Storm clouds of a different kind are gathering on the macro-economic horizon and they have nothing to do with surging global crude oil prices. The monsoon has played truant across large parts of India, with western and southern India reeling under the impact of deficient and scanty rainfall
Land acquisition for special economic zones is stuck because of a year-old directive by the Empowered Group of Ministers that bars state governments from carrying out compulsory acquisition of land for the zones.
On July 21, trade ministers from nearly 50 countries will converge at Geneva to finalise proposals on agriculture and non-agricultural market access (Nama) which are part of the Doha Round of world trade talks. World Trade Organisation Director General Pascal Lamy tells Business Standard why the ministerial is crucial.
The seven government-owned special economic zones across the country are likely to be given autonomy, resulting in greater financial flexibility for these tax-free enclaves. The move will help these zones compete with the private sector SEZs, which are attracting investment from companies.
Automobile giant General Motors will invest Rs 1,000 to Rs 1,200 crore (Rs 10-12 billion) to set up a power train (engine and gear box) manufacturing facility at its Talegaon Plant near Pune.
Vehicles going from Mumbai towards Goa and Konkan were diverted from Panvel via Khopoli and Pali as the stretch near Pen at Vashi naka was blocked by farmers protesting against the Maharashtra government's decision to approve the rehabilitation and resettlement package announced by Mumbai SEZ Pvt Ltd, a Reliance Industries company.
London-based Dar Consultants has said its bid and the one by preferred bidder Anil Dhirubhani Ambani Group's RELINFRA-Hyundai consortium are both 'responsive' or worth considering. Dar Consultants' recommendation puts the responsibility of re-considering the preferred bidder between the warring brothers squarely back with the political executive. The state cabinet's committee on infrastructure will meet Wednesday to decide the fate of the project.
The Maharashtra government will take a final decision on the Anil Dhirubhai Ambani Group (ADAG)-led consortium's bid for the Rs 6,000 crore (Rs 60 billion), six-lane sea link between Sewri and Nhava Sheva, better known as the Mumbai Trans Harbour Link (MTHL), within two weeks, said Public Works Minister Anil Deshmukh.
Exports double, while jobs and investments show robust growth rate. The commerce ministry has projected exports from the zones at around Rs 1,25,950 crore (Rs 1,259.5 billion) in 2008-09, growth of 89 per cent over the previous year.
Even if our findings are not to the liking of our sponsor groups, we always stand by them, Icrier Director and Chief Executive Rajiv Kumar tells Business Standard. The study took a long time to come and the perception is that the data have been 'fixed' to arrive at tailor-made conclusions that suit the government (the sponsor of the study).
In what may be a sign of the changing political environment ahead of general elections, the Centre has turned down the Maharashtra government's proposal to provide labour law flexibility in special economic zones.
The annual supplement to the Foreign Trade Policy, which will be released on Friday by Commerce Minister Kamal Nath, is likely to announce a host of measures for exporters to help them tackle the appreciation in rupee against the dollar as well as to achieve an export target of $200 billion for 2008-09. Significantly, this is the last year of the Foreign Trade Policy, which was introduced after the UPA government came into power in May 2004.
A revamped Electronic Data Interface system and easier norms for the Accredited Clients Programme are some features likely to be introduced to reduce the transaction time and costs of exporters. Some of the measures may figure in the annual supplement to the Foreign Trade Policy, which is being released on Apr 11. ComMin officials expect the new Electronic Data Interface System to become operational by the end of this fiscal. Exporters will have to submit lesser documents.
On Tuesday, in the midst of the government's multi-pronged crackdown on inflation, the cement producers had announced a rise in prices. The export ban will augment domestic availability while the cheap imports from Pakistan will soften prices.
The commercial capital of India, which enjoys 24x7 power unlike any other cities of the country, is likely to suffer power cuts this summer owing to a dispute between the power distribution utilities Brihanmumbai Electric Supply and Transport and Reliance Energy Ltd over who should foot the bill for 300 Mw of power which is required to be bought to keep Mumbai free from power cuts.
The buoyancy in exports, which are expected to grow 23 per cent to around $155 billion in 2007-08, does not convey the real picture.Commerce ministry data show that the sectors with higher import content like petroleum products, gems and jewellery, engineering goods, pharmaceuticals, chemicals, and agriculture have provided the momentum for growth in exports, which have been hit by the appreciation of the rupee and infrastructure bottlenecks.
The price surge at Jhajjar has more to do with skyrocketing land prices near the SEZ site plus a recent rumour that the Haryana government may increase the minimum price for land acquisition to more than Rs 55 lakh (Rs 5.5 million) per acre.
Ultimately, it boils down to whether a loan waiver will help without taking action to improve irrigation facilities and to ensure remunerative prices for farmers.
The Dabhol power plant of the Ratnagiri Power and Gas Company is in trouble once again with problems in the recently commissioned second unit and delays in commissioning the third.
The other two denotification routes are amendment of the SEZ Act through Parliament and through a presidential ordinance. The latter has been ruled out since Parliament is in session and there is nothing to stop the developers of the three SEZs from going to court if the government waits for the session to end. An amendment of the SEZ Act will not only need approval from the Commerce Ministry, but may also provoke political opposition from the Congress itself.
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