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ADB report: China, India lead Asia in oil consumption
New Delhi: The Asian Development Outlook 2005 Update, the Asian Development Bank's flagship publication, released on Thursday, says that Asian countries are consuming more oil than the region produces, led by China and India.

Developing Asia has a huge thirst for oil, producing about 11 per cent of the world's crude oil, but consuming more than 20 per cent of it. "This gap is widening, as the two regional giants - China and India - continue to need more oil.

"In 2003, 44.7 percent of oil consumed in the region was imported, compared with just about 10 per cent in the mid-1980s," states the Asian Development Bank's flagship publication, forecasting economic trends in the Asia and Pacific region.

According to the update with signs of economic stress starting to emerge, developing Asia needs to make some hard decisions to cope with high oil prices, states the report in its update on the study released in April. The price of world crude has risen by nearly 75 per cent since the start of 2005.

"Higher oil prices are expected to stay for the remainder of 2005 and through 2006. A recent study by Goldman Sachs projects that oil prices are likely to be sustained at over US$60 per barrel over the period 2006-2010," the ADB report has pointed out.

Between 1990 and 2003, while for the world as a whole the annual demand for oil grew at 1.3 per cent, in the case of China and India combined it expanded at seven per cent.

Together, these two countries have accounted for almost 40 per cent of the growth in demand since 1990. The rising demand of China and India "has been magnified by their comparatively inefficient use of energy," the study points out.

Among other countries in the region, ADB points to India's growing subsidy bill, with the state-owned oil companies bearing much of the burden. Some countries in southeast and south Asia could see growth trimmed by more than one percentage point if oil prices stay high through 2006, the report points out.
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Sensex at 8,000: India Inc says its thanks to a healthy economy
New Delhi: India Inc is upbeat about the zooming Sensex and attributes the growth to healthy performance of the economy of the country.

With the Sensex touching a new landmark of 8,000 points on Thursday, The Associated Chamber of Commerce and Industry President, Mahendra K. Sanghi, described the development as a good economic indicator and refused to subscribe to a view that speculators and manipulators in the broker community were behind it.

"It is the firm conviction of the chamber that healthy economics and reasonably good performance of the Indian economy in almost all sectors have contributed to this development," said Sanghi.

The Federation of Indian Chambers of Commerce and Industry President, Onkar S. Kanwar, said that the buoyant sentiment could be interpreted as an affirmation of the investor confidence in India's consistent economic growth and prospects.

He attributed the surge in the Sensex to expectations of good corporate performance in the second quarter of the current fiscal and easing of oil prices in Asian trade.

Further, a good monsoon in most parts of the country is bound to have aided the strong sentiment, Kanwar said. He further added that with hopes of agricultural revival, rural India is expected to have more disposable income and spending power.
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Baalu asks global investors to tap 'infrastructure revolution'
Chennai: The union minister of Shipping, Road Transport and Highways, T R Baalu, on Thursday wooed investors in Singapore to avail the innumerous business opportunities thrown up by the infrastructure revolution happening India.

Inaugurating a conference on 'Gateway to Logistic Opportunities in India' jointly organised by the Federation of Indian Chamber of Commerce and Industry (FICCI) and the Singapore Business Federation (SBF) in Singapore, Baalu said as India further integrated itself with the global market, there was going to be rapid growth in international and domestic trade cargo volumes.

"To facilitate the seamless movement of such freight traffic, an efficient transport network of roads, ports, airports and railways was essential," an official release press release quoting the Minister, said. In India, the total logistics costs constituted nearly 10 per cent of the GNP of which about 40 per cent was due to transportation alone.

Recalling the words of John F Kennedy that it was not the wealth that built the roads but it was the road that built the wealth of the nations, Baalu said that India had already embarked on an ambitious programme for developing transport infrastructure.
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Govt. to review FBT distortions
New Delhi: The Government on Thursday announced that it was reviewing inconsistencies in the Fringe Benefit Tax (FBT).

Declaring this at a seminar on "Fringe Benefit Tax: Rules and Implications", organised by the Associated Chambers of Commerce and Industry of India (ASSOCHAM), Dr. Parthasarthi Shome, adviser to the finance minister, said that the review package would be made public after intensive and comprehensive consultations with trade bodies.

"Inconsistencies in fringe benefits accorded to a large section of employees by their employer such as Medical Reimbursement and LTA which currently fall under FBT is a serious issue before the Government. Other inadequacies too are there and still others should be brought to its notice so that these can be corrected and removed", said Dr. Shome without giving a timeline for their removal from the recent circular, which in his opinion is too long.

Dr. Shome, however, made it clear that the current circular on FBT made it amply clear that only incomes that accrue to employees are taxed and that no expenditure incurred by them will be taxed. He also added that only such expenditures are liable to be taxed under FBT as the ones that bring utility and satisfaction to employers while offering hospitality to persons occupying positions of importance and influence.

The Advisor to the Finance Minister categorically stated that the Government before imposing FBT made an in-depth analysis of incomes that were surreptitiously transferred to employees' account by employers to escape taxation. It was against this background that the Finance Ministry had to introduce FBT to tax the income, which the employees were getting in terms of perquisites from their employers.
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