20 Picks for 2008

Adlabs Films
With a strong presence across the entertainment industry value chain of content production, distribution, and exhibition, Adlabs becomes the choicest pick. Domestic consumption and leisure spends will remain buoyant as disposable incomes rise across the country fuelling growth at Adlabs. Adlabs produces and distributes films, and is a dominant player in the multiplex segment. It has also acquired 51 per cent stake in television content producer Synergy Communications, the maker of Jhalak Dikhhla Jaa and Kaun Banega Crorepati. In the FM radio business, its subsidiary, which runs Big FM has 44 FM licenses across India. This could also become a value unlocking opportunity going forward. Over the past three years, Adlabs has impeccably delivered a top line growth of over 100 per cent y-o-y, along with high profitability. In the September 2007 quarter, it raked in a whopping 69 per cent operating profit margin. But going by the past numbers, operating margins have remained in excess of 50 per cent consistently, with net profit margins at over 22 per cent. The stock has appreciated three-fold since January 2007 and should do well. Bank of Baroda
Bank of Baroda has a strong presence in western India —a key zone for retail and industrial growth—with equally good rural network. Further, the bank is one of the few banks having a substantial international presence, which contributes 18-20 per cent to total business and 30 per cent to profits. This business is expected to rise further with the bank growing its global presence. The bank has improved its fundamentals over the past several years on key parameters such as net interest margins (NIMs) and asset quality despite growing at a robust pace (asset growth CAGR of 19 per cent in FY04-07). Going ahead, the bank's focus on NIMs backed by moderate growth augurs well. Besides, its initiatives such as online trading services, and joint ventures in insurance and asset management, will help it create value for its shareholders. Additional triggers could be in the form of consolidation within the public sector bank space. All this put together makes this stock, which is reasonably valued at 1.4 times its FY09 estimated book value, an attractive investment opportunity. Bharat Bijlee
Though Bharat Bijlee has risen by a whopping 228.5 per cent in the last one year, even at current levels, it is inexpensive. Consider this: The company has investment in various companies including Siemens, HDFC and ICICI Bank. At current rates, their combined value works out to Rs 317 crore, or about Rs 560 per share. Excluding this, the core business is valued at attractive valuations of 20 times FY08 earnings and 15 times FY09 estimated earnings. The company is capitalising on the emerging opportunities in the power transformer sector, which accounts for 65 per cent of its total revenues with the balance from motors. In the Eleventh Five Year Plan, a total power generation capacity of 78,000 mw is planned. This augurs well for transformer manufacturers such as Bharat Bijlee. The company on its part has recently expanded its transformer capacity to 11,000 MVA from 8,000 MVA. The motors business is also witnessing 25 per cent growth and Bharat Bijlee has forayed into higher frame motors of up to 400 kw. All this put together make Bharat Bijlee a good pick. Bharati Shipyard
Stocks of shipbuilding companies have been re-rated on the back of rising order book-to-sales to over seven times. The stock price of ABG Shipyard has gone up 267 per cent, while Bharati Shipyard is up 107 per cent over the last one year. The gain has been higher in the case of ABG Shipyard, thus stretching its valuation at 33 times its FY08 estimated earnings. Bharati Shipyard is still trading at a comfortable 18 times estimated FY08 EPS and 13 times FY09 EPS. Also, its current order book of about Rs 4,639 crore (11 times its FY07 revenue) is strong enough for maintaining 50 per cent growth for the next three years. Bharati is building a greenfield shipyard which will enable it to build six vessels up to 60,000 dwt (dead weight tonne) against 15,000 dwt currently by December 2008. This will enable Bharati to improve its execution speed and bid for more projects. Besides, it is planning to invest Rs 2,000 crore along with Apeejay Shipping to set up a shipbuilding yard on the eastern coast, which will be commissioned in FY 2011. A relatively lower valuation and strong earnings visibility makes this stock an attractive investment. Bhel
Today, the biggest constraint in the power sector is the supply of equipment, especially the critical power equipment required for the larger projects. But, for Bhel, which commands about 65 per cent market share in the domestic power equipment industry, this provides long-term earnings visibility. While competition is rising with new players like L&T and Chinese companies vying for a share, Bhel's order book of Rs 62,400 crore, almost 3.6 times its FY07 revenues, instils confidence. The successful acquisition of orders for super critical boilers and high technology gas turbines required for the bigger projects would only improve its order book further. Considering the huge order backlog and the orders in pipeline, Bhel is expanding its capacities by 67 per cent to 10,000 mw by January 2008, which will further increase to 15,000 mw by December 2009. Bhel is also expanding its forging and casting capacities and a new fabrication plant to help reduce its dependence on imports. These should also help lower costs in the years to come. Overall, a better industry outlook, strong order book and expansion of existing capacities will drive the stock from the current levels. Bharti Airtel
With a mobile subscriber base of 51 million, Bharti Airtel is India's largest mobile service provider. While it has added an average of 2 million subscribers a month in Q2, it is expected to crack the 100 million subscriber mark by FY10. While the company has experienced good growth, its ARPU has fallen by 10 per cent over the last three quarters, much ahead of the 4 per cent decline experienced by Reliance Communications. Even then, operating margins have improved, on the back of higher margin in broadband business and cost reduction. Going forward, increase in scale of operations will keep costs in check. Capital and operating expenditure is also likely to come down after the formation of Indus, a tower infrastructure company, which will manage the tower infrastructure of Bharti, Vodafone and Idea. A trigger for the stock could be the listing of Bharti Infratel, the tower division and which holds 42 per cent in Indus. Bharti Infratel already has 20,000 towers and plans to set up more. RCOM will be the biggest threat for the company if it manages to soon roll out its GSM services across 15 circles. Additionally, any unfavourable outcome over the spectrum issue will have its impact; it could lead to increased investments in upgradation of existing equipment. To conclude, Bharti's revenues should grow by 35 per cent in the next two years on the back of subscriber expansion, start of Sri Lankan operations by March 2008, and launch of IPTV and DTH. A sum-of-parts valuation puts the per share value of Bharti at Rs 1,200, a 27 per cent upside from the current levels. Blue Star
The central air conditioning major, Blue Star, is a key beneficiary of the economic boom in the country across sectors like IT/ITES, retail and telecom. This is reflected in the strong CAGR of 32 per cent and 40 per cent in sales and operating profit respectively in the past three years. Notably, such strong growth traction is expected to continue as the company is sitting on a strong order book position, which is at Rs 1,030 crore as on September 2007. It is likely to get repeat orders from its existing customers as they expand operations. It is expanding its capacities by investing about Rs 60-70 crore, which will lead to economies of scale and rationalisation of costs leading to margin expansion. Its return on equity and return on capital employed, which were at 34 per cent and 26 per cent respectively in FY07, will only improve. However, the full benefits will be reflected only from the next financial year. The macro factors too continue to be robust, with huge investments planned in all the above mentioned sectors. Dishman Pharmaceuticals
Dishman, a pharma outsourcing player, is moving up the value chain from being a commoditised chemicals supplier to a research partner for innovator companies. Its acquisition of Swiss-based Carbogen-Amcis (CA), which offers drug development and commercialisation services, has helped it tap into the client base of CA that includes seven of the top ten US drug companies. With three projects in phase-III development, and likely to hit commercial production in two years, CA's revenues are expected to grow 15 per cent annually to Rs 400 crore by December 2008. Dishman caters to 50 per cent of Dutch pharma major Solvay Pharma's requirement of eposartan mesylate, an anti-hypertension medication. Its acquisition of Solvay's Vitamin-D business will boost revenues. Its foray into China to manufacture Quats, a catalyst, is also seen positively. All these should help reduce Solvay's share of 25 per cent in Dishman's revenues going forward. With earnings expected to grow between 25-30 per cent in the next two years (Rs 12 in FY08, Rs 15 in FY09 and Rs 20 in FY10), the stock can deliver 28-30 per cent returns in one year. Educomp Solutions
Educomp, the market leader in Kindergarten-12 education products, is a successful niche player. It has made some smart acquisitions, entered new areas. and garnered a client base of almost 6,000 schools across India besides, a small presence in Singapore and the US. Its first mover advantage makes it difficult for competition to catch up anytime soon. Besides, the company has so far acquired and built the abilities to design and create content for schools, learning and school infrastructure management solutions, online teaching solutions, community building solutions and more recently into setting up its own schools. Financially, Educomp's top line has almost doubled every year and operating margins have been maintained above 50 per cent. Considering the growth potential in the Indian education industry, Educomp is likely to keep its juggernaut rolling for the coming few years. In FY09, Educomp will double its top line again and grow its earnings by 75 per cent. Although there has been a concern over valuations, the consistent earnings growth justify the same. HDFC
HDFC is an ideal play on the gamut of financial services. Besides market dominance in housing finance, it provides huge potential for value unlocking from its investment in banking, insurance and mutual fund subsidiaries. The proposed UTI Mutual Fund IPO, stake sale by Reliance Capital in its mutual fund entity and the probability of listing of insurance companies though in the long term, should provide triggers. Moreover, there is a possibility of a merger with HDFC Bank. Its core business--housing finance will continue to do well. Its loan book is expected to witness a CAGR of 25 per cent over the next two years. Its net interest margins are expected to remain stable at around 3 per cent. And, HDFC is known for its asset quality. HDFC's stock trades at about 5 times FY09 estimated book value (adjusted for the value of its subsidiaries, which is about 30 per cent of HDFC's market capitalisation), and is a worthy pick. India Infoline
India Infoline is another company representing financial services, except the lending business. Its stock price has grown more than fourfold in the last one year amid many positive triggers like capital raising for expansions, tie-up with strategic investors for investments in subsidiaries and restructuring of its various businesses. Besides equity broking, it has expanded its product basket to include institutional equities broking, commodities broking, margin finance, investment banking and, distribution of life insurance, mutual fund and loans products. It is investing towards building a strong distribution network (596 branches in 345 cities) and customer base (5 lakh clients) for its various services. Accordingly, the share of its traditional broking business of about 56 per cent in FY07 revenues is expected to come down over the years. The stock trades at 51 times and 44 times estimated earnings for FY08 and FY09 respectively. While it looks cheaper than Edelweiss, in terms of market capitalisation to revenues, it trades at a higher P/E than Indiabulls. However, it has the most de-risked business model compared to other players. Given India Infoline's aggressive growth strategy, the stock is ideal for long term investors. Jain Irrigation
Jain Irrigation, which is in the businesses of micro irrigation systems, food processing and plastic pipes and sheets, is a direct play on the growing emphasis on agriculture. Irrigation systems account for 30 per cent of its revenue. It's revenues from micro irrigation have grown at 70 per cent annually. Growth will be maintained on the back of its plans to launch new irrigation systems, higher replacement demand, focus on geographical diversification. Jain's five overseas acquisitions, including a 50 per cent stake in NaanDan of Israel, the world's fifth largest micro-irrigation company, will help in terms of access to technology and access to large markets such as South Africa, US, and Europe. In food processing, which accounts for 14 per cent of total income and grew by 74 per cent in FY07, Jain produces juices and dehydrated vegetables for companies like Coco Cola, Nestle, etc. This business to grow at healthy from hereon. In plastic pipes and sheets, its products find application in agriculture (30 per cent market share) and telecom (70% share) among others and, should continue to grow at a healthy pace. To sum up, Jain is operating in high growth areas, while exports too are expected to grow rapidly, which makes it a good investment case. Jindal Saw
Jindal Saw, the most diversified Indian pipe manufacturer, makes submerged arc welded (Saw), seamless and ductile iron spun pipes, which are used in diverse applications like oil & gas and water-based infrastructure. The company is expanding its capacities in phases which will bring economies of scale– longitudinal Saw pipes (by 25 per cent), helical Saw pipes (233 per cent) and seamless pipes (150 per cent) -- by FY09. These expansions are well-timed due to strong demand for pipes on account of surging demand for oil and gas globally. Over the next three-four years, global demand (including India), for Saw pipes is estimated at 200,000 km involving an investment of $60 billion. Jindal Saw is likely to gain due to restructuring of the investment holdings in Jindal Group companies, wherein it has substantial investments in Nalwa Sons, Jindal Stainless, JSW Steel and Jindal Steel & Power, are worth about Rs 2,200 crore. Excluding the value of investments, the stock trades at 9 times its FY09 estimated earnings, which is attractive as compared with 17 times for Welspun Gujarat. Larsen & Toubro
Reinventing itself and successfully developing new businesses are among L&T's key strengths. That, along with the domestic infrastructure and global hydrocarbon investments, is responsible for the rising revenues and order book. It is now targeting a turnover of Rs 30,000 crore by FY10 as compared with Rs 18,363 crore in FY07. Going forward, there is more business to come, as the government has estimated an infrastructure investment of $500 billion during the Eleventh Five Year Plan. Besides, a lot of money will also be spent by domestic players in the metal, oil and gas, power and other industries. Little wonder, L&T's order book has been rising. As of September 2007, the engineering and construction division had an order book of Rs 42,000 crore. Going forward, L&T is also focusing on the overseas markets and has targeted exports to increase to 25 per cent of 2010 sales. It is entering shipbuilding, railway locomotives, power generation and power equipment as well. While all these investments in different businesses will help sustain future growth, the medium term continues to be robust. Some of it is already rubbing off positively on the share price. Although the stock seems richly valued, it can fetch good returns. Maruti Suzuki
On the back of a sound foundation of existing products (13 models priced between Rs 2 lakh and Rs 15 lakh), strong distribution, efficient service network and new product launches, Maruti Suzuki will maintain its dominant position. The company has 52 per cent market share by volume of the Indian car market and 62.5 per cent of the small car segment, which is commendable given the stiff competition from global majors. Maruti grew at a scorching 18 per cent, compared with the 13 per cent recorded by passenger car market in H1 FY08. For eight months ended November 2007, sales volume was up 19.7 per cent to 500,108 vehicles led by 49 per cent growth in exports. Notably, exports are expected to grow 40 per cent annually for the next two years; its share in total sales is likely to move up to 12 per cent in 2010 from 7 per cent in FY07. Maruti is already augmenting capacities by 3 lakh in a phased manner by FY10 to a million units. Besides, it has lined up Splash (A2 segment) and the concept car A-Star (A1 segment), while a Swift sedan is on the cards. These will help earnings grow by 20 per cent annually in the next two years. Aggressive pricing, enhanced margins on the back of improved product mix, indigenisation and scale benefits, will help Maruti do well. ONGC
Oil exploration companies are set to benefit from the current high oil prices and firm outlook. India's largest oil exploration company, ONGC is the best bet in this space. ONGC with interest in 85 domestic blocks including 52 offshore fields, has made 28 discoveries in the past two years, of which, 14 were made in FY08 itself. Further, its 100 per cent subsidiary, ONGC Videsh has stakes in 26 blocks across 15 countries and is expected to be the key growth driver with its share in ONGC's consolidated revenues and profits expected to rise to 20 per cent (14 per cent now) and 14 per cent (9 per cent now) respectively. ONGC's substantial interests in MRPL, Petronet LNG, GAIL and Indian Oil Corporation are the topping. Moreover, the IPO of Oil India in the next few months could provide further triggers. What also makes ONGC attractive is that it is the cheapest among its Asian peers trading at 10.1 times estimated FY09 earnings and enterprise value per barrel oil equivalent of about 7.5 times for FY09. Going ahead, exploration successes especially in the KG basin and favourable announcement on various issues like sharing of subsidy burden, cess and deregulation in gas prices will be big positives. Patel Engineering
Patel Engineering, which is having an order book of Rs 5,400 crore almost 4.8 times its FY07 revenues, would be the key beneficiary of the boom in the construction, power and real estate sectors. Within power sector, the 11th Five Year Plan has an outlay of Rs 70,000 crore, adding another 18,000 mw in hydropower generation. Patel Engineering has 22 per cent market share in the domestic hydropower construction, which accounts for 60 per cent of its current order book. Also, the company has pre-qualified for new projects worth over Rs 6,000 crore as on September 30, 2007. Besides, its entry into own power generation setting up of 1,200 mw thermal power plant at an investment of Rs 5,000 crore are positive triggers. Meanwhile, its core businesses including construction of dams, transportation and micro-tunneling are growing at a faster pace thus providing sustainable earnings growth. The immediate trigger would come from its real estate business. Patel Engineering has transferred a land bank of about 1,000 acres spread across Bangalore, Chennai, Hyderabad and Mumbai to Patel Realty India, a 100 per cent subsidiary. According to estimates, the real estate business is valued between Rs 500-520 per share. All of these make Patel Engineering an attractive investment. Reliance Communications
Reliance Communications (RCOM) has a mobile telephony market share of 18 per cent and subscriber base of 38 million, which is rising by a million every month. And this should continue to rise as RCOM penetrates into smaller towns. What's more interesting is that despite concerns over declining, operating margins have improved to 42.2 per cent in Q2 FY08, thanks to the benefits of larger scale. This is expected to improve further if RCOM gets the go-ahead to operate an additional 15 GSM circles as 65 per cent of passive infrastructure such as telecom towers, is common to both GSM and CDMA technologies and the investments in its existing networks will be incremental. Additionally, it is the value unlocking in its subsidiaries that are likely to provide further triggers. In 2008, RCOM is likely to announce a stake sale and subsequently list its tower subsidiary, Reliance Telecom Infrastructure, list its submarine cable subsidiary, FLAG Telecom, hive off of its SEZ and BPO businesses and the launch IPTV and DTH services by the first quarter of 2008. Analysts estimate that a conservative sum-of-parts valuation based on FY09 numbers for RCOM comes to Rs 850-Rs 900 per share, which indicates an appreciation of 17-24 per cent from current levels. Reliance Industries
In 2008, Reliance Industries' (RIL) exploration and production (E&P) division, which accounts for 50 per cent of its sum-of-parts valuation, will start selling gas from the KG Basin. The only ambiguous aspect here seems to be the pricing of gas and settlement with the ADA group and NTPC. Within a few months, Reliance Petroleum will also start operations, all of which should lead to a jump in RIL's profits. Also, the bids for NELP VII will be awarded by July 2008. While further wins will add to reserves, new discoveries at existing reserves should further add to valuations and the possible de-merger of RIL's E&P division would unlock value. While the company is yet to prove its mettle in its retail and SEZ initiatives, given its track record managing mammoth projects, one can hope to see positive results here as well. Notably, analysts maintain their bullish outlook on the core businesses. Refining margins for RIL, already the best among global players, should remain firm until FY11, while petrochemical margins are expected to be stable with good growth in volumes. At a P/E of under 12 times FY09 estimated core earnings, RIL is a worthy investment. State Bank of India
SBI's move to merge State Bank of Saurashtra with itself has the potential to trigger the re-rating of public sector banking stocks by pushing the much needed consolidation process. To further expedite consolidation, the boards of SBI and its other six associate banks are meeting in January to consider merger. Should that happen, SBI's standalone balance sheet size will grow 1.5 times to Rs 8.20 lakh crore, almost double the size of ICICI Bank's. Also, its branch network will jump 50 per cent to 14,400 branches. But, the improvement in valuations (re-rating) should get a boost when the merged entity is able to rationalise costs and extract benefits from the merger. SBI will raise Rs 17,000 crore through a rights issue that should provide fuel for future growth. In a competitive Indian banking business, it is important for banks to achieve size and scale to be globally competitive. And for investors, it is more important to find such banks at reasonable valuations. SBI meets both these criteria. SBI's stock trades at 2.2 times and 2 times its estimated consolidated book value for FY08 and FY09 respectively. Further, SBI has investments in mutual fund and life insurance subsidiaries, which make valuations more compelling.

Via Business Standard

No entry load on Mutual Funds from Jan 4 2008

As a New Year gift to mutual fund investors, market regulator Sebi on Monday exempted them from payment of entry fee on applications filed directly to the asset management companies (AMC).

"It has now been decided that no entry load shall be charged for direct applications received by the AMCs i.e. applications received through Internet, submitted to AMCs or collection centre/ investor service centres that are not routed through any distributor/agent/broker," Securities and Exchange Board of India said in a circular.

The exemption would apply for investments in existing schemes with affect from January 4, 2008 and in new schemes to be launched thereafter.

The Sebi circular further said, the entry fee exemption would also apply to additional purchases made directly by the investors under the same folio or for switching from one scheme to the other.

These exemptions, the SEBI said, were intended "to protect the interests of investors' securities and to promote the development of, and to regulate the securities market".

"This is good and positive move and will help the mutual fund industry," said managing director of the Delhi-based Taurus Asset Management Company R K Gupta while commenting on the SEBI notification.

Gupta further said that this decision was overdue and "for the past five years we have been pressing for this exemption".

Sebi's move, however, would have adverse implications for the intermediaries who have been involved with the mutual fund industry.

Post Market Commentary

The market closed on a positive territory on the last trading day of the year 2007. The market opened with handsome gains on the back of favoring cues from the global markets. But all of a sudden it lost the momentum to pare most of its initial gains and gathered the momentum after the mid session as the buying intensified across the counters. The Consumer Durables, Realty and Capital goods index remained the centre of attraction as most buying is seen from these baskets. Both the Mid Caps and Small Caps indices once again outperformed the benchmark indices to closed higher by 214.92 points and 447.08 points at 9,789.49 and 13,348.37 respectively. The BSE Sensex closed higher by 80.04 points at 20,286.99 and NSE Nifty grew by 58.9 points to close at 6,138.60.

BSE Consumer Durables index surged 354.79 points to close at 6,956.79. Scrips that grew are Videocon (10%), Blue Star (5.45%), Rajesh Exports (3.60%), Titan (1.91%) and Lloyd Ele (1.63%).

BSE Health Care index closed up by 79.70 points at 4,418.65. Scrips that jumped are Bilcare Ltd (12.66%), Dishman Pharma (7.29%), Matrix Labs (4.57%), Fortis Healthcare (4.35%).

BSE Metal index advanced by 71.77 points to close at 20,020.22. Scrips that pushed up are Jindal Stainless (2.43%), Ispat Industries (2.23%), Jindal Saw (1.89%), SAIL (1.74%)

BSE Realty index closed higher by 176.16 points at 12,727.42. Scris that grew are Purvankara (6.36%), IndiaBull Real (3.60%), Akruti City (3.41%), HDIL (2.79%) .

BSE Oil & Gas index grew by 99.34 points to close at 13,301.60 as BPCL (10.77%), HPCL (7.69%), Indian Oil (7.48%), Cairn India (4.37%), Gail India (2.15%) closed in green.

BSE Bankex index grew by 31.65 points to close at 11,418. Scrips that gained are Canara bank (6.70%), CentBOP (6%), Oriental bank (2.16%), Allahabad bank (1.58%), IOB (0.79%) .

BSE IT index fell 22.47 points to close at 4,529.59. Scrips that fell are Infosys (1.52%), Niit Tech (1.03%), Wipro (0.82%), Tech Mahindra (0.81%) and I-Flex (0.44%).

Mute welcome to the new year

The Sensex opened 116 points above its previous close tracking positive Asian markets. But, the market could not hold on to its gains as trading progressed on lack of buying support. However, the presence of bullish sentiment helped the market to remain in a range with a positive bias in the latter part of the session with buying in consumer durables, PSU and FMCG stocks. However, selling in frontline stocks towards the close saw the Sensex touch its day's low of 20,240. The Sensex finally closed the session with a gain of 80 points at 20,286, while the Nifty added 59 points at 6,139.

Breadth of the market was extremely positive on the Bombay Stock Exchange (BSE) with gainers outpacing losers in the ratio of 7.02:1. Of the 2,930 stocks traded on the BSE 2,551 stocks advanced, 363 stocks declined and 16 stocks ended unchanged. Except the BSE IT index, all sectoral indices ended in positive territory. The BSE CD index ended firm with gains of 5.37% at 6,957, while the BSE PSU index rose 2.18% at 10,468, the BSE HC index added 1.84% at 4,419, the BSE FMCG index added 1.72% at 2,320 and the BSE Teck index moved up by 1.64% at 4,015.

Action in several index heavyweights lifted the market. Bharti Airtel led the pack and shot up by 5.72% at Rs995. NTPC soared 3.58% at Rs250, M&M surged 3.16% at Rs861, Ranbaxy flared up by 2.49% at Rs426, ITC jumped by 2.34% at Rs210, Reliance Communication added 1.90% at Rs747, ACC advanced by 1.59% at Rs1,025, Tata Motors was up 1.55% at Rs742. However, HDFC dropped 1.76% at Rs2,827, Ambuja Cement slipped 1.54% at Rs147, Infosys lost 1.52% at Rs1,768 and Cipla dipped 1.07% at Rs213 while Reliance Energy, HLL, Wipro, Reliance Industries, SBI and HDFC Bank slipped marginally.

Over 3.48 crore IFCI shares changed hands on the BSE followed by GV Films (2.54 crore shares), Ispat Industries (1.67 crore shares), GTL Infrastructure (1.63 crore shares), and Tata Teleservices (1.42 crore shares).

Valuewise, IFCI registered a turnover of Rs314 crore on the BSE followed by Eclerx (Rs275 crore), RNRL (Rs215 crore), Transformers & Rectifiers India (Rs191 crore) and Brigade Enterprises (Rs183 crore).

Sensex gains 47% in 2007

The market posted modest gains on the last day of calendar year 2007, led by gain in telecom stocks and in select heavyweights. Asian markets which opened before Indian market, edged higher. European markets which opened after Indian market, slipped.

The 30-share BSE Sensex rose 80.04 points or 0.40% to 20,286.99. Sensex opened 116 points higher at 20,323.28 and hit a high of 20,484.28 in early trade. At the day's high Sensex had gained 277.33 points. Sensex hit a low of 20,239.63 in the day. Sensex had struck an all time high of 20,498.11 on 13 December 2007.

The broader CNX S&P Nifty rose 58.90 points or 0.97% to 6,138.60. Nifty hit a high of 6,167.75 during the day. Its all time high is at 6,185.40, struck on 13 December 2007.

In the calendar year 2007, the BSE Sensex surged 6500.08 points or 47.14% to 20,286.99, from its close of 13786.91 on 29 December 2006. The S&P CNX Nifty vaulted 2172.20 or 54.76% in calendar 2007.

BSE clocked a turnover of Rs 8977 crore as compared to Rs 8497 crore on Friday 28 December 2007. The NSE futures & options turnover was Rs 46186.73 crore, lower than Rs 50436.85 crore on Friday 28 December 2007.

Nifty January 2007 futures were at 6156, a premium of 17.40 points compared to the spot closing of 6138.60.

The market breadth was strong on BSE with 2496 shares advancing as compared to just 387 that declined. 17 remained unchanged

The BSE Mid-Cap index rose 2.24% to 9,789.49, while the BSE Small-Cap index gained 3.47% to 13,348.37. The BSE Mid-Cap index struck an all time high of 9,817.28 today. The BSE Small-Cap index hit a record high of 13,376.80 today. Both these indices outperformed the Sensex.

In the calendar year 2007, BSE Mid-Cap index gained 3984.31 points or 68.63% to 9,789.49, from its close of 5805.18 on 29 December 2006. The BSE Small-Cap index gained 6456.05 points or 93.67% to 13,348.37, from its close of 6892.32 on 29 December 2006.

All sectoral indices on BSE settled higher today, except BSE IT index. BSE Oil and Gas index (up 0.75% at 13,301.60), BSE TecK index (up 1.64% to 4,015.03), BSE Capital Goods index (up 0.56% at 19,755.39), BSE Consumer Durables index (up 5.37% to 6,956.79), BSE FMCG Index (up 1.72% at 2,319.92), BSE Health Care index (up 1.84% at 4,418.65), BSE PSU index (up 2.18% to 10,468.14), BSE Power Index (up 1.25% at 4,548.85), BSE Auto index (up 1.29% at 5,667.45), BSE Realty (up 1.40% to 12,727.42), outperformed the Sensex.

BSE IT index (down 0.49% to 4,529.59), BSE Metal index (up 0.36% at 20,020.22), and Bankex (up 0.28% to 11,418.00), underperformed the Sensex.

Among the Sensex pack, 15 advanced while the rest 15 declined.

India's largest cellular services provider in terms of market capitalisation, Bharti Airtel surged 5.03% to Rs 988. 3.96 lakh shares changed hands on the counter on BSE. The stock rose on reports a clutch of international investors, led by Singapore's Temasek Holdings, are putting in $1 billion in its 100% subsidiary Bharti Infratel.

Other telecom stocks, Reliance Communication (up 1.17% to Rs 741.15) and Idea Cellular (up 6.38% to Rs 140), also logged gains

India's largest private sector firm by market capitalization & oil refiner Reliance Industries was down 0.57% to Rs 2881.70 on 5.29 lakh shares. The stock eased from session's high of Rs 2948.80.

ITC (up 2.43% to Rs 210.50), and Ranbaxy Laboratories (up 1.90% to Rs 423.50) were the other gainers from Sensex pack.

Housing Development Corporation (HDFC), the country's largest dedicated housing finance company slipped 1.92% to Rs 2868. It was the top loser from the Sensex pack

IT pivotals slliped. Wipro (down 1.67% to Rs 521.10), Satyam Computers (down 0.75% to Rs 446.25) and Infosys Technologies (down 1.82% to Rs 1763), edged lower.

Shares of state-run refining and marketing companies surged on reports that the government is likely to finalise price increase at a meeting of a Group of Ministers around second week of January 2008. Indian Oil Corporation (IOC) surged 6.90% to Rs 790, Bharat Petroleum Corporation (BPCL) gained 10.65% to Rs 523 and Hindustan Petroleum Corporation (HPCL) advanced 6.31% to Rs 364.50.

Brokerage shares surged on fresh buying. India Infoline (up 8.30% to Rs 1921), Edelweiss Capital (up 5.54% to Rs 1607), Motilal Oswal Financial Services (up 5.57% to Rs 1860) and Religare Enterprises (up 10% to Rs 607.50), surged.

Axon Infotec (up 20% to Rs 90.30), GIC Housing Finance (up 20% to Rs 98.10), Jayant Agro Organics (up 20% to Rs 20.34), Gati (up 20% to Rs 184.90), Ucal Fuel (up 20% to Rs 122.70), and Deepak Nitrite (up 20% to Rs 150.65), surged

Era Construction (down 10% to Rs 815.95), Garnet International (down 8.21% to Rs 111.75), and Core Projects (down 6.99% to Rs 423), slipped

Brigade Enterprises settled at Rs 378, a discount of 3.07% over IPO price of Rs 390. The stock debuted at Rs 399.70, a premium of 2.48% over the IPO price. The stock moved in a range of Rs 409.40 and Rs 365.80 for the day.

eClerx Services settled at Rs 447.50 on BSE, a premium of 42.06% over the IPO price of Rs 315. The stock moved in a range of Rs 466.80 and Rs 320 for the day

Industrial Finance Corporation of India soared 12.61% to Rs 92 on hopes of re-bidding for a 26% strategic stake sale in the firm.

Housing Development and Infrastructure gained 4.04% to Rs 1087 on reports the company is planning to set up a 5,547-acre special economic zone in Vasai-Virar region near Mumbai.

Rashtriya Chemicals & Fertilizers surged 4.98% to Rs 117.95, after the company said it has signed a memorandum of understanding with GAIL India for setting up coal gasification project in Talcher, Orissa

Time Technoplast rose 2.91% to Rs 993.90 on reports the company is eyeing 2-3 acquisitions in the solar energy space to boost its presence in the renewable energy space.

Bata India surged 12.78% to Rs 289 after reports that Reliance Industries' subsidiary Reliance Retail has entered into a strategic alliance with the company to jump-start its footwear vertical.

France's CAC 40 index was down 0.46% to 5,601.28 whereas the FTSE 100 index in UK was down 0.54% to 6,442.20.

Asian markets were trading firm today, 31 December 2007. Hang Seng (up 1.62% at 27,812.65), Straits Times (up 1.06% at 3,482.30) and Taiwan Weighted (up 1.30% to 8,506.28) rose. Stock markets in Japan, China, Indonesia and South Korea were closed today, 31 December 2007.

US markets ended on a mixed note on Friday, 28 December 2007, after new home sales declined 9% in November 2007 to an annualized rate of 6,47,000 units. The Dow Jones industrial average was up marginally by 6 points at 13,366. The Nasdaq Composite index was down 2 points at 2,674.

India's wholesale price index rose 3.45% in the 12 months to 15 December 2007, lower than the previous week's rise of 3.65%, government data showed on Friday, 28 December 2007.

2007 Stocks, stats

 BSE Metal Ind up 122%, Cap Goods up 117%, Oil up 116%

BSE IT Index down 13.9%, BSE Auto Index up 3%

REL up 310%, RPL up 255%, SAIL up 220%, L&T up 189%

Tata Power up 162%, RIL up 127%, NALCO up 127%

Infosys down 21%, Tata Mot down 17.7%, Cipla dn 15%

FIIs pump in Rs.70,291cr in cash+F&O in 2007

MFs net buyers of Rs.6622cr in 2007

Jai Corp up 769%, IFCI up 663%, Ispat up 646%

GMDC up 611%, Nag Fert up 538%, India Info up 530%

Hexaware dn 57%, Subex dn 50%, Sundaram Clay dn 38%

List of Trading Holidays - 2008

 1. Mahashivratri 6th March 2008 Thursday


2. Id-E-Milad 20th March 2008 Thursday


3. Good Friday / Holi (1st Day) 21st March 2008 Friday


4. Ambedkar Jayanti 14th April 2008 Monday


5. Mahavir Jayanti 18th April 2008 Friday


6. Maharashtra Day 1st May 2008 Thursday


7. Buddha Purnima 19th May 2008 Monday


8. Independence Day 15th August 2008 Friday


9. Ganesh Chathurthi 3rd September 2008 Wednesday


10. Ramzan Id / Gandhi Jayanti 2nd October 2008 Thursday


11. Dasera 9th October 2008 Thursday


12. Diwali (Laxmi Pujan) 28th October 2008 Tuesday

13. Diwali ( Bhaubeez) 30th October 2008 Thursday

14. Gurunanak Jayanti 13th November 2008 Thursday


15. Bakri-Id 9th December 2008 Tuesday


16. Christmas 25th December 2008 Thursday

Facts about NSE and BSE

Market Cap: At the beginning of this bull run, the Indian stock market, as represented by NSE, was just another stock exchange in developing world. Though it was admired for its online trading platform, its gyrations hardly mattered to the world. Five years hence, NSE now ranks among the world's 10 biggest stock exchanges and India is inching closer to the status of being a global asset class. Since '03, NSE's market capitalisation has recorded a compounded annual growth rate (CAGR) of 55%.

Obviously, no global fund manager will have the courage to ignore such high returns. In contrast, developed markets have witnessed a CAGR of 10-15%. What's more, with each 10% rise in NSE's market cap, it is improving its ranking by one notch. Don't be surprised if India breaks into the top five in next 2-3 years. As the market cap rises, so does the market breadth and its ability to absorb greater amount of capital. Besides, it reduces the probability of wide fluctuations and price aberrations.

Number Of Trades: Critics may describe the rise as a fluke and temporary in nature, without realising the fact that the NSE is already the world's third busiest stock exchange in terms of the number of shares bought and sold. The bull run has been supported by an over 25% compounded growth in the number of trades. The fact that NSE can handle such a heavy load without a hitch proves the resilience of its system and raises the confidence of the global investment community in the Indian capital market. This will prove positive in attracting capital in Indian over the longer term.

Value Of Shares Traded: In October this year, shares worth $564 billion were traded on the NSE — almost two-and-a-half times more than at the beginning of '03. Though volume growth in India lags that of other emerging markets, it has now crossed a psychological barrier of half-a-trillion dollars.

2007...Expansion and modernization of ports

Several developmental projects got underway at the major ports during the year. The year also witnessed significant growth in traffic and capacity at ports and also the growth in Indian Tonnage. During the year, the Perspective Plans have been prepared for 12 Major Ports alongwith a consolidated National Development Plan.

Port Sector

Preparation of Perspective Plans for Major Ports
Pursuant to the decision of the Committee on Infrastructure (COI) headed by the Prime Minister, the 12 Major Ports engaged international consultants for preparation of their respective Perspective Plans (Business Plans) for 20 years which would include an Action Plan for 7 years also. The Perspective Plans have been prepared for 12 Ports alongwith a consolidated National Development Plan. These plans are expected to serve as guides for the Major Ports in preparing their Annual Plans and undertaking various developmental projects in future.

Growth in Traffic and Capacity
In the first eight months of financial year 2007-08 i.e. April-Nov., 2007, the traffic handled was 333.27 MT as against 294.60 MT in the corresponding period in the previous years registering a 13.13% increase

Mumbai Port Trust
Construction of Offshore Container Terminal on BoT basis at a estimated cost of Rs. 1228 crore. The Mumbai Port Trust's component of work of Rs. 366 crore.

Construction of 2nd Chemical Jetty at a cost of Rs. 116 crore through Internal Resources of Mumbai Port Trust approved by the GOI. It will have a capacity of 2.0 MTPA.

Redevelopment of 18 to 22 Indira Docks at an estimated cost of Rs. 355 cr. Has also been approved.

Paradip Port Trust

* The approval of the Government was granted to the Revised Cost Estimate proposal of 'Deepening of Channel at Paradip Port' on 29.11.2007.
* The proposal of Deep Draught Iron Ore Berth on BoT basis was approved by PPPAC (in principle) at estimated cost of Rs. 504.76 crores on 30.3.2007.
* The proposal of construction of Deep Draught Coal Berth on BoT basis was approved by the PPPAC (in principle) at an estimated cost of Rs. 612.22 crores on 30.3.2007.

Visakhapatnam Port Trust
Modernisation of Outer Harbour at VPT at an estimated cost of Rs. 185. 15 crore approved .

Tuticorin Port Trust

* Construction of Berth No.9 and North Cargo Berths are in progress.
* 'In-principle' of approval of Planning Commission obtained for Deepening of Channel and Basin project at Tuticorin Port.
* Approval of Public Private Partnership Appraisal Committee (PPPAC) received for the project of Development of 8th Berth as the Second Container Terminal at Tuticorin Port on BOT basis. Further action is under process.
* The old Tug Rajaji was replaced with a new Tug MT Tuticorin. TBP at total cost of Rs. 25 crores.

Iron Ore, Coal and Marine Liquid Terminals at Ennore Port

* A Marine Liquid Terminal of capacity 3 MTPA has been awarded at a Cost is Rs. 196.25 crores.
* EPL has also signed the Concession Agreement with the selected bidders for development of an 8 MTPA Coal Terminal and 12 MTPA Iron Ore Terminal on BOT basis. The estimated capital cost of these projects is Rs. 348.00 crores and Rs. 480.00 crores respectively.
* The Government has approved the project for undertaking Capital Dredging- Phase-I by EPL at an expenditure of Rs. 91 Crores.
* Contract for shore protection completed
* LOI issued for package covering Fishing Harbour Road, MOR road, northern segment of Inner Ring Road and 3 additional groint
* Project completion by December, 2008

Second Container Terminal at Chennai Port

* Estimated Cost - Rs. 495 crores
* License agreement signed on 7.3.2007 and Project will become operational from April, 2009
* Creation of additional open storage area by reclamation at an Estimated cost Rs. 200 crores

Modernisation of Chennai Port At an Estimated Cost – Rs. 200 crores

* Construction of new bridges across Ponnai River at Tiruvalam on NH-4 near Vellore
* Chennai-Ennore Port Road Connectivity of 30 Kms. Length with an estimated project cost of Rs. 309 crores. A progress of 9.7% in case of Phase I has been achieved upto November 2007.
* 4-laning of NH-7A connecting Tuticorin Port of 47.2 kms. Length with estimated project cost of Rs. 231 crores is under implementation.
* 4-laning of Tuticorin-Madurai Road (NH-45B) with road length of 144 kms at an estimated cost of Rs. 629 crores has been sanctioned, work awarded and Financial Close achieved.
* Doubling of Madurai-Dindigul section of railway line connecting Tuticorin Port of 62.06 kms. Length with estimated project cost of Rs. 126 crores has been sanctioned and the work has been awarded. Scheduled completion date is December, 2008.
* Project Report for Puttur-Attipattu Chord Line connecting Ennore Port 144 kms length at an estimated cost of Rs. 435 crores is under preparation.
* Elevated Expressway from Chennai Port to Maduravoyal on National Highway 4 is under consideration.

Kolkata Port Trust

* Construction of Berth No. 2 at a cost of Rs. 46.80 cr. has been completed which will add a capacity of 2 MTPA.
* Construction of Berth No. 13 at a cost of Rs. 39.56 cr. has been completed which will add a capacity of 2 MTPA.

Modern Deep Sea Port in West Bengal
For undertaking the development works, at Indian Ports a provision of Rs. 2000 crores is made in the 11th Five Year Plan period.

One of the initiative in this direction is the proposal for setting up of a deep draft port in West Bengal, keeping in view that the Major port of Kolkata, which suffers from draft limitations. The project as conceived envisages 'Development of a deep-sea port on the coastline of the State of West Bengal, India with the facility to receive and berth vessels requiring a minimum draft of 17m at all times and 50 years perspective'. D/O Shipping is working for selecting consultants for the Project.

Sethusamudram Ship Channel Project (SSCP)
Dredging work on a stretch of channel in Palk Strait viz. Package 'D' which was awarded to M/s Dredging Corporation of India (DCI) was under progress in 2006-07. Dredging Contract for dredging at Adam's Bridge and Southern Parts of Palk Bay/Palk Strait (Package 'A', 'B' & 'C') under Sethusamudram Ship Channel Project (SSCP), were also awarded to Dredging Corporation of India (DCI). About 28 Million Cu.mtrs. of dredging has been undertaken so far. Dredging in Adam's Bridge has been suspended in view of order of Hon'ble Supreme Court of India dated 31.08.2007 and 14.09.2007.

Rail Road Connectivity of Major Ports
During the year 2006-07, Railways completed projects for Rail connectivity to the Major Ports at Haldia, New Mangalore, Kandla and JNPT. The project for Road connectivity to VPT was also completed.

Rail Connectivity to International Container Transshipment Terminal at Vallarpadam, Cochin Port India has been approved on 22.3.2007 at cost of Rs. 245.67 crore.

Tsunami Rehabilitation Programme
Rs. 897.31 crores for Tsunami Rehabilitation Programme in Andaman & Nicobar Islands upto 2008-09 was approved and Rs. 31.02 crores was approved for other organizations under Deptt. of Shipping. Various projects are under implementation in Andaman & Nicobar Islands.

Model Concession Agreement (MCA) for Ports
The draft MCA for Public Private Partnership projects has been finalized and is under process for obtaining approval of the Government.

The Retirement Age of Port and Dock Workers and Employees was raised to 60 years from 58 w.e.f. 30.9.2007

DEPARTMENT OF SHIPPING

Growth in Tonnage
The Indian tonnage has been continuously growing during the last two years due to the introduction of Tonnage Tax for Shipping industry and also the current shipping boom. At present (1.12.2007) the tonnage is 9.06 million Gross Tonnage (GT) as against the last year's tonnage of 8.3 million GT.

Indian Maritime University
The establishment of Indian Maritime University is under active process.

Cruise Shipping policy
The National Cruise Shipping policy is on the anvil

IMO Council
-India won election to the IMO Council in Category'B' which second highest

Number of votes with 127 votes cast in favour out of 138 valid votes.

Shipping Corporation of India Ltd.
The Shipping Corporation of India (SCI) has placed orders for the construction of 16 vessels Also Tonnage Acquisition of two Capesize bulk carriers, four Panamax Bulk Carriers, two Container vessels in pipeline

The SCI won the Best International Solution Award and Shipowner/Operator of the year 2007 Award and also the " Shipower of the Year 2007".

Profit of Public Sector Undertakings

* Shipping Corporation of India (SCI), declared a profit of Rs.1015 crore for the year ended March, 2007 and declared a Dividend of 85%.
* Cochin Shipyard Ltd. (CSL) has made a profit of Rs.58.07 crores during 2006-07 which is more than 3 times of the previous years and also paid dividends of Rs.8.34 crore
* Hooghly Dock & Port Engineers Ltd. have posted operating profit of Rs.16.80 crore during 2006-07 after 2002-03 inspite of all odds.

Shipbuilding Sector
The Cochin Shipyard Ltd (CSL) achieved a production of 127022 DWT during six month of the year. The CSL has also achieved ship repair turnover of Rs.182 crore.

Ship repair activities have commenced in Southern NW works in HDPEL after a decade and some of the old machinery has been made functional / operational and the system has been restored.

The HDPEL has been able to obtain / won orders amidst stiff the orders from Indian Navy amounting to Rs.99.61 crores and of Rs.28 crores from Inland Waterways Authority of India for construction of Work Boats.

The Shipbuilding Subsidy scheme expired on 14th August,2007. In order to give a boost to Shipbuilding Industry, revival of the subsidy scheme is on anvil.

Central Inland Water Transport Corporation(CIWTC

Based on the recommendations of Board for Reconstruction of Public Sector Enterprises (BRPSE), the Govt. has taken a decision to disinvest the Central Inland Water Transport Corporation(CIWTC). The Rajabagan Dockyard (RBD) has been handed over to Garden Reach Shipbuilders & Eingineers (GRSE) and financial restructuring of CIWTC is being undertaken before the disinvestment. The action to assess the viability of Disinvestment of CIWTC is under process.

Inland Water Transport

Development of National Waterways.

* National Waterway (Lakhipur-Bhanga Stretch of the Barak river) Bill 2007was introduced in Lok Sabha on 29.8.2007 which has been referred to the Standing Committee..
* Protocol Renewal meeting held on 31st March and Ist May, 2007 in New Delhi between India and Bangladesh to review Indo-Bangladesh Protocol on Inland Water Transit and Trade (IWT&T). The Protocol was renewed for a period of 2 years upto 31.3.2009 after many short term renewals.

2007...Textile Industry

Textiles Sector has been identified as one of the priority sectors having high growth potential and higher multiplier effects for employment generation. Timely policy intervention can boost the competitiveness of this sector manifold, as the growth impetus prevailing in the sector is vibrant. Textile and Clothing industry plays a dominant role in the country's economy and has a prominent position in the textile world. It has a total market size of US $52 billion and accounts for 26% of the manufacturing sector, 20% of industrial production and 18% of industrial employment. It contributes 15% to gross export earnings and 4% to national GDP. It provides direct employment to about 35 million persons. Besides, another 50 million people are engaged in allied activities. Market size potential for the industry is envisaged at USD 115 bn by FY 2012.

One of the major events that took place during the year under review, was the organization of the two-day Tex-Summit 2007 by the Ministry of Textiles, actively supported by industry associations, etc. The aim was to involve the stake holders in formulating the appropriate programmes and policies, consistent with the emerging global challenges.The Summit was held not only to highlight the critical issues the textile industries had been faced with but to suggest the ways and means to surmount the perilous industry situation as well as to gear up for the global competitive trade requisites. Setting agenda for the growth path, the Hon'ble Prime Minister, inter- alia, announced following new initiatives:

1.

To set up a Technology Mission on Technical Textiles to take policy initiatives and to encourage new investment.
2.

To launch Investment Regions for the Textile Sector to consolidate the phenomenon of agglomeration, visible in textiles to further reduce transaction costs and enhance competitiveness. Concentrated, contiguous investment and production regions with high quality infrastructure and covering the entire value chain can help obviate, to an extent, the burden imposed by multiple levies, high power costs, bottlenecks in shipment and delays in legal clearances.
3.

Finalization of the proposal of Ministry of Textiles for Manpower and Skill Development through the Scheme of Neighborhood Apparel and Textile Training Institutes for Job Assurances (NATIJA) for training 4 million workers.
4.

To develop a focused strategy for Market Expansion and Product Diversification to facilitate better market access and greater value realization for products.
5.

To revitalize Handloom Cooperatives on the pattern of agricultural cooperatives.

Necessary proposals have since been initiated to implement the above schemes in consultation with the concerned Ministries and stakeholders.

Fiscal Reforms

*

The fiscal duty structure has been generally rationalized to achieve growth and maximum value addition within the country.
*

Except for mandatory excise duty on man-made filament yarns and man-made staple fibres, the whole value addition chain has been given an option of excise exemption. For those opting to pay the duty and thereby avail of duty credit, the applicable rate of excise duty is 4% for cotton textile items (i.e. yarns, fabrics, garments and made-ups) and 8% in respect of all other textile goods.
*

The import of a number of textile machinery items of spinning, weaving, processing and readymade garment sectors has been allowed at concessional customs duty of 5% and 10% as against normal customs duty of 12.5%.
*

The Government has de-reserved the hosiery and knitwear from the SSI sector.

Flagship Schemes
Two flagship schemes of the Ministry of Textiles; namely, the Technology Upgradation Fund Scheme (TUFS) and the Scheme for Integrated Textile Parks (SITP) have been approved for continuation in the Eleventh Five Year Plan. These schemes not only provide environment conducive to the growth of this sector but also enable the industry to expand and modernize its capacity.

To tide over the crisis emanating from the steep upsurge in Rupee value, the Government announced a set of measures in July, 2007 to provide relief to exporters by way of accelerated reimbursement of dues to exporters, reduction in the interest rate on pre-shipment and post-shipment credit and revision in drawback rates and Duty Entitlement Pass Book (DEPB) rates. In addition, the Government has also notified refund of service tax to exporters for use of services not in the nature of "input services". A further set of measures was announced in October 2007, thereby, inter alia, extending Service Tax relief in respect of more services; period of interest subvention on pre-shipment and post-shipment credit was also extended in respect of more sectors.

In November, 2007, the Government has announced further a relief package which reduces basic Customs Duty on certain items relating to textiles sector as well as refund of service tax paid by exporters on taxable services linked to exports, has been further extended. A support package for providing relief to export sectors, like Textiles, which have low import intensity, was also announced through additional subvention of 2% in pre-shipment and post-shipment credit to the textiles including Ready Made Garments and carpets but excluding man-made fibre.

Various measures taken by the Government will surely enable this sector to take rapid strides forward and capture a sizable share of the global textile trade.

Higher Investments
In the past three years, the textiles sector, including the clothing industry, witnessed investments to the tune of Rs 64,478.00 crores. The level of investments is expected to reach Rs 1,50,600.00 crores in 2011-2012.

Exports
Exports of textiles and clothing for the period ended 31st March, 2007 recorded an all time high of USD 18.73 billion. This was around 7% higher than the exports of Textiles and Clothing recorded in 2005-06. India continued to be among the highest suppliers of garments and apparel to the USA and EU countries. Although, a slump in the growth of exports of textiles and clothing has been recorded since the beginning of 2007, due to appreciation of the Indian rupee vis-à-vis the US dollar according to the T&C Industry, the Government has taken proactive steps to arrest this decline by introducing several fiscal measures intended to shore up the confidence of the exporters so that the export target of US$ 25 billion for 2007-08 could be achieved.

Technology Upgradation Fund Scheme (TUFS)
The garmenting, technical textiles and processing segments of the textiles industry have great potential to add value and generate employment. The Working Group on Textiles and Jute Industry for the XI Five Year Plan, constituted by the Planning Commission, has set a growth rate of 16% for the sector, projecting an investment of Rs. 150,600 crore in the Plan period.

In this context, it was decided to extend the Technology Upgradation Fund Scheme during the Eleventh Plan period, and to reframe some of the financial and operational parameters of the Scheme in respect of new loans. The modified techno-financial parameters of the Scheme are expected to infuse capital investment into the textiles sector, and help it capitalize on the vibrant and expanding global and domestic markets, through technology upgradation, cost effectiveness, quality production, efficiency and global competitiveness. It is estimated that this will ensure a growth rate of 16% in the sector. The modified structure of TUFS focuses on additional capacity building, better adoption of technology, and provides for a higher level of assistance to segments that have a larger potential for growth, like garmenting, technical textiles, and processing.

Scheme For Integrated Textiles Parks (SITP)
With a view to provide the industry with world-class infrastructure facilities for setting up their textile units, the Scheme for Integrated Textile Park (SITP) was approved in July 2005, by merging the Apparel Park for Exports Scheme (APES) and the Textile Centres Infrastructure Development Scheme (TCIDS) to create new textiles parks of international standards at potential growth centres. Primary objective of the SITP is to facilitate setting up of textiles units with desired infrastructure facilities.

As per target of the Xth Five Year Plan, 30 projects have been sanctioned. Estimated project cost (for common infrastructure and common facilities) is Rs. 2,893.42 crores, of which Government of India assistance under the scheme would be Rs. 1,054.76 crores. So far, an amount of Rs. 205 crores has been released under the Scheme. 2,186 entrepreneurs are scheduled to put up their units in these parks covering an area of 3,206 Acres. The estimated investment in these parks would be Rs. 15,258 crores and estimated annual production would be Rs 24,024 crores. After these Textiles Parks become functional, there will be employment generation for 5.45 lakh persons.

Taking into consideration the response to the scheme and the opportunities for the growth of textile industry in the quota free regime, the Ministry of Textiles has proposed for continuation of the scheme in the XIth Five Year Plan to develop 50 more textiles parks.

Jute & Jute Textiles Industry
As envisaged in the National Jute Policy 2005, Government approved the Jute Technology Mission, to be implemented during 2006-07 to 2010-11 at an estimated cost of Rs.355.55 crores, and establish a National Jute Board at Kolkata by merging the Jute Manufactures Development Council (JMDC) and the National Centre for Jute Diversification (NCJD). Steps have also been initiated to set up a National Institute of Natural Fibres and a National Jute and Jute Geo-Textiles Museum.

The Minimum Support Price (MSP) for raw jute has been increased to Rs.1055.00 per quintal in 2007-08 up from Rs.1000.00 per quintal in 2006-07 with a view to protect the jute farmers from seasonal uncertainties, and help to prevent distress sales by farmers.

Cotton Production
Due to focused support to cotton growers by the Government, the cotton production reached a record high of 280 lakh bales (170 kgs. each) in the 2006-07 cotton season (October-September), and is expected to increase at 310 lakh bales during 2008-09 as per Cotton Advisory Board. The productivity has increased from 472.17 Kg./hectare in 2005-06) to 520 Kg./ hectare in 2006-07.

Handlooms
Handlooms provide employment to more than 6.5 million persons. The production of cloth by the handlooms sector during 2006-07 was 6536 mn. sq. mtrs., and in 2007-08, it is estimated at 7074 mn. sq. mtrs. Under the Integrated Handloom Cluster Development Scheme, 20 handloom clusters have been set up in the first phase at an estimated cost of Rs. 40.00 crores.

In 2006-07, the Government identified 100 additional clusters for their integrated and holistic development at an outlay of Rs.50.00 crore. These clusters will be developed in a time frame of about three years. Diagnostic study of these clusters has already been completed. These clusters along with other additional clusters will be taken up for development under the new "Integrated Handlooms Development Scheme".

Handicrafts
The exports of handicrafts, including hand knotted carpets, during the year 2006-07 were Rs 20,963 crores (US$ 4619.20 Million) registering an increase of 19.04 % in Rupee terms and 16.08 % in dollar terms. The main export items which exhibited increase during 2006-07 were carpets (19.23%), Zari and Zari goods (13.08%), Art metalware (12.89%), and Miscellaneous handcrafted goods (5.52%). The export target for 2007-08 has been fixed at Rs. 25,278 crores. During the period April-November 2007, provisional export of handmade carpets & other Floor coverings has shown a decrease in rupee terms by 17.12% and decrease by 6.59% in US $ term in comparison to the export during April-November 2006. However, the export of other handicrafts items has shown decrease during the period under report by 14.01% in rupee terms and decrease by 3.07% in US $ terms compared to April - November 2006. The total provisional export of handicrafts including hand knotted carpet during April - November 2007 is estimated at Rs. 9607.97crores (US $ 2,361.60 millions), whereas the export April - November 2006 was of Rs. 11250.12 crores (US $ 2,453.36 millions) thus showing n decrease of 14.60 % in rupee terms and decrease of 3.75 % in US $ terms.

The sub-group on handicrafts recommended six generic schemes for the development of handicrafts in the country to be implemented during the XIth Five Year Plan. The scheme recommended for implementation during the XIth Five Year Plan are as under :

*

Baba Saheb Ambedkar Hastshilp Yojana
*

Design & Technical Up gradation
*

Marketing Support and Services schemes
*

Human Resource Development Scheme
*

Research & Development
*

Handicrafts Artisans Welfare Scheme

Out of six generic schemes proposed for implementation during 11th Five Year Plan, four schemes i.e Design and Technical up-gradation Scheme, Research and Development Scheme, Welfare and Human Resource Development Scheme have been launched for implementation. The approval of the remaining two schemes i.e. Baba Saheb Ambedkar Hastshilp Vikas Yojana (AHVY) and Marketing Support & Services Scheme is awaited.

National Textiles Corporation (NTC)
NTC is modernizing 22 Mills with latest state-of the-Art technology on its own. As on 30.09.2007, there are 16,818 employees in 52 Textile Mills ( after closure of 67 mills), with 9.55 lakh spindles, 577 looms producing 400 lakh kgs of yarn and 185 lakh mtrs. of cloth annually. So far, 55,642 employees have opted voluntary retirement under the Modified Voluntary Retirement Scheme (MVRS) and Rs.1951.13 crores have been paid as VRS compensation to all the employees of closed unviable mills and surplus employees of viable mills.

As per approved Modified Revival Schemes, the total cost of modernization of 22 mills was estimated at Rs.530 crores. Out of these 22 mills, modernization scheme is being implemented in 15 mills. The balance 7 mills proposed to be modernized are as under:

1.

2 mills will be modernized on turn-key basis. Contract given to M/s L.M.W., M/s Technopack and M/s Gherzias.
2.

Consultants in respect of 4 mills have been appointed for setting up of 4 green field projects by re-locating them from city to sub-urban areas.
3.

The work was delayed in. Cannanore Spg.Wvg.Mills, Mahe due to strike by workers,. Now the matter has been resolved and MoU has been signed between workers union & mill management. The orders for new machineries would be placed for modernisation when 90% utilization is achieved.
4.

Besides the above, there are 16+2 mills to be revived through Joint Venture Route. Out of this, MOU has been signed with 3 JV partners initially for 5 mills situated in Maharashtra State.
5.

NTC has submitted a modified revival to BIFR through IDBI on 24.9.07 to expand the capacity in NTC mills when the space is available. 12 (10+2) mills to be closed further when most of the workers opt for MVRS and no production activity in the mills.

2007..Highlights of 'Food Sector'

The food sector, in 2007, saw acceleration of procurement and movement of foodgrains, which in turn ensured adequate consumption-stocks.

A package was introduced to improve liquidity of sugar mills by defraying carry-over costs, offering concessional loans and export assistance to stabilize domestic sugar prices. This was primarily intended to ensure that the dues of sugarcane farmers are paid in time.

Effective steps have been taken to strengthen the PDS system and infusing transparency in it.

Efforts are on for sprucing up the efficiency in FCI.

Enactment of Warehousing (Development and Regulation) Act was another important initiative taken in 2007 with a view to ensure that the farmers are able to keep their goods in certified warehouses and use the warehouses receipts as a negotiable instrument. With the full implementation of this Act, farmers would find it easy to take loans from commercial banks against negotiable warehouse receipts and not resort to distress sales to take care of their urgent cash needs.

Details of the initiatives taken by the government in 2007 towards food sector management are as follows:

Initiatives in procurement:

* Procurement of wheat in rabi marketing season (RMS 2007-08) was 111.27 lakh tonnes as against 92.226 lakh tonnes in the previous year.
* Procurement of rice in 2006-07 was 250.761akh tonnes. In KHARIF MARKETING SEASON (KMS 2007-08), Procurement of rice is 111.23 lakh tonnes as against 113.25 lakh tonnes in the same period (as on 18th December, 2007).
* The minimum support price (MSP) plus bonus for paddy stands at Rs.745(common) and Rs.775 (Grade 'A') per quintal for this year as against RS.550 and Rs.580 per quintal in 2003-04. The MSP for wheat has been announced at Rs.1000 per quintal for the coming Rabi Season as against Rs.620 in 2003-04. The Government has, thus, provided the biggest increase in MSP to increase procurement of wheat and paddy and also to ensure that farmers get better prices for their produce.

Reduction in storage and distribution costs

* 100 lakh MT of decentralized procurement leading to saving on freight was achieved.
* Carrying cost has also been reduced through improved stock management.

Improving the warehousing system

* The National Policy on Bulk Handling, Storage and Transportation of Foodgrains is under implementation.
* The Warehousing (Development and Regulation) Act 2007 has been enacted to ensure that the farmers are able to keep their goods in certified warehouses and use the warehouses receipts as a negotiable instrument. The Act is proposed to be implemented during the year 2007-08. With the full implementation of this Act, farmers would find it easy to take loans from commercial banks against negotiable warehouse receipts and not resort to distress sales to take care of their urgent cash needs.
* 5.5. lakh MT capacity for Bulk Handling, storage and transportation facilities is being created on build-own-operate (BOO) basis through private sector participation; Silos each of 21akh MT have been constructed at Moga and Kaithal. The construction of field depots at New Mumbai, Chennai, Coimbatore and Bangalore is in progress.

Revamping/strengthening the public distribution system

* 2.43 crore households have been identified under Antyodaya Anna Yojana (AAY) households against targeted 2.50 crore poorest of the poor families, and issued with distinctive AA Y ration cards.
* Offtake of foodgrains under AA Y has increased more than 200% - at 86.61 Lakh MT in 2006-07 from 41.65 Lakh MT in 2003 -04.
* Beefing up of PDS system through nine-point Action Plan for streamlining the Targetted PDS (TDPS) - (i) 1 crore bogus/ineligible ration cards have been eliminated in 11 states, (ii) number of inspections has been increased, (iii) direct delivery of foodgrains to fair price shops is being done in 14 states and UTs, (iv) panchayati raj institutions are being involved in vigilance committees and running of fair price shops in 23 states & UTs, (v) BPL lists are being displayed at fair price shops in 27 states and UTs, (vi) computerisation of PDS has been initiated in 12 states, (vii) States & UTs are being persuaded to allow sale of non-PDS items by ration shops, and (viii) the government of India has removed restrictions on margins to be given to fair price shops.
* Revised Citizen's Charter has been issued for facilitating use of RTI provisions in relation to functioning of TPDS.
* Rationalization of allocation of wheat and rice for above poverty line (APL) category has been done to accommodate allocations within stocks in the central pool.

initiatives in the sugar sector

Efforts to reduce cane arrears -The decline in open market realization of non-levy sugar by about Rs. 450-600 per quintal in 2006-07 season severely constrained the capacity of sugar mills to liquidate cane arrears of about Rs. 2,600 cores (as on 30.9.2007) payable to the sugarcane farmers and accordingly the Government came out with a sugar package primarily intended to ensure that the dues of sugarcane farmers are paid in time. The provisions of the package are:

A.

1. Creation of buffer stock of 50 lakh tons for one year involving an annual subsidy of Rs. 880 crore (approx) to be borne from Sugar Development Fund.
2. Additional credit by banks estimated to provide additional credit of Rs. 978 crore (approx) on creation of buffer stock.
3. Export assistance estimated at Rs. 300 cores to defray expenditure on internal transport, marketing and handling charges and ocean freight @ Rs. 1350/- per tonne for sugar factories located in coastal areas and Rs. 1450/- per tonne for sugar factories located in non-coastal areas (subject to actuals for export by road/rail to neighboring countries) has been announced for a period of one year with effect from 19th April, 2007.
4. Facilitation of sugar exports - Procurement of Release Orders for export has been dispensed with from 31st July, 2007 to facilitate sugar exports and improve liquidity position of sugar companies.

B. Besides the above, the Government has recently taken the following decisions to further help sugar factories and sugarcane farmers:

1. Extending of moratorium period for outstanding term loans of co-operative sugar factories: announced in September 2005, from 2 years to upto 5 years (reckoned from 01.04.2005) and to include co-operative sugar mills in the modified NABARD package [not included in the earlier 2005 NABARD package], for availing the benefits of term loan restructuring. Harvesting and transport charges figuring in the books of accounts of sugar factories were also made eligible for restructuring to medium term loans at existing rates of interest. Interest subvention amount to be provided by the Central Government from budgetary support, to the banks for reduction in the rate of interest to 10% per annum on the restructured loans, has been increased from Rs. 560 crore to Rs. 600 crore (approx). The decision of the Government has already been conveyed to NABARD.
2. To give loans from banks under special guidelines to the sugar mills - in private, public and cooperative sectors - of an amount equivalent to the notional central excise duty payable on total production during 2006-07 and 2007-08 sugar years and to provide interest subvention to the banks on account of this loan through budgetary provisions by the central government to the extent of 5% and further 7% to be provided through the Sugar Development Fund, which could be replenished by a loan. Fresh lending to the cooperative sugar factories will be done against guarantees to be issued by the respective State Governments in case of units classified as NPAs
3. To extend export assistance scheme continuing at present, by one more year from 19th April, 2008 to 18th April 2009 to target an additional export of 3 million tons of sugar. The export assistance estimated at Rs. 420 crore (approx) will be provided from the Sugar Development Fund. This would help the sugar factories to make advance contracts for export of sugar.

C. Apart from the above, the Government has also taken the following decisions to improve the financial position of sugar factories:

1. Ethanol doping- Making 5% blending of ethanol with petrol mandatory across the country, except in J & K, North Eastern States and Island Territories and to make 10% blending optional from October, 2007 and mandatory from October, 2008, except in the areas mentioned above.
2. Uniform purchase price of Rs. 22.50 per litre ex-factory for supply of ethanol which can be implemented all over the country for three years.
3. Reduction of customs duty from 7.5 % to 5% on 'denatured alcohol' and from 10% to 5% on molasses and to implement the same only when mandatory ethanol blending at 5% level is operationalised in the country.
4. Permitting sugar factories to produce ethanol directly from sugarcane juice to augment availability of ethanol and reduce oversupply of sugar.

Imports of wheat:

* Wheat imports had to be resorted to ensure that the PDS is not starved of foodgrains and that there would be adequate supplies in the country. The Government, in March, 2007, decided to import upto 5 million tons of wheat to meet the shortfall in procurement. Accordingly, the STC was authorized to float tenders in the months of April, June and August. The Government considered the recommendations of the STC and authorized STC to place orders for 5.11 lakh tons of wheat in July, 2007 at the weighted average price of US$ 325.59 per ton and 7.95 lakh tons in September, 2007 at the weighted average price of US$ 389.45 per ton. It has been decided to import another about 5 lakh tonnes of wheat in November -December 2007, bringing the total imports this year to about 18 lakh tonnes.
* As on 30.11.2007, 5.63 lakh MT of imported wheat have arrived at the Indian Ports.

Improving the efficiency of the food corporation of India:

* To improve the efficiency of the FCI, the recommendations of M/s Mckinsey & Co. is under speedy implementation.
* FCI negotiated rate of interest from 10.95% in December, 2003 to 8.75% in 2006 on its cash credit limit for its operation, resulting in a saving of Rs. 1003 crore.
* Linear programming has been implemented to save on rail freight on movement of foodgrains.

2007...Steel production expected to touch 55.5 mn tons in FY08

Led by robust domestic demand the steel sector in the country has been witnessing extraordinary growth, making India the fifth largest crude steel producer in the world as against 8th position held three years back. Production of finished carbon has increased from 35.41 million tonnes in 2002-03 to 49.58 million tonnes in 2006 -07. During the first seven months of the current year from April to October 07, production of finished carbon is estimated to be about 29.37 million tonnes and is expected to be 55.5 million tonnes in FY 08. While exports have remained fairly stable between 2002-03 until last year at around 4.5 million tonnes, imports have increased from 1.51 million tonnes in 2002-03 to 4.10 million tonnes maintaining a rising trend this year, largely to fill the demand supply gap in the domestic market.

The demand for steel is expected to remain buoyant, above 10 per cent over the next five years, and in the most likely scenario the steel production capacity in the country is expected to touch 124 million tonnes by 2012. While the brownfield expansion plan over the next five years is expected to add 40.5 million tonnes capacity to the existing capacity of 56.84 million tonnes, the most likely scenario for addition to capacity by setting up of greenfield projects is expected to be 28.72 million tonnes taking the total capacity to 124.06 million tonnes. Furthermore, taking into consideration the intentions expressed by various steel investors including multinationals, domestic steel majors and FDIs, the likely capacity achievable by 2019-20 will be around 275 million tonnes.

The Public Sector Undertakings, Steel Authority of India Limited (SAIL) and Rashtriya Ispat Nigam Limited (RINL), are in the midst of ambitious expansion plans. The expansion plan would increase the capacity of SAIL from 14.6 million tonnes of hot metal to 26 million tonnes by 2010 at an estimated cost of around Rs. 53,000 crore. SAIL is also planning to expand its capacity further to 60 million tonnes per annum by 2020. In case of RINL, the expansion would increase its capacity from the present level of 3 million tonnes of hot metal to 6.3 million tonnes by 2009-10 at an estimated cost of around Rs.9,000 crore. RINL also plans to enhance capacity to 16 million tonnes per annum by 2020.

An MOU was signed between SAIL, RINL and NMDC this year for setting up a 4 million tonnes steel plant in Chhattisgarh. MECON has been appointed as consultant to prepare the site selection and economic feasibility report by April 2008. In a major move for implementing the project a tripartite MOU was signed between the Railway Ministry, Chhatisgarh Government and SAIL and NMDC for laying a 235 kilometer railway link between Dalli- Rajhara and Rowghat and further to Jagdalpur.

Acquisition of coking coal mines
In the wake of major expansion/investment plan, securing raw materials has been a major concern. By 2020, about 70 million tonnes of coking coal will be required of which 85 per cent will have to be imported. SAIL, RINL, Coal India Limited, NTPC and National Mineral Development Corporation signed a MOU in August this year to jointly promote a Special Purpose Vehicle for acquisition of coal mines/properties abroad. The union cabinet has approved the proposal of the Steel Ministry in November 2007.

Major initiatives of the Steel Ministry
With a view to facilitate speedy actualization of major steel investments in the country, the Prime Minister has approved the constitution of an Inter Ministerial Group to monitor and coordinate issues concerning major steel investments in the country. The IMG is chaired by Secretary, Steel with Secretaries of DIPP, Mines, Environment and Forest, Road Transport and Highways, Shipping, Member (Traffic), Railway Board and Chief Secretaries of concerned State Governments as its members. The broad terms of reference of the IMG are to review and coordinate measures for early completion of major steel capacities and to address various problems concerning infrastructure, availability of raw materials, speedy environment clearance, availability of other resources such as land and water and issues concerning rehabilitation.

A coordination committee consisting of representatives of steel industry, Ministry of Steel and Railway Board has been constituted to identify the major bottlenecks in railway facilities to steel sector. The Ministry of Steel has also commissioned a study with the Economic Research Unit to assess the infrastructure deficiencies and requirements in the major steel producing areas, particularly Orissa, Jharkhand and Chhatisgarh.

In order to make available quality steel to the consumers, it has been made mandatory for the producers and distributors to obtain quality certification under the Bureau of Indian Standards Act. The notification issued in November this year comes into force after a period of six months from the date of the notification. The notification applies to 17 steel products used in housing and construction, plates used in pressure vessel and Boilers, electrical sheets for transformers and Motors, galvanized sheets for roofing and paneling, tinplates used for packaging of food products etc. All manufacturers of the 17 steel products covered under this order will have to apply for license from the Bureau of Indian Standards for the use of the ISI mark within 45 days of the publication of the order. Any violation of the order will attract punitive action which includes jail terms upto one year and fine. This will go a long way in making available critical steel products of certified quality to consumers.

In a move to increase the use of lower grade iron ore, the Ministry of steel organized an international seminar with participation of about 200 experts from home and abroad. The objective was to use such ore by beneficiating the same and also to maximize the use of iron ore fines by pelletisation. The seminar which evoked considerable interest is expected to lead to addition of substantial green field capacity for producing pellets based on iron ore fines.

To ensure transparency in functioning, the vigilance machinery in PSUs has been strengthened as SAIL, RINL, NMDC, MECON, KIOCL, HSCL, BRL, MOIL have obtained ISO 9001- 2000 certification. During this year all the PSUs under the Ministry have implemented Integrity Pact. The Pact is considered an International best practice from Transparency International, for improving fairness and transparency in procurement and contracts with bidders/vendors for all major purchases.

Since its deregulation in 1991, the steel sector in the country is free to decide on its domestic and export prices. Following a demand from the steel consumers in the National Steel Consumers Council Meeting a Steel Price Monitoring Committee was formed with both officials and representatives from Steel industry and Steel consumers as its members. The Committee besides monitoring prices also advises the industry to decide their product mix as well as long term capacity additions, keeping in view the demand growth in long products. Producers were also advised to keep the ex-factory prices of long products in check and to maintain their export balance vis-à-vis the domestic demands for steel.

Both SAIL and RINL are expanding their dealership network to ensure availability of commonly used items of steel in rural areas. While SAIL has nearly 1300 dealers covering 602 districts across the country, RINL has dealers in 131 districts.

Corporate Social Responsibility (CSR)
All profitable Steel PSUs are committed to the cause of CSR and have earmarked 2 per cent of their distributable profits for CSR activities. The total budget is about Rs. 230 crore. They have contributed to flood relief measures. SAIL alone has organized 153 health camps during April – September 07 in six states of Bihar, Jharkhand, Chhatisgarh, Orissa, West Bengal and Tamil Nadu. All the major PSUs have been urged by the Steel Ministry to adopt villages around their plant and help develop these villages as model villages.

2007.Unprecedented growth of 'Telecom Sector'

Telecommunications has been able to provide state of the art world class infrastructure at globally competitive tariffs and reduce the digital divide by extending connectivity to the unconnected areas. About a quarter million handsets are being sold every day at prices which are within reach of the common man which in turn has made India one of the most sought after telecom manufacturing destinations.

The Indian Telecom sector is currently witnessing a resurgent growth and has emerged as the fastest growing telecom market in the world with the addition of over 7 million subscribers per month. With current subscriber base of over 250 million and a monthly addition of about 7 million, the half a billion mark is expected by the year 2010. The growth in this sector is also contributing significantly in the economic growth of the country. As against a target of 250 million telephone connections by December 2007, 264 million telephone connections have already been installed by November 2007. The overall Teledensity is 23.21.

The Group of Ministers on 'vacation of spectrum and raising resources for the purpose' has decided to constitute a Committee under the Chairmanship of National Security Advisor with Secretary (Telecom), Defence Secretary and representatives from Department of Space, Ministry of Defence and Department of Telecommunications as members to come up with a workable plan for alternate network to facilitate quick release of spectrum for mobile services without compromising the requirements of Defence and Space Services.

To sustain this growth trajectory in the sector, as a major policy initiative, DoT decided to set up seven Telecom Centres of Excellence in collaboration with major Telecom Service Providers and Indian Institutes of Technology, Indian Institute of Science and Indian Institute of Management in Public Private Partnership mode in different parts of country. The main focus of these centres shall be to enhance the talent pool, creating an environment of technology innovation, securing and managing our national information infrastructure during peace/disaster and ensuring general economic upliftment through increased connectivity at an affordable price. Six Memoranda of Understanding (MOUs) have been signed during the year.

"India Telecom 2007", an exhibition-cum-conference was held during 12-15th December 2007 in New Delhi. It was inaugurated by the Prime Minister. 'India Telecom Exhibition 2007' had more than 150 Exhibitors and participation from 30 countries. The exhibitors had put on display latest technology available in the world in the telecom industry which proved to be very useful for the Indian Telecom operators and manufacturers. It also provided opportunities for transfer of technology and setting up of R & D base in collaboration with international firms in the country.

The Department of Telecommunications has been actively encouraging the adoption of modern technologies. Pilot projects on the existing and emerging technologies have been undertaken including Wireless Broadband, 3G etc. Emphasis is being given to technologies having potential to improve rural connectivity.

The Broadband Policy announced in October 2004 has a vision of covering 20 million broadband subscribers by the end of 2010. The Year 2007 was christened as the 'Year of Broadband' for popularizing broadband services in villages. As on October 2007, about 3 million broadband connections have been provided in more than 1100 towns.

The Department of Telecommunication's thrust on rural telephony would go a long way in improving rural connectivity and reducing dissatisfaction in the rural areas which in turn would lead to a better internal security situation. 90 per cent of the villages have already been provided with Village Public Telephones (VPTs) under 'Bharat Nirman Programme', which is a focused programme to provide VPTs in 66,822 uncovered villages by June, 2008. As against this target, the number of villages provided with VPTs till October 2007 is 51,136. Apart from this 46,253 villages with a population exceeding 2,000 and without a Public phone facility other than the VPT were to be provided with Rural Community Phone (RCP). As on October 2007, number of RCPs installed is 37,911.

The Department of Telecommunications has also launched a scheme to provide support for setting up and managing 7871 infrastructure sites (towers) spread over 500 districts for provision of mobile services in the specified rural and remote areas where there is no existing fixed wireless or mobile coverage.

The low power usage (both outdoor and indoor) in the frequency band 5825-5875 MHz has been exempted from licensing requirement, within specified parameters. This should give a boost to usage of this band for Wi-Fi type services.

The Broad guidelines for 3rd Generation (3G) mobile services and Broadband Wireless Access (BWA) services have been released during the year.

Keeping in view the interest of consumers, the Department of Telecommunications has decided to introduce mobile number portability in the four metro cities i.e. Delhi, Mumbai, Kolkatta and Chennai in the initial phase. This will provide the customer the facility to retain the same number while switching over from one operator to another within the same service area. This facility is likely to be available to the mobile subscribers by the fourth quarter of 2008. This would make the telecom market truly competitive.

"Given the central aim of NTP 99 to ensure rapid expansion of tele-density" and the objective "to transform in a time bound manner, the telecommunications sector to a greater competitive environment in both urban and rural areas providing equal opportunities and level playing field for all players", the recommendations of TRAI that there should be no cap on the number of access provider in any service area has been considered by the Government and has been accepted

2007...Policies boost investment in Petrochemicals

In a major move to boost investment in the Petrochemical Sector the government came up with the National Policy on Petrochemicals and the Petroleum, Chemical and Petrochemical Investment Regions.

PCPIR Policy
The Petroleum, Chemical and Petrochemical Investment Regions (PCPIR) policy released on 8th May, 2007 envisages establishment of investment regions with world-class infrastructure with both center and states playing key roles. The Government of India will ensure availability of external physical infrastructure including rail, national highways, ports, airports and telecommunication facilities in a time bound manner through public-private partnership. The State Governments will be responsible for providing all physical infrastructure and utilities linkages like power, water, sewerage, health, safety and environmental concerns. It will give a thrust to industrialization in the regions by way of setting up of down-stream units.The PCPIR an investment region of 250 sq. kms is expected to have 40% area designated as processing area having manufacturing facilities for domestic and export led production of petroleum, associated logistics and other services & infrastructures and 60% area designated as non-processing area having commercial and other social & institutional infrastructure.Investment in the external infrastructure in each of the PCPIRs would be about Rs.8,000 crore to Rs.14,000 crore.

So far four proposals from the States of Andhra Pradesh, Karnataka, Gujarat and West Bengal have been received for hosting PCPIRs.

National Policy on Petrochemicals
The "National Policy on Petrochemicals" was released on 28th September, 2007.. The Policy resolution aims to increase investments in the sector, capture a slice of resurgent Asian demand in polymers, creating quality infrastructure to ensure value addition and increase exports.The other objectives include to increase the domestic demand and consumption of plastics and synthetic fibres and to increase the use of petrochemicals in thrust areas.The existing per capita domestic polymer consumption of 4.7 kg is likely to rise to 12 kg as compared to the existing world average of 25 kg. per capita. National Policy on Petrochemicals envisages an investment of Rs.36,000 crore in thenext five years

Assam Gas Cracker Project
A Joint Venture Company M/s Brahmaputra Cracker & Polymer Limited (BCPL) was incorporated on 8th January, 2007 following an agreementin this regard. The Prime Minister Dr. Manmohan Singh laid the foundation stone ofM/s BCPL of Assam Gas Cracker Project at Lepetkata in Dibrugarh district on April 09, 2007.BCPL signed the feedstock supply agreement with ONGC for this project on 15th October,2007. The 2,80,000 tonnes per annum gas cracker plant is being set up at the cost of Rs.5460 crore. The Department of Chemicals and Petrochemicals has released Rs.30 crore during the year 2007-08 towards Capital Subsidy for implementation of the project.The Ministry of Chemicals and Fertilisers will monitor the implementation of the project through a high-powered committee led by the Secretary, Department of Chemicals and Petrochemicals. This Project is likely to generate substantial employment both direct as well as indirect.

National Pharmaceutical Policy
The draft National Pharmaceutical Policy, 2006 submitted to the Cabinet on 29.12.2006 for its approval was referred to a Group of Ministers (GOM) on 11.01.2007 after consideration. A GOM has since been constituted and it held two meetings on 10.04.2007 and 12.09.2007.No time frame has been given forfinalisation of the pharma policy. In the meantime government has taken several steps to ensure availability of medicines at affordable prices. The Government has recommended to the Department of Revenue for exemption of Customs and Excise Duty for all anti cancer drugs.

Pharmaceutical Advisory Forum
The Pharmaceutical Advisory Forum set up by the Ministry of Chemical and Fertilisers has unanimously recommended that 20 per cent of the MP-LAD and MLA-LAD funds should be earmarked for medical treatment of poor people. This proposal found strong support from Parliamentary Consultative Committee of the Ministry. The Forum under the Chairmanship of Minister of Chemicals and Fertilisers constituted for a comprehensive dialogue amongst all the stakeholders on various issues concerning Drug Policy held its third meeting on 15-05-2007 and took the following decisions.

Working Group on Health Insurance, Drug Banks, District Illness Assistance Fund and Cancer Assistance has been constituted under the Chairmanship of JS(PI).ThisWorking Group met twice on 18.07.2007 and 04.10.2007.

Working Group on Consumer Awareness on Drug Prices, Generic Drugs and other related issues has been constituted under the Chairmanship of Chairman NPPA.This Working Group has given its recommendations to be furnished by NPPA in the form of a report.

The phase II of the Neem Project was launched on21st Feburary,2007 to promote Neem based,cost effective,ecofriendly biodegradable pesticide, an alternative to chemical pesticides.

NIPERs
The Union Cabinet has given in principle approval for setting up of six National Institutes of Pharmaceutical Education & Research (NIPER) at Ahmedabad (Gujarat), Hyderabad (Andhra Pradesh), Hajipur (Bihar), Kolkata (West Bengal), Rae Bareli (Uttar Pradesh) and Guwahati (Assam). Four of them at Ahmedabad, Hyderabad, Hajipur and Kolkata have started working from this academic session 2007-08.With these institutes there would be seven NIPERs in the country and each would cost approximately Rs. 200 crores. These national level institutes will cater to excellence in education and research in pharmaceutical sciences.

Fertiliser
Department of Fertilisers has taken a number of steps to ensure timely and adequate availability of fertilisers throughout the country.

Pricing Policy
The Government has approved the Stage III of New Pricing Policy on 1.2.2007 Urea units.The policy is based on the recommendations of the Alagh Committee.It aims at augmenting indigenous production (particularly nitrogenous fertiliser), inducing conversion from naptha, FO/LSHS to gas based plants, having concession schemes for decontrolled phosphatic and potassic fertilisers and encouraging investment in joint venture projects abroad where gas is readily available at reasonable prices.

Subsidy
Inspite of increase in cost of fertilisers the farmers have been kept insulated from its effects by increasing subsidy allocations.It is estimated that in last 5 years 88% of the increase in subsidy is due to sharp increase in international prices of fertilisers inputs and finished fertilisers while only 12 per cent increase is attributed to the enhanced consumption of fertilisers.The total fertiliser subsidy for this year 2007-08 is Rs. 47979 crores as compared to Rs. 25952 crore last year.

The issue of nutrient based subsidy/concession is under consideration of the Group of Ministers (GoM) and will apply to all phosphatic and Potassic fertilisers when approved.

Availability and movement of fertilisers
Many steps have been taken to ensure proper movement and distribution of fertilisers throughout the country. Under the new pricing scheme Stage III, the subsidy on urea will be paid only after it reaches the district level.The freight on movement of urea will be paid on actual rail and road leads. The Rail freight will be paid as per the actual expenditure on the basis of composite road transport index.75% of the month's requirement will be pre-positioned by the first of every month in each state.

Fertiliser Monitoring System (FMS)
For monitoring availability and movement of fertilisers the Department launched a web-based on-line Fertiliser Monitoring System (FMS) (www.urvarak.co.in) with effect from 22.01.07.This system enables to track dispatch, receipt and sale of fertiliser in each district of the country against the approved plan.

For further movement and distribution States have to put their machinery in place effectively.

FMS consist of 3 modules: Company module captures the data at the company end, Payment module deals with subsidy payment based on the monthly sale/dispatch made by the company.The public domain module is a website based interface with the public.

Revival of PSUs
Under the UPA Government's Common Minimum Programme efforts are on to revive sick industry by restructuring and modernizing public sector units.The Financial restructuring package for Fertilisers and Chemicals Travancore Ltd. (FACT), the only fertiliser company in Kerala was sanctioned.Pursuant to a decision taken on April 2007 the Government has initiated the process of examining the feasibility of revival of closed fertiliser units of HFC and FCI, subject to availability of gas. Specfically, Rashtriya Chemical Fertilisers (RCF)has shown interest in the Durgapur and Talchar Units; National Fertilisers Ltd. (NFL)in Barauni and Ramagundam Units; and Krishak Bharti Cooperative Ltd. (KRIBCO) have shown interest in the Gorakhpur unit. For FCIL-Sindri & Korba and HFCL-Haldia, the Chief Ministers of the states of unit's locations have been requested to consider equity participation.

Conference
Department of Fertilisers (DoF) oraganised a conference of the State Agriculture Minister on 29th January, 2007 to discuss issues relating to countrywide supply, distribution and availability of fertilisers.The meet proved to be a meaningful interaction and active coordination between Department of Fertilisers and the State Governments.The State Governments were advised to strengthen the state institutional agencies for streamlining the fertiliser supplies by coordinating with manufacturers, importers, dealers, farmers and transporters.

Joint Ventures
To augment the supply of fertiliser in the long run initial talks have been held for joint ventures for production of urea in Saudi Arabia, Kuwait, Nigeria, Egypt and Mozambik.The Government is considering joint venture project in phosphorous rich countrieslike Tunisia, Algeria, Morocco and Jordan.