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McKinsey interview: PM says, will work for FDI in retail
New Delhi: In an interview on August 16 to Rajat K Gupta, a director in the management consultancy firm McKinsey & Co, Prime Minister Manmohan Singh has expressed the hope that he will eventually manage to convince his coalition partners to allow foreign participation in India's retail trade, while conceding that coalition politics posed limitations in the way of economic reforms.

However, he said, he hoped to carry his "political colleagues" along. "A politician before he can become statesman has to remain in office for long enough," the prime minister said. The interview appears in The McKinsey Quarterly 2005 special edition: Fulfiling India's promise.

"With regard to retail trade, I am convinced that we can work out a package that is fair, that entry of foreign enterprises into the retail trade will not hurt our small shopkeepers but will create a lot more employment. We have to carry our conviction with our political colleagues. I am convinced that over a period of time, we can do that.

"But for the time being, I have my task cut out to carry conviction with our political colleagues that this is a way to move our economy to a higher growth path, to create new employment opportunities, that this is not a strategy to hurt the small shopkeepers in our country. So I have my task cut out. In the next four or five months, I propose to engage myself in the task," he said.

Singh admitted that the "extreme rigidities" in India's labour market were not consistent with the country's goals. He, however, said coalition politics had limitations.

The Prime Minister said he planned to identify areas where India needed a big thrust forward and set up a mechanism to bring about "convergence" in what the state governments did and what the Centre did so as to maintain a sustained and fast pace of development. He said the next 5 to 10 years were crucial to stimulate economic growth and ensure that the accelerated growth benefited the poorest segment of society.

Stating that the country needed a sustained growth of 7 to 8 per cent over the next 10 to 15 years, the Prime Minister said, "We underpin that growth by strong performance of our agriculture, strong performance of our physical and social infrastructure."

Singh said India needed a lot more foreign direct investment. "We may not be able to reach where the Chinese are today, but there is no reason why we should not think big about the role of foreign direct investment, particularly in the areas relating to infrastructure, where our needs for investment are very large," he said.
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First outcome budget - Govt. to monitor all major programmes
New Delhi: Finance minister P. Chidambaram has said that all major programmes of the government will be monitored closely as part of the outcome budget, the first of which he presented today.

Employment guarantee schemes, infrastructure building and mid-day meal plans are among the ones that will be under watch.
The outcome budget, a progress report on what ministries and departments intend to do with the money allotted in the budget, is expected to push them to perform.

"There will be close monitoring of flagship programmes by the Planning Commission and finance ministry. Others will be put under scanner too," Chidambaram said.

Teams, official and private, will fan out to various parts of the country to study the performance of these programmes. The outcome budget assesses schemes based on the money allotted, objectives, time and risk factors, besides diagnosing problems.

The outcome budget also warns that the Commonwealth Games in Delhi may suffer, as current allocations will need to be scaled up amid cost over-runs.
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India short lists financial advisors for Iran-India gas pipeline
New Delhi: India has short listed KPMG, Standard Chartered and Ernst & Young as its financial advisors for the execution of the US$7.4bn Iran-Pakistan-India gas pipeline.

"Out of 23 financial consultants, who applied for the job, three were qualified, based on stringent criteria. KPMG, Standard Chartered and Ernst & Young made presentations to us earlier this week and we intend to appoint a consultant by end of this month," a top petroleum ministry official said.

The financial consultant would suggest a project structure (who should build the pipeline, own and maintain it and how the project is to be financed) and security measures to be built in every aspect - technical, legal, financial and commercial - of the project.

It would also facilitate dialogue with Iran and Pakistan and suggest approach to pricing of gas and other issues like transit fee, inter-government framework agreement, guarantees etc, he said.

The financial consultant, who is to submit a report within two months, will also help in selecting a legal consultant for drafting project framework agreement and other agreements.

"We intend to put in place the financial advisor by end of this month and the legal consultant would be appointed in 3-4 weeks time," the official said.

Pakistan would also appoint separate Financial advisors for the same purpose, he said, adding that the two sides would converge their ideas, along with the proposal of Iran before the three nations sign the framework agreement by year end for the project to take off by early 2006.

The official said the financial advisor would be retained by India for the entire period of construction of the pipeline project even if the three countries involved for execution of the project choose a separate consultant.

"We wish to retain the financial consultant to continue advising us on the project," he said.
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Handloom sector targets US$50bn in exports by 2010
Rajahmundry: With rising demand in the international market, and no competition from any country, the Indian handloom sector is targeting US$50bn in exports by 2010, said Dr B.V. Somasekhar, Director of the National Institute of Fashion Technology.

He spoke to reporters here on Thursday after making a presentation at a one-day workshop on handloom exports organised by the Handloom Export Promotion Council.

Dr Somasekhar said exports currently stood at US$15bn, of which garments accounted for US$6.5bn. He said the Union Government had set up a technology up-gradation fund and would focus on integrated human resource development in the sector. He said handlooms constituted merely 20 per cent of the country's total cloth production. "There is greater demand for eco-friendly dyes, textures and multifarious designs in the international market. Handloom products are much sought after."

He said 13 lakh skilled workers were needed to achieve the US$50bn target. "Each of the seven NIFT centres would adopt one rural cluster with the support of the respective state government.
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