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Economic Survey 2013: 10 Key points on agriculture
Weak growth: Growth in agriculture has been weak in 2012-13 at 1.8% as against 2.7 last year, following lowerthan-normal rainfall, especially in the initial phases (months of June and July) of the south-west monsoon. Slower economic growth hurts: The economic survey attributed lower growth in agriculture and industrial activities for the significant slowdown in the overall growth of the economy. Need for appropriate policies: For improved agricultural growth, the survey underlines the need for stable and consistent policies where markets play an appropriate role, private investment in infrastructure is stepped up, food price, food stock management and food distribution improves, and a predictable trade policy is adopted for agriculture. Faster growth sought: Growth target twelfth five year plan has been set at 4 per cent growth for the agriculture and allied sector as against 3.6% achieved in the eleventh five year plan ended 2011. Big employer: Although agriculture, including allied activities, accounted for only 14.1 per cent of the GDP at constant (2004-5) prices in 2011-12, its role in the country's economy is much bigger with its share in total employment according to the 2001 census, continuing to be as high as 58.2 per cent. Capital formation doubles: Overall Gross Capital Formation (GCF) in agriculture (including the allied sector) almost doubled in last 10 years and registered a compound average annual growth of 8.1 per cent. Rate of growth of GCF accelerated to 9.7 per cent in the Eleventh Plan (2007-12) compared to a growth of 2.7 per cent during the Tenth Plan (2002-07). Higher private investment: Average annual growth of private investment at 12.5 per cent during Eleventh Plan (first four years) was significantly higher as against nearly stagnant investment during the Tenth Plan. Good flow of credit: The flow of agricultural credit since 2003-4 has consistently exceeded the target. The target of agriculture credit flow for the year 2012-13 was fixed at Rs 5,75,000 crore, against which achievement as of September 2012 was Rs 2,39,629 crore. Monsoon weakness hurts: Output is expected to decline in all major crops in 2012-13 due to deficienct monsoon. The overall area coverage at 665.0 lakh ha under foodgrains during kharif 2012- 13 shows a decline of 55.8 lakh ha compared to 720.86 lakh ha during kharif 2011-12 when the total foodgrains production reached an all-time high of 259.32 million tonnes. Foodgrain output drops: foodgrains production in 2012-13 is estimated to be 5% down as against last year while output of oilseeds and sugarcane is down by 5.8% and 7.3% respectively.

Economic Survey 2013: Lift FDI barriers in legal, accountancy services

Removing restrictions on foreign investment in legal and accountancy services can result in dynamic gains for the Indian economy, the Economic Survey 2012-13 said today. It said immediate attention is needed on several of the restrictions and regulations in the different services like transport, accountancy and legal in order to boost the growth of the sector. "...the myriad restrictions and regulations in the different services domestically need immediate attention. Removing or easing them can lead to dynamic gains for the Indian economy," it said. It has listed some important domestic regulations in India, which need to be examined for suitable policy reforms in the services sector. In accountancy services, the survey said FDI is not permitted in this sector and foreign service providers are not allowed to undertake statutory audit of companies as per the provisions of the laws in India. There are also domestic regulations like prohibition on the use of individual logos for partnership and single proprietorship accounting firms, it said.

Economic Survey 2013: Efforts to improve industrial relations bore fruit
Incidences of strikes and lock-outs have declined considerably in the recent years, according to the Economic Survey for 2012-13. "...Due to constant endeavour of the industrial relations machineries of both the Centre and states, the industrial relations climate has generally remained peaceful and cordial," it said. While the number of incidences of strikes and lock-outs reported during 2007 were 389, this figure came down to 189 in 2011 (provisional) and stood at 194 (provisional) up to October 2012. Wage and allowances, bonus, personnel, indiscipline and violence and financial stringency have been stated to be the major reasons for strikes and lock-outs. Similarly, the man-days lost also declined from 2,71,66,752 in 2007 to 20,29,439 (provisional) in 2012. However, as far as the industry-wise distribution of incidences of strikes and lock-outs are concerned, widespread variations exist among different states as well as Union Territories, it said.

Economic Survey 2013: Mixed signals on industrial production
Industrial production presents a mixed picture of sluggishness bottoming out as well as continuing for a little longer period, the Economic Survey 2012-13 said today. The industrial production measured on IIP made a smart recovery in October 2012 by showing a growth of 8.3 per cent, but entered into negative zone in the subsequent two months.

"Notwithstanding a pick-up in industrial growth observed in October 2012, there are mixed signals on whether the slowdown phase has bottomed out or the current sluggishness would persist a little longer," the Survey said. Overall industrial performance, continued to moderate from first quarter of 2011-12 with growth turning negative in first quarter of 2012-13, before improving to 2.1 per cent in October-December quarter of 2012-13. The Survey, however, said there are at least two factors which suggest some optimism on the industrial front. Firstly, data on frequency distribution of products/product groups, which constitute the IIP, indicate the number of products with a negative growth has declined from 182 in fourth quarter of 2011-12 to 160 in October-November, 2012. The second factor showing optimism is the RBI's business expectation index, which recorded moderately positive growth in third quarter of 2012-13, after persistent negative growth for the previous six quarters. The index tracks IIP growth fairly closely and this suggests a possible bottoming out of IIP growth moderation. As per the survey, latest data indicate the growth of the sector could remain moderately positive at around 3 per cent for the current year. Growth in IIP during April-December stood at 0.7 per cent against 3.7 per cent year-on-year. The survey said IIP growth remains vulnerable to several domestic factors and external shocks.

Economic Survey 2013: FDI in telecom sector plunges by 96% to $70.46 million
The country's telecom sector has seen sharp decline in foreign investor interest with FDI plummeting by 96 per cent to $ 70.46 million in April to November 2012 period, the Economic Survey today said. The sector saw Foreign Direct Investment of $ 1,987.18 million for the same period a year ago. The cumulative Foreign Direct Investment in the sector from April 2000 to November 2012 period stood at $ 12.62 billion. The sector saw decline of bank credit throughout the financial year 2011-12 from 17.77 per cent to 15.21 cent, the Survey said. With a marginal rise in bank credit share at 15.55 per cent for the telecom sector in first quarter of FY 2012-13, credit to the industry further declined to 13.5 per cent in third quarter. The average bank credit for the sector was at Rs 930.43 crore throughout 2011-12 fiscal. "This is further confirmation that telecom sector is in deep financial trouble and needs quick action from the government to get back on its feet. FDI is a critical source for the sector to make the needed investment in network," industry body COAI Director General Rajan Mathews said. The survey, however, expects telecom sector to perform better following recent policy announcements. "...the recent announcement of reform measures at regular intervals including mild relaxation in the monetary and credit policy, sectors like retail, construction, and telecom are expected to perform better," the survey said. Telecom was among leading sectors along with Tourism and Railways that have registered more growth compared to

other sectors, it said. The survey said that telecom connections ( wire and wirelessBSE 1.32 %) increased from 4,297.25 lakh in 2008-09 to 9,513.4 lakh in 2011-12. "The data till 31st December, 2012 shows that 8,955.1 lakh connections have been provided," the survey said.

Economic Survey 2013: India lost 10% share in global BPO mkt to China,Brazil in 5 years
India has lost about 10 per cent share of the global BPO market in the last five years to destinations like China, the Philippines and Brazil, raising concerns for the USD 20-billion Indian BPO industry. The pre-budget Economic Survey 2012-13, which was tabled in Parliament today, said India faces stiff competition from several emerging countries in the BPO sector. It called for information campaigns by the industry to dispel the myths and fears about outsourcing in the developed economies. Countries like Malaysia, China and the Philippines in Asia; Egypt and Morocco in North Africa; Brazil, Mexico, Chile and Columbia in Latin America; and Poland and Ireland in Europe are emerging as attractive destinations for voice contracts, posing a significant threat to Indian firms, it said. "According to Nasscom, in the last five years, India has lost about 10 per cent market share to the rest of the world in the world BPO space, most of which is in the voice contract segment," it said. According to industry body Nasscom, in FY13, IT services would account for USD 50 billion, while Business Process Management (BPM or BPO) and Engineering services would contribute USD 20 billion and USD 10 billion, respectively. In terms of competition, though China faces challenges like language proficiency, it is making large investments in the mission mode to increase English proficiency. "Thus, (China) may eventually emerge as a threat to India," it added. The Philippines, which is the second largest destination for outsourcing, is also a serious competitor having developed both the hardware and software segments of IT. Outsourcing has become a national issue in many developed countries like the US and the UK, who are supporting the local BPO industry through various means. "In such a situation, the Indian BPO industry needs to gear up to address the challenges. Information campaigns to dispel the myths and fears about outsourcing needs to be undertaken by the industry in the developed economies," it said. In the overall IT and IT-enabled services space, new competitors like China, Israel and the Philippines have emerged in recent years.

Between 2005 and 2011, the annual average growth of IT-ITeS services was 69 per cent in the Philippines, 28 per cent in Sri Lanka, 59 per cent in Ukraine, 27 per cent in the Russian Federation, 37 per cent in Argentina and 35 per cent in Costa Rica. "Even if in some cases the export values are relatively low, the average annual growth of computer services in these economies is well above the average of the top exporters," it said.

Budget 2013: IT industry seeks reduction in MAT to 5%
The IT and IT-enabled services industry here has sought the reduction in minimum alternate tax (MAT) to 5 per cent in the Budget 2013-14 for all IT companies operating in SEZs. The Finance Minister is slated to announce on Thursday the budget proposals for the next fiscal. "With the introduction of MAT for SEZ units, it has become very difficult for the IT companies in India (specifically for SME) sector to operate competitively and in a profitable manner," ITsAP (the IT and ITES Industry Association of AP) said in a statement. "This has reduced the employment generation rate and further FDI investment in India. Hence the MAT should be rolled back or decreased to 5 per cent," it said. Under the present IT laws, business losses can be forwarded only for a minimum of 10 years and the same should be allowed to carry forward without any limitation. In the current economic downturn globally, recouping the losses in 10 years may not be possible and many countries are allowing losses without any limitation to period, the IT body requested. ITsAP also requested the FM to give an opportunity to set -off the taxes payable against refund due to the assessee which will increase the liquidity and save time in following up for the refunds. On Service Tax issues, the ITsAP said all export companies in IT/ITES are entitled for refund paid on the input services.

Economic Survey 2013: Image change needed for Indian tourism sector
India's tourism sector needs an urgent image makeover and higher investment in infrastructure, including through PPP mode to capitalise on opportunities provided by overall growth in world tourist arrivals, the Economic Survey said today. Global tourist arrivals are expected to increase by 43 million every year on an average from 2010 to 2030. The Survey for 2012-13 tabled in Parliament said there is also a need to address issues like high luxury taxes on hotels by states and ensure greater cleanliness and safety for tourists, which can help in giving a big boost to this sector. "With world tourist arrivals expected to increase by 43 million every year on an average from 2010 to 2030 and FTAs in emerging countries expected to grow faster than in advanced economies, a goldmine of opportunity in tourism is waiting for India, which at present has a paltry share of 0.64 per cent in world tourist arrivals," the survey said.

It, however, said "an image change for Indian tourism is needed with higher investment in tourism infrastructure including through PPP mode." Calling for more private participation in the sector, it said: "Even user charges could be levied if monuments or tourist sites are developed by the private sector or through PPP (public private partnership)." On the taxation issues, the survey said refunding VAT as done in countries like Thailand and Singapore can also help the tourism sector. Domestic tourism is also an important contributor to the growth of this sector with a 14.34 per cent CAGR of domestic tourist visits from 1991 to 2011. During 2011, there were 851 million domestic tourists, the Survey noted. The hotels and restaurants sector with a 1.5 per cent share in India's GDP in 2011-12 is an important sub-component of the tourism sector. As per 12th Five Year Plan approach paper, India's travel and tourism sector is estimated to create 78 jobs per million rupees of investment compared to 45 jobs per million rupees in the manufacturing sector, the Survey said. "As per Tourism Satellite Account (TSA) data 2009-10, the contribution of tourism to India's GDP was 6.8 per cent (3.7 per cent direct and 3.1 per cent indirect) and its contribution to total employment generation was 10.2 per cent (direct 4.4 per cent and indirect 5.8 per cent)," it added. To promote tourism, the government has taken many policy initiatives including a five-year tax holiday for 2, 3, and 4 star hotels located around all UNESCO, World Heritage sites (except Delhi and Mumbai) for hotels which start operating with effect from April 1, 2008 to March 31, 2013.

Economic Survey 2013: Indian economy more vulnerable to global shocks
: Indian economy has greater vulnerability to global shocks and economic re-balancing will help in reducing the risks, the Economic Survey said today. Emphasising that India cannot take the external environment for granted, the Survey said the country is exposed to shifts in risk tolerance of global investors. Another external risk is that India's import bill is strongly tied to the price of oil. "Globalisation of Indian economy has helped raise growth, it has also meant greater vulnerability to external shocks. A focus on domestic macroeconomic re-balancing will help reduce vulnerability," said the Economic Survey 2012-13, which was tabled by Finance MinisterP Chidambaram in Parliament. It is unlikely that the support to Indian growth from the global economy would be significant, it added. "India cannot take the external environment for granted, and has to move quickly to restore domestic balance," the survey said. "The government is committed to fiscal consolidation. This along with demand compression and augmented agricultural production should lead to lower inflation, giving the RBI the requisite flexibility to reduce policy rates," it added. It also said that global recovery would depend on risks managed from the US fiscal adjustment and Eurozone area.

Crisis in the Eurozone has become deep, structural and multifaceted, despite several rescue packages over the last two years, posing a major downside risk to the global outlook

Economic Survey 2013: Lift FDI barriers in legal, accountancy services
Removing restrictions on foreign investment in legal and accountancy services can result in dynamic gains for the Indian economy, the Economic Survey 2012-13 said today. It said immediate attention is needed on several of the restrictions and regulations in the different services like transport, accountancy and legal in order to boost the growth of the sector. "...the myriad restrictions and regulations in the different services domestically need immediate attention. Removing or easing them can lead to dynamic gains for the Indian economy," it said. It has listed some important domestic regulations in India, which need to be examined for suitable policy reforms in the services sector. In accountancy services, the survey said FDI is not permitted in this sector and foreign service providers are not allowed to undertake statutory audit of companies as per the provisions of the laws in India. There are also domestic regulations like prohibition on the use of individual logos for partnership and single proprietorship accounting firms, it said. "These regulations need to be relaxed and streamlined to facilitate tie-ups and penetrate foreign markets given the potential for exporting these services by the outsourcing mode," it said. Talking about legal services, it said FDI is not permitted in the sector and international law firms are not authorised to advertise and open offices in India. "Foreign service providers can neither be appointed as partners nor sign legal documents and represent clients. The Bar Council is opposed to entry of foreign lawyers/law firms in any manner," it said adding Indian advocates are not permitted to enter into profit-sharing arrangements with persons other than Indian advocates. In education services, it said these come under the concurrent list with multiple controls and regulations by central and state governments and statutory bodies. "Regulations of minimum of 25 acres of land to establish a medical college restricts the setting up of medical colleges in cities like Delhi," it said. In trade and transport services, Survey said some constraints in these sectors include restrictions on interstate movement of goods which could ease with the adoption of the model Agriculture Produce and Marketing Committee (APMC) Act by many states. It also called for revision of the Multimodal Transportation of Goods Act 1993 to ease the existing restrictions on transportation and documentation through different modes of transport.

Economic Survey 2013: Challenges remain in making India preferred destination for global investors
India's financial sector faces certain challenges that hold it back from becoming a preferred destination for global investors even though reforms have made domestic capital market more vibrant and transparent, the Economic

Survey said today.

The performance of domestic financial sector will depend on both short term and long term factors such as risk perception of investors, said the Economic Survey for 2012-13 tabled in Parliament. "...there are still certain challenges in the development of the Indian financial sector which need to be addressed to make it an important avenue for productive channelisation of savings by domestic investors and a preferred investment destination for international investors," it said. India has been a late starter in initiating reforms in the financial markets, which began in the 1990s. "...the country now has one of the most vibrant and transparent capital markets in terms of market efficiency, transparency and price discovery process," the report said. Last year, Indian market was among the top few performers in the world, mainly helped by foreign institutional investors. FIIs pumped in $31.01 billion into the domestic market in 2012. The Survey said that economic and political developments in the euro zone and the United States impacted domestic and other markets. "In the short run, factors like expectation of higher relative returns, risk perception of investors and global liquidity will decide the level of flow of funds to the domestic equity market," it noted. About Rs 13,050 crore was mopped up through equity issues till December, in the current fiscal. During the AprilDecember period, the BSE 30-share index, Sensex, surged 11.62 per cent, while the key NSE 50-scrip index, Nifty, climbed 11.51 per cent. Many capital market initiatives have been taken in the recent times, including the launch of the Rajiv Gandhi Equity Savings Scheme (RGESS) and its expansion for Qualified Foreign Investors (QFIs). Investment sentiment started improving in the last few months with foreign investors reposing more confidence in the Indian economy in general and markets in particular, the Survey said. "The reform measures initiated by the government recently have been received well by the markets," it added. Among others, the government has relaxed Foreign Direct Investment ( FDI) limits in multi-brand retail and aviation sectors.

Economic Survey 2013: Urgent attention required on infrastructure, taxes to boost exports
India needs "urgent attention" on issues related to infrastructure, trade facilitation, taxes and credit in order to boost the country's exports, said the Economic Survey 2012-13. According to the survey, the recent global slowdown has thrown up new challenges for India with its export growth being continuously negative since May 2012 compared to high growth rates of even above 50 per cent in some months of the previous year.

Making a marginal recovery, India's exports entered the positive zone after a gap of eight months, recording a growth of 0.82 per cent to $25.58 in January.

Economic Survey 2013: India suffered peak power shortage of 9% in 2007-12
India witnessed a peak power shortage of 9 per cent during the five years ending 2012 when over 50,000 MW new generation capacity was created, Economic Survey said on Wednesday. "During the 11thFive Year Plan (2007-12), nearly 55,000 MW of new generation capacity was created. Yet there continues to be a peak shortage of 9 per cent," it said. Peak power shortage is shortfall in generation capacity when electricity consumption is maximum. The survey said the resources currently allocated to energy supply are not sufficient for narrowing the gap between energy needs and energy availability. One of the key challenges remain resolving the energy bottlenecks. Further, the country's excessive reliance on imported crude oil make it imperative to have an optimal energy mix that will allow it to achieve its long-run goal of sustainable development. As on March, 2011 country's estimated coal reserves were at about 286 billion tonnes, lignite at 81 billion tonnes, crude oil at 757 million tonnes and natural gas 1,241 billion cubic metre (BCM). Electricity generation by power utilities during 2012-13 was targeted to go up by 6.05 per cent to 930 billion units. The growth in power generation during April to December, 2012 was 4.55 per cent as compared to about 9.33 per cent during April-December, 2011. The estimated hydro potential is about 1,45,000 MW. The total potential for renewable power generation from various sources other than large hydro projects stood at 89,760 MW. Import dependence on crude oil is projected at 78 per cent while that in coal will be 22.4 per cent by 2016-17, Survey said. An integrated power transmission grid helps to even out supply-demand mis-matches. The existing inter-regional transmission capacity of 27,750 MW connects the northern, western, eastern and north-easterns in a synchronous mode operating at the same frequency and southern region asynchronously operating in the same mode. Synchronous inter-connection of the southern region with other regions is expected to be established by April, 2014. Meanwhile, trading in electricity is enabled through traders and power exchanges that optimises generation resources by facilitating trade and flow of electricity across the country. It has helped in sale of surplus power by distribution utilities and captive power plants on one hand, and purchase of electricity by deficit firms on the other hand to meet sudden increases in demand, it said. The capacity addition during the 12th plan period (2012-17) is estimated at 88,537 MW comprising 26,182 MW in the central sector, 15,530 MW in the state sector and 46,825 MW in the private sector respectively. The capacity addition target for the year 2012-13 was set at 17,956 MW. A capacity of 9,854 MW has been added till December 2012.

Economic Survey 2013: Banks approaching infrastructure exposure limits
Funding of infrastructure will become a challenge with banks approaching their lending limits amid stalled projects and rising requests for loans restructuring. "The issue needs to be looked into in the context of the limitation of banks to finance such projects," said the Economic Survey. "Moreover banks are also approaching their exposure limits." Infrastructure projects require long-term financing in order to be sustainable and cost effective. So far, banks have been the main source of funding these projects but they are unable to provide long-term funding given that their funds are short term in nature with even most long term funds are with a maturity of one to three years. The survey said that infrastructure development funds are expected to provide long-term low-cost debt for infrastructure projects by tapping into savings like insurance and pension funds. Given the long-term investment capability of insurance and pension funds, they have so far played a comparatively limited role in financing infrastructure, the survey said.

Here are the ten key takeaways from the Survey:
1) Unhedged foreign currency loans `dangerous gamble'. 2) Need to temper government moves that push up wages. 3) External debt within manageable limits. 4) Rupee very volatile due to high share of FIIs to total capital flows. 5) Vulnerable to 'reversal' and 'sudden stop' of capital, especially in times of stress. 6) Medium term indicates liquidity deficit widening. 7) Seeks RBI stance shift to improve credit. 8) Need to shift financial system towards bonds vs banks. 9) Global economic environment fragile; may disappoint. 10) Banks near limits on infrastructure lending.

Economic Survey 2013: 10 key points on infrastructure and energy
Need to align energy prices with international levels: The survey says this may be the ideal option, especially when large imports are involved. Misalignment could pose both micro- and macroeconomic problems. Underpricing reduces the incentive for energy efficiency and reduces the incentive and ability of producers to invest in the sector.

Natural gas prices being reviewed: The operator of a field is free to sell gas produced from the NELP blocks at a market-determined price, subject to the approval of pricing formula. The government is reviewing pricing under the price sharing contract (PSC) to clarify the extent to which producers will have the freedom to market the gas. Refining capacity rising rapidly: It rose from 187.4 million tonnes on April 1, 2011 to 215.1 million tonnes on April 1 2013, and is projected to reach 218.4 million tonnes by the end of 2012-13 and 239.6 million tonnes in the following year, with capacity augmentation of existing refineries and commissioning of the Paradip Refinery. Power shortage: There is an overall shortage of power in the country both in terms of energy deficit and peak shortage. At present, overall energy deficit is about 8.6 per cent and peak shortage of power is about 9.0 per cent Need to import more coal : Neet to meet target of 795 million tonnes of coal production by the end of the five-year plan from 540 million tonnes in 2011-12 This increase of 255 million tonnes assumes an increase of 64 million tonnes of captive capacity with the rest by Coal IndiaBSE -1.08 % Limited. However, even with this increase, there will be a need to import 185 million tonnes of coal in 2016-17 which may further add to the financing cost of power projects Aviation fuel pricing: There is a need to rationalize the tax regime particularly value added tax of 20-30% in most states. The aviation ministry wants a uniform tax of 5%. Pricing should be transparent. High tax regime will reduce wider economic gains from aviation and hurt economic growth and revenue. Good news from Air India : The national carrier is already doing better. It is expected that the company will achieve positive EBIDTA (earnings before income, taxes, depreciation and Amoritization) in the results for the Financial Year 2012-13," the survey said. Need to speed up infrastructure projects: The country is not well-endowed with energy resources, except coal, and the existence of policy distortions makes management of demand and supply more difficult. Accordingly, the short-run action needed to remove impediments to implementation of projects in infrastructure, especially in the area of energy, includes ensuring fuel supply to power stations, financial restructuring of Discoms, and clarity in terms of the NELP. Long-term strategy should focus on issues like coal production, petroleum price distortion, natural gas pricing, and effective management of urbanization. Ultra Mega Power Projects(UMPP): Three units of the MundraBSE 1.20 % project, each of 800 mw have been commissioned by October 2012. The fourth and fifth units are expected to achieve commercial operation in May and September 2013. Need for exit route in road projects: Of late, financing of road projects has run into difficulty as leveraged companies implementing road projects are unable to raise more debt in the absence of fresh equity. In current market conditions, these firms are unable to raise new equity. Exit route needs to be eased so that promoters can sell equity positions after construction, passing on all benefits and responsibilities to entities that step in. Promoters can then use the equity thus released for new projects. Steps are also needed to up-scale projects in PPP mode for achieving the targets envisaged for the development of roads in the Twelfth Plan.

India corruption threatens foreign investment
http://www.telegraph.co.uk/finance/personalfinance/expat-money/8385379/India-corruption-threatens-foreigninvestment.html

Endemic corruption in India has grown in scale and represents billions of pounds, with the potential to discourage investors and derail growth prospects, consultancy firm KMPG said in a survey.
The survey of 100 leading domestic and foreign businesses was published as Prime Minister Manmohan Singh's government struggles to defend itself against graft cases ranging from a £24 billion telecoms scandal to houses for war widows diverted to bureaucrats. The scams, exposed in recent months, point to a pervasive culture of corruption in Singh's administration, prompting a man once seen as India's most honest politician to defend his leadership and scramble to keep the ruling coalition intact. More than two-thirds of those surveyed said corruption prevented India from moving beyond the nine per cent growth expected in the next fiscal year starting April 1. Just over half said graft would make the country less attractive to foreign investors. And the graft riddling Asia's third-largest economy was no longer confined to bribing government officials for passports or telephone connections from the state provider. "Today India is faced with a different kind of challenge," the report said. "It is not about petty bribes (`bakshish') any more, but scams to the tune of thousands of crores (billions of rupees) that highlight a political/industry nexus which, if not checked, could have a far reaching impact."

Automobile:
The amount of cumulative foreign direct investment (FDI) inflow into the automobile industry during April 2000 to November 2012 was worth US$ 7,518 million, amounting to 4 per cent of the total FDI inflows (in terms of US$), as per data published by Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce. The vision of Automotive Mission Plan (AMP 2006-16) aims India to emerge as the destination of choice in the world for design and manufacture of automobiles and auto components with output reaching a level of US$ 145 billion accounting for more than 10 per cent of the gross domestic product (GDP) and to provide additional employment to 25 million people by 2016.

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Volvo Group plans to invest Rs 3,800 crore (US$ 710.28 million) in India over the next few years. Of this, Rs 1,800 crore (US$ 336.45 million) would be invested in its joint venture (JV) with Eicher Motors. Volvo also aims to export about 30 per cent of the capacity at its Indian engine plant it plans to open in Pithampur, Madhya Pradesh in 2013, as it looks to leverage costs from India operations Honda Car India, the wholly-owned subsidiary of Honda Motor Co, plans to set up a greenfield diesel engine factory at its second industrial location in Rajasthan Jaguar Land Rover (JLR) will incur capital expenditure worth US$ 3.26 billion per year over the medium term mainly for product development, according to Crisil. In addition, Tata Motors has started assembling the Jaguar XF at its new facility in Chakan near Pune, Maharashtra The research and development (R&D) team of Fiat India will assist Chrysler to design and develop the smallest Jeep, to be launched globally by mid-2014. The Italian company has also commissioned an R&D set-up, Chrysler India Automotive Pvt Ltd, in Chennai

Industrial:
The miscellaneous mechanical and engineering industries' sector-wise foreign direct investments (FDI) inflows from April 2000 to October 2012 was calculated at US$ 2, 282.02 million, as per the Department of Industrial Policy and Promotion (DIPP).

Havells India Limited, a US$ 1.3 billion leading Fast Moving Electrical Goods (FMEG) company and power distribution equipment manufacturer has launched India's first large scale lighting fixture plant at Neemrana, Rajasthan. The company infused a capital of Rs 100 crore (US$ 18.2 million) to build this state-of-the-art plant as a part of its strategy to strengthen its position in the fast growing and rapidly emerging lighting fixtures market in India. The plant, currently employing around 250 people, will cater to both, consumer and industrial lighting applications. It will also help to effectively control production efficiency and quality, widen customer responsiveness and reduce delivery response time. The Indian government has been really pro-active in promoting R&D activities and improving engineering services in the country. With support from the World Bank, the Government has been conducting the 'technical education quality improvement programme', under which 127 engineering institutions were covered for quality improvement in its first phase from 2002 to 2009. In the second phase, from 2010 to 2014, it aims to cover another 190 engineering institutions

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Chinese consumer durables giant Haier intends to make India its manufacturing hub to boost its exports to the neighbouring markets and African region. The company would initially export refrigerators and washing machines, most of which would be produced in India Germany-based manufacturer Lemken GmbH and Co KG has established its first non-European manufacturing unit at Butibori, Nagpur in order to grab a pie of the agro equipment market in India which is estimated to touch Rs 3,000 crore (US$ 551.72 million) in future. In the first phase of operations, the company’s subsidiary Lemken India Agro Equipment Pvt Ltd, will manufacture hydraulic reversible ploughs that can be used on tractors (with over 40 HP in power) however, the second phase would involve production of seedbed preparation implements, cultivators and disc harrows. Around Rs 60 crore (US$ 11.03 million) would be infused to implement each of the phases. Chennai-based Voltech group has partnered with the American NanoPV to put up a 100 mega watt (MW) solar module manufacturing plant near Chennai and a solar park near Tuticorin at an estimated cost of Rs 100 crore (US$ 18.39 million). The initial capacity of the plant would be 10 MW which would be ramped up eventually. Voltech is a medium-sized group that manufactures transformers Havells India Limited, a leading Fast Moving Electrical Goods (FMEG) company and power distribution equipment manufacturer has commenced India's first large scale lighting fixture plant at Neemrana, Rajasthan. The company has invested Rs 100 crore (US$ 18.39 million) on the state-of-the-art plant as a part of its strategy to strengthen its position in the fast growing and rapidly emerging lighting fixtures market. Catering to both, consumer and industrial lighting applications, the plant would be instrumental in effectively controlling production efficiency & quality, increasing customer responsiveness and shortening delivery response time China-based solar module manufacturer, ReneSola plans to use India as manufacturing hub for producing cells and modules, for supplying not only to the domestic Indian market, but also to the neighbouring countries. Bagging orders from two Indian solar power developers, ReneSola visions a total quantity of 250 MW from India-made modules over a two-year period Swedish truck, bus and earth-moving equipment producer Volvo plans to infuse an outlay of Rs 3,800 crore (US$ 698.85 million) in India over next few years. Of this, Rs 1,800 crore (US$ 331.03 million) would be invested in its joint venture (JV) with Eicher Motors while the remaining amount would go towards its operations expansion. Meanwhile, the company is preparing to launch new truck models in the value segment to boost its growth in India.

Pharma:
The cumulative drugs and pharmaceuticals sector attracted foreign direct investments (FDI) worth US$ 9,776 million between April 2000 to November 2012, according to the latest data published by Department of Industrial Policy and Promotion (DIPP).

 Glenmark Pharmaceuticals S A (GPSA) has entered into an agreement with Forest Laboratories, Inc, to
collaborate on the development of inhibitors to treat chronic inflammatory conditions, including pain. Under the terms of the agreement, latter is to make a US$ 6 million upfront payment to Glenmark and provide an additional US$ 3 million to support the next phase of work Contract research firm GVK Biosciences and the US-based Onconova Therapeutics have entered into a novel joint partnership to develop new drugs for cancer Wockhardt has received US Food and Drug Administration (USFDA) approval to launch 25 mg, 50 mg, 100 mg, 200 mg and 300 mg extended release tablets of Lamotrigine in the US. The drug is used for the treatment of epilepsy

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Investments

 Israel-based Teva Pharmaceuticals in collaboration with Procter & Gamble (P&G) plans to set up world's
largest over-the-counter (OTC) medicine facility at Sanand, Gujarat

 GlaxoSmithKline (GSK) and the Hyderabad-based Biological E Ltd have teamed up for early stage research    
and development (R&D) of a six-in-one combination pediatric vaccine against polio and other infectious diseases Claris Lifesciences Ltd has entered into joint venture (JV) agreement with two Japan-based drug makers Otsuka Pharmaceutical and Mitsui & Co Ltd for its injectable business in India and other emerging markets Nipro Corporation has set up India's first dialyser manufacturing facility at Shirwal near Pune, with an investment of Rs 700 crore (US$ 130.60 million) Aurobindo Pharma Ltd has received approval from the US Food and Drug Administration (USFDA) to manufacture and market various medicines namely Oxacillin injections and Rizatriptan Benzoate tablets in the US, besides Nafcillin and Ondansetron injection Eli Lilly and Strides Arcolab have inked a pact to increase delivery of cancer medicines in emerging markets. Agila Specialties, the specialties division of Strides Arcolab, will make cancer medicines and Eli Lilly will market them in emerging geographies

Science and Technology

An exclusive research facility for Zebrafish has been set up at the Centre for Cellular and Molecular Biology (CCMB). The genome of Zebrafish is similar to the genome of human beings. This has prompted the lab to deal exclusively with this fish to investigate developmental biology in vertebrates, according to Dr Ch Mohan Rao, Director, CCMB Deutsche Forschungsgemeinschaft (DFG), the German Research Foundation, has expanded its India presence with the formal launch of a Centre in Hyderabad. It is collaborating with the Department of Science & Technology on about 40 bilateral research projects in science and engineering currently, said Dr Torsten Fischer, Director, DFG India

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Crompton Greaves (CG) Ltd has acquired 100 per cent stake in Spain-based ZIV Aplicaciones Y Technologia, SL for an enterprise value of €150 million (US$ 196.19 million). ZIV deals in high value smart grid and automation solutions for industrial and utilities segments Intel Future Scientist programme developed in India, aims to sustain the innovative streak in students, has been launched by the global chip maker. The programme empowers teachers to transform science and math education in their classrooms and aims to reach about 50,000 girls to help them develop scientific skills and expertise Bosch Group will set up an independent research centre at the Indian Institute of Science (IISc) with an investment of Rs 140 crore (US$ 25.75 million). The proposed investment will be from the German major's global Bosch InterCampusprogramme