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Birmingham Chamber of Commerce and Industry

January 1, 2007

Prime Minister Manmohan Singh outlines the five challenges before the nation

Cautioning against complacency following the rapid progress achieved by the country, Prime Minister Manmohan Singh on December 17 outlined five major challenges that would engage India over the next decade on the road to becoming a developed economy.

Releasing the 'India Rural Infrastructure Report' prepared by the National Council for Applied Economic Research (NCAER) in New Delhi, the Prime Minister said: "It would be wrong to assume, as some do, that the major development challenges have been solved and that the Indian economy can now effortlessly coast towards becoming a developed country."

The Prime Minister said inflation had been contained despite a high level of public debt, and "in brief, the economic environment facing the private sector has been transformed and the results are evident".

"However, we must not be complacent," Singh said, while handing down policy prescriptions for each of the five challenges, namely, revitalisation of the rural economy; improved delivery of essential public services; improved management of urban areas; preparing the financial system for greater inclusion and increased global integration; and establishing a regulatory culture to facilitate cost-effective private investment in infrastructure.

It was heartening that the growth process that commenced with the external sector and services, had now spread to manufacturing, he said, but added that more rapid growth was required to provide employment to the millions of youth joining the labour force each year so as to accelerate the reduction of extreme poverty.

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FDI inflows to grow by 100% this fiscal: Kamal Nath

The foreign direct investment (FDI) inflows into the country this fiscal are set to grow by around 100 percent, crossing the $11 billion mark, as compared to $5.5 billion in 2005-06.

Giving an overview of the performance of the Department of Industrial Policy and Promotion (DIPP) during the current fiscal year, Commerce and Industry minister Kamal Nath said, "Once the reinvested earnings of foreign companies, already present in India, are also taken into account in the inflows, which is a worldwide practice, the total FDI inflows in the fiscal 2006-07 could be as high as $14 billion, compared to $7.7 billion last year."

He added that the country is well on its way of reaching the export target of $120 billion set for this fiscal. "Growth in exports is needed to achieve a target of 10 percent GDP growth," the Minister said.

According to Kamal Nath, the software industry, the financial services segment and the manufacturing sector have seen huge investments. "Investments in the manufacturing sector are first-mile investments and are likely to be followed up by further funding for completion of the projects and also for their further expansion," he added.

He also pointed out that compared to last year, the manufacturing sector had grown by 11.2 percent in the April to October period and this rate was likely to be sustained.

"The targeted rate of growth of 12 percent in the sector during the 11th Plan is likely to be achieved in the terminal year of the 10th Plan itself," the Minister said.

According to Nath, the manufacturing sector played a major role in achieving the 10 percent growth rate of industrial production during the April to October period this fiscal.

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An Indian space walk

Indian-American astronaut Sunita Williams has made her spacewalk debut, joining an exclusive club of eight women who achieved this feat since the first-ever space walk in 1965. She also became the first person of Indian origin to walk in space. For Williams, 41, it was a great outing as she stepped out from the station into the vacuum of space for an hazardous EVA (Extra-vehicular activity). There have been a total of 281 spacewalks since 1965, of which only eight have been by women -- seven Americans and a Russian.

Arrivals record at Taj Mahal

On December 25, a new record for tourist arrivals was set at the Taj Mahal, the 17th century monument to love that is India's leading tourist destination. Against an average of 5,000-6,000 visitors a day, Christmas day saw 15,000 visitors -- surpassing the record of around 11,000 visitors on Christmas last year. A police official said that more personnel had been deputed at the Taj till January 5 in view of a likely rush of tourists.

Harvard, Wharton and Railways

Railway Minister Lalu Prasad on December 27 held a "class" for 130 students from Harvard and Wharton, outlining how he scripted the success story of the country's loss-making railways -- something that has generated tremendous international interest. The students, some of the brightest in the world, bombarded the minister with questions on the railways' dramatic turn-around, besides its network that transports 14 million people daily. "The railways which a few years back was not in a position to pay dividends to the government now boasts of a cash surplus of more than Rs. 130 billion ($2.8 billion) in a short span of 30 months. This would take a quantum leap to Rs. 200 billion by the end of current fiscal," he said.

The reason: Growth in freight and passenger volumes and, on the supply side, an "increase in axle load coupled with reduction in turnaround time of wagons from seven to five days has contributed to an incremental loading capacity of 170 million tonnes, resulting in revenues of Rs. 100 billion", Lalu Prasad said.

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Reusable launch vehicle test

India's space programme is set to soar into a new hi-tech era when, between January 10 and 15, the Indian Space Research Organisation (ISRO) will evaluate the reusable launch vehicle (RLV) technology for the first time. It's a mission that is being viewed with considerable interest by international space agencies. The payload will include a space capsule recovery experiment (SRE). The capsule will be placed in orbit at an altitude of 625 km and recovered after some time. This will allow ISRO to study the reusable launch vehicle technology, especially in the area of re-entry when it will experience searing temperatures.

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