US and India announce 'Open Skies' pact
Washington: The US and India have reached an agreement on opening their skies setting the scene for revolutionising air travel between the two countries. The agreement, announced by US Transportation Secretary Norman Mineta, will lead to cheaper airfares and more direct flights between the two nations.

"The agreement means the two countries will be closer than ever before. It begins a new era, where consumers, airlines and economies can reap the rewards of cheaper flights, more choices and faster air service," said Mineta.

The agreement will strengthen commercial aviation in a number of ways, including more direct flights to serve the approximately two million passengers traveling between the two countries every year.

The agreement allows airlines from both countries to select routes and destinations based on consumer demand, providing for open routes, capacity, frequencies, designations, and pricing.

It also allows for cooperative marketing arrangements. That includes code sharing with domestic Indian carriers to aid in making reservations and giving a greater choice of flights. The deal will further allow all-cargo operators to operate in either country without directly connecting to their homeland.

India's tourist inflow neared 5 million in 2004 mostly from US and Europe but the tourism sector was crippled by the unavailability of seats.

The latest move now has the potential of changing India's tourism scene.
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J&K: Enthusiasm for first civic polls in twenty-seven years
Srinagar: The civic polls have rejuvenated political activity in urban Kashmir generating a lot of enthusiasm among the candidates, especially youngsters. As always the question mark arises, whether this enthusiasm will translate into votes, given the call for a poll boycott by separatist groups in Kashmir.

But sporadic attacks by militants have failed to dampen enthusiasm for the civic polls being held after 27 years in Jammu and Kashmir. With huge numbers vying for party tickets, parties are desperately seeking ways of allotting tickets to aspirants.

With 33 per cent seats reserved for women, a large number of young women are coming forward to participate in the polls as well. The elections have the potential to change the status of women, which has been badly affected by violence in the valley.

Significantly, majority of the candidates in the Srinagar Municipal Corporation elections are youngsters. For them lack of development is the motive behind their participation.
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Musharraf: No new CBMs before bus service rolls
Islamabad: Pakistan President, Pervez Musharraf, has ruled out initiation of new confidence building measures with India, insisting that no new CBMs will be initiated, until New Delhi agrees to run the bus service for Kashmiris without passports and visas

The bus talks have not made any headway during the past few months. India had agreed to do away with the visas but insisted on passengers carrying a passport besides permit papers.

Pakistan in turn has been insisting on completely doing away with the passports and visas wanting the bus service to be exclusively devoted for Kashmiris on both sides.

India wants the service it to be opened for all Indians and Pakistanis.
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Government approves panel for oil PSUs revamp
New Delhi: The government has approved the constitution of an advisory panel to suggest restructuring of public sector oil firms. The panel will hold its first meeting on January 24, and has been given two months to submit its report.

The six-member Advisory Committee to consider synergy in Energy will be headed by National Advisory Council member V. Krishnamurthy.

The panel will explore options of merging two or more companies to create oil behemoths. According to Petroleum and Natural Gas Minister, Mani Shankar Aiyar, these merged companies would have financial capabilities to match Chinese firms in international arena.

The panel includes G. K. Arora, former Disinvestment Commission Chairman G. V. Ramakrishna, former advisor to finance minister, Vijay Kelkar, former ONGC chairman B. C. Bora and former BPCL chairman U. Sunderajan.
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Government permits export of cotton
Mumbai: To arrest the downward trend of cotton prices in the domestic market, the centre has permitted the Cotton Corporation of India (CCI) to export 20 lakh bales. It has also extended cost neutralisation benefits to step up the exports.

Out of the 20 lakh cotton bales, the CCI has already exported 1,000 bales and the exports will be picking up from this week. CCI has said that the government has extended cost neutralisation benefits on transportation and other charges, which would help CCI to remain competitive from private players in the international market.
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ADB praises tax reforms
New Delhi: The Asian Development Bank (ADB) has praised India for carrying forward tax reforms. It has also said that setting up of Tax Information Network has revolutionalised the tax administration. However, it has urged the government to take more steps to widen the tax base, particularly service and direct taxes.

In its India Economic Bulletin, the ADB has said that over the past ten years these reforms have transformed India's "intrusive, complex and restrictive" tax structure.

It said the peak customs duty has been lowered from more than 300 per cent before 1990-1991 to 20 per cent in January 2004, and peak income tax rate was cut from 56 per cent in 1990-1991 to 30 per cent in 2003-04.

However, the increase in buoyancy and revenue mobilisation expected from the tax policy reforms of 1990s has not been fully realised as the tax base continues to be limited and improvement in tax administration has lagged behind tax policy reforms.
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India must hike municipal spending: WB
New Delhi: The World Bank has said that India must increase its municipal spending by at least ten times in order to set right its creaky, decaying urban infrastructure.

India's municipal spending is only 0.6 per cent of its GDP as against six per cent in Brazil and South Africa, according to the World Bank's Urban Advisor Patricia Clarke Annez.

Countries like China, Brazil, Poland and South Africa have realised the importance of increased spending on urban facilities and have substantially stepped up their municipal spending, she said. Even smaller developing countries spend 3-4 per cent of their GDP on urban infrastructure.

What is more regrettable is that the municipal spending in India has remained stagnant at a little over half a per cent of GDP since 1992-93 despite the fact that urbanisation was growing by leaps and bounds. Spending on vital infrastructure like water supply, wastewater collection and treatment, solid waste and road networks has been stagnant or is falling with respect to GDP.

In China, urban public investment has grown at record rates, Annez added.
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