XED NEWSLETTER

11 Pages 25th FEBRUARY 03rd March 2011

a weekly news bulletin

www.xedintellect.com

IN BRIEF
COVER STORY
Budget 2011, A bag full of opportunities or Pandoras Box?
ECONOMIC INDICATORS
(as on 04.03.2011 )

BSE SENSEX : 18,848 INR/1 Dollar: Rs. 44.9 INR/1 Euro : Rs. 62.8
45.45.3845.38523452344444 BUDGET-2011

44545.5845.5845

SALIENT FEATURES OF BUDGET 2011-12 Expenditure in 2011-12 estimated at Rs.12, 57,729 crore. Growth at 8.75 percent to 9.25 percent in 2011-12. Rs.343, 000 crore of market borrowings in 2011-12. Revenue gain of Rs.11, 000 crore from increase in indirect taxes. FIIs can invest $40 billion in corporate bonds.

NEWS DIGEST
BUSINESS NEWS INTERNATIONAL NEWS MISCELLNEOUS NEWS

COMPILED BY

India's ballooning trade deficit unsustainable: govt

Boeing Wins $35-Billion Us Air Force Deal

Gaddafi strikes at town, rebels eye foreign help

TOP 10 HEADLINES OF THE WEEK

1. India's ballooning trade deficit unsustainable: govt. 2. Aamirs Thanda with Coca-Cola. 3. Vodafone emerges biggest gainer of MNP adds nearly 1.9 lakh users. 4. Tata Motors showcases small car 'Pixel' at Geneva Motor Show. 5. Hrithik is the highest paid film star on TV. 6. Jindal Steel plans worlds largest plant in Orissa. 7. Boeing Wins $35-Billion US Air Force Deal. 8. Yunus removed as Grameen Banks MD. 9. Gaddafi strikes at town, rebels eye foreign help. 10. Tihar inmates make a killing in placements.

ECONOMIC INDICATORS
Current Market Rates as on 04 Mar11 Rupee / 1Dollar Rupee/ 1Euro Values 44.90 62.80 Stock Market Indices as on 04th Mar11 BSE SENSEX NSE Nifty Values 18,848 5,543

Does the difference between the age of a country's people and its leader matter?

At first glance, it appears that less than half of all MPs in the current Lok Sabha have entered politics through the grassroots. 46.8% of the MPs have no significant family political background. Three out of ten MPs (28.6%) entered politics through family connections. There is a direct linear relationship between age and hereditary MPs, a greater proportion of younger MPs have a family political background, in comparison to others. All MPs whose age is less than 30 years are hereditary. More than two-thirds of MPs aged under 40 are hereditary. Since a hereditary MP is likely to join parliament at an early age, this translates into a decade of political advantage for him/her.

Egypt's median age is 24. President Hosni Mubarak was the fifth-oldest leader in the world before he was toppled aged 82. The countries in the chart suggest that such a wide gap is more common in autocracies like Saudi Arabia, Yemen, Algeria, Cuba and North Korea. Democracies, by contrast, seem to prefer more youthful leaders these days, though India and Italy are exceptions to this trend.

COVER STORY: BUDGET 2011, A BAG FULL OF OPPORTUNITIES OR PANDORAS BOX?

What is the purpose of a Budget? In layman terms it is the distribution of money that the government has taken or borrowed from you, the taxpayer. A Budget is a mechanism rather than a solution. This budget like every other earlier evoked mixed response from media, economists, political parties and everyone who loves to express his/her opinions on economic activities of big magnitude. It has been presented at a time when the Indian economy is heading towards a high growth trajectory, albeit certain challenges such as elevated inflation, high Current Account Deficit (CAD), and moderating growth of industrial production, which have surfaced in the recent past. Fiscal Arithmetic for FY12: For Financial Year 2012, total expenditure is budgeted to increase by 3.38% to Rs 12,577.29 bn as compared to the revised estimates (RE) of Rs 12,165.76 bn for Financial Year 2011. As in the last budget, the Plan expenditure received a major boost with an allocation of Rs 4,415.47 bn, an increase of 11.78% over the FY11 RE. The nonplan expenditure, however, is budgeted to register a marginal decline compared to the revised estimates of FY11; the expenditure on this front is slated to decline by 0.65%. The subsidy burden is budgeted to decline by 12.54% during FY12 over FY11 RE, owing to relatively lower budgeted fertilizer & petroleum subsidy burden and decline in budgeted payments to lending institutions against debt waiver and debt relief scheme for farmers. It is important to note here that if the international crude oil prices continue to rise unabated, the strain on petroleum subsidy might increase. How the budget fared in different sectors: Energy: The proposals in respect of the energy sector oil and gas, power and renewable were as anticipated; the roll forward of the income tax holiday for power by a year, denial of tax holiday for the ongoing round of NELP and indirect tax concessions for renewable. These were quite predictable. Bold initiatives hoped via policy announcement such as diesel decontrol, were notable by their omission. The budget subsidy for under recovery of petroleum prices is woefully inadequate and will fall short unless reforms are undertaken rapidly. Serving the Services: Budget 2011 proposes relatively limited changes in the taxing framework for the Financial Services industry. Though, on the face of it, it may appear that the Budget could have done more for the Financial Services industry, on balance, it seems to be a fairly good budget as it has targeted an annual growth rate of approximately 8.6%, and has put much more emphasis on the infrastructure sector, which is closely inter-twined with the Financial Services industry. This would help the Financial Services industry leverage off the various initiatives taken by the Government for benefitting the infrastructure sector. Infrastructure & Real Estate: Budget 2011 doled out quite a few measures both tax and non-tax in order to boost investment in infrastructure sector. Key non-tax proposals include issuance of tax-free bonds to the tune of Rs 300 billion, extension of tax exemption by a year on tax-saving infrastructure bonds, proposal to introduce special infrastructure debt funds to attract foreign financing in infrastructure sector and hike in FII investment limit by an additional USD 20 billion for investment in infrastructure-related sectors. On the indirect taxes side there are material changes which may have far reaching impact for the infrastructure sector, such as significant revamp of CENVAT credit scheme necessitating a relook at prevailing tax positions; change in levy of service tax from receipt to accrual basis and introduction of prosecution provisions. Agriculture: Food for thought or thought for food In the budget the Government further enhanced its thrust to improve the storage facilities in the agriculture sector by allocating funds for creation of warehousing facilities. Facilitating for further private sector participation will ensure reduction in wastage of farm output, thereby enhancing greater food security going ahead. There has been announcement of new initiatives such as accelerated Fodder Development Programme which bodes well for the sector. The Government also placed due emphasis on resolving the supply chain blockages in the agricultural sector which required serious attention besides, considerably stepping up the credit flow. Fertilizer: The major move in the sector which will drive investment is by including capital investment in fertilizer production as an infrastructure sub sector which will help to mitigate the risk of investing. Moreover, extending the benefits of investment linked deduction to businesses engaged in the production of fertilizers will increase the flow of capital in the sector. The governments intention to move to a NBS of fertilizers not only bodes well for the industry but also promotes balanced use of fertilizer. Further, the proposed system of direct transfer of subsidy for fertilizers is seen as a good move for the domestic industry.

India looked interested in her largest quantifiable asset (Human Resource): Integrated Child Development Services has got a boost. An allocation made for Mahatma Gandhi National Rural Employment Guarantee Scheme amounting to Rs 400 is expected to contribute to the employability in rural areas. Swaranjayanti Gram Swarozgar Yojana (SGSY) will be promoted for establishing micro-enterprises in rural areas and they will include people from SCs/STs and people with disability. Mr. Mukherjee has reduced the eligibility criterion for availing Rs. 200 per month under the Indira Gandhi National Old Age Pension Scheme for below poverty line to 60 years from 65 years. And for those who 80 years and above the pension amount is being raised from Rs. 200 at present to Rs. 500 per month. Income Tax relief is provided to general tax payers as the limit has been increased by Rs. 20,000 from current limit of Rs 1.60 lacs to Rs. 1.80 lacs. Also the eligibility for pension is proposed to be reduced from 65 years at present to 60 years. Further, for those who are 80 years and above, the pension amount is being raised from Rs 200 at present to Rs 500 per month. Education: Government showed strong intentions of promoting education sector by an allocation of Rs 210 bn for Sarva Shikha Abhiyan which is 40% higher than Rs 150 bn allocated in FY11. We also might see a lot of vocational courses coming along and a strong commitment to bolster the not so successful MID Day Meal program. The Connectivity to all 1,500 institutions of Higher Learning and Research through optical fiber backbone is a major move in technical up gradation of the educational sector. Also, introduction of a scholarship scheme in FY12 for needy students belonging to the Scheduled Castes and Scheduled Tribes studying in classes ninth and tenth would benefit about 40 lakh Scheduled Caste and Scheduled Tribe students. Regional Development: By allocating 36.40% of the total plan outlay for the social sector during FY12, the Government has reiterated its emphasis for the upliftment of the weaker sections of the country. In order to enhance financial inclusion, a dedicated fund with a corpus of Rs 1 bn have been created for smaller MFIs besides, forming a Womens Self Help Groups Development Fund which would enhance the empowerment of women. Sentiments galore or populist agenda: While the senior citizens (BPL beneficiaries) have been given a special attention under the pension schemes, the Rashtriya Swasthya Bima Yojana has been extended to cover unorganized sector workers in hazardous mining and associated industries. The Government has also paid due attention for further development of the backward regions, allocating funds for the infrastructure needs for Ladakh and Kashmir besides directing funds for addressing problems related to Left Wing extremism affected districts. Moreover, for the first time, specific allocations have been earmarked towards Scheduled Castes Sub-plan and Tribal Sub-plan. Besides, the Governments focus on drinking water, health and sanitation is another positive aspect for the social sector in this budget. Rural Infrastructure: The plan expenditure for infrastructure sector to constitute around 48.50% of total plan outlay for FY12 a growth of 23.03% over the Union Budget 2010-11, indicating an increased thrust on the sector. Over 11% rise in budgetary allocation on road transport & highways is expected to encourage the transportation and logistics sector in India. The Budget provides thrust through various financing schemes. Since most of the infrastructure companies are organised in the form of SPVs, FIIs would also now be permitted to invest in unlisted bonds with a lock-in of three years. A rise in the cap of FII investment in corporate bonds with residual maturity of five years, issued by infrastructure companies, to US$ 25 bn from US$ 20 bn would also provide impetus to the infrastructure development. Additionally, allowing for tax free bonds to the tune of Rs 300 bn by various Government undertakings including IRFC, NHAI, HUDCO and Ports would further support infrastructure financing. IT & ITeS: Crying loud The Government has announced in the budget to levy MAT on companies which are operating in SEZs from FY12. The budget also makes no mention of the extension of the sunset clause under the Software Technology Park of India (STPI) Act, related to deduction in respect of export profits beyond FY11. These moves will impact the IT sector as profit margins of IT companies (especially small and medium) who enjoyed tax exemptions under the above mentioned schemes is expected to come down.

Hospitality: Pay more to avail more The introduction of service tax on hotels, air conditioned restaurants as well as increasing the same on air travel is a negative for the overall hospitality sector. With the introduction of 5% and 3% effective burden on hotels accommodation and air conditioned restaurants serving liquor respectively, billing amount to the customers will increase thereby impacting the overall business in the hotel industry. Further, rise in service tax on domestic as well as international air travel and introduction of 10% tax in the domestic higher class travel will increase the overall cost of air travel putting a negative impact on the aviation sector. In Black and White:Indian companies that do business in such countries will be charged a higher withholding tax-like fee on services they offer. These companies will also have to face transfer pricing audits to prove they are not shifting profits outside India. They wont get any tax benefits in India on payments made to financial institutions based in such countries. They will also have to explain the source of funds. Criticisms: In showing a fiscal deficit of 4.6% of the GDP for 2011-12 compared to 4.8% mandated by the Thirteenth Finance Commission, the FM has indulged in sheer deception and tried to bury this deception in a lot of verbiage. The fiscal deficit projected in Budget estimates 2010-11 was 3, 81,408 crore. In revised estimates, it is 4, 00,998 crore despite the 3G bonanza. The actual deficit for 2009-10 was 4, 18,482 crore. So, if the fiscal deficit for 2010-11 is 5.1% of GDP instead of 5.5%, the credit doesnt go to expenditure contraction or higher revenues, it goes to the unexpected one-time windfall gain from 3G and the higher growth rate projected for the year. On infrastructure, the Budget is a huge disappointment. The FM has not explained why the government is constructing only 4 km of national highways a day, instead of the 20 km announced with fanfare two years ago. There is no effort to roll back the last Budgets hikes in petroleum duties. There is no reference to prohibiting huge speculative trading in the commodity exchanges. Nor is there is any reference to releasing from central godowns food stocks that are more than double the buffer norm. Any, if not all, of these measures would have eased the pressure on prices. There is a relief of 11,500 crore in direct taxes, a subsidy to the rich, while there is an additional mobilization of 11,300 crore through indirect taxes, a burden on the consumers. This Budget, therefore, continues with the philosophy that subsidies to the rich are incentives for growth while those to the poor are detrimental. No concrete measures such as reviewing the double taxation avoidance agreement with Mauritius, through which 42% of foreign capital inflows to India are routed. With the now-declared desire to appease international finance capital, India is being rendered vulnerable to global speculative shocks, particularly with Indias current account deficit widening. During the last three years, corporate and personal income tax concessions, according to the budgetary Statement of Revenue Foregone, amounts to a whopping 3,61,415 crore. If this revenue were collected and utilized for public investments, we would have been able to build our much-needed infrastructure and generate employment. There is so much leakage in PDS, NREGS, ICDS and other schemes. The STPI tax benefit would have allowed them to reinvest and grow big. The two biggest attractions for SEZs no MAT and no DDT have been neutralized in one shot. This move will adversely impact exports and defeat the goal of doubling Indias exports to $450 billion by 2014. At a time when world agri commodity prices are on the rise, Indian farmers deserve to be encouraged to meet that demand and raise their incomes in the process, not hobbled through export restrictions. On healthcare front the budget would directly hit the poor consumers seeking healthcare and argued it would have been better if the tax was levied on super-specialty hospitals which were owned by and cater to the rich. Conclusion: India missed a trick or two with its latest fiscal budget. Projections from Finance Minister Pranab Mukherjee of a moderately declining deficit make sense only by ignoring the funny accounting and assuming the economy keeps rocketing ahead. With state spending, inflation and commodity prices all increasing, India it betting on higher economic growth to solve its problems.

BUSINESS NEWS
1. India's ballooning trade deficit unsustainable: govt-Reuters Feb 23 The Indian government raised "serious concern" on Wednesday about a trade deficit that could more than double to $278.5 billion in three years and may cause an unsustainable current account deficit. The trade deficit of Asia's third-largest economy could widen to 12.8 percent of gross domestic product (GDP) by 2014 from 7.2 percent in this fiscal year on current trends, leading to a higher reliance on foreign capital inflows to plug the current account gap, a trade ministry document showed. India is on track to exceed a 15 percent export growth target in the financial year ending this March. While IT and service exports have played a huge role in India's economic boom, merchandise exports have lagged behind the potential of the world's second-fastest growing major economy, which is seen returning to a pre-crisis growth rate of 9 percent soon. 2. Aamirs Thanda With Coca-Cola-ET Feb 28 Coca-Cola has decided not to renew its brand endorsement contract with Aamir Khan, its biggest brand ambassador for more than a decade, as the beverages maker is looking for younger faces to connect with the youth brand Cokes core target. Coke is the second brand to drop the countrys costliest celebrity endorser in the past six months after biscuit maker Parle Products. Since then, his nephew Imran Khan has been appearing in fresh Coca-Cola commercials. The star behind blockbuster films like Lagaan and Taare Zameen Par has been the face of Cokes most popular campaigns over the years, including thanda matlab Coca-Cola and paanch matlab chota coke. Interestingly, PepsiCo had dropped the other big superstar of Bollywood, Shahrukh Khan, two years ago, replacing him with a much younger Ranbir Kapoor as the ambassador of brand Pepsi. When Parle Products decided not to renew its contract with Aamir, its officials said the company will go for regional endorsements in line with their regional plan. It had hired regional actors Ravi Kishan and Rituparno Sengupta for its Monaco salty biscuits brand. 3. Vodafone emerges biggest gainer of MNP, adds nearly 1.9 lakh users- PTI Feb 27 Nearly a month after the nationwide rollout of mobile number portability services, Vodafone Essar has emerged as the biggest gainer, notching up 1.9 lakh new subscribers, whereas state-owned BSNL lost more customers than it attracted from other service providers. Since the launch of MNP services, nearly 20 lakh mobile subscribers have switched service providers using the facility. MNP allows users to change service providers while retaining their phone numbers. Prime Minister Manmohan Singh had launched nationwide MNP services on January 20 this year. According to latest available figures, Vodafone Essar gained as many as 1.9 lakh customers, followed by Idea Cellular, with a net gain of 1.5 lakh subscribers. All that a customer needs to do for changing his telecom operator is pay a maximum of Rs 19. He/she will get a new service provider within seven working days as per the guidelines of the sectoral regulator, Telecom Regulatory Authority of India. 4. Tata Motors showcases small car 'Pixel' at Geneva Motor Show- PTI Mar 01 Tata Motors today showcased concept small car 'Pixel', based on the Rs 1 lakh car 'Nano', for the European market at the ongoing 81st Geneva Motor Show. Based on Tata Nano, the new car is a four seater with just over three metres in length, the company said. The car will be powered by a 1.2 litre diesel engine and the company claims that it will give a mileage of about 29 km per litre and CO2 emission of 89 grams in every kilometre. Besides the Pixel, the company is displaying other car models such as Indica Vista Electric Vehicle and Aria at the motor show. 5. Hrithik is the highest paid filmstar on TV- PTI Mar 01 Bollywood heartthrob Hrithik Roshan , who is making his television debut as a dance reality show judge, is the highest paid film star on small screen. The shooting for "Just Dance" the dance reality show on Star Plus will start next month where the 37-year-old film star will judge contestants along with choreographers Farah Khan and Vaibhavi Merchant. Hrithik is looking forward to a successful inning on the small screen after his two previous films 'Kites' and 'Guzaarish' bombed at the box office. But sources close to the actor claim that the Hrithik is indeed the highest paid actor on television. "He gets Rs two crore per episode. Whereas Salman Khan shot for his last TV show only during the weekends and would wrap up two episodes in a single day and take home a pay packet of Rs 2.5 crore," sources said.

6. Jindal Steel plans worlds largest plant in Orissa- PTI Feb 26 Optimistic of commissioning first phase of its proposed six-million tonnes per annum (mtpa) steel project by March 2012 in the state, Jindal Steel and Power (JSPL) today said it would set up the worlds biggest steel plant in Orissa. The capacity will be expanded to 20 mtpa in next 10 years. This will be the biggest steel plant in the world," executive vice- chairman and managing director Naveen Jindal said after meeting chief minister Naveen Patnaik. Stating the company had already invested `10,000 crore and placed the order for another `5,000 crore for its Orissa steel project, Jindal said they would start operations with the commissioning of a two mtpa steel plant in the first phase. We will be able to achieve the capacity of six mtpa by 2013," he said, adding the company was planning a big investment in the state. 7. Infosys American Staff Sues Firm For Visa Fraud-BS Feb 27 An American employee of Infosys has filed a case against the company accusing it of visa and tax fraud. In his complaint filed before an Alabama Court early this week, one Jack Palmer said he worked for Infosys as a Principal - Enterprise Solutions since August 2008. In his-13 page complaint, he alleged Infosys sent lower level and unskilled foreigners to the US to work in fulltime positions at its customer sites in direct violation of immigration laws. PTI 8. M&M to rectify Stallio gearbox BS Feb 27 Automaker Mahindra & Mahindra (M&M) has offered to rectify a problem in the gearbox of some of its 110cc Stallio motorcycles. The Stallio marked the entry of the maker of utility vehicles and tractors into the highly competitive motorcycle market. Responding to a query on problems with the Stallio gearbox, M&M in a statement said: We... are aware that certain parts of the bike require some fine tuning and adjustment in asmall proportion of the product. We are proactively addressing the same. Since its launch in September 2010, M&M has sold over 5,135 Stallios until January this year. However, average sales of the Stallio during the last two months have been less than 400 units a month. In comparison, the countrys leading twowheeler makers like Hero Honda, Bajaj Auto, TVS Motor and Honda sell an average of over 100,000 bikes a month in the 75-125cc segment. 9. India becomes a jewel in the Capgemini crown-BS Feb 27 When Paris headquartered IT consulting and services firm Capgemini recently promoted three Indian leaders to global position, it signalled the importance of India and Indian leadership in the companys growth plan. The8.7 billion Capgemini is one of the few European IT firms to have successfully used India as an offshore centre. For instance, Salil Parekh will head the $4-billion application services business of Capgemini that include North America, the UK and Asia Pacific. He will also be responsible for hyper growth markets like India. Before this, Parekh was the chief executive officer (CEO) of global financial services, Asia Pacific and India offshore. The India unit is one of the largest centres for the group with over 31,000 employees. At present the total offshoring capability of the company is 38 per cent (includes centres in India, Philippines, China and Brazil). Capgemini increased its India focus post acquisition of Kanbay in 2006. It joins the rank of many of the other multi-national firms in India who have made India as their hub for innovation or centre of their software development programme. 10. Law and order situation in many states affecting coal mining- BS Feb 27 The coal ministry has cited law and order problems, especially in Jharkhand, Chhattisgarh, Orissa and West Bengal, inordinate delays in land acquisition and the considerably long wait for mining lease approvals as major roadblocks for coal projects. Land acquisition is one major hurdle to expansion of coal projects or starting of new ones. The problems are basically relief and rehabilitation (R&R) issues such as delays in authentication of claims of tenants, the nonavailability of valid title document, related court cases, rehabilitation and the demand for higher compensation. A fast-growing economy offers a huge domestic market (with relatively inelastic demand) for coal Wide gap between the price of domestic coal and that in the international market should give comfort to domestic industry and encourage higher investment in the sector. But delays in various clearances, land acquisition continue to affect coal mining Opposition from various quarters to the opening up of coal sector to private sector investment for commercial mining will impede speedier growth of the sector Leveraging bilateral and multilateral relations for coal assets acquisition.

11. RBNL plans to launch TV channels in neighbouring countries-PTI Feb 27 Reliance Broadcast Network Ltd, a part of Anil Ambani-led ADA Group, is in the process of launching television channels in neighbouring countries such as Nepal, Bangladesh, Pakistan, Bhutan, Sri Lanka and Maldives. The company has already launched a general entertainment TV channel Big CBS Prime in partnership with CBS Studios International in India and two new channels Love and Spark are slated for launch next month. Besides, expanding internationally, RBNL is also enhancing its distribution within India. The channels are currently available in India through DTH service providers such as Videocon, Sun and cable operators. The company have already signed up with Airtel Digital and are looking at TataSky and Dish TV. 12. Karnataka cancels pvt yard licence of Metro Cash & Carry-BS Mar 01 The Karnataka government on Monday cancelled the private market yard licence to German retail giant Metro Cash & Carry, following protests by agriculture traders here. The traders had shut shops indefinitely from Monday to protest the granting of licence. Chief Minister B S Yeddyurappa yesterday ordered the cancellation of licence with immediate effect. The state governments licence to Metro Cash & Carry India Pvt Ltd on January 18 allowed it to trade in the 112 notified agriculture commodities, including pulses and cereals, from both its outlets outside the APMC yard in Yeswantpur. The traders had objected to it arguing it was aviolation of the Agriculture Produce Market Committee (APMC) Act. The Act stipulates that no private trader can sell notified commodities within a 25 km radius from the APMC yards in the state. 13. RIL Talking to Orix to Buy IL&FS Holding for $1.2 b- ET Feb 28 The Reliance Industries group, owned by billionaire Mukesh Ambani, is negotiating with Japans Orix Corporation to acquire its 23.87% stake in Infrastructure Leasing & Financial Services (IL&FS), one of Indias leading infrastructure developers and financiers, for around $1.2 billion. If the deal materialises, it will make Reliance the second largest investor in IL&FS after Life Insurance Corporation of India (LIC) and will pave the way for its entry into the financial services business. The financial services business had been out of bounds for the older Ambani brother as part of a non-compete pact with younger sibling Anil Ambani. But following a settlement last May, this pact was scrapped and group companies of both brothers are free to pursue any business they wish. RIL has acquired licences to offer wireless broadband services across India marking its re-entry into telecom. 14. Budget 2011: Factories to power India's growth story in the coming decade- ET Mar 02 Manufacturing will contribute a quarter of Indias gross domestic product over a decade with the government betting on the sector to power economic expansion and to create jobs for its young population. Share of manufacturing in the worlds second fastest-growing major economy, after China, stagnated to 15-16% in the last five years. The GDP growth has been led by the services sector that contributed over 50% in the last few years. In China, manufacturing contributes about 40% of the GDP. Development of physical infrastructure need to go hand in hand for manufacturing to grow. Just building manufacturing plants making capital goods may not get the desired impact if there are no transport means to get the goods to the market. The share of services grew to about 55-60% of the GDP while that of manufacturing stagnated at around 16%, Mitra said. India is the second fastest-growing car market in the world after China with sales growing at 30% this year. 15. E-mail marketing set to log in growth of over 100% every year- ET Feb 27 With millions of Indians having access to e-mails and their number growing rapidly, e-mail marketing is expected to grow at over 100 per cent every year, an industry expert has said. Email marketing is a form of direct marketing which uses electronic mail as a means of communicating commercial or fund-raising messages to audience. E-mails, directly or indirectly, influence 48 per cent of marketing budget of an average size enterprise and are used mainly for promotional and informational purposes, he said. Around 80-90-million Indians have access to e-mails. The total e-mail marketing size is around Rs 40crore and "we expect the market to grow up to Rs 500 crore in the next few years," he said.

16. Plastic ban shuts down gutkha factories in Karnataka-TNN Mar 02 Faced with a ban on plastic sachets, gutkha manufacturers have shut shop and gone home. While this could have the desired effect on people's health and reduce the incidence of oral cancer, it would also help maintain a cleaner environment, with no sachets adding to the litter. According to the Karnataka State Pollution Control Board (KSPCB), almost all gutkha factories stopped manufacturing from Tuesday, until they find a cheap and acceptable packing alternative. But doctors don't think the ban is going to be very effective. "I don't think there will be a major impact if the cost of packaging increases or the price does. Heavy tax should have been levied on the product. However, there is some evidence that if the cost of the pack increases, consumption of addictive substances reduces a little," said Dr Moni Abraham Kuriakose, director of surgical oncology, Mazumdar-Shaw Cancer Centre. 17. Malaysia to recruit 45,000 foreign workers, mostly from India- ET Feb 27 Malaysia is set to recruit some 45,000 foreign workers, mostly from India , to overcome massive labour shortages, particularly in the country's small-scale business sectors. Human Resources Minister Dr S. Subramaniam, who is of Indian ethnic origin, today said the the government has approved the recruitment of 45,000 foreign workers to meet the demand in 13 small-scale business sectors, which are currently facing manpower shortage. He said the government had now agreed to approve the entry of 45,000 foreign workers into 13 business sectors to meet the initial requirement so that they can continue operating. Subramaniam said the approval was to ease labour shortage in various sectors, including restaurants, grocery shops and the textile industry which had difficulty in recruiting local workers. He said most of the foreign workers were from India. Ethnic Indians form eight per cent of Malaysia's population of 27 million people. 18. Budget 2011: BMW, Audi, Mercedes prices may zoom by over Rs 8 lakh- ET Mar 02 Playing a partypooper to the countrys growing clout in the luxury car segment, a new provision in the Budget could well lead to a hefty hike, over Rs 8 lakh or more, in the prices of entryl evel cars of the companies like BMW, Audi and Mercedes. In what appears to be a bolt from the blue for the luxury carmakers, mainly from the German stable, a change in definition of completely knocked down (CKD) car is threatening to derail the softer import duty regime. In simple terms, this implies that auto companies that are doing CKD business in India with fully-imported pre-assembled critical parts like engines or gearbox or transmission cannot claim the lower 10% import duty on them as these will no longer be defined as CKDs. This would bring these vehicles on a par with fully-built units and thus slap a hefty 60% import duty on them, which would go up to 110% after the addition of counter-vailing duty, VAT and other local levies. The models affected could be all entry-level luxury cars. The affected companies have approached the auto industry body Society of Indian Automobile Manufacturers (Siam) for help. 19. Fickle Sensex Changes Mood, Jumps 623 Points- ET Mar 02 Benchmark indices posted their biggest single-day gain in 22 months on Tuesday as the governments lower-than-expected fiscal deficit estimate for 2011-12 prompted traders to reverse their bearish bets. But investors are skeptical about the endurance of the recent stock market rebound because a renewed rally in crude oil prices would raise doubts on whether the government would meet its budget shortfall target. BSEs 30-share Sensex rose 623.10 points, or 3.50%, to 18,446. All shares on the index ended with gains. NSEs 50-share Nifty gained 189 points, or 3.54%, to 5,522. In the broad market, gainers outnumbered losers 2128:759 on the BSE. Shares of automobile companies led gainers on Tuesday after the government did not raise excise duty, contrary to expectations that taxes would be increased. BSEs Auto Index rose 5.6%, the highest among all sectoral gauges on Tuesday. 20. Renault plans aggressive India strategy-IST Mar 02 With the Logan episode behind it, Renault India is making a more concentrated attempt to get it right this time. Starting with the launch of the Fluence, a large sedan with the Honda Civic and Toyota Corolla as competition, by the middle of this year, followed by the Koleos SUV by the end of the year, Renault is looking at a top-down strategy for India. These two cars will be followed by three more by the end of 2012 or the beginning of 2013. The latter currently sells the Micra and will soon introduce the Sunny by the middle of this year; both cars utilise the V platform. With these five cars, Renault hopes to be a volume player in India. The Duster will also be exported. Renault is also mulling a new small car, their sixth model in the country, to be introduced by 2013 or 2014, to operate in the segment dominated by the Maruti Suzuki Alto. The new car is independent of the low-cost car that Bajaj is developing, which will be marketed by Renault. Entry-level small car in the Alto segment by 2013; aims to be among top 10 in India in 3years

INTERNATIONAL NEWS
21. Boeing Wins $35-Billion Us Air Force Deal-BS Feb 25 Boeing, the sole supplier of aerial refueling tankers to the US Air Force since 1948, beat European Aeronautic, Defence & Space Co for a $35 billion programme to build 179 new tankers, the Pentagon said yesterday. It was the Chicago-based companys third try at the contract since Congress and the Air Force first proposed the tanker replacement program in late 2001 a contest in which Boeing was viewed as an underdog, said an analyst. Boeing will manufacture basic 767-model aircraft in Everett, Washington, and convert them into tankers in Wichita, Kansas, during the first stage of a three part Air Force programme stretching decades to replace its tanker fleet. The initial contract for the development phase was valued at $3.5 billion. The entire first phase covers 13 production lots through 2027. The Pratt & Whitney unit of United Technologies will provide the engines. Boeing says the win will create and sustain 50,000 jobs among 800 suppliers in 40 states. 22. Yunus removed as Grameen Banks MD- Reuters Mar 02 Nobel laureate Muhammad Yunus has been removed from his position as head of microlender Grameen Bank, Bangladeshs central bank said on Wednesday, following allegations of irregularities in its operations. Yunus, 70, set up Grameen Bank and has been its managing director since 2000. Yunus has denied any financial irregularities and his supporters say he is being discredited by the government because of a feud with Hasina dating back to 2007, when he tried to set up a political party while Bangladesh was ruled by an interim military government. The official retirement age of managing directors at commercial banks is 60. Yunus has said the banks board, which is mainly made up of borrowers, allows him to stay on as long as he is able to perform his duties. 23. Samsung launches ultra-slim notebook, targets Apple-Reuters Feb 24 South Koreas Samsung launched an ultra-slim notebook on Thursday, seeking to bolster its presence in the high-end mobile computer segment dominated by Apple Inc. Samsung, emerging as one of the strongest rivals to challenge Apple in the booming smartphone and tablet computer market, is eyeing the notebook market, in which Apple is seeking to replicate the success of the iPhone and iPad with its MacBook series. Samsung launched the lightweight 9 Series notebook on Thursday to compete with Apples ultra-thin MacBook Air, introduced in October. Samsung said the new laptop would cost 2.5 million won ($2,218) in Korea and would launch globally launched from next month in the Americas and Europe. Apple displaced Hewlett-Packard last quarter as the worlds top mobile PC maker, propelled by strong sales of its iPad tablet, according to research firm DisplaySearch. 24. 3 Navy ships to set sail for Libya to evacuate Indians-ET Feb 25 Having woken up belatedly to what it called "sharp and unprecedented deterioration" in the situation in Libya, the government on Thursday was scrambling to launch evacuation operations for the around 18,000 Indians stuck in the violence-hit country. Three naval warships will now head for Libya to supplement the evacuation operation. Though it will take around 10 days for them to sail the 4,000 nautical miles to Libya, the three warships are needed to ferry around 9,500 Indians from Libyan ports like Tripoli and Benghazi to Malta and Alexandria (Egypt), from where they can be airlifted to India. The ministry of external affairs on Thursday said Scotia Prince, which has a seating capacity of 1,200, will sail to Benghazi which will be the initial focus of rescue operations. MEA personnel and medical teams will be on board to assist the evacuees. 25. Apple's Jobs puts on lively iPad 2 show-Reuters Mar 02 A thin but energetic Steve Jobs made a surprise return to the spotlight on Wednesday, taking the stage to unveil Apple Inc's new iPad and drawing a standing ovation. Defying speculation in some tabloid reports that he was seriously ailing, Jobs took swipes at rivals and mocked competing tablet computers. Striding back and forth across the stage at the Yerba Buena Center, Jobs spoke passionately about the iPad 2's features as No. 2 and heir apparent Tim Cook looked on. The $499 device is thinner than the iPhone 4, twice as fast as the last tablet, camera-equipped, and ships March 11 in the United States and March 25 in 26 more countries. The surprisingly fast roll-out highlights the fierce competition in the tablet market.

MISCELLANEOUS NEWS
26. Gaddafi strikes at town, rebels eye foreign help-Reuters Mar 02 Muammar Gaddafi launched a land and air offensive to retake territory in Libya's east at dawn on Wednesday, sparking a rebel call for foreign air strikes on African mercenaries they said were helping him stay in power. The veteran ruler twinned the attack with a fiery propaganda broadside against the rebels, playing on both nationalist opinion and Western jitters by saying much blood would be shed in "another Vietnam" if foreign powers intervened in the crisis. On the battlefield, government troops briefly captured Brega, an oil export terminal, before being driven back by rebels who have held the town 800 km (500 miles) east of Tripoli for about a week, rebel officers said, adding they were ready to move westwards against Gaddafi's forces if he refused to quit. 27. Tihar inmates make a killing in placements-TNN Feb 26 It was a special campus placement session. Eight companies interviewed 46 candidates. Fourteen were given job offers while the rest are hopeful. Whats special is that the campus was Delhis Tihar jail, and the candidates, inmates serving time there. Agarwal Packers and Movers, one of the countrys largest companies in their field, was one of the companies that agreed to be part of the drive. These 46 inmates were chosen for their impeccable conduct, said Neeraj Kumar, DG (Prisons). Agarwal Packers picked up seven inmates, Vedanta Foundation and Good House Keeping recruited two each, and JRA & Associates and ASP Sealing made an offer each. 28. WikiLeaks, Arab uprisings nominated for Nobel Peace Prize-IST Mar 01 Key figures in the wave of uprisings across the Arab world and whistleblower website WikiLeaks are among a record 241 candidates in the running for this year's Nobel Peace Prize. The names of nominees are kept secret by the Nobel Institute for 50 years, but director Geir Lundestad said on Tuesday the 2011 list of nominees was influenced by the popular uprisings in the Arab world. There were 237 nominations for last year's award, a record at the time. Those who are entitled to nominate are allowed to reveal the name of the person or organisation they have proposed, if they wish to do so, and it is already known that WikiLeaks are on this year's list. Also known to be on the list of nominees are the three men considered to be the creators of the Internet: Americans Larry Roberts and Vint Cerf and Britain's Tim Berners-Lee. 29. 30 pc drop in number of Indian students in Australia in 2010- PTI Feb 25 The number of Indian students in Australia has recorded a decline of over 30 per cent last year following a spate of attacks targeting them in that country, the government said today. According to the Student Visa Programme Report released by the Department of Immigration and Citizenship of Australia on February 11 this year, there were 59,719 student visa holders from India as on December 31, 2010, compared to 85,560 as on December 31, 2009, Minister of State for External Affairs E Ahamed told Rajya Sabha in a written reply. This shows a decline of 30.2 per cent, he said. Apart from a series of attacks on India students, other factors such as the global financial crisis, ongoing college closures creating uncertainty about the stability of Australian education providers and the rising value of the Australian dollar also contributed to the drop in number of Indians seeking admission into institutions there, he said. Among the reasons for the lower number of admissions was introduction of a range of changes to Australia's visa processing procedures and skilled migration programme, the government said. 30. BCCI slams ICC official for criticising Dhoni on Umpires Decision Review System issue- TNN Mar 02 The BCCI today slammed ICC General Manager Dave Richardson for criticizing Indian captain Mahendra Singh Dhoni as the latter had expressed his grouse on the Umpires Decision Review System (UDRS). In a hard-hitting letter to the ICC Chief Executive Haroon Lorgat, BCCI Secretary N Srinivasan said Richardson has no business to criticise Dhoni and he should be instructed not to do so in future. Dhoni had questioned "adulteration of technology with human thinking" when England batsman Ian Bell was ruled not out off a Yuvraj Singh delivery even after TV replays showed that the ball would have hit stumps, leading to Richardson asking the Indian captain to read the rules related to UDRS first before criticising it. Srinivasan went on the say that Richardson's comments on the issue was tantamount to pressurising Dhoni when the World Cup is going on.