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Bush, Singh to cooperate on defense and energy
Washington DC, USA: President George W. Bush has said that U.S. and India would undertake greater cooperation on defense, energy and economic issues.

``We're charting new steps in our defense relationship'' that will help our two nations work together to counter the threat of terrorism,'' Bush said today during a White House news conference with India's Prime Minister Manmohan Singh.

Singh said he appreciated Bush's ``steadfast determination and leadership'' in the global war against terrorism, and his emphasis on a closer relationship between the two countries on defense, trade and business.

India, which for decades has posed political and economic challenges to U.S., has since overhauled its economy, and U.S.- Indian ties are strengthening to the benefit of both nations, the world's two biggest democracies.

``We face common challenges that threaten our way of life,'' Singh said in an arrival ceremony at the White House earlier. Bush called India ``an emerging economic power'' whose relationship with the U.S. ``has never been stronger.'' Singh later was a guest at a formal state dinner, the first of Bush's second term.

Singh's visit was ``one of the most important'' by a foreign leader to the U.S. this year, Undersecretary of State for Political Affairs Nicholas Burns told reporters at the White House.

India may rival China in coming years as an emerging superpower, some experts say. ``By the middle of this century, India and China clearly are going to be two of the three pre-eminent nation-states in the world,'' says Robert Hathaway, director of Asia Studies at the Woodrow Wilson Center in Washington.

India is considering giving U.S. businesses more access to its market of 1.07 billion people. Singh, 72, wants to increase trade and defence ties with the U.S.

Today, Singh will address a joint session of Congress and on July 20 he speaks at the National Press Club in Washington.

The two leaders have announced a forum to increase trade that includes ten chief executive officers from each side, including Charles Prince of Citigroup Inc., the biggest U.S. financial- services firm; William Harrison of JPMorgan Chase & Co., the third-largest U.S. bank; Warren Staley of Cargill Inc., the largest U.S. agriculture company; and David Cote of Honeywell International Inc., the top maker of cockpit electronics. The Indian CEOs include Ratan Tata of Tata Group, India's biggest conglomerate by market value.

Singh acknowledged the ``support and goodwill'' of the U.S. in helping India manage the transition to a ``fast-expanding economy'' from a developing country.

The U.S. is India's biggest trading partner and its largest investor, estimated to have pumped $4.1 billion into the Indian economy last year, more than double the $1.8 billion of foreign direct investment in 1998, according to the U.S.-India Business Council.

Trade in merchandise between the two nations was worth $21.7 billion last year, according to the U.S. Commerce Department. The U.S. trade deficit with India from January through May of this year totalled $4.15 billion, the department said, while the deficit with China for the same period was $72.5 billion.

India's $661 billion economy, Asia's fourth largest, is forecast to expand 7 per cent in the 12 months ending in March 2006.

``The president's assurance to me that India's sustained economic growth has his strong support and the support of the United States means a lot to us,'' Singh said at the news conference.
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Exports up 19 per cent for Q1
New Delhi: Maintaining its momentum, the country's exports have registered a robust 19.04 per cent growth at USD7,110.96 million in June 2005, as against USD5,973.68 million during June 2004.

Even as the country's exports during the first quarter of the current fiscal from April to June 2005 were higher by 19.54 per cent at USD20,900.31 million than USD17,483.26 million during April-June 2004, the country's trade deficit breached the USD10-billion mark in the quarter for the first time as imports also shot up.

Imports during June 2005 at USD11,101.23 million were up by close to 30 per cent over USD8,540.70 million in June 2004. Imports during the period April to June 2005 at USD32,360.13 million showed an increase of 38.02 per cent over USD23,445.70 million in the corresponding period last year.

Oil imports during the first quarter are valued at USD9,598.33 million, 33.16 per cent higher than USD7,207.90 million in the corresponding period last year. Non-oil imports are valued at USD22,761.75 million, which is 40.18 per cent higher than USD16,237.80 million in April to June 2004-05.

As a result of relatively robust export growth and a higher import growth, the country's trade deficit during the first quarter of the current fiscal is estimated at USD11,459.82 million, which is far higher than the deficit of USD5,962.44 million during April to June 2004-05.
Back to News Review index page   Sethusamudram project to open for traffic by 2008
Chennai: Sethusamudram Corporation Ltd, the special purpose vehicle (SPV) floated for the implementation of the project, has said that the multi-crore Sethusamudram Ship Canal would be thrown open for traffic by November 2008.

The first leg of dredging work started on July 2 after Prime Minister Manmohan Singh inaugurated the project.

According to a press statement, the dredging contract for the 13.57 km Palk Strait has been awarded to the Dredging Corporation of India (DCI) area on a nomination basis. The DCI vessels would be dredging about 13.55 million cubic metres in this segment within a period of two years.

The SPV has floated global tenders for the remaining three legs of the project measuring 35 km in Adam's bridge area and 40.68 km in Palk Strait region. Tenders have been invited from dredging firms on July 9.

The tender process for this major portion of the project involving a total of 69 million cubic metres of dredging work will be completed on August 31 and the work in these segments is scheduled to begin in November, the statement said.

A separate mechanism is also being put in place to closely monitoring the project.
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Post offices set to usher in banking services
Chennai: Union IT and Communications Minister Dayanidhi Maran has said that the department of posts has commissioned KPMG to work out the modalities for Indian Posts to usher in banking services as part of its overall operations in the country.

Indicating that this could happen soon, Maran said, "We have already initiated talks with the ministry of finance and other authorities to get the required approvals. There is no reason why post offices cannot offer banking services as already they are collecting deposits and repaying them on maturity."

The communications minister said that post offices currently have over Rs3,75,000 crore as deposits and over 18 crore customers, larger than even the largest public sector bank viz. State Bank of India. "In the last 150 years India Post has hardly seen any change. It is now time to reorient itself to become strong financially," he added.

Currently the postal department expenditure or deficit as per 10th Plan estimates is in the region of Rs1,300 crore. "This is largely due to the social obligations that the department undertakes."

Making a cause for the postal department to catch up with other private players, Maran indicated that the vision is to transform India Post on the lines of Deutsche Post, which subsequently became DHL Couriers.

"There is no reason why India Post cannot go international and we will take the necessary steps to do so. Accordingly we have kicked off the process to computerise all the post offices and in the near future all of them will have Internet terminals also," said Maran.

Meanwhile India Post has tied up with IDBI Capital Market Services Ltd for retailing government securities (G-Secs). Under this scheme G-Secs can be purchased and sold through select India Post branches in the country.

Initially it is being introduced in select post offices in Tamil Nadu, Andhra Pradesh, Mumbai and Delhi. According to IDBI Capital officials any individual who is above 18 years of age or a HUF is eligible to buy G-Secs. The investor must have a demat account and the minimum face value to be purchased/sold is Rs10,000. IDBI Capital will provide quotes for purchase/sale to the post offices and investors can select from a range of securities of varying maturity periods.
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CBDT allows online furnishing of annual information returns
New Delhi: The Central Board of Direct Taxes (CBDT) has allowed Government agencies and other agencies who are obliged to furnish annual information returns (AIR) to submit such returns through online transmission of electronic data under digital signatures.

"The basic idea behind the change in procedure is to provide a facility of online filing of AIR. The rules have been amended to facilitate online submission. There has however been no expansion in the scope of transactions or entities covered under the AIR," a senior revenue department official said.

The official also said that an AIR administrator, not below the rank of a Commissioner, would specify the server to which the online transmission could be made.

The CBDT is relying on AIR to enlarge their information base on high-value transactions. Such returns are expected to enable the tax department to detect tax evasion in a non-intrusive manner.

The first set of AIRs are expected to be furnished by certain categories of persons (which includes Government agencies, banks, mutual funds, registrars) by August 31 for specified transactions recorded or registered with them during financial year 2004-05. In all seven categories of entities/persons and transactions above certain specified value are currently under the scope of AIR.
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