What is Human Development Index? What is measured in HDI? Where does India rank as compared to other countries?

The Human Development Index (HDI) is a comparative measure of life expectancy, literacy, education, and standards of living for countries worldwide. It is a standard means of measuring well-being, especially child welfare. It is used to distinguish whether the country is a developed, a developing, or an underdeveloped country, and also to measure the impact of economic policies on quality of life. The index was developed in 1990 by Pakistani economist Mahbub ul Haq. Countries fall into three broad categories based on their HDI: high, medium, and low human development India ranks 126th with a HDI of 0.611 in the MEDIUM category.

What is FBT? Tell us more about it. How has the current Budget impacted FBT?
The taxation of perquisites -- or fringe benefits -- provided by an employer to his employees, in addition to the cash salary or wages paid, is fringe benefit tax. Any benefits -- or perks -- that employees (current or past) get as a result of their employment are to be taxed, but in this case in the hands of the employer. This includes employee compensation other than the wages, tips, health insurance, life insurance and pension plans. Fringe benefits as outlined in section 115WB of the Finance Bill mean any privilege, service, facility or amenity directly or indirectly provided by an employer to his employees (including former employees) by reason of their employment. They also include reimbursements, made by the employer either directly or indirectly to the employees for any purpose, contributions by the employer to an approved superannuation fund as well as any free or concessional tickets provided by the employer for private journeys undertaken by the employees or their family members. One important change in this Budget is the taxability of Employee Stock Options (ESOPs). Till now, ESOPs were taxable at the time of sale of shares in the hands of the employees. There was no perquisite taxation for employees. With the recent increasing trends of multinationals granting huge amount of incentive compensation to attract and retain talent in the form of ESOPs, the value of the ESOP benefit will fall under the Fringe Benefit Taxation (FBT) regime. The FBT would be leviable at 33.99% on the difference between the fair market value on the date of exercise of ESOPs and the exercise price. This would entail a significant outflow of taxes for the employer. For plans not compliant with the Central Government Guidelines, there is no perquisite taxation. But the employer would be subject to FBT on similar basis. Such expenditure would not be tax deductible for the employer.

What is VAT? Tell us more about it? Why was it opposed? Which states have implemented it? What has it replaced?
Value Added Tax (VAT) is a general consumption tax assessed on the value added to goods and services. It is a general tax that applies, in principle, to all commercial activities involving the production and distribution of goods and the provision of services. It is a consumption tax because it is borne ultimately by the final consumer. It is not a charge on companies. It is charged as a percentage of price, which means that the actual tax burden is visible at each stage in the production and distribution chain. It is collected fractionally, via a system of deductions whereby taxable persons can deduct from their VAT liability the amount of tax they have paid to other taxable persons on purchases for their business activities. This mechanism ensures that the tax is neutral regardless of how many transactions are involved. In other words, it is a multi-stage tax, levied only on value added at each stage in the chain of production of goods and services with the provision of a set-off for the tax paid at earlier stages in the chain. The objective is to avoid 'cascading', which can have a snowballing effect on prices. It is assumed that due to cross-checking in a multi-staged tax; tax evasion will be checked, resulting in higher revenues to the government. VAT has replaced the Central Sales Tax. VAT is regressive It is claimed that the tax is regressive, ie its burden falls disproportionately on the poor since the poor are likely to spend more of their income than the relatively rich person. VAT is too difficult to operate from the position of both the administration and business. (a) The administration It is often argued that VAT places a special burden on tax administration. However, it is worth noting that wherever VAT was introduced one of its effects was the rationalisation and simplification of the previous indirect tax system and its administration. Each of the previous indirect taxes such as customs duties, purchase tax and excise duties replaced by VAT had its own rate structure as well as a different tax base and separate administrative procedure. The consolidation and incorporation of numerous indirect taxes into the VAT would simplify the rate structure, tax base, and administration of the indirect tax system, thereby eliminating the overlapping auditing practices that had plagued those systems. In addition, the abolition of a number of alternative indirect taxes releases experienced personnel to focus on a single tax. It also means reduction in the number of forms used, legislation to be applied and returns and accounts with which the business person has to contend. (b) Business It is true that the VAT is collected from a larger number of firms than under any form of income tax or single state sales tax; to the typical smaller firms the complexities of the tax and the need for more extensive records (for example, to justify deductions) are likely to 2

prove serious. However, it is often overlooked that businesses already function with considerable administrative responsibility for a number of laws including the National Insurance Act and the Income Tax Act. Under the Income Tax (Accounts and Records) Regulations of 1980 every person, without exception is required to maintain detailed and extensive records of all its transactions. Compliance with this will certainly ensure compliance with VAT regulations, and since there is an actual benefit to be derived from accounting for VAT paid on input there is an incentive for proper record-keeping. As we have noted before, VAT also allows for the exemption of small businesses from the system. Under any form of sales taxation, small businesses have to be granted special treatment because of their inability to cope with the requirements of keeping adequate records which larger enterprises can handle at a reasonable cost. The intent of the special treatment is to reduce the administrative burden on small enterprises, but not the taxes that normally would be charged on the goods and services they supply. The revenue loss at the final link in the commercial cycle is limited only to the value added at that stage ,whereas in the case of income tax or sales tax the entire tax is lost. To recover the loss from exemptions, a flat tax on turnover may be applied. In the larger businesses with proper staff and computers, the task is really one of double entry book-keeping and any additional work is hardly ever noticed. VAT is inflationary Some businessmen seize almost any opportunity to raise prices, and the introduction of VAT certainly offers such an opportunity. However, temporary price controls, a careful setting of the rate of VAT and the significance of the taxes they replace should generally ensure that there is no increase if any in the cost of living. To the extent that they lead to a reduction in income tax, any price increases may be offset by increases in take-home pay. In any case, any price consequence is one time only and prices should stabilise thereafter. VAT favours the capital intensive firm It is also argued that VAT places a heavy direct impact of tax on the labour-intensive firm compared to the capital- intensive competitor, since the ratio of value added to selling price is greater for the former. This is a real problem for labour-intensive economies and industries.

States Welcoming VAT in India Except the following 8 states (among them 5 BJP ruled states), all the 21 states have given a welcome hug to VAT in India. Ramesh Chandra, secretary of the federal panel overseeing Indian VAT implementation said that other states will join within a month-and-a-half.

Uttar Pradesh Tamil Nadu (to join from July 1) Uttaranchal 3

BJP ruled states

Madhya Pradesh Rajasthan Jharkhand Gujarat Chattisgarh

Name some national/regional/local Trade Unions and their leaders?

AITUC
All India Trade Union Congress

CITU
Centre of Indian Trade Unions Founded Members Country Key people Office location 1970 2.8 million India M K Pandhe, president New Delhi, India

Founded Country Affiliation

1920 India WFTU

Key people Gurundas Dasgupta, secretary general Office location New Delhi, India

Are any political parties controlling trade unions? Which?

All India Central Council of Trade Unions (Communist Party of India (Marxist-Leninist) Liberation) All India Centre for Trade Unions (Communist Marxist Party) All India Centre of Trade Unions (Marxist Communist Party of India) All India Trade Union Congress (Communist Party of India) Anna Thozhil Sanga Peravai (All India Anna Dravida Munnetra Kazhagam) Bharatiya Kamgar Sena (Shiv Sena) Bharatiya Mazdoor Sangh (Rashtriya Swayamsevak Sangh) Centre for Indian Trade Unions (Communist Party of India (Marxist)) Hind Mazdoor Kisan Panchayat (Janata Dal (United)) Indian National Trade Union Congress (Indian National Congress) Labour Progressive Federation (Dravida Munnetra Kazhagam) 4

What is SENSEX? How do the stock markets function?

The BSE Sensex or Bombay Stock Exchange Sensitive Index is a value-weighted index composed of 30 stocks with the base April 1979 = 100. It consists of the 30 largest and most actively traded stocks, representative of various sectors, on the Bombay Stock Exchange. These companies account for around one-fifth of the market capitalization of the BSE. A stock market is a market for the trading of company stock, and derivatives of same; both of these are securities listed on a stock exchange as well as those only traded privately. Participants in the stock market range from small individual stock investors to large hedge fund traders, who can be based anywhere. Their orders usually end up with a professional at a stock exchange, who executes the order Actual trades are based on an auction market paradigm where a potential buyer bids a specific price for a stock and a potential seller asks a specific price for the stock. (Buying or selling at market means you will accept any bid price or ask price for the stock.) When the bid and ask prices match, a sale takes place on a first come first served basis if there are multiple bidders or askers at a given price.

Mittal Arcelor deal

A new steel giant is being created out of a bitter battle, after Arcelor agreed to a merger with its rival Mittal Steel in a deal valued at 26.8 billion euros, or $33.5 billion. The merger combines Arcelor a symbol of successful, pan-European cooperation and economic revival, with operations that span Belgium, France, Luxembourg and Spain with a fast-growing conglomerate founded by the India-born Lakshmi Mittal, who built a fortune turning around troubled steel plants in expanding markets from Trinidad to Kazakhstan. The deal is the latest sign that shareholder activism is reaching into the once staid boardrooms of Europe. The agreement to pair with Mittal caps a wrenching turnaround for Arcelor's board and its management, who once dismissed the idea of a merger with a "company of Indians" but were forced to backtrack after shareholders threatened to revolt. It has also silenced politicians in Europe who once criticized Mittal, raising hope that protectionist barriers may be softening in Europe. Mittal is offering cash and shares valued at 40.37 euros ($50.49) for each share of Arcelor, nearly double what the company was trading at when Mittal first made an offer in January. The new company will be named Arcelor-Mittal, and will have its headquarters in Luxembourg. Arcelor shareholders will have 50.6 percent of the new company. The merger is a milestone in the consolidation of the steel industry, creating a behemoth with three times the capacity of its nearest rival, Nippon Steel, and 10 percent of global market share. With 320,000 employees and an estimated $70 billion in revenue, the company will be the first steelmaker with more than 100 million tons of annual capacity enough for twice as many automobiles as the world makes every year. Arcelor's choice of Severstal as a white knight was problematic from the beginning. An 5

unconventional vote on the deal, which is scheduled for Friday, was immediately criticized. It allowed the deal to pass unless the meeting is attended by an unprecedented number of Arcelor shareholders and they voted it down.

Tata-Corus Deal
The most dramatic change in Indian business in the past decade has been the surge in ambition. Take Ratan Tata, the Mumbai-based tycoon who won the race to buy Britain's Corus Group, beating his Brazilian rival Benjamin Steinbruch in a closely contested auction. At 6.2 billion, or $12 billion, Tata Steel's offer may be a pygmy by U.S. standards of deal-making. It is, however, the largest ever attempted by an Indian company and, when completed, may just make the league table of Top 30 all-cash transactions globally. Ratan Tata calls it "a moment of great fulfillment." Shareholders in his company don't quite see it that way. Several analysts are suggesting that Tata has gone overboard in trying to best Steinbruch's Companhia Siderurgica Nacional, or CSN. Tata Steel raised its offer to 608 pence a share, from 455 pence initially. CSN bid 603 pence. The leveraged deal, they say, may have put the 100-year-old Indian company's finances at risk. Tata Steel shares fell almost 11%. Acquiring Corus will also give Tata access to European customers of steel, especially in the automobile and aerospace industries. Corus will benefit from access to Indian iron-ore reserves as well as a virgin market for steel. India's per capita steel consumption is still about 35 kilograms, or 77 pounds, a year, or about one-tenth of developedcountry levels. The Tata-Corus combination will be the world's fifth- biggest steel producer. What Ratan Tata is buying for $12 billion is the opportunity to be among the global leaders in a business that will probably become more profitable and less volatile in the years to come.

Warren Buffet
Buffett has amassed an enormous fortune from astute investments, particularly through the company Berkshire Hathaway, of which he is the largest shareholder and CEO. With an estimated current net worth of around US$52 billion, he is ranked by Forbes as the second-richest person in the world, behind Microsoft co-founder Bill Gates. In June 2006, he made a commitment to give away his fortune to charity, with 83% of it going to the Bill and Melinda Gates Foundation. The donation amounts to approximately $30 billion. Buffet's donation is said to be the largest in U.S. History. At the time of the announcement the donation was enough to more than double the size of the foundation. Buffett views himself as a capital allocator above anything else. His primary responsibility is to allocate capital to businesses with good economics and keep their existing management to lead the company. When Buffett acquires a controlling interest in a business, he makes clear to the owner the following: 6

He will not interfere with the running of the company. He will be responsible for hiring and setting the compensation of the top executive. Capital allocated to the business will have a price tag (a hurdle rate) attached. This process is to motivate owners to send excess capital that does not return more than its cost to Berkshire headquarters rather than investing it at low returns. This cash is then free to be invested in opportunities that offer higher returns.

Indian States & their Capitals.

1. Andhra Pradesh - Hyderabd 2. Arunachal Pradesh -Itanagar 3. Assam - Dispur 4. Bihar -Patna 5. Chhattisgarh- Raipur 6. Goa -Panaji 7. Gujarat - Gandhinagar 8. Haryana - Chandigarh 9. Himachal Pradesh - Shimla 10. Jammu and Kashmir - Srinagar 11. Jharkhand - Ranchi 12. Karnataka - Bengalooru 13. Kerala - Thiruvanthapuram 14. Madhya Pradesh -Bhopal 15. Maharashtra-Mumbai 16. Manipur - Imphal 17. Meghalaya - Shillong 18. Mizoram - Aizwal 19. Nagaland - Kohima 20. Orissa - Bhuvaneshwar 21. Punjab - Chandigarh 22. Rajasthan- Jaipur 23. Sikkim - Gangtok 24. Tamil Nadu - Chennai 25. Tripura - Agartala 26. Uttar Pradesh - Lucknow 27. Uttarakhand -Dehradun 28. West Bengal- Kolkata.

What are SEZ`s? SEZ Act? Controversy? Singur? Nandigram?

A duty free enclave which is deemed to be foreign territory in the geographic Indian area, as far as trade , operations, duties and tariffs are concerned. Thus a SEZ is a specifically delineated duty free enclave and shall be deemed to be a foreign territory for the purpose of trade operations and duties and tariffs. It was early 2000 when the then Union Commerce and Industry Minister, the late Murasoli Maran, undertook a trip to China to get first-hand experience of how the Middle Kingdom has come to become the darling of foreign investors. Included in his itinerary was a visit to special economic zones, which led to his announcement of SEZs in India through the annual Export-Import (Exim) Policy of March 2000. It is now almost six years since the concept has been part of economic policy. The country not only has greenfield SEZs, but also the erstwhile export processing zones (EPZs) converted into SEZs. The policy of the Central Government was to encourage and enable the establishment of SEZs in the private or joint sector in association with the States or by their governments themselves. Meanwhile, a lot of time was spent in evolving an all-encompassing legislation called the Special Economic Zones Bill, which was introduced in Parliament earlier this year and passed subsequently. The Special Economic Zones Act, 2005, got the Presidential imprimatur in June. The Act, however, is yet to be notified, even though there has been a tremendous surge in interest for the launch of SEZs, as is evident 7

from the growing number of big industrial houses applying to the Board of Approval for putting up SEZs in many areas. India's SEZs are no patch on their massive Chinese counterparts for a host of reasons. Partly, it is because China divided each region into an SEZ and granted preferential treatment to foreign ventures that enabled high-cost industrialised countries to use it as an attractive outsourcing platform for manufacturing activities. Though India has, of late, emerged as the preferred destination for back-office business process outsourcing in IT and software industry, it is way behind China as an emerging outsourcing platform for manufacturing activities. It is against this harsh reality that the new-fangled idea of SEZs could make a modest start in showcasing India's manufacturing prowess, attract foreign direct investment (FDI) and facilitate domestic manufacturers to make a foray into SEZs. Singur Controversy: It all began rather innocuously when the Government decided to acquire farm land and transfer it to the Tatas for setting up their much hyped motors factory for manufacturing the middle class dream car costing rupees one lakh only. No sooner was the process of acquiring land set in motion that the Chief Minister Buddhadeb Bhattacharya was hit by the gale wind of opposition from all directions. Many villagers have lost their land in the acquisition and every political party is ready to make the issue profitable, by fishing in the troubled waters as ever do. When BJP (Bharatiya Janata Party) President Rajnath Singh, Trinmool Congress chief Mamta Baneerjee and JD (U) leader Gorge Fernanades joined hands on the issue no one was surprised as they belonged to the old company of NDA. But what has Buddhadeb Bhattacharya worrying is the unexpected opposition from some extreme left outfits. Adding flame to the controversy, social activist Medha Patekar and Mamta Banerjee have come forward in support of the villagers and started indefinite hunger- strike. Chief Minister has appealed to Mamta to withdraw her fast but they are not prepared unless the process of land acquisition is stopped Trinmool Congress, hibernating since its defeat in the Assembly polls has threatened to government of prolonged agitation if the matter is not resolved to its satisfaction at the earliest. Meanwhile, BJP president Rajnath Singh also pitched in with his presence and getting arrested by the police force, during his visit to Singur. Declaring categorically that Mamta was not alone, he has found an occasion to make not only common cause but also sowed seeds for future political harvest. It is ironical, that the CPI(M) and its leader, Sitaram Yechuri, have been forced on the backfoot on the issue of compensation package though he claims that the offer by the Left Government is the best that has been offered. He assured that, compensation rates were not only the best in the country but took pains in emphasizing that the project doesnt exist under the SEZ (Special Economic Zone), which has drawn considerable controversy of its own. Nandigram Contoversy: The Nandigram SEZ controversy started when the West Bengal government decided that the Salim group of Indonesia would develop a special economic zone at Nandigram, a rural area in the district of Purba Medinipur. This would require the acquisition of over 14,000 acres of land. The special economic zone would be spread over 29 mouzas (villages) of which 27 are in Nandigram. Probodh Panda, a CPI MP from the district has said that most of the land to be acquired is multi crop and would 8

affect over 40,000 people. Social activist Medha Patkar had visited Nandigram on 7 December 2006 to protest against land acquisition. At least 14 people were killed in police firing at Nandigram in east Midnapore on March 14 2007 as the administration moved in to take charge of an area that had virtually been marooned since January 7 2007. The casualty, West Bengals worst in 30 years of Left Front rule, left the state stunned. Trinamool Congress estimates put the toll at 50. PWD minister Kshiti Goswami of the RSP, a Left Front constituent, said 50 bodies were taken to hospital, but it was impossible to ascertain how many were actually dead. The CPM has attempted to justify the police action in Nandigram, despite concerns among its Left Front partners threatened to quit the coalition government. In its justification, the CPM has recently stated that there was no notification for land acquisition in Nandigram, directly contradicting a notice circulated earlier by Lakshman Sett, CPM MP and strongman of Haldia across the Haldi river. Faced with stiff resistance from villagers unwilling to part with their land, the party says that land acquisition will not be made without the consent of the people of Nandigram. The proposed SEZ has ostensibly been shelved following the March 14 police action.

IA & AI proposed merger

Even though an empowered group of ministers is yet to take a final call on the proposed merger of AirIndia and Indian Airlines, global consultant Accenture has already begun working on the second stage of the two carriers integration. This is according to highly placed government sources. After providing four different options for the merger, Accenture, which was appointed for this purpose, has started to move on the amalgamation of the senior management of the two state-owned carriers. A special committee has been set up under Amod Sharma, director, personnel, Air-India, to look into this. Civil aviation minister Praful Patel is keen on the government approving the merger before the end of the current fiscal. Patel wants human resources issues to be resolved as early as possible as they are being touted as the biggest hurdle on way to merging the two entities. Air-India has 15,416 employees and Indian Airlines has over 18,300. The merged entity will be headed by a group CMD and have a board of directors. One-third of the board will be independent members who will be neither from Air-India nor Indian Airlines. The board will oversee six different business units for commercial passenger operations, MRO, cargo, ground-handling and in-flight services. As mandated by the GoM in its second meeting on January 15, Patel met the representatives of the employees of both the airlines on January 17. The minister is said to have explained to them the post-merger benefits and the reason behind the move. Detailed discussions were held on HR issues. Employees were assured of their future prospects and their apprehensions were addressed. The employee representatives were also assured that the merger would involve no retrenchment, no cuts or losses in pay, perks or allowances. The other major issues are tax exemptions and the high stamp duty incidence. Though the minister has said that the proposed cost of merger is between Rs 150-200 crore, analysts believe the bill will run into many hundred crores.

Microfinance Mohammed Yunus Grameen Bank

Microfinance is a term for the practice of providing financial services, such as microcredit, microsavings or microinsurance to poor people. By helping them to accumulate usably large sums of money, this 9

expands their choices and reduces the risks they face. Suggested by the name, most transactions involve small amounts of money, frequently less than 100 USD. Dr. Muhammad Yunus is a Bangladeshi banker and economist. He is famous for his successful application of the concept of microcredit, the extension of small loans to entrepreneurs too poor to qualify for traditional bank loans. Yunus is also the founder of Grameen Bank. In 2006, Yunus and the bank were jointly awarded the Nobel Peace Prize, "for their efforts to create economic and social development from below."Yunus himself has received several other international honors, including the ITU World Information Society Award, Ramon Magsaysay Award, the World Food Prize and the Sydney Peace Prize. He is the author of Banker to the Poor and a founding board member of Grameen Foundation. 1976, Yunus founded the Grameen Bank to make loans to poor Bangladeshis. The Grameen Bank has issued more than US$ 6 billion to 7 million borrowers. To ensure repayment, the bank uses a system of "solidarity groups". These small informal groups apply together for loans and its members act as coguarantors of repayment and support one another's efforts at economic self-advancement.As it has grown, the Grameen Bank has also developed other systems of alternate credit that serve the poor. In addition to microcredit, it offers education loans and housing loans as well as financing for fisheries and irrigation projects, venture capital, textiles, and other activities, along with other banking services such as savings. The success of the Grameen model has inspired similar efforts throughout the developing world and even in industrialized nations, including the United States. The Grameen model of micro financing has been emulated in 23 countries. Many, but not all, microcredit projects also retain its emphasis on lending specifically to women. More than 96% of Grameen loans have gone to women, who suffer disproportionately from poverty and who are more likely than men to devote their earnings to their families.

ILO
The International Labour Organization (ILO) is a specialized agency of the United Nations that deals with labour issues. Its headquarters are in Geneva, Switzerland. Founded in 1919, it was formed through the negotiations of the Treaty of Versailles, and was initially an agency of the League of Nations. It became a member of the UN system after the demise of the League and the formation of the UN at the end of World War II. The primary goal of the ILO today is to promote opportunities for women and men to obtain decent and productive work, in conditions of freedom, equity, security and human dignity." In working towards this goal, the organization seeks to promote employment creation, strengthen fundamental principles and rights at work - workers' rights, improve social protection, and promote social dialogue as well as provide relevant information, training and technical assistance.

World Bank
The World Bank Group is a group of five international organizations responsible for providing finance and advice to countries for the purposes of economic development and eliminating poverty. The Bank came into formal existence on 27 December 1945 following international ratification of the Bretton Woods agreements.Its five agencies are: International Bank for Reconstruction and Development (IBRD) International Finance Corporation (IFC) International Development Association (IDA) 10

Multilateral Investment Guarantee Agency (MIGA) International Centre for Settlement of Investment Disputes (ICSID)

Global warming
Global warming is the observed increase in the average temperature of the Earth's near-surface air and oceans in recent decades and its projected continuation. Most of the observed increase in globally averaged temperatures since the mid-20th century is very likely due to the observed increase in anthropogenic greenhouse gas concentrations," which leads to warming of the surface and lower atmosphere by increasing the greenhouse effect. An increase in global temperatures can in turn cause other changes, including a rising sea level and changes in the amount and pattern of precipitation. There may also be increases in the frequency and intensity of extreme weather events, though it is difficult to connect specific events to global warming. Other consequences include changes in agricultural yields, glacier retreat, reduced summer streamflows, species extinctions and increases in the ranges of disease vectors.

Kyoto protocol
The world's primary international agreement on combating global warming is the Kyoto Protocol. The Kyoto Protocol is an amendment to the United Nations Framework Convention on Climate Change (UNFCCC). Countries that ratify this protocol commit to reduce their emissions of CO2 and five other greenhouse gases, or engage in emissions trading if they maintain or increase emissions of these gases. Developing countries are exempt from meeting emission standards in Kyoto. This includes China and India, the second and third largest emitters of CO2, behind the United States. The International Energy Agency predicts China will exceed total U.S. emissions before 2010.

8 US Presidents
George Washington Abraham Lincoln Theodore Roosevelt Eisenhower John F Kennedy Richard Nixon Ronald Reagan George W Bush Sr. Bill Clinton

US Presidential Elections
Presidents and vice presidents of the United States are elected every four years indirectly through the United States Electoral College. They are the only nationally-elected offices in the United States, since executive officers and judges are appointed, United States Senators are elected at the state level, and United States Representatives are elected at the district level. On election day, the voting citizens select their preferred candidate, usually by voting for a slate of electors put forward by the candidate's party. The ballots for each voting citizen typically has the names of the candidates for president and vice president (running together on a ticket), and votes for those individuals translate at the state level into votes for the electors chosen from their respective parties. Although State Legislatures have the constitutional power to appoint slates of electors, all fifty states have established 11

popular election of presidential electors. In December, following the general election, Electors gather at their respective State capitals to cast their ballots, which are then transmitted to Congress under the care of the sitting Vice President of the United States. Originally, under Article II, the electors cast two votes for the office of president, the individual with the most votes becoming president, the runner up becoming vice president.

Green house gases and warming

Greenhouse gases are components of the atmosphere that contribute to the Greenhouse effect. Some greenhouse gases occur naturally in the atmosphere, while others result from human activities. Naturally occurring greenhouse gases include water vapor, carbon dioxide, methane, nitrous oxide, and ozone. Certain human activities add to the levels of most of these naturally occurring gases.

Ottavio Qattrochi Bofors

The Bofors Scandal was a major corruption scandal in India in the 1980s; the then Prime Minister Rajiv Gandhi and several others were accused of receiving kickbacks from Bofors AB for winning a bid to supply India's 155 mm field howitzer. The scale of the corruption was far worse than any that India had seen before, and directly led to the defeat of Gandhi's ruling Indian National Congress party in the November 1989 general elections. The name of the middleman associated with the scandal was Ottavio Quattrocchi, an Italian businessman who represented the petrochemicals firm Snamprogetti. Quattrocchi was close to the family of Prime Minister Rajiv Gandhi and emerged as a powerful broker in the '80s between big business and the Indian government. Even while the case was being investigated, Rajiv Gandhi was assassinated on May 21, 1991. In 1997, the Swiss banks released some 500 documents after years of legal wrangling and the Central Bureau of Investigation filed a case against Quattrocchi, Win Chadha, also naming Rajiv Gandhi, the defence secretary and a number of others. Several attempts to extradite Quattrocchi failed. Meanwhile February 5, 2004 the Delhi High Court quashed the charges of bribery against Rajiv Gandhi and others, but the case is still being tried on charges of cheating, causing wrongful loss to the Government, etc. on January 16, 2006, CBI claimed in an affidavit filed before the Supreme court that they were still pursuing extradition orders for Quattrocchi. The Interpol, at the request of the CBI, has a long standing red corner notice to arrest Quattrocchi. Quattrocchi was detained in Argentina on 6 February 2007, but the news of his detention was released by the CBI only on 23 February, stoking claims that it may have been suppressed by the ruling Congress government because of state elections. February 26: Quattrocchi has been released by Argentinian police. However, his passport has been impounded and he is not allowed to leave the country. There is no extradition treaty between India and Argentina, and the extradition case will be tried in Argentina on March 8, 2007. 12

Information on Natwar Singh Oil for Food scam Volcker report

The Paul Volcker Report made public a list of corporations and politicians across the world who benefited from an elaborate scam devised by now deposed Iraqi dictator Saddam Hussein to make money for his regime and presumably himself from the United Nations' Oil For Food Programme. The Volcker Committee -- set up by the United Nations to inquire into the Oil For Food Programme -named K Natwar Singh, who resigned from the Manmohan Singh Cabinet on December 6, the Congress party and several Indian companies as beneficiaries of the scandal. There is mounting evidence that the United Nations Oil-for-Food program, originally conceived as a means of providing humanitarian aid to the Iraqi people, was subverted by Saddam Hussein's regime and manipulated to help prop up the Iraqi dictator. Saddam's dictatorship was able to siphon off an estimated $10 billion from the Oil-for-Food program through oil smuggling and systematic thievery, by demanding illegal payments from companies buying Iraqi oil, and through kickbacks from those selling goods to Iraq-all under the noses of U.N. bureaucrats. The members of the U.N. staff administering the program have been accused of gross incompetence, mismanagement, and possible complicity with the Iraqi regime in perpetrating the biggest scandal in U.N. history. The hearings, combined with the IGC probe, have prompted U.N. Secretary General Kofi Annan to call for an "independent" inquiry, appointed by Annan himself. He has appointed a three-man commission headed by former U.S. Federal Reserve Chairman Paul Volcker, with South African Judge Richard Goldstone and Swiss lawyer Mark Pieth as the other two members. History of the Oil-for-Food Program The Security Council established the Oil-for-Food program in 1995 "as a temporary measure to provide for the humanitarian needs of the Iraqi people" while economic sanctions remained in place Of Iraq's population of 24 million, 60 percent were dependent on food shipments administered through Oil-for-Food. Oil-for-Food was the United Nations' biggest program anywhere in the world. As Claudia Rosett pointed out in The Wall Street Journal, the U.N. oversaw "a flow of funds averaging at least $15 billion a year, more than five times the U.N.'s core annual budget. Oil-for-Food was administered by 10 U.N. agencies employing over 1,000 staff internationally and in New York, as well as 3,000 Iraqi nationals. The U.N. collected a 2.2 percent commission on every barrel of oil sold, generating more than $1 billion in revenue. The program was shrouded in secrecy, with little transparency or public accountability. There was no system of external auditing or publishing of accounts. The identity of the banks holding the Iraqi funds was kept secret. Oil-for-Food became a cash cow for the U.N. and a lucrative source of contracts for Russian and French companies. The Times of London calculated that from 1996 to 2003, Russian companies received $7.3 billion of business through Oil-for-Food, and French firms earned $3.7 billion.4 K. Natwar Singh, India's External Affairs Minister, as well as the Congress Party are listed in the report of the Volcker Committee as "non-contractual beneficiaries" of Iraqi oil sales in 2001 under the United Nations Oil-for-Food Programme. Mr. Singh is shown in Table 3 of the Report as the non-contractual "beneficiary" in connection with 4 million barrels of oil allotted to Masefield AG, the contracting company, which actually lifted 1.936 million barrels out of this. 13

In addition, the Congress Party is listed in the same table as the non-contractual "beneficiary" in connection with 4 million barrels. The table also lists Reliance Petroleum Limited as a "beneficiary" from an allocation of 19 million barrels of oil to Alcon Petroleum Limited . "Under the Programme," the Volcker Committee report says, "the Government of Iraq sold $64.2 billion of oil to 248 companies. In turn, 3614 companies sold $34.5 billion of humanitarian goods to Iraq. The Report illustrates the manner in which Iraq manipulated the Programme to dispense contracts on the basis of political preference and to derive illicit payments from companies that obtained oil and humanitarian goods contracts." "Several of the tables," the report explains, "identify specific illicit payments made in connection with oil and humanitarian contracts under the Programme. Oil surcharges were paid in connection with the contracts of 139 companies, and humanitarian kickbacks were paid in connection with the contracts of 2,253 companies." The principal data sources are Ministries in the Government of Iraq and banks; in some cases information was provided by the company contractors. The Committee estimates the total "illicit income received by Iraq under the Programme" at $1.8 billion. The Volcker Committee report is at pains to clarify that the identification of a company's contract as "the subject of an illicit payment" does not necessarily mean that the company made, authorised, or knew about the payment.

Globalisation
Globalization refers to increasing global connectivity, integration and interdependence in the economic, social, technological, cultural, political, and ecological spheres. Theodore Levitt is usually credited with globalization's first use in an economic context.Globalization is an umbrella term and is perhaps best understood as a unitary process inclusive of many sub-processes that are increasingly binding people and the biosphere more tightly into one global system with one destiny. Globalization in short is how our world is becoming more and more like one country each and every day There are several definitions and all usually mention the increasing connectivity of economies and ways of life across the world. The Encyclopedia Britannica says that globalization is the "process by which the experience of everyday life ... is becoming standardized around the world." While some scholars and observers of globalization stress convergence of patterns of production and consumption and a resulting homogenization of culture, others stress that globalization has the potential to take many diverse forms.[2] In economics, a broad definition is that globalization is the convergence of prices, products, wages, rates of interest and profits toward developed country norms.Globalization of the economy depends on the role of human migration, international trade, movement of capital, and integration of financial markets. The International Monetary Fund notes the growing economic interdependence of countries worldwide through increasing volume and variety of cross-border transactions, free international capital flows, and more rapid and widespread diffusion of technology.

What is MAT? Which companies have been impacted by it? Why?

Minimum Alternative Tax (MAT) This is a simple system by which small traders and business persons can make a self assessment , and decide whether they are liable to pay tax and pay just a fixed sum which is small enough to encourage tax 14

compliance. It has been a great success in India and a lot of such assessees can be seen proudly displaying their paid Chalan at the shop premises. Which goes to prove that the simpler the tax administration better will be the compliance Normally, a comapny is liable to pay tax on the income computed in accordance with the provisions of the income tax Act, but the profit and loss account of the company is prepared as per provisions of the Companies Act. There were large number of companies who had book profits as per their profit and loss account but were not paying any tax because income computed as per provisions of the income tax act was either nil or negative or insignificant. In such case, although the companies were showing book profits and declaring dividends to the shareholders, they were not paying any income tax. These companies are popularly known as Zero Tax companies. Inorder to bring such companies under the income tax act net, section 115JA was introduced w.e.f assessment year 1997-98. According to this section, if the taxable income of a company computed under this Act, in respect of previous year 1996-97 and onwards is less than 30 % of its book profits, the total income of such company is chargeable to tax for the relevant previous year shall be deemed to an amount equal to 30 % of such book profits. A new tax credit scheme is introduced by which MAT paid can be carried forward for set-off against regular tax payable during the subsequent five year period subject to certain conditions, as under:

When a company pays tax under MAT, the tax credit earned by it shall be an amount which is the difference between the amount payable under MAT and the regular tax. Tegular tax in this case means the tax payable on the basis of normal computation of total income of the company. MAT credit will be allowed carry forward facility for a period of five assessment years immediately succeeding the assessment year in which MAT is paid. Unabsorbed MAT credit will be allowed to be accumulated subject to the five year carry forward limit. In the assessment year when regular tax becomes payable, the difference between the regular tax and the tax computed under MAT for that year will be set off against the MAT credit available.

The credit allowed will not bear any interest. Current trends 115JA was replaced by section 115JB for assessment years 2001-02 onwards. As per this section, your normal tax payable is to be compared with 7.5% of your book profits and you are required to pay the higher of the two. From assessment year 2007-2008 onwards your normal tax payable will be compared with 10% of book profits are your required to pay the higher of the two. Credit for MAT paid can be carried forward under section 115JAA for 5 year Companies impacted by it India's export-oriented enterprises such as in the thriving software outsourcing industry were brought back under the tax net in the annual Union budget. Finance Minister P Chidambaram proposed to extend minimum alternate tax (MAT) to firms claiming deductions under Sections 10A and 10B of the Income Tax Act. Now, they must pay the minimum tax, still lower than a full-fledged corporate income tax, practically seeing an end to their tax holiday status conferred years ago. 15

Chidambaram, in his earlier tenure as finance minister a decade ago, introduced MAT as a way of taxing companies that weren't paying any tax by availing various concessions. But a 10-year tax holiday had still kept the software industry from its coverage.

Indias Noble Prize Winners

RABINDRANATH TAGORE (1913) -Literature Popularly known as Gurudev, India's most famous writer and poet was awarded the Nobel Prize in recognition of his work Geetanjali, a collection of poems, in 1913. CHANDRASHEKAR VENKATA RAMAN (1930) -Physics C.V. Raman won the Nobel Prize for an important research in the field of optics (light). Raman had found that diffused light contained rays of other wavelengths-what is now popularly known as Raman Effect. His theory explains why the frequency of light passing through a transparent medium changes. DR.HARGOBIND KHORANA (1968) -Medicine It was his study of the human genetic code and the role it plays in protein synthesis that got him the Nobel Prize. MOTHER TERESA (1979) -The Nobel Peace Prize Mother Teresa was born Agnes Gonxha Bojaxhiu at Skopje, now in Yugoslavia. She wanted to become a nun and joined the Irish order of the Sisters of Loretto (at Dublin) in 1928. It is as a nun that Agnes came Calcutta in 1929. Here she was extremely touched by the misery of the poor and the sick. She decided to dedicate her life to serving them. She then founded a group of similar minded people called the Missionaries of Charity and set up Nirmal Hriday a center where she took care of the dying, the lepers and other people who had been left alone on the streets of Calcutta to die. Today her group has centers all over the world. SUBRAMANIAN CHANDRASHEKAR (1983)-Physics He developed a theory on white dwarf stars forecasts the limit of mass that dwarf stars can have.This limit is called as Chandreshekhars LIMIT . His Theory also explains the final stages of the evolution of stars. AMARTYA SEN (1998)-Economics Prof. Amartya Sen is the first Asian to win the Economics Nobel. He is one of the most respected economics thinker in the world. He is also an excellent teacher. He won the Nobel for his work in the area of economic theory. Some of his most important work is in the areas of poverty, democracy, development and social welfare. 16

Indian authors who have bagged international awards.

Arundhati Roy was awarded the 1997 Booker Prize for her fiction The God of Small Things. The award carried a prize of US$1 million and a citation that noted: 'The book keeps all the promises that it makes.' In 2002, she won the LannanFoundation's Cultural Freedom Award for her work "about civil societies that are adversely affected by the worlds most powerful governments and corporations" and "to celebrate her life and her ongoing work in the struggle for freedom, justice and cultural diversity." Roy was awarded the Sydney Peace Prize in May 2004 for her work in social campaigns and her advocacy of violence. In January 2006 she was awarded the Sahitya Akademi award for her collection of essays on contemporary issues, The Algebra of Infinite Justice, but she declined to accept it Salman Rushdie-Awards that Rushdie has won include the following: Booker Prize for Fiction- Booker Prize 1981 Midnight Children

James Tait Black Memorial Prize (Fiction) Arts Council Writers' Award English-Speaking Union Award Booker of Bookers or the best novel among the Booker Prize winners for Fiction Prix du Meilleur Livre Etranger Whitbread Novel Award Writers' Guild Award (Children's Book)

Ruth Prawer Jhabvala R. K. Narayan Jhumpa Lahiri- Her debut collection, Interpreter of Maladies, won the 2000 Pulitzer Prize for fiction. It was translated into twenty-nine languages and became a bestseller both in the United States and abroad. In addition to the Pulitzer, it received the PEN/Hemingway Award, the New Yorker Debut of the Year award, an American Academy of Arts and Letters Addison Metcalf Award, and a nomination for the Los Angeles Times Book Prize. Lahiri was awarded a Guggenheim Fellowship in 2002. The Namesake is Jhumpa Lahiri's first novel. Rohinton Mistry Vikram Seth :Prizes and awards 1983 Thomas Cook Travel Book Award From Heaven Lake: Travels Through Sinkiang and Tibet 1985 Commonwealth Poetry Prize (Asia) The Humble Administrator's Garden 1993 Irish Times International Fiction Prize (shortlist) A Suitable Boy 1994 Commonwealth Writers Prize (Overall Winner, Best Book) A Suitable Boy 1994 WH Smith Literary Award A Suitable Boy 2001 EMMA (BT Ethnic and Multicultural Media Award) for Best Book/Novel An Equal Music Anita Desai. India born novelist Kiran Desai has bagged the National Book Critics Circle Award for Fiction for her Bestseller The Inheritance of Loss in 2007. 17

6 Union & State Ministers. CMs STATES

J&K -Ghulam Nabi Azad HARYANA Bhupinder Singh Hooda Maharashtra - Shri Vilasrao Deshmukh Karnataka- H.D.Kumaraswamy Uttar Pradesh -Mulayam Singh Yadav Orissa Mr. Naveen Patnaik Tamil Nadu - Dr. Kalaignar M Karunanidhi Rajasthan - Smt. Vasundhara Raje Madhya Pradesh-Shri Shivraj Singh Chouhan Gujarat- Shri Narendra Modi Bihar - Nitish kumar. Assam Tarun Kumar Gogoi Jharkhand- Madhu khoda. Punjab- Sardar Prakash Singh Badal

UNION TERRITORIES
Delhi Sheila Dixit. Chandigarh- S.F. Rodrigues.(Administrator) Daman&Diu/ Dadra Nagar Haveli- Arun Mathur(Administrator) Lakshadweep Parimal Rai(Administrator) Pondicherry N.Rangaswamy.

Premiers of important countries

US -President -Gorge.W.Bush Russia- President Vladmir Putin Canada- PM- Paul Edgar Philippe Martin, India PM Dr. Manmohan Singh Pakistan President Gen.Pervez Musharaf. Germany Chancellor Angela Merkel UK PM - Tony Blair France Jacques Chirac. Italy- Prime Minister Romano Prodi' Japan PM Shinzo Abe China- Premeir Wen Jiabao Brazil Luiz Inacio Lula D Silva Australia PM John Howard

INDO US Nuke Deal

3 March 2006 On his maiden visit to India, US President George W. Bush yesterday secured a historic nuclear energy agreement between the two countries. The recent US-India Civilian Nuclear Cooperation Initiative is indicative of a new era in US-India cooperation. This initiative will bear fruit for all the citizens of our two great nations. It will go a long 18

way in putting behind us a history of misunderstanding and distrust over our respective nuclear motives and capabilities. The US-India civilian nuclear cooperation initiative is born of trust and mutual respect and recognises that India has been a responsible steward of a sophisticated nuclear programme for more than three decades. The facts are clear: India and the world need clean, efficient power. Cooperation between the US and India in this vital area will enable the rapid development and deployment of this technology to the benefit of Indians and citizens of the world at every level. India will be opened to nuclear trade with the US as its strengthens its controls against proliferation, accepts UN safeguards on its civil programme, and holds itself ready to join in a treaty stopping the production of fissionable material for use in weapons. Top former intelligence official has said India would have the capacity to make about 50 nuclear warheads a year as it would be able to retain six reactors outside safeguards envisaged under the India-US nuclear agreement. "Under the deal, India shall retain six unsafeguarded reactors and shall have the capability of producing nearly 50 nuclear warheads per year," J K Sinha, former Additional Secretary in the Research and Analyses Wing (R&AW) of the Cabinet Secretariat, has said. Sinha said the assurance of supply of nuclear fuel from the US as well as the Nuclear Suppliers Group (NSG) would free India's existing capacity to produce highly enriched uranium and plutonium for its nuclear weapons programme. In an article in "Indian Defence Review", Sinha said an estimate showed that "the exempted reactors would be able to produce 130 kg of weapon-grade plutonium per year. Considering that just three to five kg of plutonium-239 is enough to manufacture a bomb of the kind that was dropped on Hiroshima and Nagasaki", he observed that the destructive capacity of India's nuclear arsenal was "self-evident". Maintaining that there should be no doubt that India would continue to produce fissile material for nuclear weapons; he said the entire Fast Breeder Reactor (FBR) programme was out of the safeguards ambit. "The potential of the FBR technology is huge for India's nuclear weapons programme and for power generation," he said. Observing that it would be for India to designate which of its indigenously manufactured reactors would remain outside the purview of safeguards, the former R&AW official said, "thus, the contention that the concept of ''dynamic credible minimum nuclear deterrence'' will be compromised and the nuclear deal will cap India's weapons capability, appears patently erroneous with no relevance to ground realities." In fact, cooperation of the world community giving India access to the latest technology in the nuclear field following the India-US deal "will only enhance India's capabilities to sustain dynamic nuclear deterrence vis--vis Pakistan and China", he said. Sinha also focussed on the urgent need for the Indian Navy to acquire nuclear submarines that could travel long distances and remain submerged for long periods with the least possibility of detection and destruction. "India must concentrate its efforts on manufacturing and acquiring nuclear submarines" and the India-US deal, though not directly, would help it in its ongoing efforts to acquire them. He also stressed the need for improving India's land- based missile capability "by leaps and bounds to meaningfully support the concept of dynamic nuclear deterrence within the framework of No First Use to which India stands committed".

Cola Controversy.
The pesticide-in-cola controversy which erupted in India earlier this month leading to a drop of sales of carbonated beverages manufactured by cola giants, Coca-Cola and Pepsico, by as much as 15 percent, denting their brand images in one of the world's largest and fastest growing consumer markets, has turned out to be a valuable lesson in crisis management. Prompted by the findings of the Delhi-based NGO, the Centre for Science and Environment (CSE) which reported on August 2 that samples of soft drinks manufactured by the cola giants contained more than permissible limits of pesticides, several states across the nation imposed ban on the sale of the soft drinks in schools, colleges, government offices and hospitals. The leftist-party ruled government of Kerela took the 19

extreme step by even calling for a ban on its production within the state, without even verifying the truth of the NGO's findings. Even as the U.S. soft drink heavyweights spluttered and fumed, letting out a barrage of denials and waved sponsored test results from foreign laboratories that went against the claims of the CSE, they witnessed their sales fall slowly but steadily in the $ 2 billion Indian soft drink market. But, with the Central Government's recent declaration that CSE's findings were "inconclusive" and "erroneous," the cola giants may soon see their fortunes turn. Nonetheless, public relation experts are claiming that this controversy, which may take a long time to die down, provides a valuable lesson in crisis managament. According to public relation experts, the cola companies did not respond to the pesticide allegations quickly enough, which resulted somewhat in erosion of the consumers' confidence. "They (cola companies) did not expect that the controversy would snowball into a national scandal and misjudged the speed with which local politicians would seize on an Indian environmental group's report to attack a powerful global brands," said Kapil Sood, a public relation expert. "They underestimated the political sensitivity to foreign influences in India and failed to respond swiftly enough to soothe the anxieties of their customers." The consequence? A fall in sale of soft drinks by as much as 15 percent in the $ 2 billion soft drinks market within the past few weeks. Moreover, instead of immediately challenging the findings of CSE, the cola companies chose to go into a huddle, maintaining a dignified silence and working out legal and public relations issues. "They chose to wait for the results of tests conducted by laboratories commissioned by them instead of bluntly dismissing the findings of the NGO," said Vineet Agar, a market analyst. "They became bogged down in the technicalities of the allegations, instead of focusing on winning back the sympathy of their customers. Their delay cost them dearly giving rise to consumer suspicion." "They got behind the curve and now they are chasing the crisis," said Richard Levick, president and chief executive of Levick Strategic Communications, which is based in the United States and which specializes in advising businesses in this kind of crisis. Coca-Cola and PepsiCo executives have also admitted that their delay in responding to the NGO's findings had eroded consumer confidence. "We have some way to go to restore consumer confidence in our brands," said Kari Bjorhus, Coca-Cola's communications director. PepsiCo India's chairman, Rajiv Bakshi has also admitted that there was much work to be done. "Has our side of the story got across to the consumer yet?" he said. "Not really. I am concerned about that." Though Coca-Cola group's communications director, Kenth Kaerhoeg said that they were "a little surprised and disappointed by the bans" and had "expected politicians to make their decisions on the basis of facts and not reports," Suhel Seth, leading adman and marketing wizard of India, said that the cola majors should have known better. "Fringe politicians will continue to be publicly hostile to big Western companies, regardless of how eager they are for their investment," he said. "Large multinational corporations are still seen by pockets of consumers and opinion makers as marauders and not as contributors." 20

According to Seth, another mistake the cola majors made was maintain silence hoping that the crisis would blow over. "In the U.S. and the West there is a certain dignity to silence," he said. "But here people interpret silence as guilt. You have to roll up your sleeves and get into a street fight. Coke and Pepsi didn't understand that." "They underestimated their own importance," Levick agreed, noting that the companies had completely failed to take into account the political repercussions of this kind of controversy in a developing country. "Much more than companies, they are symbols of the West. They don't realize how powerful that is." "The market abhors a vacuum. Consumers these days need information, they need to know the truth," explained Sumit Tandon, a public relations analyst. "This is what the cola companies failed to provide." However, with the Central Government rubbishing the findings of CSE, Coca-Cola and PepsiCo are working overtime to win back the consumers' confidence by printing advertisements with slogans like, "Is there anything safer for you to drink?" and inviting the general public to visit their plants, see for themselves how the beverages were made and reassure themselves about the stringent quality standards followed by the companies. "The public sympathy lies with these multinationals," said Raj Samant who has been drinking cola since 1980s. "Similar charges were leveled against these companies by CSE in 2003but nothing could be proved and they were vindicated." "Now, the Central Government has also given them a clean chit," said Samant. "CSE is losing groundsoon the states have to reverse their bans." "If CSE sticks to its claims, the cola companies will soon be riding on a wave of public sympathy," explained Anand Mullick, owner of a posh restaurant in Delhi. "If CSE withdraws its claims, the cola companies will be proved right once again whatever action the NGO takes now will enable the cola companies to strengthen their brand images and recover lost ground." Some market watchers feel that the cola majors can even sue the NGO for damages. "Certainly the cola majors stand vindicated post the (government's) findings, but the issue is a larger one concerning the entire food & beverage category," said Harish Bijoor, brand consultant. According to Bijoor, the brand images of both Coca-Cola and PepsiCo have been affected by CSE. "The state governments are also to be blamed for the ban imposed on the cola majors," he said, adding that the cola companies could take legal action against the NGO for the damages done to their goodwill. "For Coke and Pepsi it's a matter of survival and this is the time they should put their foot down. This is not the time for soft peddling. CSE should to be charged for damages done to the cola brands," said Shripad Nadkarni, an independent marketing consultant, and ex-marketing head, Coca-Cola, adding that both the soft drinks majors should use the government's findings to educate the consumers. "The cola majors can take CSE to court on account of defamation and mala fide intent. This step could also lead to accountability in NGOs and the reports filed by them," suggested Diljeet Titus, a legal expert and head of India's leading law firm, Titus & Co. The legal battle against CSE can be substantiated by declining sales as well as TV and print reports, he said. Incidentally, besides the central government, the cola majors have another powerful ally India Inc. At a time when they were facing the brunt of the ire of consumer groups and state governments, India Inc. came 21

out in support of the two soft drink manufacturers, stating that the ban of their products in several states across India, especially in Kerala was "arbitrary, avoidable and causing unnecessary panic." Apex chambers like the Federation of Indian Chambers of Commerce and Industry (FICCI), the Associated Chambers of Commerce and Industry (ASSOCHAM) and the Confederation of Indian Industry (CII) rallied around the cola majors, warning that the arbitrary decisions by the state governments could send a 'wrong signal' to global investors keen on coming in the country. "Before revoking their licences, equal opportunity should have been given to them to clarify their stand," ASSOCHAM president Anil Aggarwal said, adding that the chamber has urged the Centre to frame comprehensive standards for ensuring the quality of cola drinks and other food items. "Banning these drinks is not a solution." "We are concerned that apparently arbitrary decisions have been taken to ban manufacture and sale of carbonated beverages without going through the due process of law," CII president R. Seshasayee said. "We are a law abiding country. Government actions have to be driven by the rule of law and in the overall public interest. We are concerned that the apparently arbitrary decisions have been taken to ban manufacture and sale of the carbonated beverages, without going through the due process of law." Expressing concern against such actions, Seshasayee said such reactions enormously impact the country's image and credibility. He said the CII had been working closely with the national standard-setting bodies, namely the Central Committee for Food Standards and the Bureau of Indian Standards (BIS) and in facilitating development and implementation of scientific standards for all products, including the food and beverages sector. "Industry is committed to providing the consumer products conforming to the highest standards of safety .

Women CEOs / Women Entrepreneurs.

1) Shelly Lazarus-Chairman & CEO, Ogilvy & Mather 2) Meg Whitman-President & CEO, eBay Technologies 3) Andrea Jung-President & CEO, Avon Products 4) Anne Mulcahy-Chairman and Chief Executive Officer, Xerox Corporation 5) Patricia Russo-Chief Executive Officer, Alcatel-Lucent 6) Brenda Barnes-Chief Executive Officer, Sara Lee 7) Janet . Robinson -Chief Executive Officer, New York times. 8) Dona Davis Young-Chief Executive Officer, Phoenix 9) Patricia Gallup-CEO, PC Connection

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TOP INDIAN WOMEN CEOs 1) Indra Nooyi -CEO , Pepsi Co. Global. 2) Akhila Srinivasan, Managing Director, Shriram Investments Ltd 3) Chanda Kocchar, Executive Director, ICICI Bank 4) Ekta Kapoor, Creative Director, Balaji Telefilms 5) Jyoit Naik, President, Lijjat Papad 6) Kiran Mazumdar-Shaw, Chairman and Managing Director, Biocon 7) Lalita D Gupte, Joint Managing Director, ICICI Bank 8) Naina Lal Kidwai, Deputy CEO, HSBC 9) Preetha Reddy, Managing Director, Apollo Hospitals 10) Priya Paul, Chairman, Apeejay Park Hotels 11) Rajshree Pathy, Chairman, Rajshree Sugars and Chemicals Ltd 12) Ranjana Kumar, Chairman, NABARD 13) Ravina Raj Kohli, Media personality and ex-President, STAR News 14) Renuka Ramnath, CEO, ICICI Ventures 15) Ritu Kumar, Fashion Designer 16) Ritu Nanda, CEO, Escolife 17) Shahnaz Hussain, CEO, Shahnaz Herbals 18) Sharan Apparao, Proprietor, Apparao Galleries 19) Simone Tata, Chairman, Trent Ltd 20) Sulajja Firodia Motwani, Joint MD, Kinetic Engineering 21) Tarjani Vakil, former Chairman and Managing Director, EXIM Bank
22) Zia Mody, Senior Partner, AZB & Partners

23) Dr Gita Piramal is managing editor of The Smart Manager,

10 Top FMCG Companies & their products.

Hindustan Liver Ltd.

Lux,Margo,Lifebuy,Fair&Lovely,Ponds,Rexona,Liril,Pears,Lakme,Santoor(soap/Personal care) Pepsodent,Close-Up- Oral Care Dalda- Vanaspati Edible Oil Clinic All Clear- Shampoo Wheel,Rin ,Vim,Surf,Surf Excel(Fabric Wash) Annapoorna,Kissan(atta/Food) Clinic Plus ,Sunsilk(shampoo) Lipton/Red Label Beverages.

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Pepsi Co.

Pepsi,Mirinda,7-up,Mountain Dew -Soft Drinks Coca-Cola ltd.

Coca-Cola ,Thumbs-UP, Fanta, Limca ,Sprite,Maaza - Soft drinks Kinley Mineral Water Nestle India

Maggi Noodles,Cerelac ,Maggi Tomato Ketchups ,Maggi Soups- Nestle Foods. Nestle tea ,Nescafe,Milo,Sunrise Beverages Nestle Kit-Kat,Munch,milky-Bar,POLO,Eclairs-Chocolates & Confectionery Colgate Palmolive

Colgate Toothpaste Oral care Cadbury India

Cadbury Dairy Milk, 5 Star, Perk, Celebrations,Gems,Eclairs- Chocolates Cadbury Bytes, Bournvita- Snacks& Beverages Proctor& Gamble India

Ariel,Tide(washing Powder) Pantene,Rejoice,Head& Shoulders- (shampoo) Duracell(battery) Britannia Industries

Pure Magic,Marie,Good Day (Biscuits/cookies) Britannia -Milkman ( canned milk, cheese, butter) Marico Industries

Parachute- coconut oil Saffola/sweekar-refinaed edible oil Parachute Lite- Value Added Coconut oils 24

Revive- Fabric Starch Mediker- Anti Lice Shampoo SIL -Jams ITC

Aashirvad (atta) Sunfeast(cookies) WILLS(Navy Cut),Gold Flake,Jaisalmer (cigarettes)

NAFTA
The North American Free Trade Area is the trade bloc in North America created by the North American Free Trade Agreement (NAFTA) and its two supplements, the North American Agreement on Environmental Cooperation (NAAEC) and the The North American Agreement on Labor Cooperation (NAALC), whose members are Canada, Mexico and the United States. It came into effect on 1 January 1994. The agreement was initially pursued by conservative governments in the United States and Canada supportive of free trade, led by Canadian Prime Minister Brian Mulroney, U.S. President George H. W. Bush, and the Mexican President Carlos Salinas de Gortari. The three-nation NAFTA was signed on 17 December 1992, pending its ratification by the legislatures of the three countries. There was considerable opposition in all three countries, but in the United States it was able to secure passage after Bill Clinton made its passage a major legislative initiative in 1993. During his presidential campaign he had promised to review the agreement, which he considered inadequate. Since the agreement had been signed by Bush under his fast-track perogative, Clinton did not alter the original agreement, but complemented it with the aforementioned NAAEC and NAALC. After intense political debate and the negotiation of these side agreements, the U.S. House passed NAFTA by 234-200 (132 Republicans and 102 Democrats voting in favor) and the U.S.Finally, Clinton sanctioned the ratification on November 1993.

SAFTA
The Agreement on the South Asian Free Trade Area is an agreement reached at the 12th South Asian Association for Regional Cooperation (SAARC) summit at Islamabad, capital of Pakistan on 6 January 2004. It creates a framework for the creation of a free trade zone covering 1.4 billion people in India, Pakistan, Nepal, Sri Lanka, Bangladesh, Bhutan and the Maldives.The seven foreign ministers of the region signed a framework agreement on SAFTA with zero customs duty on the trade of practically all products in the region by end 2012. The SAARC Preferential Trading Arrangement (SAPTA), with concessional duty on sub-continent trade, went into force on 1 January 1996. The new agreement i.e. SAFTA, came into being on 1 January 2006 and will be operational following the ratification of the agreement by the seven governments. SAFTA requires the developing countries in South Asia, that is, India, Pakistan and Sri Lanka, to bring their duties down to 20 percent in the first phase of the two year period ending in 2007. In the final five year phase ending 2012, the 20 percent duty will be reduced to zero in a series of annual cuts. The least developed nations in South Asia consisting of Nepal, Bhutan, Bangladesh and Maldives have an additional three years to reduce tarrifs to zero. 25

Information on SEBI
Securities and Exchange Board of India (SEBI) is a board (autonomous body) created by the Government of India in 1988 and given statutory form in 1992 with the SEBI Act 1992 with its head office at Mumbai. It is chaired by Mr. M. Damodaran a respected turnaround civil servant credited with turning around large public sector companies from near death scenarios including the famous Unit Trust of India. The Board is comprised of whole time members and outside members (representing the finance ministry, RBI and experts). The present members are Mr. G Anantharaman, Dr. TC Nair and Mr. VK Chopra. Below the Board, headed by the Chairman, the staff/officers of the organization are led by Executive Directors. The present EDs are Mr. RK Nair, Ms. Usha Narayanan and Mr. Sandeep P Parekh. Also Mr. MS Ray is an Officer on Special Duty (equivalent to an ED). The organisational structure of SEBI can be found under the SEBI website by clicking on the RTI Act 2005 at the top.(no direct link) Sebi has three functions rolled into one body: quasi-legislative, quasi-judicial and quasi-executive. It drafts rules in its legislative capacity, it conducts enquiries and enforcement action in its executive function and it passes rulings and orders in its judicial capacity. Though this makes it very powerful, there is an appeals process to create accountibility. There is a Securities Appeallate Tribunal which is a three member tribunal and is presently headed by a former high court judge - Mr. Justice NK Sodhi. A second appeal lies directly to the Supreme Court directly (where important questions of law arise). Sebi has had a mixed history in terms of its success as a regulator. Though it has pushed systemic reforms aggressively and successively (e.g. the quick movement towards making the markets electronic and paperless), it lacked the legal expertise, till recently, needed to sustain prosecutions/enforcement actions. It has recently been announced that it is going to the top law campuses to recruit talent and has found with reasonable success there.

Information on TRAI.
The Telecommunications Regulatory Authority of India or TRAI (established 1997) is the independent regulator established by the Government of India to regulate the telecommunications business in India.Notwithstanding anything contained in the Indian Telegraph Act,1885 Past chairmen of TRAI were Justice S.S. Sodhi, a retired Judge who was followed by Mr M.S. Verma a career banker from India's leading Public Sector bank, the State Bank of India. During Pradeep Baijal's three year tenure the Telecom sector in India witnessed rapid growth. A lot of this was on account of decisions to remove controls on tariffs and services almost entirely. Mr Baijal has now been succeeded by Nripendra Mishra, also from the IAS cadre. Under Mr Mishra, TRAI has striven to balance the increasing subscriber growth with network expansion to deliver better quality of service (QOS)and adequately supported by good customer care, and has taken on the challenge of pushing operators to streamline their haphazard growth and to bring a semblance of focus towards the customer

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Information on RBI
The Reserve Bank of India (RBI) is the central bank of India, and was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934. Since its inception, it has been headquartered in Mumbai. Though originally privately owned, RBI has been fully owned by the Government of India since nationalization in 1949. RBI is governed by a central board (headed by a Governor) appointed by the Central Government. The current governor of RBI is Dr.Y.Venugopal Reddy (who succeeded Dr. Bimal Jalan on September 6, 2003). RBI has 22 regional offices across India. The Reserve Bank of India was set up on the recommendations of the Hilton Young Commission. The commission submitted its report in the year 1926, though the bank was not set up for nine years.

RBI Governors
Sir Osborne Smith (1935 1937) Sir James Taylor (1937 1943) Sir C. D. Deshmukh (1943 1949) Sir Benegal Rama Rau (1949 1957) K. G. Ambegaonkar (1957) H. V. R. Iyengar (1957 1962) P. C. Bhattacharya (1962 1967) L. K. Jha (1967 1970) B. N. Adarkar (1970 S. Jagannathan (1970 1975) N. C. Sen Gupta (1975) K. R. Puri (1975 1977) M. Narasimham (1977) Dr. I. G. Patel (1977 1982) Dr. Manmohan Singh (1982 1985) Ghosh (1985) R. N. Malhotra (1985 1990) S. Venkitaramanan (1990 1992) Dr. C. Rangarajan (1992 1997) Dr. Bimal Jalan (1997 2003) Dr. Y. Venugopal Reddy (2003 present)

Balance of payments
The balance of payments (or BOP) measures the payments that flow between any individual country and all other countries. It is used to summarize all international economic transactions for that country during a specific time period, usually a year.

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The BOP is determined by the country's exports and imports of goods, services, and financial capital, as well as financial transfers. It reflects all payments and liabilities to foreigners (debits) and all payments and obligations received from foreigners (credits). The components of BOP are as follows: 1) Current account 2) Capital Account 3) Reserves.

Detailed information of Maharashtra FACT FILE

Maharashtra is India's third largest state in terms of area and second largest in terms of population after Uttar Pradesh. It is bordered by the states of Gujarat, Madhya Pradesh, Chhattisgarh, Andhra Pradesh, Karnataka, Goa and the Union territory of Dadra and Nagar Haveli. The Arabian Sea makes up the state's western coast. Mumbai, India's largest city, is the capital of Maharashtra where as Nagpur serves as the second capital or winter capital of the state. Maharashtra is bordered by the states of Madhya Pradesh to the north, Chhattisgarh to the east, Andhra Pradesh to the southeast, Karnataka to the south, and Goa to the southwest. The state of Gujarat lies to the northwest, with the Union territory of Dadra and Nagar Haveli sandwiched in between. The Arabian Sea makes up Maharashtra's west coast. The Western Ghats are a hilly range running parallel to the coast, at an average elevation of 1,200 metres (4,000 feet). To the west of these hills lie the Konkan coastal plains, which is 50 80 kilometres in width. To the east of the Ghats lies the flat Deccan Plateau. The Western Ghats form one of the three watersheds of India, from which many South Indian rivers originate. To the north of the state, near the Madhya Pradesh border, lies the Satpura Range. The various sections of the Western Ghats of Maharashtra are Tamhini Ghat, Varandha Ghat and Sawantwadi Ghat. The Ghats are also the source of numerous small rivers which flow westwards emptying into the Arabian Sea. To the north of the state, the Tapti River and River Narmada flow westwards into the Arabian Sea, irrigating most of northern Maharashtra. To the east are major rivers like Vainganga that flow to the south and eventually to Bay of Bengal. There are many multi-state irrigation projects in development, including Godavari River Basin Irrigation Projects. The plateau is composed of black basalt soil, rich in humus. This soil is well suited for cultivating cotton, and hence is often called black cotton soil. Maharashtra is divided into thirty-five districts, which are grouped into six divisions: Aurangabad Division, Amravati Division, Konkan Division, Nagpur Division, Nashik Division, and Pune Division. These are official revenue divisions of government of Maharashtra. Geographically, historically and according to political sentiments Maharashtra has five main regions: Vidarbha or Berar (Nagpur and Amravati divisions), Marathwada (Aurangabad Division), Khandesh and Northern Maharashtra (Nashik Division), Desh or Western Maharashtra (Pune Division), and Konkan (Konkan Division). Mumbai Pune Nashik 28

Nagpur Aurangabad Kolhapur Solapur

Sarva Shiksha Abhiyan

The 'Sarva Shiksha Abhiyan' (Hindi: The 'Education for All' Movement, sometimes referred to as "each one teach one") is a flagship programme of the Government of India for achievement of universalization of elementary education in a time bound manner, as mandated by the 86th amendment to the Constitution of India making free and compulsory education to children of ages 6-14 (estimated to be 205 million in number in 2001) a fundamental right. The programme aims to achieve the goal of universalization of elementary education of satisfactory quality by 2010. The programme seeks to open new schools in those habitations which do not have schooling facilities and strengthen existing school infrastructure through provision of additional class rooms, toilets, drinking water, maintenance grant and school improvement grants. Existing schools with inadequate teacher strength are provided with additional teachers, while the capacity of existing teachers is being strengthened by extensive training, grants for developing teaching-learning materials and strengthening of the academic support structure at a cluster, block and district level. SSA seeks to provide quality elementary education including life skills. SSA has a special focus on girl's education and children with special needs. SSA also seeks to provide computer education to bridge the digital divide. Objectives All children in school, Education Guarantee Centre or Alternate School by 2003 All children complete five years of primary schooling by 2007 All children complete eight years of schooling by 2010 Focus on elementary education of satisfactory quality with emphasis on education for life Bridge all gender and social category gaps at primary stage by 2007 and at elementary education level by 2010 Universal retention by 2010.

Mid Day Meal Scheme

The mid-day meal scheme is the popular name for school meal programme in India. It involves provision of lunch free of cost to school-children on all working days. The key objectives of the programme are: protecting children from classroom hunger, increasing school enrolment and attendance, improved socialisation among children belonging to all castes, addressing malnutrition, and social empowerment through provision of employment to women. The scheme has a long history especially in Tamil Nadu and Gujarat, and has been expanded to all parts of India after a landmark direction by the Supreme Court of India on November 28, 2001. The success of this scheme is illustrated by the tremendous increase in the school participation and completion rates in TAMIL NADU. Various scams involving Mid-Day Meal Scheme have been unearthed since it was started. In January 2006, the Delhi Police unearthed a scam in the Mid-Day Meal Scheme.[1] In December 2005, the police had seized eight truckloads (2,760 sacks) of rice meant for primary schoolchildren being carried 29

from Food Corporation of India (FCI) godowns in Bulandshahr District of UP to North Delhi. When the police detained the trucks, the drivers claimed that the rice was being brought all the way to Delhi to be cleaned at a factory. However, according to the guidelines, the rice has to be taken directly from FCI godown to the school or village concerned. Later it was found that the rice was being siphoned off by a UPbased NGO, Bharatiya Manav Kalyan Parishad (BMKP), in connivance with the government officials. In November 2006, the residents of Pembong village under the Mim tea estate (around 30 km from Darjeeling), accused a group of teachers of embezzling mid-day meals. In a written complaint, the residents claimed that students at the primary school had not got midday meal for the past 18 months.[2] In December 2006, The Times of India reported a scam involving government schools that siphon off foodgrains under the mid-day meal scheme by faking attendance. The modus operandi of the schools was simple -- the attendance register would exaggerate the number of students enrolled in the class. The additional students would not exist -- they were "enrolled" to get additional foodgrains which were pocketed by the school staff. The scam was exposed, when P Asha Kumari, an assistant teacher at the government model primary school, Jakkur, in Yelahanka acted as a whistleblower. She informed the Lok Ayukta, who conducted a probe and indicted four persons for misappropriation. The whistleblower was harassed by the school staff and requested a transfer. She was transferred to a government primary school at Cholanayakahalli, where she again found the same modus operandi being used to siphon off the foodgrains. She again complained to the Lok Ayukta, who issued notice to the school.

Retail Sector
India's retail sector is wearing new clothes and with a three-year compounded annual growth rate of 46.64 per cent, retail is the fastest growing sector in the Indian economy. Traditional markets are making way for new formats such as departmental stores, hypermarkets, supermarkets and specialty stores. Western-style malls have begun appearing in metros and second-rung cities alike, introducing the Indian consumer to an unparalleled shopping experience. Retail sector: on an upward curve India's vast middle class and its almost untapped retail industry are key attractions for global retail giants wanting to enter newer markets. While organised retail in India is only two per cent of the total US$ 215 billion retail industry, it is expected to grow 25 per cent annually, driven by changing lifestyles, strong income growth and favourable demographic patterns. KSA-Technopak, a retail consulting and research agency, predicts that by 2010, organised retailing in India will cross the US$ 21.5-billion mark from the current size of US$ 7.5 billion. Retail space: up for grabs By 2007, an estimated 50 million square feet of quality retail space will be available across India. This is in sharp contrast to the situation a decade ago. Then, there was not one shopping mall in India. Today, in Delhi, Mumbai and their suburbs, there are about 100 malls. Of the 700 new malls coming up all over India, 40 per cent are concentrated in the smaller cities. Organised retailing in small-town India is growing at a staggering 50-60 per cent a year compared to 35-40 per cent in the large cities. A push for branded retail

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India's branded retail sector, estimated at about US$ 6 billion, makes up only three per cent of the total market, but is forecast to grow at 25-30 per cent a year over the next four years, with plush department stores and malls springing up across the country. Food retail Food dominates the shopping basket in India. The US$ 6.1 billion Indian foods industry, which forms 44 per cent of the entire FMCG sales, is growing at 9 per cent and has set the growth agenda for modern trade formats. Since nearly 60 per cent of the average Indian grocery basket comprises non-branded items, the branded food industry is homing in on converting Indian consumers to branded food. The mobile revolution The retail market for mobile phones - handset, airtime and accessories - is already a US$ 16.7 billion business, growing at over 20 per cent per year. In comparison, the consumer electronics and appliance market looks paltry, at just US$ 5.6 billion, with growth rate just half of the mobile market, and that too in a good year. Kids retailing: no child's play Kids retailing is growing by leaps and bounds in India and those in the industry say it is likely to see 30-35 per cent growth per annum. From clothes to stationary, sportswear, outerwear, tailored clothing, eyewear, watches, fragrance, footwear and accessories, the list is endless. Apparel, however, remains the key revenue driver accounting for almost 80 per cent of total sales. According to industry insiders, The total apparel market in India for kids is around US$ 2.9 billion, out of which about US$ 668.2 780.5 million is branded apparel. The retail road ahead The Indian retail market is estimated at US$ 350 billion. But organised retail is estimated at only US$ 8 billion. However, the opportunity is hugeby 2010, organised retail is expected to grow to US$ 22 billion. With the growth of organised retailing estimated at 40 per cent (CAGR) over the next few years, Indian retailing is clearly at a tipping point. India is currently the ninth largest retail market in the world. And it is names of small towns like Dehradun, Vijayawada, Lucknow and Nasik that will power India up the rankings soon.

Golden Quadrilateral Project

The Golden Quadrilateral (GQ) is the largest express highway project in India launched by Sri Atal Bihari Vajpayee, former prime minister of India. It is the first phase of the National Highways Development Project (NHDP), and consists of building 5,846 kilometres of four/six lane express highways connecting Delhi, Mumbai, Kolkata and Chennai (thus forming a quadrilateral of sorts), at a cost of Rs. 60,000 crores (US$ 12.317 billion) (at 1999 prices) (Rs 580 billion). As of May 31, 2006, 92% of the entire work has been completed, with the final completion date set as December 2006, approximately two years behind schedule, this has been mainly due to issues with the various states about giving up land for the national highway and the termination of several contracts which take 6 months to get issued again. The GQ project is managed by the National Highways Authority of India (NHAI) under the Ministry of Road, Transport and Highways. The Mumbai-Pune Expressway, the first controlled-access toll road to be built in India is a part of the GQ Project though not funded by NHAI. Infrastructure Leasing & Financial 31

Services (IL&FS) has been one of the major contributors to the infrastructural development activity in the GQ project. This highway will interconnect many major cities and ports. It will give an impetus to truck transport throughout India. It will help in industrial growth in all small towns along it. It will provide vast opportunities for transport of agricultural produce from the hinterland to major cities and ports for export. In addition, it will provide job opportunities in its construction as well as demand for cement, steel and other construction materials. The project involves an enormous outlay of funds and has been the focus of several charges of corruption. In August 2003, project director Satyendra Dubey, in a letter to the Prime Minister, outlined a list of malafide actions in a segment of this highway in Bihar. Dubey claimed that the contractors for this stretch were not executing the project themselves, but had sub-contracted the work to small builders who lacked technical expertise. This would lead to substandard work, he claimed. Within months of this whistleblowing action, Dubey was brutally assassinated in Gaya, Bihar. It is not clear that any action was taken by NHAI on the most germane issues raised by Dubey. In February 2006, a 600 meter stretch of the highway connecting Kolkata to Chennai subsided into the ground, opening up ten meter gorges near Bally, West Bengal 2. This stretch had been completed a year back by a Malaysian multinational firm, selected after global tendering. Despite these events, the completion of many of these tasks has proven that India can execute a large highway development project, confounding critics who said that this was impossible. Travelling on these roads is comparable to the Interstate Highways in USA.

2007 Finance Budget

Education & Healthcare prime objectives Safety net for rural poor widens Defense spending hiked Direct tax rates unchanged Duty on Petrol & Diesel reduced

INDIAN Federal Budget for fiscal 2007-08 presented by countrys Finance minister P. Chidambaram in Parliament on February 28 reasserts the Congress(I)-led UPA governments commitment to economic reforms, fiscal prudence and monetary stability. The Budget gives special emphasis to raise the quality of life of the bottom-line people in particular. Prime Minister Manmohan Singh thinks education and healthcare are prime imperatives as far as this Budget is concerned. The allocation for defense to Rs. 96,000 crore. This would include Rs. 41,922 crore for capital expenditure. Any additional requirement for the security of the nation would be provided. The Budget 2007-08 has taken special care of the rural poor. Revenues are buoyant for the third year in succession. Additional revenues have been generated and have been used to promote inclusive growth, equity and social justice that are at the core of the National Common Minimum Programme. Reduction of duty on petrol and diesel, expanding the safety net for rural poor, additional 1 percent cess to fund secondary and higher education and expansion of the service tax net are some of the major features of the Federal Budget. 32

The ad valorem component in the excise duty from 8 percent to 6 percent on petrol and diesel. The peak rate of customs duty for non-agricultural products has been slashed from 12.5 percent to 10 percent. While cigarettes and bidis will cost more, duty on pan masala not containing tobacco has been reduced from 66 percent to 45 percent. Duties on most chemicals and plastics have been reduced from 12.5 percent to 7.5 percent and customs duty on polyester fibers and yarn has also been reduced from 10 percent to 7.5 percent. The Gem and jewellery industry gets relief with duty on cut and polished diamonds reduced from 5 percent to 3 percent. Dredgers have been fully exempted from import duty. Duty on drip irrigation systems, agricultural sprinklers and food processing machinery have been reduced by 2.5 percent. Additional countervailing duty of 4 percent has been completely lifted from crude and refined edible oils. On the direct tax front, there is no change in the tax rate. However, the threshold limit for income tax payers has been increased by Rs. 10,000, giving every tax payer a relief of Rs. 1000. The new threshold limit for women will be Rs. 1,45,000 and for senior citizens Rs. 1,95,000. Companies with a taxable income of Rs. 1 crore or less, will not have to pay surcharge on income tax. Companies providing cross country natural gas distribution network, including gas pipeline and storage facilities will be entitled to tax concession. To facilitate creation of urban infrastructure, tax-free bonds will be issued through State Pooled Finance Entities. BUDGET (2007-08) HIGHLIGHTS Gross budgetary support for plan to be increased to rs. 205,100 crore from rs.172,728 crore. Non-plan expenditure to go up by 6.5% to rs. 435,421 crore. Allocation for bharat nirman increased by 31.6% to rs. 24,603 crore. Allocation for education increased by 34.2% and for health & family welfare by 21.9%. Mid-day meal scheme to cover children of upper primary classes in 3,427 educationally backward blocks. National means-cum-merit scholarship scheme introduced for students from class ix to xii; 100,000 scholarships to be awarded every year. National rural employment guarantee scheme to be expanded from the current 200 to 330 districts . Allocation for scs and sts substantially increased. Provision of rs. 108 crore for multi-sector development programme in districts with custom duties on most chemicals and plastics reduced from 12.5% to 7.5% . No change in general cenvat or service tax rates. Ad valorem component of excise duty on petrol and diesel reduced from 8% to 6%. Excise duty exemption limit for small scale industry increased from rs. 1 crore to rs. 1.5 crore. Service tax exemption limit for small service providers raised from rs. 400,000 to rs. 800,000. Service tax extended to some new areas. Central sales tax to be reduced from 4 to 3%. No change in personal income tax rates but threshold limit of exemption in all cases incrased by rs. 10,000. Maximum limit of deduction in respect of medical insurance premium to be increased to rs. 15,000; for senior citizens the limit is rs. 20,000. Corporate income tax rate remains unchanged; 33

concentration of minorities. Interest subvention scheme for short-term crop loans to continue. National agricultural insurance scheme to continue in present form. Death and disability insurance cover through lic to be extended to rural landless households under aam admi bima yojana Limit of loans under differential rate of interest scheme for weaker sections raised. National housing bank to introduce reverse mortgage for senior citizens. Allocation for defence increased to rs. 96,000 crore. Allocation for e-governance increased from rs. 395 crore to rs. 719 crore. Government to support creation of about 100,000 jobs every year for physically challenged. For current year revenue deficit to be 2% and fiscal deficit 3.7% - both lower than budget estimates. Evenue deficit for 2007-08 estimated at 1.5% of gdp and fiscal deficit at 3.3% of gdp. Peak rate for customs duties for non-agricultural products reduced from 12.5% to 10%

surcharge on income tax on all firms and companies with a taxable income of rs. 1 crore or less removed. Five year income tax holiday for new hotels in nctd. Tax holiday for undertakintgs in jammu & kashmir extended up to march 31, 2012. Rate of dividend distribution tax raised from 12.5% to 15% on dividends distributed by companies and to 25% on dividends paid by money market mutual funds and liquid mutual funds. Banking cash transactions tax exemption limit for individuals and hufs incrased from rs. 25,000 to rs. 50,000. Additional cess of 1% levied on taxes to fund Secondary and higher education. Employees stock option plan to be brought under fringe benefit tax. During three years of upa government, gdp growth rate improves from 7.5% in 2004-05 to 9.2% in 2006-07; growth rate in manufacturing goes up from 8.7% to 11.3% and in services from 9.6% to 11.2%. Average growth of agriculture sector during tenth plan estimated at 2.3%. Average inflation in 2006-07 estimated at 5.25.4%. Bharat nirman makes impressive progress

Dividend distribution tax has been hiked from 12.5 percent to 15 percent. Money market mutual funds and liquid mutual funds will attract 25 percent Dividend Distribution Tax. The scope of Fringe Benefit Tax has been expanded to include employees stock option plan. 1 percent additional cess has been imposed on all taxes to fund secondary and higher education and expansion of capacity by 54 percent for reservation for socially and educationally backward classes. The total revenue receipts of the Central Government is estimated to be Rs. 486,422 crore and the revenue expenditure at Rs. 557,900 crore. The revenue deficit is estimated at Rs. 71,478 crore, which is 1.5 per cent of GDP. The fiscal deficit is estimated at Rs. 150,948 crore, which is 3.3 per cent of GDP. 34

We are on course to achieve FRBMA targets., said the Finance Minister. The Plan Expenditure for 2007-08 is estimated at Rs. 205,100 crore. As a proportion to the total expenditure (net of the SBI share acquisition) Plan Expenditure will be 32 per cent. On the other hand, non-plan expenditure in the year 2007-08 (net of the SBI share acquisition) is estimated to be Rs. 435,421 crore, which is only 6.5 per cent higher than 2006-07.

2007 Railway Budget

Initiatives in passenger business

800 more coaches to be attached in popular trains. Plan to provide cushioned seats in unreserved second class coaches. Increase in unreserved second class coaches from four to six in every new train Efforts will be made to increase unreserved second class coaches in existing trains also. Facility for reservation of lower berths for senior citizens and women above 45 years traveling alone. Increase in provision of special coaches (SLRD & SRD) for physically challenged passengers. Vendor coaches for sections frequented by milk and vegetable vendors and other retail sellers. More convenient, comfortable and high capacity new design passenger coaches will be manufactured. Concession of 50% in second class for candidates appearing for main written examination conducted by SSC and UPSC.

Facilitating travel by passengers Countrywide Train Enquiry call centres Common Tel. No. 139 Pilot project for providing hand held terminals to TTEs in reserved coaches to update PRS with onboard vacancies for giving reservation to passengers at ensuing stations without delay Expansion of reserved ticketing facilities

PRS counters to be opened at premises of Post-offices and Defence organizations to be operated by them e-ticketing services through State Governments e-services, Petrol pumps, Banks ATMs etc.

Expansion of Unreserved Ticketing facilities

UTS counters to be increased to 8000 in the next 2 years 6000 Automatic Ticket Vending Machines to be installed and linked to UTS in metropolitan cities in the next 2 years

Coupon system for ticket distribution to be extended to Kolkata and Chennai. Pilot project on Central Railway for issuing suburban tickets through multi-purpose smart cards

Passenger Amenities at Stations

300 more stations to be developed as modern stations. 35

Year 2007 declared Cleanliness Year - Special campaign to ensure cleanliness in station complexes, passenger trains, railway lines, waiting rooms etc.

Railway Safety Number of rail accidents has decreased despite substantial increase in volume of traffic. Majority of Special Railway Safety Fund works will be completed by March, 2007. Balance to be completed by March, 2008. Testing of Anti-Collision Device in last stages . General Managers empowered to sanction subways costing up to Rs 50 lakhs on unmanned level crossings for reducing accidents. Production of improved crashworthy coaches will be increased.

Railway Safety Number of rail accidents has decreased despite substantial increase in volume of traffic. Majority of Special Railway Safety Fund works will be completed by March, 2007. Balance to be completed by March, 2008. Testing of Anti-Collision Device in last stages :p> General Managers empowered to sanction subways costing up to Rs 50 lakhs on unmanned level crossings for reducing accidents. Production of improved crashworthy coaches will be increased.

Railway Security Number of trained dogs will be increased in the existing dog squads. Door frame and hand held metal detectors to detect explosives being installed in many sensitive divisions and CCTV, smart video cameras etc for sensitive stations. 8,000 vacancies will be filled in the RPF on all India basis. Jagjivan Ram Railway Suraksha Bal Academy (Lucknow) has been recognised as Centralized Training Institute.

Staff Welfare Per-capita contribution to Staff Benefit Fund will be increased from Rs 30 to Rs 35 per year. Condition of Railway Staff colonies to be improved. 50 room rest houses will be built near the Railway hospitals in the four metropolitan cities for stay of relatives of the patients. An extensive training programme will be launched to inculcate market and customer oriented approach in frontline staff. A committee has been constituted to improve promotion prospects of Group D employees. Previous service tenure of ex-servicemen and central government employees recruited by Railways, will be added to their existing service tenure in the Railways while calculating eligibility for post retirement complimentary passes.

Organisational and Human Resource Development:

Training of Railway employees and officers to be reoriented towards changing economic and competitive environment. 36

Institutions of GMs, DRMs, CAOs (Construction) to be strengthened and empowered for development as business units, profit centres and project units respectively. Railway Staff College, Vadodara will be renovated as heritage building. A Railway chair will be established at IIM/Ahmedabad for research in railway infrastructure and management.

Special Recruitment Drives 95% of the vacancies of Scheduled Castes and Scheduled Tribes have been filled through special drives and 75% of backlog in the promotional quota has been cleared. Action is being taken to fulfill the stipulated 27% quota of the OBC candidates.

Passenger Services:

8 new Garib Raths to be introduced. New Trains : 32 pairs. Extension of Trains : 23 pairs. Increase in Frequency : 14 pairs.

Annual Plan 2007-08

The Annual Plan of Rs 31,000 cr is the largest ever Annual Plan so far, which includes.

Support of Rs 7,611 cr from General Revenues. Internal Generation of Rs 17,323 cr. Extra Budgetary Resources of Rs 5,740 cr.

The thrust of the annual plan is to maintain the high growth in traffic, by focusing on early completion of works for throughput enhancement on high traffic density routes, improvement of traffic facilities and enhancing sectional capacity.

High Density Network to be made suitable for running of Heavy Axle load trains Enhanced line capacity planned for on busy routes by implementing IBS, Automatic Signaling etc. Increase in speed of trains through fly-overs, bypass, yard redesign etc. at busy junction stations, will be built and will be modified. 200 Diesel, 200 Electric engines and 11,000 wagons to be produced.

Outlay on project related Plan heads : New Lines Rs 1,610 cr, Gauge conversion Rs 2,404 cr, Electrification Rs 300 cr, Metropolitan Transport Projects Rs 722 cr. Outlay on Safety related Plan heads : Track renewal Rs 3,360 cr, Bridges Rs 597 cr, Signal & Telecommunication works Rs 1,597 cr, Road over/under bridges Rs 551 cr and manning of unmanned level crossings Rs 500 cr. Important Targets : New Lines 500 kms, Gauge Conversion 1800 kms, Doubling 700 kms. Rs 2,725 cr required for four National Projects

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BIMARU states
BIMARU (for BIhar MAdhya Pradesh Rajasthan Uttar Pradesh) is an acronym coined by taking the first letter of four northern Indian states: Bihar, Madhya Pradesh, Rajasthan, and Uttar Pradesh. This term has definite derogatory undertones as it is a take on the Hindi term 'Bimar', which means sick; the acronym "BIMARU" brings forth images of a collection of sick people. By his own admission, the pejorative BIMARU was coined by the Demographer Ashish Bose. Whether or not he coined it, he has definitely used it extensively to refer to the four states in not a very favorable light. While Bose has correctly highlighted that these states have lagged behind in most parameters of economic progress, specially since independence, he has utterly failed to address why it is so. For example, in none of his writings, one finds reference to the fact that these states have always received less funds for their development since Indian independence. Even the most glaring case of Bihar, which has received the lowest per capita grant in each of the five year plans since independence finds no mention in his writings.

Aviation sector
Revolutionised by liberalisation, the aviation sector in India has been marked by fast-paced change in the past few years. From being a service that few could afford, the sector has now graduated to being a fiercely competitive industry with the presence of a number of private and public airlines and several consumeroriented offerings. The promise and the potential of the Indian aviation market are awesome. Over 135 aircraft have been added in the last two years alone. By 2010, India's fleet strength will stand at 500550. Economic Survey says:

The years 2004-05, 2005-06 and 2006-07 have been years of record growth in air traffic in India. During the period April-September, 2006, international and domestic passengers recorded growth of 15.8 per In the same period, the domestic market size will cent and 44.6 per cent, respectively, leading to an cross 60 million and international traffic 20 million. overall growth of 35.5 per cent. During the same Airbus pegs Indias demand for airliners at 1100 period, international and domestic cargo recorded aircraft, worth US$ 105 billion, over the next 20 growth of 13.8 per cent and 8.7 per cent, years. According to Civil Aviation Minister Praful respectively, resulting in an overall growth of 12.0 Patel, the country will need 1,500 to 2,000 passenger per cent. planes in 10 years, up from 260 now. Investments, revenues, jobs: All set to take off Indias civil aviation passenger growth stands at 20 per centamong the highest in the world. More diverse businesses in non-metropolitan regions are creating new demand for air services. Airlines are bulking up on capacityten Indian carriers placed orders for 400 aircraft worth US$ 15 billion. Two of Indias largest airportsMumbai and New Delhiwere privatized recently. Two greenfield airports are coming up at hubs in southern India. Investments are pouring into almost all aspects of the industry, including aircraft maintenance, pilot training and air cargo services. With airport infrastructure being upgraded, non-aeronautical revenues will contribute almost 50 per cent to revenue of airports. Here, private players are planning malls, hospitality chains, book shops, duty-free shops, internet cafes, lounges and entertainment centres.

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With the sector expanding at a fast pace, the number of aircraft being used is on the rise and so is the need for pilots. Not surprisingly, aviation school is the latest buzzword among students as India would require 7,5008,000 pilots and an equal number or more air cabin crew by 2010. Heavy pay packets are awaiting pilots with a commercial pilot license (CPL). India's aviation pie gets bigger, goes global The countrys aviation sector is slated to cruise far ahead of other Asian giants like China or even strong economies like France and Australia. The number of passengers who will be airborne by 2020 is a whopping 400 million. Boeing announced a US$ 1.5 billion order for 10 aircraft from Jet Airways, India's largest private airline, which has 60 aircraft and will increase that number to 90 in two years. Manufacturers like Boeing and Airbus are filling their order books fast with such rapidly growing airlines in India. According to a survey by the Airports Council International (ACI), Asia will be the fastest-growing region with an annual 9 per cent growth. The two fastest-growing markets are set to be India (10.4 per cent) and China (8.1 per cent) in the next 20 years. And this hike in action is not limited to urban airports alone. The Government plans to develop around 300 unused airstrips across India a move that has raised projections for jets required for regional connectivity. The US-based Boeing and Europes Airbus, along with Embraer (Brazil), Bombardier (Canada), Sukhoi (Russia), ATR (France) and BAE System (UK) are keen to tap the emerging regional jet market in the country. Further, paving the way for foreign investment in domestic airline companies, the Reserve Bank of India (RBI) has said that foreign institutional investors (FIIs) can pick up stake in these airlines beyond the sectoral FDI cap of 49 per cent through secondary market purchases. While FII investment is distinct from FDI in the foreign investment policy, secondary market purchase was a grey area that has now become clear. "India is a big market for uswe've supplied 1,300 engines for defence and civil aviation. We expect the market to double in the next decade. So, we are looking at long-term businesses," Rolls-Royce MD Tim Jones reportedly said. Upgrading Airport Infrastructure Airline passengers are expected to increase from 39 million in 200001 to 77 million in 200607 and cargo hauled is expected to increase from 0.8 million tonnes to 1.40 million tonnes during the same period. By 2020, Indian airports are estimated to handle:

100 million passengers Including 60 million domestic passengers Cargo in the range of 3.4 million tonnes per annum

Several improvements are envisaged to sustain this tremendous growth in the civil aviation sector. Changi Airports International (CAI) will enter into a strategic alliance with the Tata Group to pursue airport projects in India. Tata will hold 51 per cent stake and CAI the remaining 49 per cent in the joint venture company, pursuant to the memorandum of understanding (MoU) to develop and manage Indian airports. It 39

is expected that, by 2010, about US$ 10 billion will be spent on airport modernisation and related infrastructure creation. Aero India-2007 The recent Aero India show that took place in Bangalore witnessed 500 companies including 275 foreign ones, 45 foreign delegations and 35 Air Force chiefscompared to 380 companies in its last edition two years ago. Significantly, what was originally an exhibition of defence aircraft was marked by a distinct drone of business deals in civil machines. Clearly, opportunities are flying high for the countrys aviation. And players from all over the world are vying for a piece of Indias blue sky.

Insurance Sector
The insurance sector in India has come a full circle from being an open competitive market to nationalisation and back to a liberalized market again. Tracing the developments in the Indian insurance sector reveals the 360 degree turn witnessed over a period of almost two centuries. Insurance sector reforms In 1993, Malhotra Committee headed by former Finance Secretary and RBI Governor R. N. Malhotra was formed to evaluate the Indian insurance industry and recommend its future direction. The Malhotra committee was set up with the objective of complementing the reforms initiated in the financial sector. The reforms were aimed at creating a more efficient and competitive financial system suitable for the requirements of the economy keeping in mind the structural changes currently underway and recognizing that insurance is an important part of the overall financial system where it was necessary to address the need for similar reforms In 1994, the committee submitted the report and some of the key recommendations included: i) Structure Government stake in the insurance Companies to be brought down to 50% Government should take over the holdings of GIC and its subsidiaries so that these subsidiaries can act as independent corporations All the insurance companies should be given greater freedom to operate ii) Competition Private Companies with a minimum paid up capital of Rs.1bn should be allowed to enter the industry No Company should deal in both Life and General Insurance through a single entity Foreign companies may be allowed to enter the industry in collaboration with the domestic companies Postal Life Insurance should be allowed to operate in the rural market Only one State Level Life Insurance Company should be allowed to operate in each state iii) Regulatory Body The Insurance Act should be changed An Insurance Regulatory body should be set up Controller of Insurance (Currently a part from the Finance Ministry) should be made independent

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iv) Investments Mandatory Investments of LIC Life Fund in government securities to be reduced from 75% to 50% GIC and its subsidiaries are not to hold more than 5% in any company (There current holdings to be brought down to this level over a period of time)

v) Customer Service LIC should pay interest on delays in payments beyond 30 days Insurance companies must be encouraged to set up unit linked pension plans Computerisation of operations and updating of technology to be carried out in the insurance industry The committee emphasized that in order to improve the customer services and increase the coverage of the insurance industry should be opened up to competition. But at the same time, the committee felt the need to exercise caution as any failure on the part of new players could ruin the public confidence in the industry. Hence, it was decided to allow competition in a limited way by stipulating the minimum capital requirement of Rs.100 crores. The committee felt the need to provide greater autonomy to insurance companies in order to improve their performance and enable them to act as independent companies with economic motives. For this purpose, it had Proposed setting up an independent regulatory body. The Insurance Regulatory and Development Authority Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in Parliament in December 1999. The IRDA since its incorporation as a statutory body in April 2000 has fastidiously stuck to its schedule of framing regulations and registering the private sector insurance companies. The other decisions taken simultaneously to provide the supporting systems to the insurance sector and in particular the life insurance companies was the launch of the IRDAs online service for issue and renewal of licenses to agents. The approval of institutions for imparting training to agents has also ensured that the insurance companies would have a trained workforce of insurance agents in place to sell their products, which are expected to be introduced by early next year. Since being set up as an independent statutory body the IRDA has put in a framework of globally compatible regulations. In the private sector 12 life insurance and 6 general insurance companies have been registered.

International terrorism
Terrorism is a term used to describe violence or other harmful acts committed (or threatened) against civilians by groups or persons for political or ideological goals(fear in latin). Most definitions of terrorism include only those acts which are intended to create fear or "terror", are perpetrated for an ideological goal (as opposed to a "madman" attack), and deliberately target "non-combatants". As a form of unconventional warfare, terrorism is sometimes used when attempting to force political change by: convincing a government or population to agree to demands to avoid future harm or fear of harm, destabilization of an existing government, motivating a disgruntled population to join an uprising, escalating a conflict in the hopes of disrupting the status quo, expressing the severity of a grievance, or drawing attention to a neglected cause. The terms "terrorism" and "terrorist" (someone who engages in terrorism) carry a strong negative connotation. These terms are often used as political labels to condemn violence or threat of violence by 41

certain actors as immoral, indiscriminate, or unjustified. Those labeled "terrorists" rarely identify themselves as such, and typically use other generic terms or terms specific to their situation, such as: separatist, freedom fighter, liberator, revolutionary, vigilante, militant, paramilitary, guerrilla, rebel, jihadi or mujaheddin, or fedayeen, or any similar-meaning word in other languages. Official definitions determine counter-terrorism policy and are often developed to serve it. Most government definitions outline the following key criteria: target, objective, motive, perpetrator, and legitimacy or legality of the act. Terrorism is also often recognizable by a following statement from the perpetrators. The key criteria are as follows: Violence According to Walter Laqueur of the Center for Strategic and International Studies, "the only general characteristic [of terrorism] generally agreed upon is that terrorism involves violence and the threat of violence". However, the criterion of violence alone does not produce a useful definition, as it includes many acts not usually considered terrorism: war, riot, organized crime, or even a simple assault. Property destruction that does not endanger life is not usually considered a violent crime, but some have described property destruction by the Earth Liberation Front and Animal Liberation Front as terrorism. Psychological impact and fear The attack was carried out in such a way as to maximize the severity and length of the psychological impact. Each act of terrorism is a performance, a product of internal logic, devised to have an impact on many large audiences. Terrorists also attack national symbols to show their power and to shake the foundation of the country or society they are opposed to. This may negatively affect a government's legitimacy, while increasing the legitimacy of the given terrorist organization and/or ideology behind a terrorist act.[6] Perpetrated for a Political Goal Something all terrorist attacks have in common is their perpetration for a political purpose. Terrorism is a political tactic, not unlike letter writing or protesting, that is used by activists when they believe no other means will effect the kind of change they desire. The change is desired so badly that failure is seen as a worse outcome than the deaths of civilians. This is often where the interrelationship between terrorism and religion occurs. When a political struggle is integrated into the framework of a religious or "cosmic"[7] struggle, such as over the control of an ancestral homeland or holy site such as Israel and Jerusalem, failing in the political goal (nationalism) becomes equated with spiritual failure, which, for the highly committed, is worse than their own death or the deaths of innocent civilians. Deliberate targeting of non-combatants It is commonly held that the distinctive nature of terrorism lies in its intentional and specific selection of civilians as direct targets. Much of the time, the victims of terrorism are targeted not because they are threats, but because they are specific "symbols, tools, animals or corrupt beings" that tie into a specific view of the world that the terrorist possess. Their suffering accomplishes the terrorists' goals of instilling fear, getting a message out to an audience, or otherwise accomplishing their political end.[8] Unlawfulness or illegitimacy Some official (notably government) definitions of terrorism add a criterion of illegitimacy or unlawfulness[9] to distinguish between actions authorized by a "legitimate" government (and thus "lawful") and those of other actors, including individuals and small groups. Using this criterion, actions that would otherwise qualify as terrorism would not be considered terrorism if they were government sanctioned. For example, firebombing a city, which is designed to affect civilian support for a cause, would not be considered terrorism if it were authorized by a "legitimate" government. This criterion is inherently problematic and is not universally accepted, because: it denies the existence of state terrorism; the same act may or may not be classed as terrorism depending on whether its sponsorship is traced to a "legitimate" government; "legitimacy" and "lawfulness" are subjective, depending on the perspective of one government or another; and it diverges from the historically accepted meaning and origin of the 42

term.[10][11][12][13] For these reasons this criterion is not universally accepted. Most dictionary definitions of the term do not include this criterion. The relationship between domestic terrorism and democracy is complex. Research shows that such terrorism is most common in nations with intermediate political freedom and that the nations with the least terrorism are the most democratic nations. However, one study suggests that suicide terrorism may be an exception to this general rule. Evidence regarding this particular method of terrorism reveals that every modern suicide campaign has targeted a democracy- a state with a considerable degree of political freedom. The study suggests that concessions awarded to terrorists during the 80s and 90s for suicide attacks increased their frequency. Some examples of "terrorism" in non-democracies to include ETA under Francisco Franco, the Shining Path under Alberto Fujimori, and the Kurdistan Workers Party when Turkey was ruled by military leaders. Democracies such as the United States, Israel, and the Philippines have experienced domestic terrorism. While a nation espousing democratic ideology may claim a sense of legitimacy or higher moral ground than regimes that promote terrorism, any act of terrorism within the former creates a dilemma for the democratic state. On one hand, a state that prides itself in its tolerance of peaceful demonstration may choose to approach the problem of terrorism in ways outlined by its constitution; this may render that state ineffective in dealing with the problem, which could reflect upon its citizens a sense of impotency in a time of crisis. On the other hand, should that same terrorized state go outside its constitution to deal with the problem, the very notion of democracy itself pales in meaning. This, some social theorists would conclude, may very well play into the initial plans of the acting terrorist(s); namely, to delegitimize democracy Causes The context in which terrorist tactics are used is often a large-scale, unresolved political conflict. The type of conflict varies widely; historical examples include: Secession of a territory to form a new sovereign state Dominance of territory or resources by various ethnic groups Imposition of a particular form of government, such as democracy, theocracy, or anarchy Economic deprivation of a population Opposition to a domestic government or occupying army

Terrorism is a form of asymmetric warfare, and is more common when direct conventional warfare either cannot be (due to differentials in available forces) or is not being used to resolve the underlying conflict. In some cases, the rationale for a terrorist attack may be uncertain (as in the many attacks for which no group or individual claims responsibility) or unrelated to any large-scale social conflict (such as the Sarin gas attack on the Tokyo subway by Aum Shinrikyo). A global research report An Inclusive World prepared by an international team of researchers from all continents has analysed causes of present day terrorism. It has reached the conclusions that terrorism all over the world functions like an economic market. There is demand for terrorists placed by greed or grievances. Supply is driven by relative deprivation resulting in triple deficits - developmental deficit, democratic deficit and dignity deficit. Acts of terror take place at the point of intersection between supply and demand. Those placing the demand use religion and other denominators as vehicles to establish links with those on the supply side. This pattern can be observed in all situations ranging from Colombia to Colombo and the Philippines to the Palestine. 43

Gross Domestic Product

A region's gross domestic product, or GDP, is one of the ways for measuring the size of its economy. The GDP of a country is defined as the market value of all final goods and services produced within a country in a given period of time. It is also considered the sum of value added at every stage of production of all final goods and services produced within a country in a given period of time. Until the 1980s the term GNP or gross national product was used in the United States. The two terms GDP and GNP are almost identical - and yet entirely different; GDP being concerned with the region in which income is generated and GNP (or GNI - Gross National Income) being a measure of the accrual of income to a region. The most common approach to measuring and understanding GDP is the expenditure method:

GDP = consumption + investment + (government spending) + (exports imports)

The components of GDP Each of the variables C, I, G and NX (where GDP = C + I + G + NX as above): C is private consumption in the economy. This includes most personal expenditures of households such as food, rent, medical expenses and so on but does not include new housing. I is defined as business investments in capital. Examples of investment by a business include construction of a new mine, purchase of software, or purchase of machinery and equipment for a factory. Spending by households on new houses is also included in Investment. Unlike its general meaning, 'Investment' in GDP is meant very specifically as non-financial product purchases. Buying financial products is classed as 'saving' , as opposed to investment. The distinction is (in theory) clear: if money is converted into goods or services, it is investment; but, if you buy a bond or a share, this transfer payment is excluded from the GDP sum. Although such purchases would be called investments in normal speech, from the total-economy point of view, this is simply swapping of deeds, and not part of the real economy or the GDP formula. G is the sum of government expenditures on final goods and services. It includes salaries of public servants, purchase of weapons for the military, and any investment expenditure by a government. It does not include any transfer payments, such as social security or unemployment benefits. X is gross exports. GDP captures the amount a country produces, including goods and services produced for overseas consumption, therefore exports are added. M is gross imports. Imports are subtracted since imported goods will be included in the terms G, I, or C, and must be deducted to avoid counting foreign supply as domestic. NX are "net exports" in the economy: gross exports gross imports. There is a fixed relation: NX = X M.

Gross National Product

Gross National Product (GNP) is the total value of all final goods and services produced by a country's factors of production and sold on the market in a given time period. Nominal GNP measures the value of output during a given year using the prices prevailing during that year. Over time, the general level of prices rise due to inflation, leading to an increase in nominal GNP 44

even if the volume of goods and services produced is unchanged. GNP does not include goods produced on a subsistance level, i.e. farmers who eat their own products do not have their crops included in the GNP. Real GNP measures the value of output in two or more different years by valuing the goods and services adjusted for inflation. For example, if both the "nominal GNP" and price level doubled between 1995 and 2005, the "real GNP" would remain the same. For year over year GNP growth, "real GNP" is usually used because it gives a more accurate view of the economy. It also has nothing to do with the population. Gross Domestic Product (GDP) is the total value of final goods and services produced within a country's borders in a year. GDP counts income according to where it is earned rather than who owns the factors of production. In the above example, all of the income from the car factory would be counted as US GDP rather than German GDP. To convert from GNP to GDP you must subtract factor income receipts from foreigners that correspond to goods and services produced abroad using factor inputs supplied by domestic sources. To convert from GDP to GNP you must add factor input payments to foreigners that correspond to goods and services produced in the domestic country using the factor inputs supplied by foreigners.

What is Inflation? Types of inflation? How is it measured?

In mainstream economics, the word inflation refers to a general rise in prices measured against a standard level of purchasing power. Previously the term was used to refer to an increase in the money supply, which is now referred to as expansionary monetary policy or monetary inflation. Inflation is measured by comparing two sets of goods at two points in time, and computing the increase in cost not reflected by an increase in quality. There are, therefore, many measures of inflation depending on the specific circumstances. The most well known are the CPI which measures consumer prices, and the GDP deflator, which measures inflation in the whole economy. There are four main types of inflation with four different causes. The most important inflation is called demand-pull or excess demand inflation. It occurs when the total demand for goods and services in an economy exceeds the available supply, so the prices for them rise in a market economy. Historically this has been the most common type and at times the most serious. Every war produces this type of inflation because demand for war materials and manpower grows rapidly without comparable shrinkage elsewhere. Other types of inflation occur more readily in conjunction with demandpull inflation. Another type of inflation is called cost-push inflation. The name suggests the cause--costs of production rise, for one reason or another, and force up the prices of finished goods and services. Often a rise in wages in excess of any gains in labor productivity is what raises unit costs of production and thus raises prices. This is less common than demand-pull, but can occur independently as well as in conjunction with it. A third type of inflation could be called pricing power inflation, but is more frequently called administered price inflation. It occurs whenever businesses in general decide to boost their prices to increase their profit margins. This does not occur normally in recessions but when the economy is booming and sales are strong. It might be called oligopolistic inflation, because it is oligopolies that have the power to set their own prices and raise them when they decide the time is ripe. One can at such times read in the newspapers that business is just waiting a bit to see how soon they might raise their prices. An oligopolistic firm often 45

realizes that if it raises its prices, the other major firms in the industry will likely see that as a good time to widen their profit margins too without suffering much from price competition from the few other firms in the industry. The fourth type is called sectoral inflation. The term applies whenever any of the other three factors hits a basic industry causing inflation there, and since the industry hit is a major supplier of many other industries, as for example steel is, or oil is, that raises costs of the industries using say steel or oil, and forces up prices there also, so inflation becomes more widespread throughout the economy, although it originated in just one basic sector. There are two main price indexes that measure inflation:

Consumer Price Index (CPI) - A measure of price changes in consumer goods and services such as gas, food, clothing and automobiles. The CPI measures price change from the perspective of the purchaser. Producer Price Indexes (PPI) - A family of indexes that measure the average change over time in selling prices by domestic producers of goods and services. PPIs measure price change from the perspective of the seller. GDP deflator (implicit price deflator for GDP) is a measure of the change in prices of all new, domestically produced, final goods and services in an economy. GDP stands for gross domestic product, the total value of all final goods and services produced within that economy during a specified period.The GDP deflator is not based on a fixed market basket of goods and services. The basket is allowed to change with people's consumption and investment patterns. Therefore, new expenditure patterns are allowed to show up in the deflator as people respond to changing prices.

G 4 Nations
The G4 (Group of Four) was an alliance among India, Germany, Japan and Brazil for the purpose of supporting each others bid for permanent seats on the United Nations Security Council. Unlike similar alliances such as the G7 or G8, where the common denominator was the economy or long term political motives, the G4's primary aim is the coveted permanent member seats on the UN Security Council.

G 8 Nations
The Group of Eight (G8) is an international forum for the governments of Canada, France, Germany, Italy, Japan, Russia, the United Kingdom and the United States. Together, the eight countries represent about 65 percent of the world economy.[1] The group's activities include year-round conferences and policy research, culminating with an annual summit meeting attended by the heads of government of the member states. The European Commission is also represented at the meetings. Each year, member states of the G8 take turns assuming the presidency of the group. The holder of the presidency sets the group's annual agenda and hosts the summit for that year. The presidency for 2007 belongs to Germany, which will host the 33rd G8 summit in Heiligendamm.

SAARC(South Asian Association for Regional Co-operation)

South Asian Association for Regional Cooperation (SAARC) is the largest regional organization in the world by population, covering approximately 1.47 billion people. SAARC is an economic and political 46

organization of seven countries in Southern Asia. The organization was established on December 8, 1985 by India, Pakistan, Bangladesh, Sri Lanka, Nepal, Maldives and Bhutan. On April 3, 2007, Afghanistan became the latest member country to join SAARC at the 14th summit in New Delhi.

In the late 1970s, Bangladesh's President Ziaur Rahman, proposed the creation of a trade bloc consisting of South Asian countries. The Bangladeshi proposal was accepted by India, Pakistan and Sri Lanka during a meeting held in Colombo in 1981. In August 1983, the leaders adopted the Declaration on South Asian Regional Cooperation during a summit which was held in New Delhi. The seven South Asian countries, which also included Nepal, Maldives and Bhutan, agreed on five areas of cooperation: Agriculture and Rural Development Telecommunications, Science, Technology and Meteorology Health and Population Activities Transport Human Resource Development

Afghanistan was added to the regional grouping at the behest of India on November 13, 2005. With the addition of Afghanistan, the total number of member states was raised to 8. In April 2006, the United States of America and South Korea made formal requests to be granted observer status. The European Union has also indicated interest in being given observer status, and made a formal request for the same to the SAARC Council of Ministers meeting in July 2006. On August 2, 2006 the foreign ministers of the SAARC countries agreed in principle to grant observer status to the US, South Korea and the European Union. On 4 March 2007 Iran requested observer status. Political issues SAARC has intentionally laid more stress on "core issues" mentioned above rather than more decisive political issues like the Kashmir dispute between India and Pakistan and the Sri Lankan civil war. However, political dialogue is often conducted on the margins of SAARC meetings. SAARC has also refrained itself from interfering in the internal matters of its member states. During the 12th and 13th SAARC summits, extreme emphasis was laid upon greater cooperation between the SAARC members to fight terrorism. Free trade agreement Over the years, the SAARC members have expressed their unwillingness on signing a free trade agreement. Though India has several trade pacts with Maldives, Nepal, Bhutan and Sri Lanka, similar trade agreements with Pakistan and Bangladesh have been stalled due to political and economic concerns on both sides. In 1993, SAARC countries signed an agreement to gradually lower tariffs within the region, in Dhaka. Nine years later, at the 12th SAARC Summit at Islamabad, SAARC countries devised the South Asia Free Trade Agreement which created a framework for the establishment of a free trade zone covering 1.4 billion people. This agreement went into force on July 1, 2006. Under this agreement, SAARC members will bring their duties down to 20 per cent by 2007. Dhaka 2005 Summit Accord observer status to People's Republic of China, Japan, South Korea and United States of America. The nations also agreed to organize development funds under a single financial institution with a permanent secretariat, that would cover all SAARC programs ranging from social, to infrastructure, to economic ones. 47

Child Labour
Child labor (or child labour) is the employment of children under an age determined by law or custom. This practice is considered exploitative by many countries and international organizations. Child labor was not seen as a problem throughout most of history, only becoming a disputed issue with the beginning of universal schooling and the concepts of laborers and children's rights. Child labor can include factory work, mining or quarrying, agriculture, helping in the parents' business, having one's own small business (for example selling food), or doing odd jobs. Some children work as guides for tourists, sometimes combined with bringing in business for shops and restaurants (where they may also work as waiters). Other children were forced to do tedious and repetitive jobs such as assembling boxes, or polishing shoes. However, rather than in factories and sweatshops, most child labor occurs in the informal sector, "selling on the street, at work in agriculture or hidden away in houses far from the reach of official labor inspectors and from media scrutiny."[1] The most controversial forms of work include the military use of children as well as child prostitution. Less controversial, and often legal with some restrictions, are work as child actors and child singers, as well as agricultural work outside of the school year (seasonal work). Child Labor in India Poor children in India begin working at a very young and tender age. Many children have to work to help their families and some families expect their children to continue the family business at a young age. India has all along followed a proactive policy in the matter of tackling the problem of child labour. India has always stood for constitutional, statutory and developmental measures that are required to eliminate child laborr in India. Indian Constitution consciously incorporated relevant provisions in the Constitution to secure compulsory universal elementary education as well as labor protection for children. Though most children begin working at a young age due to economic reasons, doing so allows them to break from some social constraints. Indian Government policies on Child Labor in India India's policy on child labour has evolved over the years against this backdrop. The present regime of laws relating to Child Labor in India have a pragmatic foundation and are consistent with the International Labour Conference resolution of 1979. The policy of the government is to ban employment of children below the age of fourteen years in factories, mines and hazardous employment and to regulate the working conditions of children in other employment. The Child Labour (Prohibition and Regulation) Act, 1986 seeks to achieve this basic objective. Child labour laws in India Through a notification dated May 26, 1993, the working conditions of children have been regulated in all employment which are not prohibited under the Child Labour (Prohibition and Regulation) Act. Following up on a preliminary notification issued on October 5, 1993, the government has also prohibited 48

employment of children in occupation processes like abattoirs /slaughter houses, printing, cashewnut descaling and processing, and soldering. Children perform a variety of jobs: some work in factories, making products such as carpets and matches; others work on plantations, or in the home. For boys the type of work is very different because they often work long hours doing hard physical labor outside of the home for very small wages. The government has made efforts to prohibit child labor by enacting Child labor laws in India including the 1986 Child Labor (Prohibition and Regulation) Act that stated that children under fourteen years of age could not be employed in hazardous occupations. This act also attempted to regulate working conditions in the jobs that it permitted, and put greater emphasis on health and safety standards. However, due to cultural and economic factors, these goals remain difficult to meet. For instance, the act does nothing to protect children who perform domestic or unreported labor, which is very common in India. In almost all Indian industries girls are unrecognized laborers because they are seen as helpers and not workers. Therefore, girls are therefore not protected by the law. Children are often exploited and deprived of their rights in India, and until further measures are taken, many Indian children will continue to live in poverty.

Glass ceiling
1) The term glass ceiling refers to situations where the advancement of a person within the hierarchy of an organization is limited. This limitation is normally based upon some form of discrimination, most commonly being sexism. This situation is referred to as a "ceiling" as there is a limitation blocking upward advancement, and "glass" (transparent) because the limitation is not immediately apparent and is normally an unwritten and unofficial policy. The "glass ceiling" is distinguished from formal barriers to advancement, such as education or experience requirements. The term is often credited as having been originally coined by Carol Hymowitz and Timothy Schellhardt in the March 24, 1986 edition of the Wall Street Journal. The term is most often used to refer to women's access to upper management. Empirical evidence for this pattern in the U.S. is pervasive.[1] This term is also extended to other groups, including racial or ethnic minorities or based upon the age of employees. 2) According to the US Department of Labor, a 'glass ceiling' is "an artificial barrier based on attitudinal or organizational bias that prevents qualified women and other minorities7 from advancing upward in their organization into senior management level positions. The concept of 'glass ceiling' surfaced in the US in the late 1970s. A glass ceiling was not a barrier to an individual as such, but a barrier to women and other minorities as a group. Initially, one of the main reasons cited for the existence of a glass ceiling was that women did not have the required experience and skills to reach the top management. They were restricted to clerical and other support services jobs. The reason seemed to be true, as in the late 1970s and early 1980s, very few women had proper college education and fewer had management degrees. 49

A survey conducted by the Wall Street Journal in 1986 revealed that the highest-ranking women in most industries were in non-operating areas such as personnel, public relations and finance. These functional specializations rarely led to top management positions.

Information on SEI CMM levels Capability Maturity Model (CMM) broadly refers to a process improvement approach that is based on a process model. CMM also refers specifically to the first such model, developed by the Software Engineering Institute (SEI) in the mid-1980s, as well as the family of process models that followed. A process model is a structured collection of practices that describe the characteristics of effective processes; the practices included are those proven by experience to be effective. [1] The Capability Maturity Model can be used to assess an organization against a scale of five process maturity levels. Each level ranks the organization according to its standardization of processes in the subject area being assessed. The subject areas can be as diverse as software engineering, systems engineering, project management, risk management, system acquisition, information technology (IT) services and personnel management. CMM was developed by the SEI at Carnegie Mellon University in Pittsburgh. It has been used extensively for avionics software and government projects, in North America, Europe, Asia, Australia, South America, and Africa. [2] Currently, some government departments require software development contract organization to achieve and operate at a level 3 standard.

Maturity model
The Capability Maturity Model (CMM) is a way to develop and refine an organization's processes. The first CMM was for the purpose of developing and refining software development processes. A maturity model is a structured collection of elements that describe characteristics of effective processes. A maturity model provides:

a place to start the benefit of a communitys prior experiences a common language and a shared vision a framework for prioritizing actions a way to define what improvement means for your organization

A maturity model can be used as a benchmark for assessing different organizations for equivalent comparison. It describes the maturity of the company based upon the project the company is dealing with and the clients.

Structure of CMM
Maturity Levels. A layered framework providing a progression to the discipline needed to engage in continuous improvement (It is important to state here that an organization develops the ability to assess the 50

impact of a new practice, technology, or tool on their activity. Hence it is not a matter of adopting these, rather it is a matter of determining how innovative efforts influence existing practices. This really empowers projects, teams, and organizations by giving them the foundation to support reasoned choice.) Key Process Areas Key process area (KPA) identifies a cluster of related activities that, when performed collectively, achieve a set of goals considered important. Goals The goals of a key process area summarize the states that must exist for that key process area to have been implemented in an effective and lasting way. The extent to which the goals have been accomplished is an indicator of how much capability the organization has established at that maturity level. The goals signify the scope, boundaries, and intent of each key process area. Common Features Common features include practices that implement and institutionalize a key process area. These five types of common features include: Commitment to Perform, Ability to Perform, Activities Performed, Measurement and Analysis, and Verifying Implementation. Key Practices The key practices describe the elements of infrastructure and practice that contribute most effectively to the implementation and institutionalization of the key process areas.

Levels of the CMM

(See chapter 2 of (March 2002 edition of CMMI from SEI), page 11.) There are five levels of the CMM. According to the SEI, "Predictability, effectiveness, and control of an organization's software processes are believed to improve as the organization moves up these five levels. While not rigorous, the empirical evidence to date supports this belief."

Level 1 - Initial
At maturity level 1, processes are usually ad hoc and the organization usually does not provide a stable environment. Success in these organizations depends on the competence and heroics of the people in the organization and not on the use of proven processes. In spite of this ad hoc, chaotic environment, maturity level 1 organizations often produce products and services that work; however, they frequently exceed the budget and schedule of their projects. Maturity level 1 organizations are characterized by a tendency to over commit, abandon processes in the time of crisis, and not be able to repeat their past successes again. Level 1 software project success depends on having high quality people.

Level 2 - Repeatable
At maturity level 2, software development successes are repeatable. The processes may not repeat for all the projects in the organization. The organization may use some basic project management to track cost and schedule. Process discipline helps ensure that existing practices are retained during times of stress. When these practices are in place, projects are performed and managed according to their documented plans. 51

Project status and the delivery of services are visible to management at defined points (for example, at major milestones and at the completion of major tasks). Basic project management processes are established to track cost, schedule, and functionality. The minimum process discipline is in place to repeat earlier successes on projects with similar applications and scope. There is still a significant risk of exceeding cost and time estimates.

Level 3 - Defined
The organizations set of standard processes, which is the basis for level 3, is established and improved over time. These standard processes are used to establish consistency across the organization. Projects establish their defined processes by the organizations set of standard processes according to tailoring guidelines. The organizations management establishes process objectives based on the organizations set of standard processes and ensures that these objectives are appropriately addressed. A critical distinction between level 2 and level 3 is the scope of standards, process descriptions, and procedures. At level 2, the standards, process descriptions, and procedures may be quite different in each specific instance of the process (for example, on a particular project). At level 3, the standards, process descriptions, and procedures for a project are tailored from the organizations set of standard processes to suit a particular project or organizational unit.

Level 4 - Managed
Using precise measurements, management can effectively control the software development effort. In particular, management can identify ways to adjust and adapt the process to particular projects without measurable losses of quality or deviations from specifications. Organizations at this level set quantitative quality goals for both software process and software maintenance. Subprocesses are selected that significantly contribute to overall process performance. These selected subprocesses are controlled using statistical and other quantitative techniques. A critical distinction between maturity level 3 and maturity level 4 is the predictability of process performance. At maturity level 4, the performance of processes is controlled using statistical and other quantitative techniques, and is quantitatively predictable. At maturity level 3, processes are only qualitatively predictable.

Level 5 - Optimizing
Maturity level 5 focuses on continually improving process performance through both incremental and innovative technological improvements. Quantitative process-improvement objectives for the organization are established, continually revised to reflect changing business objectives, and used as criteria in managing process improvement. The effects of deployed process improvements are measured and evaluated against the quantitative process-improvement objectives. Both the defined processes and the organizations set of standard processes are targets of measurable improvement activities. Process improvements to address common causes of process variation and measurably improve the organizations processes are identified, evaluated, and deployed. Optimizing processes that are nimble, adaptable and innovative depends on the participation of an empowered workforce aligned with the business values and objectives of the organization. The 52

organizations ability to rapidly respond to changes and opportunities is enhanced by finding ways to accelerate and share learning. A critical distinction between maturity level 4 and maturity level 5 is the type of process variation addressed. At maturity level 4, processes are concerned with addressing special causes of process variation and providing statistical predictability of the results. Though processes may produce predictable results, the results may be insufficient to achieve the established objectives. At maturity level 5, processes are concerned with addressing common causes of process variation and changing the process (that is, shifting the mean of the process performance) to improve process performance (while maintaining statistical probability) to achieve the established quantitative processimprovement objectives.

Extensions
Recent versions of CMMI from SEI indicate a "level 0", characterized as "Incomplete". Many observers leave this level out as redundant or unimportant, but Pressman and others make note of it. See page 18 of the August 2002 edition of CMMI from SEI. [3] Anthony Finkelstein [4] extrapolated that negative levels are necessary to represent environments that are not only indifferent, but actively counterproductive, and this was refined by Tom Schorsch [5] as the Capability Immaturity Model:

Key Process areas

For more details on this topic, see Process area (CMMI). The CMMI contains several key process areas indicating the aspects of product development that are to be covered by company processes. Key Process Areas of the Capability Maturity Model Integration (CMMI) Abbreviation Name Area Maturity Level REQM Requirements Management Engineering 2 PMC Project Monitoring and Control Project Management 2 PP Project Planning Project Management 2 SAM Supplier Agreement Management Project Management 2 CM Configuration Management Support 2 MA Measurement and Analysis Support 2 PPQA Process and Product Quality Assurance Support 2 PI Product Integration Engineering 3 RD Requirements Development Engineering 3 TS Technical Solution Engineering 3 VAL Validation Engineering 3 VER Verification Engineering 3 OPD Organizational Process Definition Process Management 3 OPF Organizational Process Focus Process Management 3 OT Organizational Training Process Management 3 IPM Integrated Project Management Project Management 3 53

ISM IT RSKM DAR OEI OPP QPM OID CAR

Integrated Supplier Management Project Management Integrated Teaming Project Management Risk Management Project Management Decision Analysis and Resolution Support Organizational Environment for Integration Support Organizational Process Performance Process Management Quantitative Project Management Project Management Organizational Innovation and Deployment Process Management Causal Analysis and Resolution Support

3 3 3 3 3 4 4 5 5

Current state
Although these models have proved useful to many organizations, the use of multiple models has been problematic. Further, applying multiple models that are not integrated within and across an organization is costly in terms of training, appraisals, and improvement activities. The CMM Integration project was formed to sort out the problem of using multiple CMMs. The CMMI Product Team's mission was to combine three source models: 1. 2. 3. 4. The Capability Maturity Model for Software (SW-CMM) v2.0 draft C The Systems Engineering Capability Model (SECM) The Integrated Product Development Capability Maturity Model (IPD-CMM) v0.98 Supplier sourcing

CMMI is the designated successor of the three source models. The SEI has released a policy to sunset the Software CMM and previous versions of the CMMI. The same can be said for the SECM and the IPDCMM; these models were superseded by CMMI.

Future direction
With the release of the CMMI Version 1.2 Product Suite, the existing CMMI has been renamed the CMMI for Development (CMMI-DEV), V1.2.[1] A version of the CMMI for Services is being developed by a Northrop Grumman-led team under the auspices of the SEI, with participation from Boeing, Lockheed Martin, Raytheon, SAIC, SRA, and Systems and Software Consortium (SSCI).[2] A CMMI for Acquisition (CMMI-ACQ) is also under development at the SEI.[3] Suggestions for improving CMMI are welcomed by the SEI. For information on how to provide feedback, see the CMMI Web site. In some cases, CMM can be combined with other methodologies. It is commonly used in conjunction with the ISO 9001 standard. JPMorgan Chase & Co. tried combining CMM with the computer programming methodologies of Extreme Programming (XP), and Six Sigma. They found that the three systems reinforced each other well, leading to better development, and did not mutually contradict, see Extreme Programming (XP) Six Sigma CMMI.

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What is WPI & CPI?

The inflation rate is the best measure of changes in the prices of groups of commodities over a period of time. This is measured by the Wholesale Price Index (WPI), Consumer Price Index (CPI) for Industrial Workers, Consumer Price Index for Urban Non-Manual Employees (UNME) and Consumer Price Index for Agricultural and Rural Labourers (CPI-ARL) depending upon what the end-user agency requires. The WPI reflects the change in wholesale prices during a year over a pre-defined base year. The rate of inflation as per Wholesale Price Index at the national level was 4.8% during 1998-99 compared to 5.3% during 1997-98 Box 6.1 Methodology for compilation of Wholesale Price Index

The current series is calculated on the principle of weighted arithmetic mean as in the previous series. The price relatives are calculated as the percentage ratios which current prices bear to those prevailing in the base period. In other words, the price relative for each variety/quotation is calculated by dividing the current price by the corresponding base period (1981-82) price and multiplying the resulting figure by 100. The commodity index is arrived at as the simple arithmetic average of the price relatives of varieties/quotations selected for the commodity. The indices for the sub-groups/groups/major groups of commodities are in turn, worked out as the weighted arithmetic mean of the indices of the items/sub-groups/group falling under their respective heads.

The current series includes 447 individual items and 2371 price quotations under the three major groups, namely (1) Primary Articles (93 items and 519 quotations), (2) Fuel, Power Light & Lubricants (20 items and 73 quotations) and (3) Manufactured Products (334 items and 1799 quotations).

The current series of WPI in India with base year 1981-82 = 100 is being compiled by Ministry of Industry, Govt. of India w.e.f. July, 1989, replacing the old series which had 1970-71 = 100 as the base year. WPI is compiled only at the All India level and is not compiled separately at State/Union Territory level.

CONSUMER PRICE INDEX FOR INDUSTRIAL WORKERS

2. The current series of Consumer Price Index for industrial Workers is being compiled since 1989 using 1982 as the base year, replacing the old series (1960=100). The Labour Bureau, Shimla has been compiling and releasing the

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index on a monthly basis for 70 selected centres in India, including Delhi. Price data is collected by the field staff of the State Government for respective centres.

3. This Index Number is used to work out dearness allowance of Govt. Employees and Industrial workers.

4. The Consumer Price Index for Industrial Workers for Delhi since 1989 indicates that the Index was 180 in 1989, 299 in 1994 and 480 in 1999. The Index registered its highest increase of 17.63% in 1998 (Table 6.2). Among the metropolitan cities, the percentage increase in the CPI during 1999 (Calendar Year) was the highest in Delhi(7.38%) followed by Calcutta (5.05%), Chennai (4.94%) and Mumbai (3.31%) (Table 6.3).

What is CRR, PLR, Repo rate & Reverse Repo?

What is CRR? Indian banks are required to hold a certain proportion of their deposits as cash. In reality they dont hold these as cash with themselves, but with Reserve Bank of India (RBI), which is as good as holding cash. This ratio (what part of the total deposits is to be held as cash) is stipulated by the RBI and is known as the CRR, the cash reserve ratio. When a banks deposits increase by Rs100, and if the cash reserve ratio is 10, banks will hold Rs10 with the RBI and lend Rs 90. The higher this ratio, the lower is the amount that banks can lend out. This makes the CRR an instrument in the hands of a central bank through which it can control the amount by which banks lend. The RBIs medium term policy is to take the CRR rate down to 3 per cent. What does a hike in this rate mean? The hike in CRR from 4.5 to 5 per cent will increase the amount that banks have to hold with RBI. It will therefore reduce the amount that they can lend out. The move is expected to shift Rs 8,000 crore of lendable resources to RBI. In the past few months the money that banks have available for giving out as credit is greater than the amount they have been lending out. This has led to an overhang of liquidity

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in the system. The objective of the CRR hike is to mop up some of the excess liquidity in the system. Will this mean a rise in interest rates on my deposits and home loans too? By when and by how much? The hike in CRR is not likely to lead to an immediate increase in interest rates. There is excess liquidity in the system even after a higher amount is deposited with RBI as reserves. Unless the demand for credit picks up to the extent that the money is all lent out, banks will not have an incentive to raise interest rates. The inflation rate may continue to be high, the economy may also continue to witness growth which will keep the demand for credit high, and international trends are for rates to move up. This means that sooner or later interest rates will go up. The first rates to get impacted are yields on government bonds. We have already seen this happening. If the inflation rate keeps rising, RBI may raise the repo rate, the short term rate at which banks park excess funds with the RBI. This makes it less attractive for banks to lend. Further, RBI may raise the bank rate, the rate at which it lends to banks. At this point you may expect interest rates on home loans and fixed deposits to go up as well. Over a year rates could go up by as much as 3 per cent. he Reserve Bank of India (RBI) has decided to increase the fixed reverse repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 5.25 per cent to 5.50 per cent, with immediate effect. The reverse repo rate is the rate at which banks park their short-term excess liquidity with the RBI, while the repo rate is the rate at which the RBI pumps in short-term liquidity into the system.

So what is the reverse repo rate? In recent times it has become the key overnight interest rate. It is the interest rate that a bank earns for lending money to the Reserve Bank of India in exchange for government securities. Suppose the reverse repo, currently pegged at 4.75 per cent, is hiked by say 25 basis points lets understand what the fallout could be. In a matter of days, interest rates in the government securities market would nudge up and, if the rise was significant, say by 40-50 basis points banks may then soon consider hiking loan rates and deposit rates. So you could opt to lock into a fixed interest rate home loan just as a reverse repo rate hike is announced. You could also decide to renew your fixed deposit since the present rate may be more attractive. PLR It is minimum prime lending rate at which credit line is offered to prime borrowers. This rate is also offered to certain loan schemes like the education loan scheme. The benchmark prime lending rate (PLR) is expected to bring flexibility to the interest rate structure in the country and align it with macro economic conditions. 57

Structural impediments to flexibility in the interest rate structure include the high carrying costs of longterm deposits mobilised in the past by banks at fixed interest rates and non-performing assets (NPA). Longterm deposits over one year contracted at fixed rates constitute around 70 per cent of the aggregate deposits of the banking systems, the RBI said in the annual report for 2002-03. Advances in the form of short-term credit at fixed rate constitute around 40 per cent of the total loan portfolio. The carrying cost of NPAs and the tendency to load additional risk premium against possibilities of further accumulation of NPAs forces up lending rates. Besides NPAs, persistence of high operating costs also results in a significant drag on commercial banks ability to lower rates, the apex bank said. The Reserve Bank of India (RBI) advocates a benchmark PLR for banks, taking into account their actual cost of funds, operating expenses, a minimum margin to cover regulatory requirement of provisioning/capital charge and the profit margin. This is the all cost concept of pricing loans by explicitly declaring processing and services charges. All other lending rates can be determined with reference to the benchmark PLR.

Bharat Nirman Project

THE Prime Minister, Dr Manmohan Singh, on Friday Dec17,2005 launched the ambitious Bharat Nirman initiative aimed at strengthening the country's rural infrastructure including water supply, power, housing and roads, and proposed a `specific financing window' for the Rs 1,74,000-crore programme. "Most of this will come from the Government's development outlays. We are also proposing a specific financing window for the Bharat Nirman through Nabard for funding selected components," Dr Singh said addressing a conference organised by the Confederation of Indian Industry. Panchayat-privates sector partnership: The delivery model proposes to involve panchayats and the private sector as partners, he said, adding that the Planning Commission was working on ways to enhance the management of rural infrastructure programmes by panchayats. "State Governments are key implementing agencies and panchayats would need to activate the demand side without which service delivery would not be effective," he said. The four-year programme is aimed at achieving identified goals in six selected areas of rural infrastructure - irrigation, water supply, housing, roads, telephony and electrification. Roads, housing: "In four of these areas we would like to see universal coverage where every village in India with over a 1,000 population will have an all-weather road, every habitation would have water supply, every village would have a telephone and every village would be in fact electrified," he said. The Government plans to build 60 lakh houses to address rural homelessness and add 10 million hectares to irrigation capacity. Dr Singh said that Bharat Nirman, along with the National Rural Employment Guarantee Act, National Rural Health Mission and Sarvashiksha Abhiyan, was aimed at giving a `New Deal to Rural India'. The India-Bharat divide: Dr Singh said that the major challenge of the economic reform programme was that of balancing the growth process and bridging the various divides, particularly narrowing the gap between India and Bharat. The Prime Minister used the term `Bharat' to signify rural areas and `India' to specify urban areas, while asking business to bridge the phenomenal gap between the two. 58

Irrigation: He noted the steady decline in public investment in irrigation over the years. "There have been a large number of projects which have been languishing for want of funds. The effort under Bharat Nirman is to identify all such projects and target their completion to create 10 million hectares of additional irrigation capacity," he said. The Government has identified major and medium irrigation projects amounting to four million hectares, which could be completed, as well as 2.8 million ha that can come from minor irrigation. Communication: On the communication side, he said by September 2007 the Centre is expected to provide every Indian village with telephone access. Currently, as many as 66,822 villages are without telephone connection. Electrification: Expressing his concern over the loss of momentum in recent years in the development of rural electrification, he said, "Over 100,000 villages still do not have electricity connection. To correct this we have initiated the Rajiv Gandhi Grameen Vidyutikaran Yojana. Our effort is to ensure electrification of all villages by the year 2009," he said. Stating that a wealth of opportunities lay at the `bottom of the pyramid', the Prime Minister urged the industry not to restrict itself to competing in existing markets but explore the possibility of creating new markets at the bottom. Will Bharat Nirman make Bharat Mahaan? Agri research needs more resources and commensurate institutional reforms to be a catalyst for global competition These are big schemes, but will they be implemented effectively? Will the government have enough resources for these? Will they really make Bharat mahaan? The research at IFPRI shows that investment in rural roads has the most potent effect on poverty alleviation. In that sense, investing in roads is a very good investment. Further, our research also shows that if the institutions through which these rural schemes are implemented bring about transparency and accountability in implementing agencies, they go a long way to make every million rupees spent more productive. But the focus in the Budget is basically on creating employment, and somehow give at least 100 days of employment to one person in the rural family ready to work. Instead of relying only on the growth process to expand employment opportunities in rural areas, the government seems to be directly stepping in to pump large government expenditure to create employment. It appears that government expenditure in rural areas is getting somewhat more welfare-oriented than providing growth impetus to agriculture and agro-industry. Take the case of investing in research and development, or in irrigation as two examples. It is well known that investments in agricultural R&D as well as irrigation have been neglected for long. Investments in agricultural R&D have the highest rates of return in terms of agricultural growth, but today the situation is that India hardly invests 0.5% of agricultural GDP into agriculture research. As a result, as much as almost 40% of vacancies for Scientists in the Agricultural Research System remain vacant and the growth impetus to agriculture seems to be waning. Agriculture research needs more resources and commensurate institutional reforms, if it has to be a catalyst for making our agriculture globally competitive. Similarly, irrigation projects have lingered for years without completion due to paucity of resources. The additional irrigation created has always lagged behind the targets in recent years by as much as 40-50%. 59

The management of irrigation systems and the pricing of water (and power for irrigation) is in such a sorry state that it appears to be a saga of huge waste of resources. The Finance Minster himself has acknowledged this in his Budget speech, but has not offered any solution. Without fixing this problem, I am afraid, just pouring in more money will not be sufficient. It may simply disappear as water disappears in sand. The problems are deep rooted and this sector needs a major institutional and pricing reforms. Untargeted subsidies on food, fertilisers and power for rural areas, which are ballooning and are epitomes of high inefficiency in the system, have not been touched. To that extent, investments in agriculture remain subdued and the hope to put agriculture growth on a higher trajectory, remains somewhat dampened. Overall, the Budget for agriculture and rural areas seems to have put welfare first and growth later.

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