Current Economic Statistics and Review For the Week 
Ended May 26, 2007 (21^st Weekly Report of 2007)

Theme of the week:

All-India Debt and Investment Survey (AIDIS)
State and Region-wise Analysis
Section 8 

Estimated Amount of Cash Loans By Credit Agencies and By Asset Holding Classes - As on 30-06-2002*

I

Introduction

This note – eighth in a series of notes on All-India Debt and Investment Survey (AIDIS) conducted by the National Sample Survey Organisation during n 2003 (January-December) along with some other surveys, viz., Situation Assessment Survey of Farmers (SAS), Land and Livestock Holding Survey (LHS), etc., in their 59^th round (January-December 2003)- deals with distribution of outstanding cash loans as on 30-06-2002 among different asset holding classes of households in rural and urban areas, borrowed from different credit agencies and by  all states and regions.

2

Distribution of the Estimated Amount of Aggregate  Debt

All-India

According to the NSSO 59^th Round (January-December 2003), there are 203.4 million households in India, having an aggregate amount of debt Rs. 1,76,795 crore as on June 30,2002, thus each household had borrowed an average amount of Rs. 8,694 (Statement 1).

It is assumed that the institutional agencies will play an important role in meeting the need of credit of the households on easy terms of contract and thus reduce the burden of heavy interest that the household would otherwise be compelled to bear. Unfortunately, their presence appears to be the least among those who probably need their service most.

Statement 2 depicts the distribution of cash loans among different asset holding classes by institutional and non-institutional agencies. It can be seen their from  that out of the total cash loans of Rs . 1,76,795 crore distributed amongst all credit agencies, institutional agencies’ share at Rs.1,12,684 crore or 63.7 per cent is much more than that of non-institutional agencies at Rs. 64,119 crore or 36.3 per cent.  But, institutional agencies have extended loans of 68 per cent or about Rs 76,000 crore  to the richest two asset holding classes, while the poorest got Rs.522 crore or 0.5 per cent. Though, non-institutional agencies also mainly cater to the needs of richer classes, their performance towards poorer classes is relatively better than that of institutional agencies. 

Regional Review

            Tables 17 to 19 present state- and region-wise data on the distribution of cash loans outstanding among different asset holding classes to different credit agencies.

            It can be seen from Table 17 that out of the total loans extended by all credit agencies as on 30-06-2002,  major chunks of Rs. 66,817 crore or 37.8 per cent and Rs. 38,722 crore or 21.9 per cent were distributed among the households of southern and western regions. Among western region Maharashtra and in southern region Andhra Pradesh enjoyed the most at about 14 per cent each of the total all-India debt. 

            Table 18 exhibits performance of institutional agencies in rendering loans for different households. Here also southern and western regions together have got almost 62 per cent of total advances rendered by the institutional agencies. Within them, Maharashtra in western region has enjoy about 20 per cent of the total advances and in the southern region, it is the households of Kerala who are better off at 10.7 per cent of total debt. An analysis of the performance of institutional agencies within the region reveals that the poorest households, that is, those households who have assets worth less than Rs. 15,000 in Maharashtra got miniscule 0.3 per cent or Rs. 65 crore of loans while at the other end i.e. the higher strata households who own assets worth Rs. 8 lakh or more got nearly 50.0 per cent or Rs. 11,260 crore of the total loans. This is the general tendency among different region/ state-wise distributions of debt by institutional agencies, i.e.  institutional agencies usually favour only the richer borrowers and neglect the poorer needy households.    

            Table 19 displays the performance of non-institutional agencies in advancing cash loans to different households state-wise and region-wise. Here also households of southern regions owe about 45 per cent of total credit extended by non-institutional agencies amounting to Rs. 28,604 crore, the highest among different regions. It is known that Andhra Pradesh has the highest incidence of indebtedness amongst all states from non-institutional agencies. This is reflected in the fact that households of Andhra Pradesh owing 23.4 per cent or Rs.15,025 crore are the highest debtors to non-institutional agencies among all the households in India as per NSSO  59^th round. However, it is interesting to note that the non-institutional agencies have not shown any favouritism in disbursing loans to households amongst various asset-holding size classes.

3

Distribution of Aggregate Amount of Debt By Asset Sizes : Rural Areas

Out of the  total debt of Rs. 1,76,975 crore , Rs.1,11,468 crore or 63 per cent of the total debt is owed by 14.8 million rural households with each household owing a sum of Rs. 7,539.

Statement 3 explains the distribution of cash loans among different asset holding classes by institutional and non-institutional agencies in rural India . It can be seen their from  that out of the total cash loans of Rs . 1,11,468 crore distributed by all credit agencies, institutional agencies at Rs.63,610 crore or 57.9 per cent is slightly higher than that share rendered by non-institutional agencies at Rs. 47,853 crore or 42.1 per cent.  Like in all-India distribution , institutional agencies have extended 60 per cent of advances or about Rs 38,000 crore  to the richest two asset holding classes, while the poorest got Rs.336 crore or 0.5 per cent. Non-institutional agencies have advanced 14.1 per cent of the total debt to richer classes and 2.6 per cent of loansf poorer classes.

Institutional Agencies

Out of the cash loan of Rs. 1,11,468 crore advanced by institutional agencies , a sum of Rs. 57,792 crore or 90.9 per cent were extended by two agencies, viz., co-op societies and commercial banks .However, the performance of these two top institutional agencies reveals that they favour more the richer classes than the poorer classes (Statement 4)

Interestingly, cooperative societies had a higher amount of loans (Rs. 30,471 crore) than that of commercial banks (Rs.27,321 crore). Commercial banks thus advanced a sum of Rs. 27,321 crore or 42.9 per cent of the institutional credit agency advances in 30-6-2002; this was about 14 per cent less than the amount advanced by co-op societies.

Commercial banks extended a nominal credit of Rs. 176 crore or 0.6 per cent to the poorest households whose asset holdings were less than Rs. 15,000 as against a huge amount of

cash loans woth  Rs. 12,208 crore or 44.7 per cent extended to the richer classes, i.e., households with Rs. 8 lakh or more. This is about 69 times more than that Rs. 176 crore advanced to poorer classes.  

Co-op societies, while extending  a credit of Rs.12,040 crore or 39.5 per cent of their total advance of Rs.30,471 crore to richest classes, i.e., households having asset worth Rs. 8 lakhs or more, they advanced  a mere Rs. 101 crore or 0.3 per cent to the poorest classes.

Non-Institutional agencies

Non-Institutional agencies advanced a sum of Rs. 47,853 crores to rural households. Out of which, a sum of Rs. 1,266 crore or 2.6 per cent were used to cater to the needs of lower strata households holding an asset worth less than Rs. 15,000 as against a sum of Rs. 6,762 crore or 14.1 per cent to the richest classes.

Amongst non-institutional agencies, agricultural moneylenders’ share was Rs. 11,145 crore or 23.3 per cent of the total non-institutional finance. Though this class of money lenders does not favour the two lowest asset holding classes, their loan distribution has been relatively more equitable among all other asset holding classes.

Professional moneylenders, by extending a credit of Rs. 21,876 crores or 45.7 per cent are the main non-institutional credit purveying agency in rural areas. Though their performance among low strata rural households are better than that of agricultural moneylenders, professional moneylenders cater to 2.2 per cent and 5.4 per cent credit needs of the last two strata of households in rural areas.

“Relatives and friends’ advances loans free of interest to the households. Their share in total non-institutional agency lending is 16.6 per cent or Rs. 7,948 crore.

Regional Review

            Tables 1 to 8 illustrate the functioning of different credit agencies among the rural households of India by states and regions.

Perusal of the said tables reveals the following:.

    (i)      Households in the southern region are the most indebted households to all the mentioned credit agencies except relatives and friends.

    (ii)      Households in Andhra Pradesh are the most indebted to non-institutional credit agencies.

   (iii)      However, households in Kerala owe more to institutional agencies.

  (iv)      Co-operative societies lend more to households in Maharashtra than the households of Kerala.

    (v)      Poorer asset class households of Orissa, West Bengal and Andhra Pradesh are better catered to by the commercial banks than the richer class.

  (vi)      Lending by of non-institutional agencies are more or less same among  different regions ( except for Andhra Pradesh).

 (vii)      Presence of agricultural moneylender is felt only in the rural areas of Haryana. Punjab, Rajasthan, Bihar ,Madhya Pradesh, Uttar Pradesh, Andhra Pradesh, Karnataka and Tamil Nadu.

(viii)      Presence of professional moneylender is miniscule in Himachal Pradesh , Jammu and Kashmir , Assam ,Jharkhand,Chattisgarh and Uttranchal

  (ix)      Relatives and friends are more dominant in the north-eastern region, as shown earlier.

4

Distribution of Aggregate Amount of Debt By Asset Sizes: Urban Areas

 Urban households had cash loans outstanding as on 30-6-2002 to the tune of Rs. 65,327 crore or 37 per cent of the total cash debt from all credit agencies with an average debt of Rs.11,771.

It can be seen from Statement 6 that when one moves from the highest class to lowest class, the deterioration in the lending process of different credit agencies are mind-boggling. This is because in urban areas institutional agencies lend 75 per cent of the total credit needs of urban households. More significantly, institutional agencies in urban areas increasingly prefer richer classes. As against this , non-institutional agencies whose share in the credit needs of urban households are about 25 per cent and they finance distinctly more of poorer classes .This is a major revelation, which has serious social and economic implications; the poor have to willy nilly depend on non-institutional agencies even in urban areas.

Institutional Agencies

Out of the cash loan of Rs. 49,060 crore advanced by institutional agencies to urban households, a sum of Rs. 32,794 crore or 66.8 per cent was extended by two agencies viz., co-op societies and commercial banks .However, performance of these two agencies reveals that they favour more the richer classes than the poorer classes (Statement 7)

Co-op societies, while extending credit of Rs.6,110 crore or 45.6 per cent of their total advance of Rs.13,392 crore to richer classes, i.e., households having asset worth Rs. 8 lakhs or more, they advanced only Rs. 88 crore or 0.7 per cent to households holding assets worth less than Rs. 15,000.

Commercial banks advanced a sum of Rs. 19,402 crore or 39.5 per cent of the institutional credit agency advances on 30-6-2002. They extended a fractional credit of Rs. 50 crore or 0.3 per cent to the poorer household whose asset holdings are less than Rs. 15,000 as against a huge amount of cash loans woth  Rs. 13,112 crore or 67.6 per cent to  the richer classes i.e. households with Rs. 8 lakh or more. This is over 250 times that of  Rs. 50 crore advanced to poor classes.  

Region-wise Review

Tables 10 to 16 presents state and region-wise data on cash loans outstanding to various credit  agencies by asset holding classes..           

* This note has been prepared by R.Krishnaswamy.

      TABLES  

Highlights of  Current Economic Scene

AGRICULTURE  

The central government has plans to provide relief package to bail out the sugar industry, which would be in addition to the already released Rs 850 crore. It is expected to increase the moratorium period till March 2010 and provide financial assistance to sugar units that missed the current crushing season. It is also planning to create an additional sugar buffer stock of 3 million tonnes as the country’s sugar production in the 2006-07 (October-September) season likely to cross 27 million tonnes against the earlier estimate of 26 million tonnes due to upward revision in sugar output estimates made by Maharashtra and Uttar Pradesh. This buffer stock would be over and above the 2 million tonnes buffer stock created in March 2007. The country has already produced 25 million tonnes of sugar by April 2007.  Meanwhile, according to the international sugar organisation, the size of the projected global surplus in 2006-07 has increased to record 9.1 million tonnes against 7.2 million tonnes projected in February 2007 primarily due to bumper production in Brazil and India . World sugar production has been revised upward by 2.4 million tonnes to a record 162.6 million tonnes.

In response to the recent wheat import tender floated by the State Trading Corporation of India (STC) 7 global bidders have offered to supply over one million tonnes of wheat to India . These include Cargill, Glencore International AG and Alfred E Toepfer International of Germany, Adani Global, Adani India on behalf of Archer Daniels Midlands of US, Rayas Trading and Concordia. The bids quoted are in the range of US $267-302 per tonne on cost & freight (C&F) basis with most of the price quotations hovering around US $296 per tonne. STC had floated the tender on May 1, 2007 for import of one million tonne of wheat on government account.

Pakistan , which planned to resume wheat exports after a four-year gap, has halted overseas sales of the grain to boost domestic supplies after prices increased 5per cent in April 2007. Pakistan , headed for a bumper wheat crop, has planned to export 8 lakh tonnes of wheat by mid-June 2007.

The central government has extended the current duty-free regime on pulses imports till March 31, 2009 as a part of measures taken to curb rise in prices of essential commodities. Prior to June 2006, pulses importers used to pay customs duty 10 per cent per tonne. Following spiralling domestic prices of pulses, imports were made duty-free initially till March 31, 2007 and subsequently till July 31, 2007 and now till March 31, 2009.

The Coffee Board has sought Rs 90 crore from the central government to promote coffee in the domestic market. The fund would be utilised over a period of five years starting from financial year 2007-08 to 2011-12. In the first year, that is, 2007-08, Rs 10 crore would be utilised for promotional activities, while the remaining Rs 80 crore would be spent in the next 4 years with each financial year being earmarked Rs 20 crore each. In addition, during the first year of campaign, the board has plans to create a ‘Transparency Label’ or ‘Coffee Mark’ and supply to roasters who produce 100 per cent pure coffee.

In an effort to bring about a change in the state of agriculture and farmers in India , the government is planning to provide collateral-free loan up to Rs 1.50 lakh to farmers through the Kisan Credit Card scheme as per the recommendation of a sub-committee of the National Development Council on agriculture and related issues. At present, banks provide such loans up to a limit of Rs 50,000.

The other major recommendations of the committee include:

An increase in the validity period of such loans to five years from the present one-year period and amendment of laws for the purpose, if necessary.

Provision of full credit relief in the form of waiver of the due amount of loan to farmers in the case of occurrence of natural calamities for three consecutive years.

Creation of a fund designated as National Agriculture Stabilisation Fund to aid such waivers.

Reduction in the stamp duty on agricultural advances or bring it down to zero.

In order to provide regular daily income to distressed farmers, National bank for Agriculture and Rural Development (NABARD) has decided to launch National Milk Plan worth Rs 1000 crore in 325 districts across the country in collaboration with National Dairy Development Board (NDDB). The plan aims at increasing productivity and optimising cost of production by providing necessary institutional credit support for quality breeding, optimising use of feed and its availability along with superior animal health services.

According to provisional estimates of the Marine Export Product Development Authority (Mpeda), seafood exports from the country have grown by a robust 10.5 per cent (in value terms) to around US $ 1.8 billion during the financial year 2006-07. The anti-dumping duty and customs bond imposed by the US has led to the Indian exporters focusing on European Union, which has continued to be the largest market for Indian marine products during the year 2006-07 also, with an approximate market share of 32 per cent, higher from 29.5 per cent a year ago.

INDUSTRY

Tyre industry

Production of truck and bus tyres for the financial year ending March 2007 has increased by four per cent. This is lower than the eight per cent rise recorded in the previous fiscal. The production has touched 123.67 lakh units in 2006-07 as against 119.41 lakh units in the 2005-06 financial year. The overall tyre production across segments has increased by 11 per cent for the fiscal to touch 735.44 lakh units as against 660.32 lakh units the year before, according to the figures released by the automotive tyre manufacturers' association (ATMA). Tractor (trailer) tyre production has seen the maximum increase at 38 per cent with 8.23 lakh units being produced (against 5.96 lakh units in 2005-06). Tractor (front) tyre production is next with 17.54 lakh units as against 13.83 lakh units, an increase of 27 per cent. On the exports front, the overall change has just been around 1.15 per cent. Truck and bus tyre exports have fallen by around 5.51 per cent. While exports in the passenger car segment has shown a decline of 8.25 per cent. There is, however, good news in the export of motorcycle tyres. It increased by 78.64 per cent to touch 1,51,677 units as against 84,908 units. According to Mr D. Ravindran, Director General, ATMA, "The industry on the whole underwent a lot of hardships during the last financial year, with the prices of raw material increasing.''

Steel

Steel prices may not go up further in the near future as the government has said that

Steel industries must hold prices if they want to continue receiving various concessions extended by the government. Stating that steel prices have gone up by about 15 per cent in the past three years, minister for steel Mr Ram Vilas Paswan has said that steel majors must either desist from arbitrarily raising prices or lose out on concessions. He has also added that the government has constituted a price monitoring committee to formulate a strategy for future pricing, analyse the variations and act as a watchdog to ensure a free and fair market environment. In order to bridge the price difference between urban and rural markets, the minister has said that public sector steel companies have been directed to sell steel at the same rate throughout the country; the extra cost of transportation to the

rural market will have to be borne by the companies.  

INFRASTRUCTURE

Aviation

The central government is planning to set up an airport economic regulatory authority to ensure a level-playing field for all airport developers. Addressing the session on `the challenge of connectivity' at the look south 2007 conference organised by FICCI, Mr. K.N. Srivastav, joint secretary, ministry of civil aviation, has said that over 300 new aircraft would be added to different airlines in India in the next five years. This phenomenal growth in the aviation sector would put pressure on airport infrastructure. And would also require an additional 5,000 pilots. A FICCI press release has said that such a growth would make it necessary for the government to make operational the 300 airstrips that are currently available but are not being used.

Roadways

Rural development ministry officials have said that they have adopted a multi-layered monitoring strategy to ensure transparency in the projects undertaken for road development. The quality checks are done right from the detailed project report (DPR) preparation stage to the road construction stage. According to Mr. Jugal Kishore Mohapatra, joint secretary, ministry of rural development, “The DPRs are cross checked by Indian institutes of technology (IITs) and state-level engineering colleges. So the problem of massive changes in scope of work at the DPR stage is handled.” When road construction begins, independent agencies are appointed at the state level as well as at the central level to monitor the progress. Moreover, during road construction, the details of materials purchased and used by contractors are put on a citizen's information board in the local area.

INFLATION

Annual rate of inflation, based on WPI on point to point basis stood at 5.27 per cent for the week ended 12^th May 2007 as compared to 5.44 per cent last week.

Over the week WPI rose by 0.1 per cent to 211.7 from 211.4 for the previous week. Primary articles prices went up by 0.5 per cent due to price rise in eggs, fruits and vegetables, milk, and Jowar. Fuel,Power,Light and Lubrints remained unchanged at 321.8. Index of Manufactured products rose marginally by 0.1 per cent in spite of fll in the prices of food products index.

WPI index for all commodities were revised upwards for the week ended 17.3.2007 to 209.6 from 209.4. Inflation rate correspondingly changed to 6.56 from 6.46 per cent. 

BANKING

Bank of Baroda will be opening 10 overseas offices this year, with the first one coming up in Trinidad and Tobago in Port of Spain . While new branches will be opened in Ghana , Bahrain and Canada , the bank will be setting up a second office each in Johanesburg , Tanzania and Botswana .

Indusind Bank has reported a net profit of Rs 21.40 crore in the fourth quarter of 2006-07 against a loss of Rs 62.40 crore a year earlier. The bank’s net profit for the year ended March 31, 2007 rose to Rs 68.22 crore from Rs 36.82 crore.

The Centurion Bank of Punjab ’s net profit for the year ended March 31, 2007 increased by 38 per cent to Rs 121.38 crore from Rs 87.80 crore in the previous year.

The RBI will bring global Master Card International and Visa International under its regulatory framework. Once the Draft Payment and Settlement System Bill gets the Parliament nod, these companies will have to share the information sought by the central bank. Currently, the central bank has to make a “request” for information from the global payment settlement companies. The Draft Payment and Settlement System Bill plans to bring all payment systems, including those owned by non-banking companies, under the RBI’s regulatory framework. A parliamentary committee had last week submitted its report on the Bill, which is likely to be tabled in the monsoon session of Parliament. The central bank wants the share of electronic payments in total non-cash payments to increase four-fold to 80 per cent from around 20 per cent in three years, especially by shifting high value clearing to electronic platforms. At the end of March 2007, the share of electronic payments in total non-cash payments was 22 per cent in volume and 65 per cent in value.

PUBLIC FINANCE

The direct tax collection of the government has shot up by 128 per cent to Rs 5,441 crore during April 2007 over Rs 2,381 crore collected during the corresponding month of the previous year mainly due to faster clearing of refunds by the income tax department during 2006-07. The I-T department has issued refunds amounting to over Rs 39,000 crore in the last fiscal year, an increase of nearly Rs 10,000 crore over 2005-06. Corporate income tax has seen the highest growth of 213 per cent to Rs 1,602 crore over the deficit of Rs 1,418 crore during the corresponding month of the previous fiscal year. Personal income tax collections have risen to Rs 3,839 crore in April 2007, a marginal increase of 1.24 per cent over the year.

FINANCIAL MARKETS

Capital Markets

Primary Market

Decolight Ceramics Limited has tapped the market between May 24 and 29 by  issuing equity Shares aggregating Rs. 4254.60 Lakhs {Excluding promoter contribution of Rs. 90 Lakhs} in a price band of Rs 45-54 per share.

Secondary Market

The market ended the week with small gains, on account of mixed trend in index pivotals. However it was highly volatile during this week pulled by series of local and global events.

The BSE 30-share Sensex added 34.59 points in the week ended 25 March 2007 to settle at 14,338.45, while the NSE Nifty was up 33.65 points, or 0.79 per cent, to 4,248.15

The week started on an upbeat note with the Sensex advancing 115.19 points to 14,418.6 on 21 May 2007, tracking firm Asian and European markets. The S&P CNX Nifty rose 46.40 points, or 1.10 per cent, to 4,260.90, an all-time closing peak before striking an all-time high of 4,269.35 in intra-day trade. Shares from the oil & gas, metal and FMCG space were in high demand.

The Nifty struck a fresh all-time high of 4,281.60 a day later (22 May 2007), as strong buying for frontline pivotals continued. The Sensex rose 35.12 points, or 0.24 per cent, to 14,453.72

The Sensex fell 90.46 points to 14,363.26 on 23 May 2007 as bulls took a breather and liquidating positions in the last hour of trade. Except for selective buying interest seen in the metal and capital goods sector, shares from the auto, FMCG, oil & gas and banking sectors declined on profit taking.

Profit booking continued a day later 24 May 2007, with the Sensex dipping a sharp 145.15 points to 14,218.11.

On 25 May 2007, the Sensex staged a smart intra-day reversal to end with a 120.34point spurt to 14,338.45. Short covering triggered the rally in the second half of the day’s trading session

Derivatives 

The Nifty May 2007 futures settled at 4,191.40, a discount of 13.50 points compared to the spot closing of 4,204.90.                                

Government Securities Market

Primary Market

RBI conducted the auction of "7.38 per cent Government Stock 2015" and "8.35 per cent Government Stock 2022" for a notified amount of Rs.5000 crores and Rs.3000 crores respectively. The cut-off yields for the "7.38 per cent Government Stock 2015" and "8.35 per cent Government Stock 2022" were 8.2399 per cent and 8.4074 per cent respectively.

The cut-off yield in 91-day T-Bill auction remained steady at 7.6435 per cent during the previous week. The cut-off yield in 364 -day T-Bill auction moved higher to 7.8032 per cent as against the previous cut-off yield of 7.7683 per cent.

Secondary Market

During the week, the weighted average call rates during the period ranged between 7.21 per cent and 9.08 per cent, while weighted average repo rates ranged between 5.98 per cent and 7.91 per cent and the weighted average CBLO rates ranged between 5.34 per cent and 7.80 per cent. The average volumes of Call, Repo, and CBLO segments were Rs.11354.04 crores, Rs.9476.45 crores, and Rs.22702.20 crores respectively. The daily average outstanding amounts in the LAF (reverse repo) and LAF (repo) operations conducted during the period were Rs.149.00 crores and Rs.6966.00 crores respectively. The weighted average YTM of G.S 2017 8.07 per cent bond was 8.154 8per cent on May 25, 2007 as compared to 8.0885 per cent on May 18, 2007. The 1-10 year YTM spreads decreased by 3 bps to 27 bps.

Bond Market

Housing Development Finance Corporation has tapped the market to mobilise Rs 200 crore with a green shoe option of Rs 100 crore by issuing bonds and offering 10.25 per cent for 5 years

Foreign Exchange Market

The rupee closed at Rs.40.6/USD on May 25, 2007 as compared with Rs. 40.9/USD as on May 18, 2007.The Rupee moved between Rs. 40.55 and Rs.40.64, with a standard deviation of 3 paise during the week.

 The six-month forward premia closed at 4.23 per cent (annualized) on May 25, 2007 vis-à-vis 4.51 per cent on May 18, 2007.

CORPORATE SECTOR

Tata Motors is in talks with Latin America’s largest small truck and car chassis maker, Metalsa, to produce chasses in India for both domestic and foreign markets. Metalsa is based at Monterrey in Mexico and manufactures chasses suspension modules, structural stamping and metal fuel systems. The two companies were planning to set up a manufacturing unit near Pune. An announcement about the tie-up will be made during the Mexican president’s visit to India in September 2007.

 In order to solve the problem of pilot shortage in India , chairman and managing director of Kingfisher Airlines has announced that he will very soon set up a pilot training centre at Nerul with an initial investment of Rs 200 crore. The airline will create a fully equipped training centre with simulators and cabin trainers.

The entity formed by the merger of Air India and Indian Airlines would be called as National Aviation Company Ltd, but its brand name would be Air India. Its new logo features a bright orange Konarak wheel. Company’s registered office will be in New Delhi , while the corporate head quarters will be in Mumbai. Low fare operations will be carried out under the Air India Express brand. Other existing brands, Indian and Alliance air, will cease to exist. ‘Maharaja’ will still be Air India ’s mascot and the ‘AI’ code will continue.

Nokia Oyj, the world’s biggest maker of mobile phones, filed six counter claims against Qualcomm Inc over patent infringements. The claims are related to Qualcomm’s chipset business.

Logistics major DHL and the Lemuir Group are planning to consolidate their logistics business in India under the name DHL Lemuir Logistics. Deutsche Post World Net, owners of the DHL brand, will hold 76 percent in the joint venture, with 24 percent being held by Lemuir.

A company from Kerala involved in tackling the problem of dumped food waste and a Karnataka firm that has provided thousands of rural families dung-based biogas plants are among 10 global projects short listed for the Ashden Awards for Sustainable Energy, popularly known as the “Green Oscars”. Former US vice-president Al Gore will present the awards and more than 2,00,000 pounds (Rs 17 lakhs approx) of prize money to the winners at the Royal Geographical Society on June 21,2007.

EXTERNAL SECTOR

The government has tightened the norm for the duty free imports of products under the trade plus scheme by allowing exporters to import only goods that will be used as an input for manufacturing the export good. According to the circular published by CBEC the item to import should be an ‘input’ in the manufacture of the exported items, which is required for ‘use’ by the exporter or the supporting manufacturer. Under TPS, exporters are entitled to rewards in the form of duty free credit based on incremental exports.

INFORMATION TECHNOLOGY

TCS has increased stake in its Brazilian joint venture TCS do Brasil to 100 per cent from 51 percent. The Grupo TBA’s 49 percent stake was purchased for a consideration of $33.4 million. Earlier in 2002, the company had entered the Brazilian market through a 51:49 joint venture with Grupo TBA. TCS do Brasil has a workforce of over 1,700 employees and recorded a top line of $66.5 million for the year ended March 31, 2007.

TELCOM

Bharati Airtel has become India ’s first and world’s 10^th telecom operator to reach 40 million customers. For the last 12 months Bharati Airtel has witnessed a spectacular growth, both in terms of customers and revenues. Its lead over Hutch has widened from 2 million in March 2006 to over 11 million in April 2007.

*These statistics and the accompanying review are a product arising from the work undertaken under the joint ICICI research centre.org-EPWRF Data Base Project.

LIST OF WEEKLY THEMES

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