1.2.11

India & Indonesia get down to business


India signed 18 agreements worth $15.1 billion with Indonesia in sectors such as mining, infrastructure and manufacturing. The two countries have set a target to double bilateral trade to $25 billion in the next five years. India’s bilateral trade with Indonesia has more than trebled in the last five years. It has increased from nearly $4 billion in 2005 to an estimated $12.5 billion in 2010. Indonesian president Susilo Bambang Yudhoyono said that India and Indonesia can cooperate in a large number of areas like infrastructure building, transportation, IT, food industry, telecommunication, R & D, energy, mining, manufacturing, education and film industry. The deals signed on Tuesday include MoUs between Indonesian industry ministry and Indian ministry of chemicals and fertilisers for urea manufacturing, Provincial Government of South Sumatera and Jambi and Reliance Infrastructure for railway and seaport, Provincial Government of South Sumatera and National Aluminium Company (NALCO) for aluminium smelter.

Asia’s first shale gas pool found near Durgapur

The potential answer to the world’s energy woes, lying buried under 1770 metres of hard rock in the Damodar basin, has finally been unearthed. ONGC scientists have found an “unlimited reserve” of shale gas, touted as the low-cost, ecofriendly fuel of the future with vast untapped resources, at Sarpi on the outskirts of Durgapur at a site spread over an area of 1250-1300 sqkm. The Sarpi deposit is Asia’s first, and the only tapped shale gas reserve outside North America, making it the focal point in India’s pursuit of green energy. The ONGC, which began its exploration of the Damodar basin last September in India’s first such experimental project, hit upon the gas source late on Monday while drilling its first rig. On Wednesday, R S Sharma, the CMD of ONGC, is likely to submit a report on thediscovery to Prime Minister Manmohan Singh. Sources said it was likely that the PM would make the announcement on Republic Day itself.

Pakistan's nuclear arsenal

Islamabad has doubled its nuclear weapons to more than 100 in the last few years, overtaking India’s tally in the process, and is adding more bombs to its arsenal, according to new estimates by proliferation gurus. Four years ago, Pakistan’s nuclear arsenal was estimated to contain between 30 to 60 weapons, about the same as India’s. Since then, the country has rapidly accelerated its program. Current estimates by western nuclear pundits cited in the Bulletin of Atomic Scientists and other journals put the number between 100 and 110 — and growing. The reports are not new. As far back as December 2008, Peter Lavoie, the U.S. national intelligence officer for South Asia, told NATO officials that “despite pending economic catastrophe, Pakistan is producing nuclear weapons at a faster rate than any other country in the world,” according to a classified State Department cable released late last year by WikiLeaks. The ostensible reason cited by Pakistan for cranking up production of nuclear weapons is the U.S-India nuclear deal, which Islamabad believes frees up India’s domestic fissile material for bomb-making purposes because it allows New Delhi to purchase nuclear fuel for civilian purposes. But nuclear theologians believe Pakistan believes it has to have more weapons because India is bigger, has greater land mass, more cities, and hence more targets. By contrast, Pakistan is smaller, has fewer cities and fewer targets, and is more vulnerable. There is also the psychological factor. As Pakistan sees India becoming a great power, “nuclear weapons become a very attractive psychological equalizer,” George Perkovich, a nonproliferation specialist at the Carnegie Endowment for International Peace, was quoted as saying in the Washington Post, which revisited the story of Pakistan’s growing arsenal on Monday. Some analysts scoffed at reports of expanding Pakistani nuclear arsenal, which has been making the rounds since Lavoie’s assertion, suggesting it was aimed at extracting a nuclear deal for Pakistan similar to the one India has arrived at with the U.S and the international nuclear club. “If Pakistan is stockpiling nukes, it’s the west that needs to be scared. India cannot be scared more than it has been since 1985 (when Pakistan first weaponized),” said Nitin Pai, who edits Pragati, the Indian National Interest Review, and is a Fellow at the Takshashila Institution. “We stopped counting after Pakistan’s first one.” Most Indian analysts believe Washington has generally winked at Pakistan’s egregious nuclear build-up because of other strategic concerns. The United States, which according to these critics indirectly funds and underwrites Pakistan’s nuclear weapons program (because the country generates no revenues beyond its bare survival) continues to be blasé in public about Islamabad’s growing arsenal, even though it is coming at the expense of a proposed international treaty to stop production of fissile material. Pakistan has blocked progress on the socalled Fissile Material Cut-Off Treaty in Geneva and remains the lone hold-out, despite living on American hand-outs, as it accelerates expansion of its arsenal. There are no signs Washington is doing much to budge its ally or restrain its production of nuclear weapons, despite the $ 7.5 billion U.S aid through Kerry-Lugar bill being conditioned on regular assessments of whether any of the money “directly or indirectly aided the expansion of Pakistan’s nuclear weapons program.”

Core sector grows 6.6% in December 2010


The country’s infrastructure sector output grew 6.6% in December from a year earlier, accelerating from the upwardly revised 3% in November. The December data augurs well for overall industrial output numbers which would be released later in the month. Industrial output data has remained volatile in the past few months. The only concern in Monday’s data was the output of the cement sector which fell 2.2% in December. The infrastructure sector—spanning crude oil, petroleum refinery products, coal, cement and steel-—accounts for 26.7% of the country’s index of industrial production. Annual factory output in Nov slowed to an 18-month low of 2.7% from a year earlier. The slowdown in Nov had raised concerns about the strength of industrial output and some economists had said the impact of interest rate increases was hitting industrial growth.

GDP growth revised to 8% for FY10




The Central Statistical Organisation revised growth in the gross domestic product (GDP) for 2009-10 to 8% from the previous 7.4% due to robust growth in manufacturing and services sectors. The government also revised the GDP growth for 2008-09 marginally to 6.8% from the previously announced 6.7%. The per capita income at 2004-05 prices is estimated at Rs 33,731 for 2009-10, up from Rs 31,801 in 2008-09, showing an increase of 6.1%. Per capita income at current prices rose 14.5% to Rs 46,492 in 2009-10 compared to Rs 40,605 crore in the previous fiscal. Per capita income refers to the earnings of each citizen in the country if the national income is equally divided among the population. National income or the size of the economy rose 16.1% at current prices to Rs 60,95,230 crore compared to Rs 52,49,163 crore in 2008-09. “The growth rate of 8% in the GDP during 2009-10 has been achieved due to high growth in transport, storage and communication (15%), community, social and personal services (11.8%), financing, insurance, real estate and business services (9.2%) and manufacturing (8.8%),” CSO said.

The Adarsh Inquiry


Posco gets green clearance



Posco’s $12 billion project in Orissa involves three units—a steel plant, a captive power plant for electricity suppy to the steel unit and a port. The Environment minister clears steel and power plant with 28 additional conditions; captive minor port cleared with 32 conditions. Ministry tells the Orissa government to provide comprehensive relief package to all forest-dwellers who lost land to the project in Jagatsinghpur district. Conditions include following national ambient air quality standards; carrying out a sustainability study of water requirement; green area within the plant to be 25% of total area and devoting 2% of net annual profit to corporate social responsibility .
In both Adarsh and Vedanta cases, the ministry of environment and forests had refused to condone past illegalities and violations. Posco, ironically, gained from the fact that the violations had been caught even before it began construction at the site. Environment minister Jairam Ramesh cleared the Korean steel firm in the crucial test against provisions of the Forest Rights Act. Earlier, three committees of the ministry, including one statutory internal one—the Forest Advisory Committee—had asked for the forest clearance to be cancelled. They had pointed out that the state was unable to provide village council clearances for using forest land and other documents as required by the environment ministry. The panels had also noted that the rights of people had neither been ascertained nor settled. Addressing these violations, Ramesh has merely asked Orissa for assurance that forest land being transferred to Posco is free of any claim under the Forest Rights Act. Even on the coastal regulations — another green standard that has been strictly enforced — Ramesh has given Posco the go-ahead after putting some conditions. This ignores the findings of several committees that the port was sitting in a high-erosion zone, and would impact the Paradip Port adversely. One panel had said that the project developers had hidden information from the Centre while seeking clearance. For Posco, the only hurdle now is a Supreme Court case against its right to mine. Another corporate group has taken the state government to court for handing over iron ore mining rights to the multinational in disregard of its prior claim on the ore.