ECONOMIC AFFAIRS 2011 January 2011 According to the 'Quick estimates' for 2009-10, released by the C.S.O.

. (Central Statistical Organisation) on 31st January. Indian GDP growth for 2009-10 revised up to 8% from the 7.4% estimated earlier for the fiscal. It occurred mainly on the better showing by manufacturing and service sectors. The country's GDP at factor cost at constant (2004-05) prices in 2009-10 is estimated at Rs 44.94 lakh crores as against Rs. 41.63 lakh crores in 2008-09. However, at current prices, it is estimated much higher at Rs 61.33 lakh crores as against Rs 52.82 lakh crores in 2008-09. The per capita income in real terms (at 2004 - 05 prices) is estimated at Rs 33,731 for 2009-10 as against Rs 31,801 in 2008-09. At current prices, it is estimated at Rs 46,492 for 2009-10 as against Rs 40,605 for 2008-09. ONGC said it had struck natural gas reserves in its maiden well drilled to tap shale gas in West Bengal. This is the first time gas has been discovered in sedimentary shale gas rocks outside the U.S.and Canada. Y H Malegam committee constituted by Reserve Bank of India (RBI) in October 2010 to recommend the practices of Microfinance Institutions (MFIs) submitted its report and proposes the maximum interest rates as 24 percent. Industrial output in November 2010 was slower-thanexpected, 2.7 percent from a year earlier, sharply lower than the previous month's revised annual growth of 11.3 percent, according to government data released. World Bank President Robert B.Zoellick signed a $220-million agreement with the Bihar government for the Kosi Recovery Project to rebuild areas affected by the 2008 floods". The gems and jewelry exports posted 39% growth at around $23.5 billion in the first three quarters of this fiscal. These were $14.46 billion in the corresponding period in the previous year, according to data given by the Gem and Jewelry Export Promotion Council (GJEPC) February 2011 Reliance Industries Ltd. On 21 February announced the sale of 30 per cent stake in its 23 blocks, including the giant KG-D6 gas fields, to British Petroleum of U.K. for $7.20 billion. It can be termed as one of the biggest foreign direct investments (FDI) in the energy sector; the deal was signed in London between RIL Chairman and Managing Director Mukesh Ambani and BP CEO Bob Dudley, BP. The

payments and combined investment could amount to $20 billion, one of the largest FDIs in the country. Steel Authority of India on 21 February said it planned to put up four 3-million tonne manufacturing facilities one each in Indonesia, Mongolia, South Africa and Oman at a cumulative investment of $12 billion. C. S. Verma is the SAIL chairman. The Amara Raja Group of companies has announced the setting up of a Digital World City' at an investment of Rs.250 crore in the next 12-18 months on a 500-acre site in Chittoor district, A.P allotted by the State Government. The Group Chairman Ramachandra N. Galla, said the Digital City was being planned as the most attractive destination for companies in electronics and related sectors and would become the country's largest integrated electronics manufacturing park. Leading telecom service provider Bharti Airtel along with 16 other global telecoms on 23 February launched the Europe India Gateway (EIG) cable system that will enhance diversity and capacity between Europe and India. Bharti Airtel said the 15,000-km-long cable project has received investment of around $700 million and has a capacity to transmit 3.84 terabits per second. Panasonic India is setting up the country's first Eco Idea factory at village Dadri-Toi in Jhajjar district of Haryana. Panasonic India president Daizo Ito said Panasonic aimed to be the world's No. 1 green innovation' company in the electronics industry by 2018 when it completed its centenary. According to the Financial Services Group City report-India is expected to be the worlds largest economy by 2050, surpassing China and the U.S. Optimistic of commissioning First Phase of its proposed 6 million tones per annum steel project by March 2012 in Orissa, Jindal Steel and Power (JSPL) said it would set up the biggest steel Plant in Orissa. JSPL Executive Vice-Chairman and Managing Director Naveen Jindal told that The capacity of the proposed 6 million tones plant will be expanded to 20 million tones in the next 10 years, Union finance minister Pranab Mukherjee has released commemorative coins of the denominations of Rs.150 and Rs.5, at a function, organised to mark the completion of the year-long celebrations of 150 years of Income Tax The reverse faces of the Rs. 150 and Rs. 5 coins, minted to commemorate Income Tax 150 years of Building India,' bear the portrait of Chanakya and Lotus with Honeybee' at the centre representing his famous lines, ..... Ideally, governments should collect taxes like a honeybee, which sucks just the right amount of honey from the flower so that both can survive... The left and right peripheries of the coins are flanked with the words: Income Tax 150 years of Building India in both Hindi and English. The Rs. 150 coin is not only unique for its denomination but also for its size and metal composition. The 44-mm circular coin is made of 50 per cent silver.

 Union finance minister Pranab Mukherjee tabled the economic survey 2010-11 in the parliament. The highlights are1. Robust growth and steady fiscal consolidations have been the hallmark of the Indian economy in the year 2010-11 so far. 2. The growth rate has been 8.6 percent in 2010-11 and is expected to be around 9 percent in the next fiscal year. 3. The growth has been broad based with a rebound in the Agriculture sector which is expected to grow around 5.4 per cent. 4. Manufacturing and Services sector have registered impressive gains. Savings and investment are looking up while exports are rising. 5. Food inflation, higher commodity prices and volatility in global commodity markets have been a cause of concern underscoring the need of fiscal consolidation and stronger reserves. 6. In order to check food inflation, it has suggested, the Government should improve the delivery mechanisms by strengthening the institutions and addressing corruption. 7. The Survey has observed that a rise in savings and investments and pick up in private consumption has resulted in 9.7 per cent growth of GDP at market prices (constant) in 2010-11. 8. Savings rate has gone up to 33.7 percent while the investment rate is up to 36.5 percent of GDP in 2009-10. 9. The Survey points out that the agriculture sector growth in the first four years of the 11th Plan (2007-12) is estimated at 2.87 per cent. 10. The food grain production went up to 232.1 billion tones from 218.1 billion tones in 2009-10. 11. With a relatively good monsoon the agriculture-sector is expected to grow at 5.4 per cent during 2010-11. 12. The rising food inflation and the critical role of agriculture underline the need for a larger investment in agriculture enrooted to the second green revolution. 13. The Survey reports that the industrial output growth rate was 8.6 per cent while the manufacturing sector registered a growth rate of 9.1 per cent in 2010-11. 14. During April-November 2010 telecom, crude oil production, civil aviation sectors performed well while the power generation, cement and fertilizer production, railway freight traffic and cargo handling at major ports have grown at comparatively lower rates. 15. Six core industries registered a growth of 5.3 per cent (provisional) in April-December, 2010 as against 4.7 per cent during the same period in 2009-10. 16. Economic Survey 2010-11 has highlighted the increasing role of infrastructure services which have been deepening rapidly with rising investments.

17. The telecommunications sector has done exceedingly well as the tele density has increased from 20.74 per cent in 2004 to 143.95 per cent in 2010 in urban areas. 18. While in the rural areas it has gone up from 1.57 per cent in 2004 to 30.18 per cent in 2010. 19. Lauding the role of services sector as the potential growth engine, the Survey has called for the policies to promote further opportunities in new areas in global demand such as accounting, legal, tourism, education, financial and other services beyond the IT and business process sectors. 20. The Survey points out that the exports in April-December 2010 went up by 29.5 per cent while the imports during the same period registered a growth rate of 19 per cent. 21. The trade gap narrowed down to US $ 82.01 ban in the same period. Balance of payment situation has improved due to surge in capital flows and rise in foreign exchange reserves which have been accompanied by rupee appreciation. 22. During current fiscal foreign exchange reserves increased by US $ 18.2bn from US $ 279.4 ban in end April 2010 to US $ 297.3 ban in end December 2010. 23. The expenditure on Social sector programs has been stepped up by 5 percent point of GDP over the past five years. 24. The Survey points out that Gross Fiscal Deficit are 4.8% of GDP in 2010-11 as against 6.3 percent of GDP in the previous year. 25. The Revenue deficit in the current financial year has been 3.5 percent of GDP as against 5.1 percent in the previous year. 26. A call for reforms in the university and higher education and correcting the demand supply mismatch in the job market has been made in the report. 27. The Economic Survey sums up by stating that the real GDP growth is expected to reach the 9 per cent mark in 2011-12 and the next two decades may well see the economy growing faster than it has done any time in the past. 28. Finance Minister of Andhra Pradesh, Anam Rama Narayana Reddy submittedBudget 2011-12 in AP Assembly on 23 February. This is first Budget for Anam Ramanarayana Reddy as a Finance Minister of the State. It is estimated that this year Budget will cross Rs. 1.2 lakh crores. Following are the highlights of Andhra Pradesh Budget 2011-12: 1. Annual Budget Plan for 2011-12: Rs 1,28,542 Crores 2. Planned Expenditure: Rs. 47,558 Crores 3. Non- Planned Expenditure: Rs. 80,984 Crores 4. Estimation of Revenue Surplus: Rs. 3826 Crores 5. Estimation of Fiscal Deficit: Rs. 17602 Crores 6. GDP Forecast: 8.5 percent 7. Growth of Industry: 9.61 percent

8. Irrigation Projects / Sector: Rs. 15000 Crores 9. Jalayagnam: Rs. 15000 Crores 10. Higher Education: Rs. 3337 Crores Japan's gross domestic product fell an annualised 1.1 per cent in the fourth quarter in 2010, marking the first decline in five quarters due to a drop in exports, diminishing government stimulus programmes and weak consumer consumption, said the sources on 14 February .According to the data, Japan has now lost its position as the world's second largest economy to China. The World Bank has stated in its latest report that India can generate 68,000 MW of power, costing less than Rs.6 a unit from renewable energy sources, a step that can address the country's energy security concerns. Union Petroleum and Natural Gas Minister Jaipal Reddy on 15 February, dedicated to the nation India's largest naphtha cracker plant at Indian Oil Corporation's (IOCs) Panipat Complex, Haryana.The complex has been commissioned in 46 months, which compares with the global standard for similar capacity plants and is ahead of average time taken in setting up similar units in India. With the completion of this petrochemicals complex, IOC has crossed a major milestone in realising its aspiration to emerge as an integrated and diversified company. Rajiv Gandhi International Airport (RGIA) ,Hyderabad has retained its number one position and has been ranked amongst the top airports in its category in the world for the second year in a row in the latest ASQ (Airport Service Quality) rankings of the Airports Council International (ACI).Besides RGIA, Delhi's Indira Gandhi International Airport (IGIA), has been ranked fourth. Both the airports are operated by the GMR group-led consortia. IGIA's ranking was in the group of 25-40 mppa (million passengers per annum). This niche league features the world's best airports like Incheon-Seoul; Changi-Singapore and Shanghai Pudong-China.The awards will be presented on April 7, 2011 during ACI conference at the ACI Asia Pacific Regional Conference and Exhibition to be held at New Delhi. As many as 153 airports across the globe, including six Indian airports participated in the ASQ survey in 2010. World's largest truck maker Daimler AG, which is setting up a state-of-the-art commercial vehicle facility at Oragadam near Chennai, will roll out the BharatBenz brand of trucks in 2012.Daimler will launch a range of Bharat Benz trucks from 6 to 49 tonnes, catering to different applications. India on 18 February adopted the New Consumer Price Index (CPI) that will reflect the actual movement of prices at the microlevel. As per the new series, the CPI has increased to 106 in January from a base of 100 in 2010 (inflation of 6 per cent).The Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation, has introduced the new series of consumer price indices for all-India, and

States and union territories separately for rural, urban and combined for the purpose of intra temporal price comparison with effect from January, 2011, with 2010 as the base year. G20 Finance Ministers meeting in Paris on 19 February reached a compromise deal to correct global economic imbalances and expressed concern over excessive commodity price volatility impacting the world food security.Pranab Mukherji attended the meeting from India. Japan's gross domestic product fell an annualised 1.1 per cent in the fourth quarter in 2010, marking the first decline in five quarters due to a drop in exports, diminishing government stimulus programmes and weak consumer consumption, said the sources on 14 February .According to the data, Japan has now lost its position as the world's second largest economy to China. The World Bank has stated in its latest report that India can generate 68,000 MW of power, costing less than Rs.6 a unit from renewable energy sources, a step that can address the country's energy security concerns. Union Petroleum and Natural Gas Minister Jaipal Reddy on 15 February, dedicated to the nation India's largest naphtha cracker plant at Indian Oil Corporation's (IOCs) Panipat Complex, Haryana.The complex has been commissioned in 46 months, which compares with the global standard for similar capacity plants and is ahead of average time taken in setting up similar units in India. With the completion of this petrochemicals complex, IOC has crossed a major milestone in realising its aspiration to emerge as an integrated and diversified company. Rajiv Gandhi International Airport (RGIA) ,Hyderabad has retained its number one position and has been ranked amongst the top airports in its category in the world for the second year in a row in the latest ASQ (Airport Service Quality) rankings of the Airports Council International (ACI).Besides RGIA, Delhi's Indira Gandhi International Airport (IGIA), has been ranked fourth. Both the airports are operated by the GMR group-led consortia. IGIA's ranking was in the group of 25-40 mppa (million passengers per annum). This niche league features the world's best airports like Incheon-Seoul; Changi-Singapore and Shanghai Pudong-China.The awards will be presented on April 7, 2011 during ACI conference at the ACI Asia Pacific Regional Conference and Exhibition to be held at New Delhi. As many as 153 airports across the globe, including six Indian airports participated in the ASQ survey in 2010. World's largest truck maker Daimler AG, which is setting up a state-of-the-art commercial vehicle facility at Oragadam near Chennai, will roll out the BharatBenz brand of trucks in 2012.Daimler will launch a range of Bharat Benz trucks from 6 to 49 tonnes, catering to different applications.

 India on 18 February adopted the New Consumer Price Index (CPI) that will reflect the actual movement of prices at the microlevel. As per the new series, the CPI has increased to 106 in January from a base of 100 in 2010 (inflation of 6 per cent).The Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation, has introduced the new series of consumer price indices for all-India, and States and union territories separately for rural, urban and combined for the purpose of intra temporal price comparison with effect from January, 2011, with 2010 as the base year. G20 Finance Ministers meeting in Paris on 19 February reached a compromise deal to correct global economic imbalances and expressed concern over excessive commodity price volatility impacting the world food security.Pranab Mukherji attended the meeting from India. India on 2nd February inked a revised tax treaty with norway for exchange of information to check tax evasion and prevent the flow of black money between the two countries. This new DTAA (Double Taxation Avoidance Agreement) will replace the existing double taxation avoidance convention (DTAC) that was signed between the two countries on decemeber 31, 1986. The National Association of software & service companies (NASSCOM) on 2nd February said, the Indian IT-BPO sector was estimated to grow 19% in the current financial year to reach $ 76 billion in revenues. Exports would continue to be the main stay of the industry with estimated growth of 18.7% to $ 59 billion revenue, while the domestic market is estimated to grow 16% to aggregate Rs 78,700 Cr in 2010-11. Direct employment is expected to reach nearly 25.40 lakh, an addition of 2.40 lakh employees in 2010-11. In a major breakthrough that put an end to more than a month of uncertainty. India and Iran on 3rd February arrived at a settlement and agreed to use EURO to pay for Iranian crude oil through a German bank named EIH Bank A ban on sale of Ayurvedic and other Herbal medicine will take effect across Europefrom may 1st, following a E.U. directive, introduced as a response to growing concern over adverse effects of such alternative medicines. India's GDP (gross domestic product) growth stands revised upwards to 8 percent for 2009-10 from the 7.4 per cent expansion estimated earlier for the fiscal, mainly on the strength of better showing by sectors such as manufacturing and services. The Per capita income at 2004-05 prices is estimated at Rs 33,731 for 2009-10, up from 31,801 in 2008-09, showing an increase of 6.1% Per capita income at current prices rose 14.5% to Rs 46,492 in 2009-10 compared to Rs 40,605 crore in the previous fiscal. National income or the size of the economy rose 16.1% at current prices to Rs 60,95,230 crore compared to Rs 52,49,163 crore in 2008-09.

 United India Insurance Company has won the "Skoch Financial Inclusion Award -2010". Company Managing Director G.Srinivasan received the Award from K.C.Chakrabarthy, Deputy Governor Reserve Bank of India at Chennai Food inflation rose to 17.05 per cent for the week ended January 22, from 15.57 per cent in the previous week, driven by higher prices of vegetable, fruits and eggs. India's foreign exchange reserves fell marginally to $ 299.172 billion during the week ended from $ 299.395 billion in the previous week, said by Reserve bank of India. March The flagship Technology Upgradation Fund Scheme (TUFS) of the Union Textiles Ministry is all set to be resumed after being suspended on June 29 last year for want of funds. The Cabinet Committee on Economic Affairs (CCEA) on 29 March approved the Ministry's proposal for provision of Rs.1, 972 crore for new projects during the remaining months of the current Plan period. In addition, the panel cleared an additional Rs.5,432 crore for the scheme to meet the liabilities towards the projects that have been already sanctioned. With this, the allocation for the scheme for the XI Plan has been enhanced to Rs. 15,404 crore from Rs.8,000 crore, a rise of Rs.7,404 crore. The restructured TUFS provides for higher capital subsidy along with interest reimbursement for installation of first handlooms. Five per cent interest reimbursement and 10 per cent capital subsidy would be provided on brand new shuttleless looms, while 5 per cent interest reimbursement would only be provided for second-hand looms and that too only those up to 10-year vintage. In a significant development, the Centre on 31 March announced allowing 100 per cent Foreign Direct Investment (FDI) in the agriculture sector, including seeds, plantation, horticulture and cultivation of vegetables. According to a circular by the Department of Industrial Policy and Promotion released on Consolidated FDI Policy Circular 1 of 2011, 100 per cent FDI has been now allowed in development and production of seeds and planting material, floriculture, horticulture, and cultivation of vegetables and mushrooms under controlled conditions. The policy will come into effect from April 1. Besides, animal husbandry (including of breeding of dogs), pisciculture, aquaculture under controlled conditions and services related to agro and allied sectors have been brought under the 100 per cent FDI norm. Similarly, the tea sector has also been brought under the 100 per cent FDI norm. Andhra Pradesh tops the list of functional Special Economic Zones (SEZs) in the country. This was stated by Union minister of state for commerce and industry Jyotiraditya Scindia in the Rajya Sabha. AP has 32 operational SEZs, followed by Tamil Nadu (22) and Karnataka (20) of the 130 SEZs in the country whose collective exports stand at Rs 2.2 lakh crore. Scindia said the total physical exports

from the SEZs in the first three quarters of the current financial year 2010-11 was to the tune of Rs 2,23,132 crore. The Centre on 22 March introduced a Constitution Amendment Bill in the Lok Sabha to facilitate implementation of the Goods and Services Tax (GST), a tax regime that would subsume levies such as excise, service tax and sales tax. The Bill, introduced by Finance Minister Pranab Mukherjee, seeks to amend the Constitution with a view to conferring simultaneous powers on the Centre and the States to levy taxes on goods and services. It will also subsume State VAT/sales tax, entertainment tax (unless levied by the local bodies), luxury tax, taxes on lottery, betting and gambling as also tax on advertisements, cesses and surcharges levied by States. However, crude petroleum, diesel, petrol, aviation turbine fuel, natural gas and alcohol for human consumption have been kept out of the GST ambit. The Bill provides for creation of a GST Council to be headed by Union Finance Minister. The council will be empowered to recommend tax rates and exemption and threshold limits for goods and services. Besides, the Bill proposes a GST Dispute Settlement Authority to deal with grievances of the Centre and the States with regard to GST. The chairperson of the authority will be a retired judge of the Supreme Court or the Chief Justice of a High Court, who would be appointed by the President on the recommendation of the Chief Justice of India. The home-grown Tata brand has been ranked as the first Indian brand to be in the top 50 club of global brands as per the latest Brand Finance's Global 500 2007 report. The group has operations in more than 80 countries across six continents, and its companies export products and services to 85 countries. The total revenue of Tata companies stood at $67.4 billion in 2009-10, with 57 per cent of this coming from business outside India. The Central Government on 24 March constituted the Financial Sector Legislative Reforms Commission (FSLRC) under the chairmanship of former Justice B. N. Srikrishna to rewrite and harmonise financial sector legislations, rules and regulations. Apart from Justice Srikrishna as the head, other members of the 11-member commission include former PFRDA Chairman D. Swarup, former Axis Bank chief P. J. Nayak and PMEAC member M. Govinda Rao. The Central Government said it would create a Rs.2, 500-crore corpus for technology modernisation of the micro, small and medium units by next year. At present, only textiles sector is availing these benefits under the Technology Upgradation Fund Scheme (TUFS) wherein the units get 5 per cent subsidy on loans, for upgrading technology, from the government. The MSMEs account for 45 per cent of the country's manufacturing output and 40 per cent of exports. The sector employs 50 million people in 26 million units producing over 6,000 products.

 Nippon Life Insurance Company on 14 March signed a definitive agreement' to acquire a 26 per cent stake in Reliance Life Insurance, one of India's largest private life insurers. Maruti Suzuki India on 15 March rolled out ten millionth car. The historic ten-millionth car, a metallic breeze blue coloured WagonR VXi (Chassis No 243899) rolled out from the company's Gurgaon plant. With this landmark achievement, Maruti Suzuki becomes the only Indian car company that makes its entry into the select club of automobile manufacturers across the globe which has crossed this milestone. Goldman Sachs Asset Management on 16 March announced that it has agreed to acquire Benchmark Asset Management Company, an asset management company in India. SBI official say-State Bank of India is on a mission to expand rural banking and is setting up mini kiosks', which offer limited banking services in villages having a population of over 2,000 persons. These kiosks are being set up on the Private Public Partnership (PPP) model with an aim of building a robust network through private partnership. In urban areas, SBI has launched One Rupee Bank,' scheme through which customers can open an account, deposit money etc using the kiosk. The Andhra Pradesh Government had allotted 1,381 villages to SBI, in which kiosks were to be set up by March 2012 as part of a major policy thrust towards financial inclusion by the Centre. The SBI has already covered 300 villages in 20 districts. In Guntur district, a rural kiosk was inaugurated at Didugu village in Tadepalli mandal. One Rupee Bank,' branch conceptand Bank on Bike,' schemes which have been launched in Medak district have become hugely popular. In its pursuit to contain price rise in the economy the Reserve Bank of India (RBI) on 17 March hiked the short-term indicative rates by 25 basis points. Since last March, this is the eighth time the RBI increased the rates and this move of the central bank would increase the borrowing cost of customers. The central bank has increased the repo rate by 25 basis points from 6.5 per cent to 6.75 per cent and the reverse repo rate by 25 basis points from 5.5 per cent to 5.75 per cent with immediate effect. Repo rate is the rate at which banks borrow money from the central bank and reverse repo is the rate at which banks park their funds with the central bank. The Centre on 17 March announced relaxation in norms for according the Maharatna status to Central public sector enterprises, a step that help many CPSEs acquire this tag, which gives a company more financial autonomy. At present, four CPSEs (ONGC, Indian Oil Corp, SAIL and NTPC) have been given the Maharatna status. As per the new guidelines issued by the Department of Public Enterprises, a company qualifying for the Maharatna status should have an average annual turnover of Rs.20,000 crore in the last three years, as against Rs.25,000 crore prescribed earlier. Similarly, a CPSE with an average annual net

worth of Rs.10,000 crore and net profit of Rs.2,500 crore for three years in a row will qualify for the status. Earlier, companies required average annual net worth of Rs.15,000 crore and net profit of Rs.5,000 crore for three consecutive years were eligible for the tag. The Reserve Bank of India (RBI) on March 7 constituted a working group under the Chairmanship of Usha Thorat, Director, Centre for Advanced Financial Research and Learning (CAFRAL), to examine a range of emerging issues pertaining to regulation of the NBFCs (nonbanking financial companies) sector. While examining a range of emerging issues pertaining to the regulation of the sector, the working group will focus on the definition and classification of NBFCs, addressing regulatory gaps and regulatory arbitrage, maintaining standards of governance in the sector and appropriate approach to NBFC supervision. Finnish Firm Neste Oil on March 8 opened the world's biggest renewable diesel plant in Singapore , taking advantage of massive palm oil production in nearby Malaysia and Indonesia. Clean diesel produced from the euro 550 million ($769 million) plant using feedstock such as palm oil and animal fat will be marketed in Europe, Canada and the U.S., which already have legislation in place supporting biofuels. With an annual capacity of 800,000 tonnes, the Singapore facility is the biggest renewable diesel plant in the world. The plant produces Neste Oil's patented NExBTL renewable diesel. The BML Munjal-led Hero Group on March 8 said it would <="" acquire="" b="" cent="" entire="" per="" stake="" the="">of Japan's Honda Motor Co in their joint-venture Hero Honda Motors Ltd (HHML) for over Rs.3,841 crore. Tata Consultancy Services (TCS), a separate business unit iON, an integrated information technology solution for SMBs. The iON solution, which carries TCS brand and provides on-demand business solutions using the cloud computing technology, will deliver IT in the third generation service model to SMBs. Using the pay-per-use business model, iON will help SMBs leverage world-class technology solutions as a key business differentiator. The Essar Group will take over Zimbabwe's state-owned Zisco Steel in a $750-million deal to revive production at the defunct firm that was once one of Africa's largest producers. The Bombay Stock Exchange plans to launch its small and medium enterprises exchange platform by the second-half of 2011 after getting approval from the capital market regulator Securities and Exchange Board of India. Finance minister Pranab Mukherjee on 28 February presented to Parliament India'sbudget for the coming financial year beginning in April. Following are the highlights of the budget: TAXES

o Standard rate of excise duty held at 10 percent; no change in CENVAT rates o Personal income tax exemption limit raised to Rs 180,000 from Rs 160,000 for individual tax payers o For senior citizens, the qualifying age reduced to 60 years and exemption limit raised to Rs 2.50 lakh. o Citizens over 80 years to have exemption limit of Rs 5 lakh. o A new revised income tax return form 'Sugam' to be introduced for small tax papers. o To raise minimum alternate tax to 18.5 percent from 18 percent o o Direct tax proposals to cause 115 billion rupees in revenue loss Service tax rate kept at 10 percent

o Customs and excise proposals to result in net revenue gain of 73 billion rupees o Basic customs duty on agricultural machinery reduced to 4.5 per cent from 5 per cent. SUBSIDIES o Subsidy bill in 2011-12 seen at 1.44 trillion rupees o o Food subsidy bill in 2011-12 seen at 605.7 billion rupees Revised food subsidy bill for 2010-11 at 606 billion rupees

FISCAL DEFICIT o Fiscal deficit seen at 5.1 percent of GDP in 2010-11 o o Fiscal deficit seen at 4.6 percent of GDP in 2011-12 Fiscal deficit seen at 3.5 percent of GDP in 2013-14

SPENDING o Total expenditure in 2011-12 seen at 12.58 trillion rupees o Plan expenditure seen at 4.41 trillion rupees in 2011-12, up 18.3 percent REVENUE o Gross tax receipts seen at 9.32 trillion rupees in 2011-12 o o Non-tax revenue seen at 1.25 trillion rupees in 2011-12 Corporate tax receipts seen at 3.6 trillion rupees in 2011-12

o Tax-to-GDP ratio seen at 10.4 percent in 2011-12; seen at 10.8 percent in 2012-13 o Customs revenue seen at 1.52 trillion rupees in 2011-12 o Service tax receipts seen at 820 billion rupees in 2011-12 o Revenue gain from indirect tax proposals seen at 113 billion rupees in 2011-12 o Service tax proposals to result in net revenue gain of 40 billion rupees in 2011-12

GROWTH, INFLATION EXPECTATIONS ( Inflation remains principal concern ) o Economy expected to grow at 9 percent in 2012, plus or minus 0.25 percent o Inflation seen lower in the financial year 2011-12 DISINVESTMENT o Disinvestment in 2011-12 seen at 400 billion rupees o Government committed to retaining 51 percent stake in public sector enterprises. POLICY REFORMS o To create infrastructure debt funds o FDI policy being liberalised. o To boost infrastructure development with tax-free bonds of 300 billion rupees o Food security bill to be introduced this year o To permit SEBI registered mutual funds to access subscriptions from foreign investments o Raised foreign institutional investor limit in 5-year corporate bonds for investment in infrastructure by $20 billion o Setting up independent debt management office; Public debt bill to be introduced in parliament soon o Bills on insurance, pension funds, banking to be introduced. o Constitution Amendment Bill for introduction of GST regime in this session. o New Companies Bill to be introduced in current session SECTOR SPENDING o To allocate more than 1.64 trillion rupees to defence sector in 2011-12 ( 11% hike in defence allocation ) o Corpus of rural infrastructure development fund raised to 180 billion rupees in 2011-12 o To provide 201.5 billion rupees capital infusion in state-run banks in 2011-12 o To allocate 520.5 billion rupees for the education sector. Rs.21,000 crore for Sarva Shiksha Abhiyan. o To raise health sector allocation to 267.6 billion rupees (20% hike in health budget ) o Rs.500 crore more for national skill development fund. o Rs.54 crore each for AMU (Aligarh Muslim University) centres at Murshidabad and Mallapuram. o Rs.58,000 crore for Bharat Nirman; increase of Rs.10,000 crore.

o Mahatma Gandhi National Rural Employment Guarantee Scheme wage rates linked to consumer price index; will rise from existing Rs.100 per day. o Increased outlay on social sector schemes. ( Social sector allocation up by 17%) o Infrastructure critical for development; 23 percent higher allocation in 2011-12. ( Rs 2,14,000 cr allocated for infrastructure sector ) AGRICULTURE ( Farm loans at 4 per cent ) o Removal of supply bottlenecks in the food sector will be in focus in 2011-12 o Agriculture growth key to development: Green Revolution waiting to happen in eastern region. o rupees o o To raise target of credit flow to agriculture sector to 4.75 trillion Gives 3 percent interest subsidy to farmers in 2011-12 Cold storage chains to be given infrastructure status

o Capitalisation of National Bank for Agriculture and Rural Development (NABARD) of 30 billion rupees in a phased manner o To provide 3 billion rupees for 60,000 hectares under palm oil plantation o Actively considering new fertiliser policy for urea o Food storage capacity to be augmented - 15 more mega food parks to be set up in 2011-12; of 30 sanctioned in previous fiscal, 15 set up. o Comprehensive policy on further developing PPP (public-privatepartnership) mode. ON THE STATE OF THE ECONOMY o "Fiscal consolidation has been impressive. This year has also seen significant progress in those critical institutional reforms that will pave the way for double digit growth in the near future." o Food inflation remains a concern o o o Current account deficit situation poses some concern Economy back to pre-crisis trajectory. Development needs to be more inclusive growth.

Others o Govt to move towards direct transfer of cash subsidy for kerosene, LPG and fertilisers. o Financial Sector Legislative Reforms Commission, to be headed by former Supreme Court judge B Srikrishna, to complete its work in 24 months; to overhaul financial regulations.

o Five-fold strategy against black money; 13 new double taxation avoidance agreements; foreign tax division of CTBT strengthened; strength of Enforcement Directorate increased three-fold. o Bill to be introduced to review Indian Stamp Act. o o New coins carrying new rupee symbol to be issued. Anganwadi workers salary raised from Rs.1,500 to Rs.3,000.

o Mortgage risk guarantee fund to be created for economically weaker sections. o Housing loan limit for priority sector lending raised to Rs.25 lakhs. The Centre has decided to set up a six-member committee headed by T.V. Mohandas Pai of Infosys to study and recommend the criteria for selecting private partners for the setting up of 20 new Indian Institutes of Information Technology. Tata Motors on 1 March showcased concept small car Pixel', based on the Rs.1 lakh car Nano, for the European market at the ongoing 81st Geneva Motor Show. The Andhra Pradesh government made a giant leap in the industrial map of the country, when Chief Minister N. Kiran Kumar Reddy cleared industrial investment worth Rs. 25,672 crore on a single day last week at the State Investment Promotion Board meeting in Hyderabad. He cleared 25 units with an employment potential of 41,406 that is expected to bring revenue to the Government through the Value Added Tax (VAT) of Rs. 878.30 crore annually. These include Bharat Dynamics Limited and Bharat Electronics Limited units at Anantapur for manufacturing missiles, NTPC-BHEL power plant equipment project at Mannavaram near Srikalahasti in Chittoor district. April International Monetary Fund (IMF) has lowered India's economic growth rate forecast to 8.2 per cent for 2011 and warned that boom like conditions could lead to over-heating of the economy. The challenge for many emerging and some developing economies (is) to ensure that present boom-like conditions do not develop into overheating over the coming year, the IMF said in its World Economic Outlook report. However, it retained its projection for global economic growth at 4.5 per cent in 2011 and 2012, which is lower than 5 per cent growth it projected for 2010. The Telecom Regulatory Authority of India (TRAI) on 13 April issued importantrecommendations related to manufacturing, infrastructure and green telecom to promote structured growth of the sector. It has also asked for making green measures as an integral part of the proposed National Telecom Policy 2011 and ensuring energy certification for all telecom products, equipment and services in the telecom network.

 A cluster of 30 units to manufacture hi-tech defense and space components, apart from a major facility for integration of missile subsystems, would be coming up at theAerospace and Precision Engineering SEZ at Adibatla, near Hyderabad. The entire 100 acres, earmarked for the SEZ and another 100 acres in the non-SEZ area for developing ancillaries, have been allotted to the units by the co-developer -- SAMUHA Engineering Industries Limited -- formed by six aerospace and defense companies. SAMUHA would develop infrastructure like power, water, sewerage, greenery, and other common facilities along with APIIC. The BRICS nations inked a pact at Sanya (china), to use their own currencies instead of the U.S. dollar in issuing credit or grants among each other. Braving the slow economic growth and declining demand from the western markets,India's exports posted an impressive 37.1 per cent rise at $245.9 billion for the fiscal ending 2010-11. During March shipments posted an impressive 43.9 per cent growth at $29.1 billion. Engineering goods constituted the largest component of the exports entailing considerable domestic value addition and engineering exports crossed $60 billion, a growth of 84.76 per cent. Petroleum products exports were up 50.58 per cent at $42.45 billion. India's food production crossed 235 million tonnes during 2010-11 as per the latest estimates and this is the highest since Independence, S. Ayyappan, Director-General of the Indian Council of Agricultural Research, said on 23 April, on the sidelines of a function held in Mandya to mark the inauguration of a Jaggery Park. In 2010-11, the country produced 30.2 million tonnes of oilseeds, and 17.2 million tonnes of pulses which had never crossed the 15 million tonne-mark in the past apart from 94.5 million tonnes of rice and 84 million tonnes of wheat. Agriculture also recorded a 5.4 per cent growth a first again compared to the four per cent growth achieved all these years. On April 27, 2011 Oil and Natural Gas Corporation (ONGC) announced two new oil and gas discoveries in Gujarat. ONGC has declared that it has 50 per cent interest in the block that it had won along with the Gujarat State Petroleum Corporation (40 per cent) and Sunterra (10 per cent) in the seventh round of bidding under the New Exploration Licensing Policy (NELP). The pension regulator, PFRDA on April 2011 opposed any form of mandatory investments into infrastructure under the National Pension Scheme (NPS). PFRDA has put forth its opposition stance comes in the wake of the governments attempt to set up an infrastructure fund with retirement savings. PFRDA reiterated that in pension products the complete market risk is being borne by accountholders, and in such a situation directing investment is not proper on the part of the regulator. The Reserve Bank of India (RBI) issued a notification on 22 April 2011 to put into force the norms on creation of the defence

mechanism by banks. The apex bank asked all the banks to create special buffers to be used by banks for making specific provisions for bad loans during system-wide downturns. The RBI expressed that it wants banks to create the counter-cyclical provisioning buffer to be set up out of any surplus available after complying with the stipulated 70% provision of coverage ratio (PCR) of the gross non-performing assets as of September 2010.The new guideline is basically in the context of Basel III requirements. The Basel III requires more aggressive capital provisioning, particularly when the going is good for banks. The RBI is always ahead of the curve when it comes to the implementation of prudential norms. President Pratibha Devisingh Patil on April 11 awarded Standing Conference of Public Enterprises (SCOPE) Meritorious Awards for 2009-10 to IOC, BHEL and HPCL, among others, for specialising in various fields. The (SCOPE) Award for environmental excellence was received by SAIL Chairman C S Verma. A K Datt, CMD, Bharat Electronics Ltd won the award in the category of corporate governance. Hindustan Petroleum Corporation Ltd (HPCL) CMD S Roy Choudhary was rewarded for corporate social responsibility. Petroleum major Indian Oil Corporation (IOC) received gold trophy for being the best among the human resource management category. The country's second largest state-owned Punjab National Bank was merited for Best Managed Bank and Financial Institution, whereas in the sector of R&D and technology BHEL was declared a winner. National Safai Karamcharis Finance Development Corporation (NSKDFC) MD Lalit Kohli was awarded for best managed Section 25 PSE. Felicitation trophies were presented to the chief executives of IOC, NTPC, ONGC and SAIL. May The Prime Minister, Dr Manmohan Singh dedicated the worldclass, 6-MMTPA Bina Refinery in Madhya Pradesh to the nation. The refinery was set up by Bharat Oman Refineries Ltd (BORL), which is promoted by Bharat Petroleum Corporation Ltd, with equity participation of 26 per cent by Oman Oil Company and about 1 per cent by the Madhya Pradesh Government. The refinery will produce Liquefied Petroleum Gas, Euro III and Euro IV Petrol and Diesel, Aviation Turbine Fuel (ATF) and Light Aromatic Naptha with sulfur as by-product. Also the project involves a crude supply system consisting of a Single Point Mooring system (SPM), Crude Oil Storage Terminal (COT) at Vadinar, District Jamnagar, Gujarat and 935 Km long cross country crude pipeline from Vadinar to Bina for supplying crude. State-run power equipment maker Bharat Heavy Electricals Ltd (BHEL) announced the successful manufacture and testing of India's first turbo generator of 600 MW rating.The new state-of-theart generator turbo generator will be supplied and installed at the upcoming North Chennai Thermal Power Project of the Tamil Nadu Electricity Board (TNEB). The turbo generators will cater to the requirements of thermal power stations with supercritical turbines of 660 and 700 MW ratings. The facility for assembly and testing of this series of

generators has been designed and engineered in-house at BHELs Haridwar plant. The Cabinet Committee on Economic Affairs (CCEA) approved the Asian Development Bank (ADB)-assisted North Eastern State Roads Investment Programme (NESRIP).North Eastern State Roads Investment Programme is centrally sponsored scheme of the Ministry of Development of North Eastern Region (MDONER).The CCEAs approval will enable construction / upgradation/ improvement of a total of 433-km-long roads in six North-Eastern States at an estimated cost of Rs 1353.83 crore to be implemented over a period of five years (2011-2016).The State-wise road lengths are: Assam 74.70 km, Meghalaya 93.40 km and Sikkim 34.20 km in Tranche-I and Assam 62.90 km, Manipur 93.20 km. Mizoram 55.00 km and Tripura 20.30 km in Tranche-II. The Cabinet Committee on Infrastructure approved Neyveli Lignite Corporation's (NLC) Rs 5907.11-crore lignitebased thermal power project in Tamil Nadu. The proposal for the project included installation of 1,000 MW lignite based thermal power project at Neyveli. The power generated from the new thermal power project (2x500MW units) will cater to the demand of the southern States. The project involves setting up of two units of 500 MW each at Neyveli in Tamil Nadu. The foreign exchange component of the power plant is R969.81 crore. NLC which is currently operating three thermal power stations at Neyveli and one at Barsingsar in Rajasthan with a total installed capacity of 2,740 mega watts is also planning to set up a 2x500 MW project in Cuddalore district of the state. The Reserve Bank of India tightened the norms for foreign exchange risk cover. The RBI mentioned that only companies with a net worth of Rs 200 crore can use derivatives to hedge against risk of volatility in currency rates. The RBI had in February 2011 pegged the net worth limit at Rs 100 crore while allowing corporates to hedge against exchange rate risks associated with trade transactions and external borrowings. Public sector oil marketing companies sought Rs 30000 crore from the government as compensation to level up the revenue loss they suffered in 2010-11 by selling fuel at government-fixed cheaper rates. Indian Oil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum Corporation together lost Rs 78,000 crore in 2010-11 by selling diesel, cooking gas and kerosene at subsidised rates, according to industry estimates. The government till date gave these firms only Rs 20,000 crore in compensation, while upstream oil companies have paid another Rs 25,000 crore. The revenue loss, termed as under-recoveries by these companies is expected to be more in the current fiscal 2011-12 because crude prices have jumped to over $120 a barrel in the international market from about $75 a year ago. India imports about 80% of its oil requirement.

 The Annual Monetary Policy for 2011-12 was presented by RBI Governor D.Subbarao on 3 May 2011. The Monetary Policy 2011-12 aim at maintaining an interest rate environment that moderates inflation and anchors inflation expectations. Also the policy targets to foster an environment of price stability that is conducive to sustaining growth in the medium-term, coupled with financial stability. The following are highlights of the Annual Monetary Policy 2011-12: o RBI increased the repo rate under the liquidity adjustment facility (LAF) by 50 basis points from 6.75 per cent to 7.25 per cent with immediate effect. o The reverse repo rate under the LAF, determined with a spread of 100 basis point below the repo rate, automatically adjusts to 6.25 per cent with immediate effect. o The Marginal Standing Facility (MSF) rate, determined with a spread of 100 basis points above the repo rate, stands calibrated at 8.25 per cent. This rate will come into effect on operationalisation of the MSF. o The Bank Rate has been retained at 6.0 per cent. o The cash reserve ratio (CRR) of scheduled banks has been retained at 6.0 per cent of their NDTL. o Reserve Bank of India (RBI) capped bank investments into liquid schemes to 10 per cent of the banks net worth as of 31 March of the previous fiscal. o Reserve Bank of India (RBI) in May 2011 decided to accept the broad framework of regulations recommended by the Malegam Committee report on micro finance institutions (MFIs) The Reserve Bank declared that it would adhere to internationally agreed phase-in period (beginning 1 January 2013) for implementation of the Basel III framework. The Reserve Bank declared that it is studying the Basel III reform measures for preparing appropriate guidelines for implementation. Industry body Federation of Indian Chambers of Commerce and Industry (FICCI) proposed setting up of National Knowledge Functional Hub (NKFH). FCCI proposed the setting up of this body to engage higher educational institutions with the industry in order to produce quality engineering graduates and meet increasing requirement of skilled hands in the market.NKFH aims at facilitating industry-academia connect in tier-II and tier-III institutions which are the source of bulk engineering graduates for the capital goods industry. June The Government of India and Asian Development Bank (ADB) signed a $132 million loan agreement for strengthening Bihars power sector. The major portion of the ADB loan ($130.3 million) planned to be used to finance infrastructure such as transmission lines.The remaining ($1.9 million) is planned be used for strengthening the internal capacity of the Bihar State Electricity Board (BSEB).The

project is expected to be completed by 31 December 2015. There is a provision for providing/transmitting additional 472,579 megawatt-hours (MWh) to consumers annually by the end of 2015 and reduce system losses by 3% by 2016 in seven districts of Bihar. The Reserve Bank of India (RBI) hiked the repo rate on 16 June 2011, by 25 basis points; to 7.5 per cent from 7.25 per cent with immediate effect. As a result, the reverse repo rate stood automatically adjusted to 6.5 per cent and the marginal standing facility (MSF) rate to 8.5 per cent with immediate effect. It implied an increase in the cost of borrowing, EMIs for home, auto and personal loans. Other key rates and ratios remained unchanged. Economic growth outlook remained unchanged at about 8% in the 2011-12 fiscal.According to the first midquarter review of RBIs Monetary Policy, 2011-12, this initiative was taken to maintain an interest rate environment that moderates inflation and checks inflationary expectations. Former finance secretary Ashok Chawla was selected by the Ministry of Corporate Affairs for the post of chairman of India's antitrust watchdog Competition Commission (CCI). The ministry sent Chawla's name for ACC (Appointments Committee of Cabinet) approval. Chawla succeeded Dhanendra Kumar, who retired on 5 June 2011.CCI was established in 2003 to replace the erstwhile Monopolies and Restrictive Trade Practices Commission and Dhanendra Kumar was appointed as its first chairman in February, 2009. Unlike sector regulators, under India's new competition laws, the CCI will have the authority to punish companies for exploiting consumers, prevent a company from taking over another by withholding permission. Committee on Small Savings headed by RBI Deputy Governor Shyamala Gopinath on 7 June 2011 suggested raising interest rates on Post Office savings bank deposits to 4 per cent. The committee recommended linking returns on other small savings schemes with interest rates on government securities. It went on to suggest that Kisan Vikas Patra (KVP) be withdrawn and the annual investme.nt limit for the popular Public Provident Fund (PPF) be raised to Rs.1 lakh from Rs.70000 at present.The committee recommended that interest rates for Post Office savings deposits be raised to 4 per cent from 3.5 per cent at present, in line with the Reserve Bank's decision to hike rates on savings bank deposits. A committee on natural resources allocation on 6 June 2011 called for the creation of a national coal market to ensure greater transparency in the allocation of the dry fuel and reduce the demand-supply mismatch.The committee pointed out the drawbacks of the existing allocation mechanism for the dry fuel. The committee headed by former Finance Secretary Ashok Chawla recommended establishing a national coal market by creating a platform for commercial trading of coal by suppliers and buyers. The committee suggested use of experience gained through the e-auction platform to create a common

one for all buyers and suppliers, including the captive allotees that are permitted to sell. The committee highlighted that introduction of both captive mining and e-auctions were right steps taken in the direction of moving toward market-based allocation. State-run NMDC on 6 June 2011 agreed to team up with Australia's Minemakers Ltd to develop a phosphate mine in Wonarah in northern Australia. India's largest iron ore miners decision to sign a memorandum of understanding with Minemakers is part of its strategy to focus on food and energy security by acquiring phosphate and coal mines. NMDC had signed an MoU with Nagarjuna Fertilisers for mining rock phosphate and potash in early 2011.As part of the MoU, NMDC and Minemakers decided to undertake a joint feasibility study into development of the Wonarah deposit. After completing the feasibility study, NMDC proposed to acquire 50% equity in the project and participate in the development of the project. The Reserve Bank of India (RBI) on 3 June 2011 permitted urban cooperative banks(UCBs) to give loans to self help groups (SHGs). RBIs initiative is expected to promote financial inclusion in the country.The measure was adopted with a view to further expanding the outreach of UCBs and opening an additional channel for promoting financial inclusion. The Gross Domestic Product (GDP) data was released on 31 May 2011 by the Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation. According to the data, the country's GDP (gross domestic product) growth slipped to 7.8 per cent in the fourth quarter (January-March) of 2010-11. The slowdown was believed to be the result of inflationary pressures and the impact of a consequent ongoing tight money policy and a poor showing by the manufacturing sector. Robust farm sector growth coupled with better showing by construction and financial services propped up the overall GDP growth for the entire 2010-11 fiscal year to 8.5 per cent from 8 per cent in the previous fiscal. The fourth quarter growth of 2010-11 was way lower than the 9.4 per cent expansion in the same three-month period of 200910.vThe Indian government on 28 May 2011 announced the setting up of a panel to examine tightening of laws to curb the growth of black money as well as to suggest ways to declare illegally generated wealth as national asset. The committee to be headed by the chairman of the Central Board of Direct Taxes (CBDT) will also include the director, Enforcement Directorate(ED), Director-General, Directorate of Revenue Intelligence (DRI), Director-General (Currency), and other top tax and revenue department officials. The commissioner of income tax (Investigations) of the CBDT would be its member secretary. The committee will examine ways to strengthen laws to curb the generation of black money in the country, its illegal transfer abroad and its recovery