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Taxing Times
The phase-out of central sales
tax is yet another move towards ushering in the national goods and
services tax (GST). The compensation to the states, in lieu of CST
phase-out, will include revenue proceeds from 33 services currently being
taxed by the Centre as well as 44 new services of an intra-state nature
that will be traded by the states. However, VAT is the way forward, though
much needs to be done to iron out the anomalies in the current VAT regime.
India, Ahoy!
Indian investments overseas are growing and how. For instance, total
Indian investment in Latin America and the Caribbean has topped $3 billion
(Rs 13,500 crore) so far. The latest investment is by ONGC Videsh, which
acquired an oilfield in Colombia for $425 million (Rs 1,912.5 crore).
Earlier, ONGC bought an offshore oilfield in Brazil for $410 million (Rs
1,845 crore).
Surging Inflows
Private equity (PE) investment
in India more than tripled in 2006. PE firms invested $7.5 billion (Rs
33,750 crore) in 299 deals in India last year, up from $2.3 billion (Rs
10,350 crore) in 2005. Two of the most significant investments during the
year were KKR's acquisition of the Indian software business of Flextronics
International for about $900 million (Rs 4,050 crore) and Providence
Equity Partners buying into telecom firm Idea Cellular.
Japan Calling
This is the age of Asian
dominance, and fittingly, two Asian giants, India and Japan, are embracing
each other for mutual advantage. The recent visit of Prime Minister
Manmohan Singh to Japan has highlighted the fact that Japan is now, more
than ever, eager to enhance and upgrade commercial ties with India. An
analysis of the trade basket.
Inclusive Growth
To achieve a 10 per cent growth rate, and sustain that over time, the
Eleventh Five Year Plan will emphasise investments in agriculture.
Agricultural GDP has been growing (limping?) along at 2 per cent since
1996. A new strategy, including one for a second Green Revolution, is
urgently needed to take India to the next level of development. An
analysis.
Calling Rural India
There are over 170 million
telephone connections in this country, but rural India is still lagging
behind. Rural teledensity is only 3.5 per cent (against the national
average of 16.6 per cent); not surprisingly, there are no telephone
connections in over 30,000 villages. A look at the strategies being
implemented to connect rural India to the rest of the country.
Flying High
The Indian aviation industry is
growing at a rapid pace, thanks to air transport deregulation, emergence
of new operators, lower fares and large untapped demand for air travel.
The numbers tell an interesting story: India will require an estimated
1,100 aircraft. The average annual passenger traffic growth in India
through 2025 is estimated at 7.7 per cent, well above the world average of
4.8 per cent and China's 7.2 per cent.
Bars Of Gold
The global gold industry is flourishing, largely fuelled by Asian demand
and a weak US dollar. The boom is probably only halfway through since
prices bottomed out in 2000. Since 1800, the boom and bust cycles have
averaged about 10 years. While production is down, the value of gold
purchased today is up 47 per cent from a year ago. The super-cycle of high
metal prices is seen to be spurred largely by demand from China and India.
An analysis.
Global Glut
Just-in-time inventories are
turning into just-too-much at companies around the world; they may become
a drag on global economic growth. Companies may idle workers and
production lines to clear out the excess. Factory inventories rose faster
than sales last quarter for the first time since 2001, according to
economists. This time, companies have been caught by the slump in the US
housing industry and the mid-year run-up in energy prices that undercut
demand.
Trading With Neighbour
There are no takers for Hu
Jintao's bid for a free trade agreement (FTA) with India, but the Chinese
President's recent visit has come at a time when Chinese companies are
aggressively eyeing opportunities in India. China and India signed a pact
on investment promotion and protection. The two sides also set a target of
raising the annual volume of their bilateral trade to $40 billion by 2010.
An analysis of Hu's visit and the impact on bilateral trade.
The New Prescription
The clinical research industry is poised for big growth. From a negligible
share in the late nineties, the market grew to $70 million in 2002 and is
now valued at $100-150 million. The industry is set to garner $1-1.5
billion in revenues by 2010, says a McKinsey report. Amidst the euphoria
over explosive growth, the sector is reporting a massive dearth of
experienced clinical research employees. In other words, scaling up is a
challenge.
Emerging Carbon Market
The global carbon trading
market grew to nearly $22 billion in the first nine months of the year,
more than doubling over the previous year. China and India are leading the
clean development mechanism market, according to the World Bank. Up to the
end of September, Asian countries accounted for 84 per cent of total
volumes in the CDM market. India has a 15 per cent share of the market, up
from 3 per cent in 2005.
Placements Aplenty
It's raining opportunities this
year at the summer placements of management colleges. Global investment
banks, consulting firms, etc., all are lining up to hire the best brains.
Intern stipends too varied, depending on the location and jobs offered.
For interns based in India, stipends for the two-month stint ranged from
Rs 90,000 to Rs 4.5 lakh. International stipends ranged from $12,000 to
$22,000. A look at the job mart.
New Games Biz
What are young, urban Indians playing? Computer and internet games are
finding growing numbers of takers. With Xbox and other gaming consoles
entering many Indian homes, the rules of entertainment are surely
changing. There are a variety of game titles now available-including
racing, sports, action and adventure. A guide for gaming enthusiasts.
Following Uncle Sam
US consumers have been one of
the main engines of global growth for the past decade. But now, as
America's housing boom threatens to turn into a bust, many forecasters
expect the economies of China and the rest of Asia to slow. However, this
time, the fate of the rest of the world will depend largely upon whether
China and the other Asian economies can decouple from the slowing American
locomotive. An analysis.
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