrade will open the countrys capital market to a wider investor base, but is unlikely to trigger a re-rating of asset values as both fixed-income and equity investors had priced in the fiscal progress that prompted the move. in January 2004. Gurchuran Das, an economic commentator, said: This is long overdue. S&P have been overly

Indias financial establishment hailed the change. P. Chidambaram, finance minister, said he was happy at the rating agencys acknowledgement of Indias improving macroeconomic stability and strength. Today India's central bank raised its growth forecast to 9 per cent, raised the official repo rate for a fifth time in a year to curb inflation, and warned of further signs of overheating.
Cherian Thomas from Bloomberg reports:

Governor Yaga Venugopal Reddy raised the Reserve Bank of India's estimate for growth in the year ending March from 8 percent and increased the repurchase rate at which it lends overnight by a quarter point to a four-year high of 7.50 percent. Reddy also today unexpectedly left the overnight

borrowing rate unchanged, surprising investors for the sixth time in the past nine scheduled central bank meetings as he tries to prevent the world's second-fastest growing major economy after China from overheating. India's record growth has kept inflation above the central bank's 5 percent tolerance level since September. As to growth prospects, India is now the second fastest growing major economy after China. The FT report, India central bank warns of overheating, notes: The economy expanded by 9.1 per cent in the first half of 2006/07 to September 30th and is set for its fastest annual

growth since the start of reforms in 1991. But signs of overheating are a growing concern to the central bank. Wholesale price inflation has recently broken out of the central banks 5-5.5 per cent comfort range, rising from 4.1 per cent in March 2006 to 6.1 per cent on January 6. Inflation at the consumer price level has been rising even faster. ...With money supply and bank credit growth also racing away, economists expect the RBI to continuing tightening. Money supply is rising by 20 per cent and bank credit by 31.2 per cent, ahead of respective targets of 15.5 per cent and 20 per cent.
Wednesday, January 31, 2007 at 08:01 AM in Central banks, Economy India, Inflation and interest rates | Permalink

A lot of the inflation is actually because of the rising prices of agricultural commodities. There's also evidence of overheating in the real estate sector. But with net profit growth in excess of 30% in the last quarter, market enthusiasm is backed by the fundamentals, although there's no doubt it's priced to perfection. A recent Goldman Sachs note says that the boom is being driven by an improvment in total factor productivity. So yes, part of the reason for 9% growth is the global boom.Is it sustainable? My guess is that even after central bank tightening, corporate investment---they're finally adding capacity after years--will keep the momentum going at least for the next couple of years.
Posted by: akhondofswat | Saturday, February 03, 2007 at 02:56 AM

India GDP (2000 to 2040) :========================== Population 15% to 18% Land 2% to 10% Food Production 8% to 15% Electricity 4% to 10% Tech 4% to 15% (Cell Phones, Computers, etc) Roads 5% to 15% (Roads, Waterways, Railroads) Culture 10% to 25% (Movies, Resturants, Events) Forex 1% to 10% (Euro, Dollar, Yuan, Taka) Debt -1% to -15% (External, Trade Deficit) Anticipated GDP 10% of world economy (6% to 16%)
Posted by: Roy | Wednesday, May 30, 2007 at 03: