DEVELOPMENT DIGEST

VOL.3 1-31 January 2001 NO.10

The Reserve Bank of India has begun displaying information in Hindi at its website rbi.org.in. The Hindi website was inaugurated by the RBI governor. This is the only Hindi website in the banking sector. RBI master circulars are now available on CD. RBI has launched a compact disc containing all the circulars issued by the department of banking operations and development.

The Government opened the automatic route for foreign direct investment, for international financial institutions, subject to the sectoral capacity and guidelines of the RBI and the Securities and Exchange Board of India. This route is open to institutions like ADB, International Finance Corporation and Deutsche Entwicklungs Gescelschaft, etc. without an element of trademark or technical collaboration. These institutions normally pick up equity stake from time to time in domestic companies without involving themselves in tech or trademark collaborations. The Government had decided in 1998 that the automatic route would not be available to those foreign investors who had a previous financial, technical and trademark collaboration in an existing domestic company engaged in the same or allied activity.

The newly built Petrapole-Benapole rail link between India and Bangladesh was

inaugurated from the Indian side by the Railway Minister. This will be the fifth rail link between the two countries. But analysts expect it to be the most favoured, because the route between Petrapole and Navapara, the biggest freight terminal in Bangladesh, will be shorter by 35 km. Another feature is that Bangladesh Railways has now agreed to accept India's modern airbrake stock with a payload of 2,300 tonnes.

In a bid to prepare the State police forces to gear up to meet the challenges of the fast changing internal security scenario, the Union Home Ministry has released Rs. 200 crore during the financial year 2000-2001. After the approval of the revised scheme of modernisation of police forces, the Ministry would be in a position to release upto Rs 1000 crore each year for the next decade. Assistance under the modernisation scheme consists of 50 per cent loan and 50 per cent grant-in-aid. About 20 per cent of the funds under the scheme are for development of forensic infrastructure. The Home Ministry has been implementing the non-plan scheme since 1969-70, but till 1980 only Rs. 52.24 crore were released to the State Governments. During the 1981-91 period, the amount was raised to Rs. 110 crore and further augmented to Rs. 464.70 crore during 1992-99. Under the revised scheme, the allocation of funds to the stats would be utilised for procurement of new vehicles, modern communication systems, night vision devices, metal detectors, bomb disposal equipment, renovation of buildings and procurement of weapons.

(Ministry of Information and Broadcasting)

MAIDEN FLIGHT BY LIGHT COMBAT AIRCRAFT

India's $1 billion ultra-modern Light Combat Aircraft (LCA) programme bore fruit when the first prototype or Technology Demonstrator 1 (TD-1) took to the skies at Bangalore. The LCA is expected to carry a $ 17-20 million a piece price tag when it joins the Indian Air Force. Nearly 300 of them may be required by the armed forces including both the trainer and fighter versions. The indigenously built aircraft will be inducted into the Indian Air Force in its real combat form in less than six years, and a full fledged squadron is likely to be up and flying by 2010. With nearly 75 per cent indigenisation and an open architecture design which will enable upgradation of all the important avionics and electronics system, TD-1 is currently fitted with GE 404 engine. Indian scientists are, however, expected to come up with a suitable indigenous engine, Cauvery, over the next couple of years.

The World Bank (WB) has extended a concessional loan of $ 65.6 million (about Rs. 300 crore) for the Kerala Rural Water Supply and Environment Sanitation Project. Since the assistance is through the International Development Agency (IDA), it is interest-free with a 35-year repayment period and a 10-year grace period. The overall objective of the Project is to improve the quality of rural water supply and environmental sanitation services in Kerala. The State Government has taken a policy decision to decentralise rural water supply service delivery from the state sector agency to the gram panchayats and in line with this policy, the Project will introduce a new service delivery mechanism through a partnership among four key players. The four partners are the Kerala Rural Water Suppply Agency

(KRWSA), which is an autonomous registered society at the State level, gram panchayats, beneficiary groups and non-governmental organisations. The institutional arrangements are expected to be sustained beyond the Project duration with the ultimate objective of replicating it throughout the State. The Project also has a national component for which approximately $ 3 million has been earmarked for assisting the Rajiv Gandhi Drinking Water Supply Mission in promoting its national rural water supply and environmental sanitation reform agenda.

Two Indian families are among the 50 most richest in the world, according to the Forbes billionaire list 2000. The pride of place goes to the families of Mr. Azim Premji and Mr. Dhirubhai Amabani. Mr. Premji, owner of technology and IT major Wipro took the 43rd position with a wealth of $6.9 billion. Mr. Ambani and his family of the petrochemicals major Reliance Industries was ranked at the 45^th position and accounted for a wealth of $6.6 billion. The Microsoft chief, Mr. Bill Gates, who was ranked first in 1999 with $90 billion retained the top position in 2000 also, however, his wealth has depreciated by 33.33 per cent to $60 billion due to global meltdown. Both Indians have posted extraordinary growth rates during the year. The Ambanis posted a 450 per cent growth and their net worth was $6.6 billion against $1.2 billion in the previous year. Similarly, in one year, Mr. Premji and family's wealth has grown from $2.8 billion to $6.9 billion, posting a growth of 146 per cent.

The Pilotless Target Aircraft "Lakshya" has been successfully inducted into the Indian Air Force (IAF) with a squadron already conducting sorties.

ENGINEERING EXPORTS UP

Outpacing the overall export growth rate, engineering goods exports have shown a growth of 26.75 per cent in dollar terms and 31.34 per cent in rupee terms during April-September 2000. The cumulative export of engineering goods for April-September 2000 has been estimated at Rs. 10,245 crore ($2,288 million) as against Rs. 7,800 crore ($1,805 million) during the same period last year. Overall exports have generally been growing by about 20 per cent in the current fiscal. "Engineering exports occupy an important place in the national export basket. The main items in the engineering goods sector comprise machinery and instruments, transport equipment, iron and steel bars or rods and primary and semi-finished iron and steel, ferro alloys and non-ferrous metals.". the Government has taken a number of policy initiatives and export promotion measures during the year. Standard Input Output Norms (SION) for 1,574 engineering products have so far been fixed under the duty exemption scheme of the export-import policy.

The Indian aviation industry has good reasons to smile this year. Growth in domestic traffic has crackled in calendar year 2000 compared to 97,98 and 99. In 2000, total domestic traffic grew by about 10 per cent over calendar year 1999-from 12.2 million annually year before last to an estimated 13.3 million by December end 2000. The total annual traffic for 2000 crossed the "12 million mark by November" and since the month-on-month passenger traffic has been about a million, 2000 closed "over the 13 million mark". The 10 per cent growth totted up in the Y2K is significant when compared to the status for 97, 98 and 99. In 1999, the growth was a mere 3 per cent from 11.8 million in 1998 to 12.2 million. The year before the growth was even slimmer -- from 11.6 million in 1997 to 11.8 million in 1998. So a 10 per cent growth in 2000 is very good indeed. The growth in cargo traffic is expected to be around 12 to 15 per cent in the current financial year. Although no shortfall in supply has been reported this year, the review was ordered to avert a repeat of last year's crisis. As demand far exceeded supply, exporters had faced difficulties last year in executing their orders.

The Haj Committee (India) has gone online with the launch of its website -- www.hajcommittee.com The Website which became operational contains a complete record of Haj pilgrims, including details of flight allotment and useful tips on orientation and training of pilgrims, according to a statement by the Haj committee. The committee has invited suggestions for improving the website, which can be accessed by pilgrims free of cost.

India will have its first women's television channel by June this year. The free-to-air 24-hour satellite channel-christened World of Women (WoW) -will target urban Indian women in the 13-49 age group. To be uplinked from within the country, the bilingual channel - to be available in Hindi and English- will also be reaching the Indian diaspora in North America and Europe through DTH platforms. The project, with an estimated cost of Rs 180 crore over the next three years, is being part-financed by the $58-million American television software production house Delaney Productions, which will hold a 20 per cent stake. The other partners include Delhi-based broadcast solutions provider Digital Broadcasting. The women-oriented programming will include live chat and talk shows, beauty and health tips, nurturing of children, housekeeping, interior decoration and

fashion shows. Serials, soaps and movies will be part of daily fare. Plans are also afoot to air dubbed popular women-oriented American programmes on the channel.

A first-of-its-kind male contraceptive developed indigenously by the Indian Institute of Technology and AllIndia Institute of Medical Sciences is in its final stage of clinical trials. The third phase of clinical trials of the injectable male contraceptive started in May. The contraceptive-Risug, an acronym for Reversible Inhibition of Sperm under Guidance -- is the result of 25 years of research combining biomedicine and engineering. It offers several advantages over conventional vasectomy. Intellectual property rights are protected by Process and Product Patents in India, Bangladesh, China and US. Some more patents are pending including an international patent under PCT. The contraceptive has been successfully tried on 100 males till now and scientists plan to test it on more than 500 individuals in the third and final stage of experimentation before marketing it. The Central Drug Research Institute (CDRI) Lucknow has approved the toxicology safety of the contraceptive, and the subjects have shown no side effects. The test on 500 people is enough to gauge the efficacy of the contraceptive and the number is in consonance with the drug and cosmetic rules. A standard 60 mg of the compound is enough for people of different physical build and therefore there is no need to test it on larger number of individuals, as the contraceptive is quite safe.

The Government has chalked out a massive Rs. 40,000 crore-investment programme in transmission and distribution services as part of the power sector reforms over the next three year. "To begin with, we will allot Rs. 2,000 crore under the accelerated power development programme to all States on an annual basis, half of which has been sanctioned by the Cabinet and the rest will be leveraged by loans from Power

Finance Corporation Ltd or other fund bodies", Union Power Minister said. Moreover, the Center would also release Rs. 9,000 crore in three years under the tenth and eleventh Plan schedule. Adding Rs 40,000 crore investment would also include improvement of plant load factors of the existing electricity boards, 100 per cent metering, energy audits, separation of the T&D and generation of the state electricity boards and keeping separate maintenance accounts. Efforts will also be made to improve the machine capacity of hydro-generating power plants and qualitative improvement of the life spans of thermal power stations in the country.

The consortium of Cairns Energy (India), Oil and Natural Gas Corporation (ONGC) and Tata Petrodyne, has discovered gas and oil in the Gulf of Khambhat (off-shore Gujrat) within eight months of their first significant strike in May 2000. Multiple gas-bearing zones have already been established in this well and gas has flowed at a rate of 5.9 lakh and 5.6 lakh cubic metres per day, respectively from two tested zones through 96/64" choke. The well also flowed oil at a rate between 17 to 38 cubic metres a day from another layer. This latest discovery in such a short span of time augurs extremely well for the future of exploration and production of oil and gas in India. This would enthuse other oil companies to enhance their efforts to find more oil and gas to meet energy needs of the country.

Foreign exchange earnings from tourism touched an all-time record of Rs 14,408.63 crore during 2000, registering a 10.5 per cent high over the previous earnings. In dollar terms , the earnings were 3,282.88 million which were also 8.1 per cent higher than the earnings of the previous year.

Tourism emerged as one of the main sources of foreign exchange earnings after information technology and textiles during the year. Total tourists arrival in the country stood at 2.62 million, 5.7 per cent higher than the previous year.

Delhi Transport Corporation (DTC) has approved an ambitious Rs 293 crore Electric Trolley Bus Project to provide environment-friendly commuting facility to Delhites on 144.6 kilometre long Ring Road. Bharat Heavy Electricals Limited (BHEL) has prepared the first draft of this Project. After examining various aspects of the Project prepared by BHEL, DTC decided to obtain an economic feasibility report. These buses would operate mainly on the Ring Road and cover 144.6 kilometres. On Outer Ring Road, it would cover 71.35 kilometres while on Inner Ring road the trolley buses will cover 49.35 kilometres.

Deepalaya, a voluntary non-government organisation working for the uplift of deprived children in Delhi, has launched a scheme of computer education and training for students coming from poor families who cannot afford to pay a large sum of money charged by private organisations offering such courses. The students who have completed their senior secondary or are studying in colleges for undergraduate courses would be eligible to apply for financial assistance for undergoing computer courses provided the total income of the parents does not exceed Rs. 50,000 per annum . To start with, a total of 100 scholarships covering about 75 to 80 per cent of the cost,S will be offered for short term as well as long term computer courses. Preference will be given to orphans and girls.

Citizens who approach the Delhi Development Authority (DDA) for mutation of property or transfer of registration or allotment of property will no longer have to run from pillar to post to

the new Assembly building for which sanction from the Centre is expected shortly. Such power plants were most suitable for remote areas where electric utilities are otherwise not available. Such plants would be very useful for commercial institutions such as hotels, restaurants, community buildings, institutional buildings, etc.

The Madhya Pradesh government has embarked on an ambitious task to introduce e-governance that seeks to computerize and network all government departments and set up computer kiosks across the State to reduce transactions time and costs for citizens interacting with state agencies. The computerization of various departments has already started and is likely to be completed by April this year. After networking all the state agencies, tenders will be invited form private companies to set up 7,500 computer kiosks in various parts of the State that will be linked to the government network. The kiosks will enable people in remote areas to transact most of their work -- be it obtaining government documents and records, getting licenses, permits or certificates or paying taxes -- without visiting the government offices. Priority is being given to computerizing the revenue-earning department like commercial tax, land records and transport. Subsequently all other departments will be computerized and linked to the government network. The computerization of the commercial tax and land record departments will not only allow the citizens to pay taxes and land revenue online through the kiosks, the government will also be able to keep a track of the tax dues and revenue earnings.

For those who find moving around the Capital baffling, there is some good news. Now they should be able to find a way out of the labyrinth that is Lutyens' Delhi with ease, thanks to New Delhi Municipal Council (NDMC) which is coming out with elaborate roadside maps for both tourists and locals. Already two "Delhi

Tourist Maps" have come up : one on Sardar Patel Marg near Dhaula Kuan and the second opposite Lakshmi Narayan Mandir on Mandir Marg. Put up at vantage points on the two sidewalks and easily accessible, they contain vital information on roads, colonies and tourist destinations. Addind to that information on various essential services, can be of great help to the public in times of distress. Raised three feet above the ground on concrete supports, these maps are user-friendly in many ways. A major part of the three-foot-by-five-foot display area is devoted to the actual map of the city. Then, at the bottom, there is another map which provides detailed information on the NDMC area. Next to this is a list of various important phone numbers to facilitate the stay and movement of tourists in the city.

It seems the Tihar Jail authorities are all set to conquer the market. The items produced by Tihar Jail inmates may fetch something around Rs 2.5 crore in the current financial year. The varieties of confectionery items like aloo bhujia, potato chips, biscuits and wafers being produced by the Tihar inmates have already caught the attention of the public, after its launch under the brand name "TJ's Special." Apart from being a major source of revenue of the jail management, it is also a vocational training for the inmates, so that the day they will be out of the jail, they would start their own business.

The Defence Research and Development Organisation (DRDO) successfully carried out the second test of the Agni-II missile to bridge a key gap in its evolving nuclear forces. The missile was tested in its "final operational configuration" meaning the final design for the "ready for battle". Agni has now been frozen. This is the last major step prior to the induction of this weapon. The Agni has a range of "about 2000km."

As in the case of first test in April 1999, the missile was powered solely by the user-friendly solid fuel. It was launched from mobile launcher at the Interim Test Range at Chandipur in Orissa.

This city hopes to boost its image as an information technology (IT) destination further with a proposed software park that would help Andhra Pradesh expand its share in India's overall software development and export. The park will be set up in Manikonda village on Hydrabad's outskirts at a cost of Rs 100 billion. The 150-acre park, which will host technology-based units, is expected to be completed in three to five years. The park in Manikonda, unlike similar parks in Chennai and Bangalore that have been developed by the respective state governments, will be developed by the Hyderabad Software Exporter's Association (HYSEA) in collaboration with the Andhra Pradesh government. HYSEA is an association of units engaged in software development and export. HYSEA Techno Park will have a different ambience from other technology parks in the country. A conducive atmosphere for creative work will be developed thorough a lot of greenery. The Park, with state-of-the-art facilities, will play a vital role in creating intellectual property to make the Indian IT industry globally competitive. The Park would also help the state improve its share in India's overall IT exports. Andhra Pradesh has set a target of $ 5 million in exports for this year.

The Navy has strengthened its fire power by commissioning guided missile destroyer INS Mumbai and guided missile corvettes INS Kirch. Built indigenously with a cost of Rs. 900 crore, the 6700-tonne INS Mumbai is fitted with