A FICTION: NOT FAR AWAY FROM RECENT FUTURE REALITY

In late evening, when I had just pressed the shut down button of my workstation, a colleague of mine entered the office chamber (Officially allotted to me to work).Hello, was the first word uttered out by her and before I could ask the purpose, she herself expressed that she planned to have my company while walking back to home, at least the part of distance that was common to we both. I welcomed the idea and also thanked her for the same. Thus the journey homewards started. While on walk the momentary silence was done away by my colleague, when she requested the permission to ask question that was coming to her mind. I agreed to help her to the limited capacity of mine.

Probably it was the prices of yellow metal that were troubling her and my colleague wanted to know, where the prices are expected to move in future and why. This I am inferring from the talks that continued.

She started the conversation by posing her curiosity as ahead: “Where do you see the price of gold going in the days to come?”

Since, at that moment, I was not exactly focusing on ‘investment advisory’, so I responded by saying that “on a broad level, the price are supposed to continue their northward journey.”

It seems that my response confused her a bit, as she soon came up with another question that “what I mean, when I say a broad level.”

I got the point and then explained to her that “the prices of any commodity do not move in a straight line. When I say on a broad level, it means that the prices will keep moving northwards, but in between they may drop as well, but they will pick up again, and thus will continue to scale up.”

It seems, that she was not ready to buy anything that I said, therefore, she questioned that what lay behind my confidence, which she visualized while I was answering her first curiosity.

Suddenly I realized that majority of investors; rarely scan the external and vital economic variables that are often of political nature. This made me aware that now I need to go bit detailed and also in a manner that she could easily comprehend.

“Well, I was just reading through some material and I realized that there is another solid reason for gold prices to go up,” I told her.

“Is it something other than all the money printing that is happening and is likely to happen in the days to come, all around the world?” she asked.

“Yes”, I answered.

“So what is this new reason?” she was now more curious.

Now I started by posing a question as ahead “Ever heard of Hugo Chavez?” Pat came the reply, “nope” with a supplementary question that now who’s he?

“He is the President of Venezuela, a country in South America.”                                

Probably she got a bit more confused and said that she knew that, but expressed her surprise on the issue that what “Venezuela” has got to do with the price of gold.

This made me aware that now my job was to explain history, international polity, and international trade, cost of transaction and accounting to her, and all this in very limited time of few minutes. I knew that I may be bombarded with whorls of questions.

 I started with letting her know that Venezuela has the 15th largest gold reserves in the world amounting to 401.1 tonnes. A lot of this gold is lying abroad in banks in New York, London and Zurich.

“But why will a country keep its gold overseas?” she interrupted.

 I started to introduce her with history. I said that “a part of the reason comes from history. Till August 15, 1971, the world was on a gold standard. Paper currencies were ultimately convertible into gold. This meant that countries had to settle their deficits in gold.” I followed this by giving an instance from international trade. I asked her to assume that England and Germany are exporting and importing goods from each other. At the end if France exports more to England than England to France, there is a deficit.” This means that England had to pay France. This payment was to be made in gold. A look at her face made me feel that she has now started picking up what I was attempting to explain. I carried on by adding that “now this meant that gold had to be physically moved from England to France, which of course was a pain. Movement meant cost of insurance as well as security.

“She was prompt in asking that “what was the way out?”

 I added for these reasons “a lot of this gold is simply stored overseas at the Federal Reserve Bank of New York (a part of the Federal Reserve of the United States, the Central Bank of the US).”

“How do you think this is going to help?”

It’s simple; I added and just narrated what Peter Bernstein writes in his book “The Power of Gold”. For example, if England lost gold to France, a guard at the Federal Reserve had merely to bring a dolly to England’s closet, trundle the gold to the French closet, and note the change in the bookkeeping records.’

She got the point, and allowed my request to take her back to Hugo Chavez.

The deliberations continued further, certainly with some statistical inferences. Estimates suggest that nearly 211 tonnes of the 400-odd tonnes of gold that Venezuela has are with banks abroad. Chavez has asked this gold to repatriated back to Venezuela.”

Now this brings a twist in the story, and the discussion to follow will also attempt to answer possible reason for Hugo Chavez’s such an act.

 “Chavez has had an anti-US stance for years and may feel that because of that Venezuela runs the risk of its gold being seized.”

“Gold Seized? Why would such happen and does the possibility of such an act exist?” was the latest in series of questions.

“It sure is. I explained the same by making her aware of the ongoing Libyan foreign exchange reserves crisis, which happens to be an outcome of its foreign reserves being seized by allied nations with declaration of war earlier this year.”

 “But what has all this got to do with the price of gold? To me it’s as simple as me wanting to have gold in my own locker rather than the bank locker.”

I agreed to her statement, while continuing to explain by adding that all is not that straightforward as concluded by her, though to some extent she was correct. The straight forward part of transaction would be limited to 99 tonnes of total 211 tonnes lying abroad, as this 99 tonnes are deposited with the Bank of England in London. Repatriating that back to Venezuela would be a straightforward process.”

Now comes the not so straight forward part, which happens to be of the tune of 112 tonnes of the gold and same is lying abroad with what are known as bullion banks. J P Morgan is one of them. Estimates suggest that Venezuelan gold worth $807 million (or around 450,000 ounces of gold) is lying with it.”

 She was instant, and argued that this should also be as straight forward as it is in the case of Bank of England, London, while simultaneously her facial expressions conveyed me that she wanted to know, if I dare to differ from her opinion. Certainly, I had to differ, and added that things are not always as simple as they seem to be. The statistics again came handy in quoting that “estimates suggest that the total amount of physical gold with J P Morgan currently stands at around 338,303 ounces (1 troy ounce equals 31.1 grams).”

Now, it seemed that she was out of reasons, as she expressed her ignorance about having to come across any news in media regarding, such a huge bank robbery in which approximately 1,11,697 ounce or 3473.8 kilo grams worth gold was looted.  I had to instantly chip in by saying that, this is not a case of bank lifting, but a way of functioning of financial system in general and banking sector in particular. Let me add an example to illustrate it? I sought her permission. The phenomenon goes as explained ahead [the attempt was to explain the process by making it as easy as possible, so that even a novice can understand].

“Central banks around the world had a huge amount of gold lying in their vaults, not earning any return. The end of 2007 witnessed the stock of gold with central banks around the world rising to 32,000 tonnes of gold.”

 I requested her to be more attentive to whatever I was going to add now. Out of the 32,000 tonnes gold held, the Central Bank lent approximately 14,000 tonnes to Bullion Banks like J P Morgan. James Turk and John Rubino in their coauthored book The Collapse of the Dollar, have argued that “lending, for instance, involves the central bank transferring gold to a major private bank, known as bullion bank, which pays the central bank a small-but-positive interest rate, then sells the gold in the open market.”

In this manner “central banks convert the gold into cash and then deploy this cash, somewhere to earn some positive rate of return. This based on a very fundamental assumption that idle assets provide no return, and there is fair possibility that such assets may ultimately add up some cost to the holder.” These costs may range from cost of storage to cost of security. As per meaning conveyed by the operative word “lending”, since the gold has been lent, therefore, the central banks have all the rights to, and can demand it back, whenever they want.

She chipped in by adding that probably “this is what Venezuela is doing right now”; and thus conveyed me a feeling that she was sincerely following the every single word uttered by me. 

 I nodded in agreement and continued further by adding that, since, the bullion banks have promised to return the borrowed gold to the central banks so they will have to return the same. In prevailing situations these bullion banks are not having the volume of gold that was lent to them by Central Bank. In financial and monetary world, this position is conveyed by the term ‘short’, and this means that these bullion banks are ‘short’ gold.

Now comes a significant turn in events, that may work as catalyst to force the prices of gold to break the roof. As the situation deliberated above suggests that, in case, sometime in future, these bullion banks are asked to deposit the volume of  gold lent to them by central bank, they will be left with no choice and would be obligated to buy gold in order to repay the central banks’.”

“So, as I can get, it goes like, that in such a scenario the bullion banks like J P Morgan will now have to buy back gold from the market in order to repay the Venezuelan government, given the situation that Venezuela has around 450,000 ounces of gold deposited with J P Morgan, whereas J P Morgan at present has only 338,303 ounces of gold in its accounts/ record books,” she added.

Exactly, I said in agreement, and carried the deliberations forward by adding, that this buying will lead to the price of gold rising further. I knew that now she has got answer to her question, but then too, I continued it by saying that this is only one part of the story.

Much like a child, who is curious to know about everything, she was now eager to learn that what the remaining part of story was now. She requested me to unfold the other part of the story.

I continued by giving her a reference of a report titled “Thing That Make You Go Hmmm” , and told that this report points out, ‘Chavez’s move could set in motion a chain of events whereby Central banks who store the bulk of their gold overseas in ‘safe’ locations scramble to repossess their country’s true ‘wealth’. If that happens, the most high-stakes game of musical chairs the world has ever seen will have begun’,” I said.

 “This sounds very scary”, she added.

“Yes, you are very much correct while mentioning that the report further states that ‘any delay in repatriating Venezuela’s gold could potentially start a frantic scramble by central banks to claim their physical. God save the scenario, but if it actually happens, rest assured that gold price will be on fire. A scenario will take place, which has neither been seen in past, nor even imagined.

It will give birth to an economic tsunami of magnitude, which will turn the great economic recession witnessed by world or even the jasmine revolution and contribution of social media to same to seem dwarf.

Don’t be surprised if I that there is enough in media to believe U S Govt. Manufactured Fake Gold

Perhaps, there are only few who can imagine the magnitude of risk, specifically if they are not linked to foreign trade. Let me illustrate it. It’s one thing to counterfeit a twenty or hundred dollar bill. The amount of financial damage is usually limited to a specific region and only affects dozens of people and thousands of dollars. Secret Service agents quickly notify the banks on how to recognize these phony bills and retail outlets usually have procedures in place (such as special pens to test the paper) to stop their proliferation.

This is the most sacred of all commodities because it is thought to be the most trusted reliable and valuable means of saving wealth.

A recent discovery — in October of 2009 — has been suppressed by the main stream media but has been circulating among the “big money” brokers and financial kingpins and is just now being revealed to the public. It involves the gold in Fort Knox — the US Treasury gold — that is the equity of our national wealth. In short, millions (with an “m”) of gold bars are fake!.Who did this? None, but the United States Government, as claimed by Chinese Authorities.

Background
In October of 2009 the Chinese received a shipment of gold bars. Gold is regularly exchanges between countries to pay debts and to settle the so-called balance of trade. Most gold is exchanged and stored in vaults under the supervision of a special organization based in London, the London Bullion Market Association (or LBMA). When the shipment was received, the Chinese government asked that special tests be performed to guarantee the purity and weight of the gold bars. In this test, four small holed are drilled into the gold bars and the metal is then analyzed.

Officials were shocked to learn that the bars were fake. They contained cores of tungsten with only a outer coating of real gold. What’s more, these gold bars, containing serial numbers for tracking, originated in the US and had been stored in Fort Knox for years. There were reportedly between, 5600 to 5700 bars, weighing 400 oz. each, in the shipment!

At first many gold experts assumed the fake gold originated in China, the world’s best knock-off producers. The Chinese were quick to investigate and issued a statement that implicated the US in the scheme.

What the Chinese Uncovered

Roughly 15 years ago — during the Clinton Administration [think Robert Rubin, Sir Alan Greenspan and Lawrence Summers] — between 1.3 and 1.5 million 400 oz tungsten blanks were allegedly manufactured by a very high-end, sophisticated refiner in the USA [more than 16 Thousand metric tonnes]. Subsequently, 640,000 of these tungsten blanks received their gold plating and WERE shipped to Ft. Knox and remain there to this day.

According to the Chinese investigation, the balance of this 1.3 million to 1.5 million 400 oz tungsten cache was also gold plated and then allegedly “sold” into the international market. Apparently, the global market is literally “stuffed full of 400 oz salted bars”. Perhaps, its worth is as much as, 600-billion U S dollars.

Always Yours — As Usual — Saurabh Singh

 RELATED LINKS FOR READERS WHO WANT TO GO IN MORE DETAILS TO BEFORE COMMENTING ON STORY

1. http://etfdailynews.com/2011/08/17/venezuelan-president-hugo-chavez-sends-precious-metal-etfs-a-wakeup-call-gld-iau-slv-gdx-agq/
2. http://philosophers-stone.co.uk/wordpress/2011/08/hugo-chavez-gold-runs-bank-runs-and-bank-holidays/
3. http://profit.ndtv.com/news/show/chavez-officially-nationalizes-venezuela-s-gold-industry-174207
4. http://notime4bull.com/aggregator/sources/13
5. http://mikepiro.com/blog/as-chavez-pulls-venezuelas-gold-from-jp-morgan-is-the-great-scramble-for-physical-starting/
6. http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/traders-brace-for-venezuela-gold-transfer/article2134031/print/
7. http://www.bighaber.com/haber/chavez-to-nationalize-venezuelan-gold-industry-1072000.html
8. http://www.advisorperspectives.com/commentaries/global_082611.php
9. http://americasfinancialmeltdown.blogspot.com/2010/11/below-is-antiwar_4391.html
10. http://mikepiro.com/blog/ron-paul-audit-federal-reserve-gold-stores/
11. http://www.freedomsphoenix.com/News/061976-2009-11-26-us-govt-manufactured-fake-gold.htm
12. http://www.the-boondocks.org/forum/index.php?t=msg&&goto=157202#msg_157202s

FEELING HEAT ON US DEBT : EARNINGS AND INDEX POISED TO EXHIBIT UNWANTED OSCILLATIONS

Wrangling over the US debt ceiling and questions marks over corporate earnings mean markets are unlikely to get a break any time soon.

Wall Street is set to close its worst three months in a year as July draws to a close next week after a roller coaster ride for markets. Whacked out fund managers hitting the beach in August may find themselves fiddling with their BlackBerrys more than the little umbrella in their cocktails.

“I need a vacation, man. After all the stuff that’s happened in the last three months I’m pretty much shot, I’m getting weird,” said one New Jersey-based fund manager, who was packing his bags for a destination in the Caribbean as temperatures topped 100 degrees Fahrenheit in New York City.

With euro zone leaders having reached a deal for yet another bailout for debt-laden Greece, investors will be free to chew over the rancor in Washington with even more attention.

Negotiations between President Barack Obama and the top Republican in the House of Representatives, John Boehner, still looked far from a deal to avert a looming US default, lawmakers said on Friday, raising the likelihood of more volatility next week if no solution is reached over the weekend.

“It’s likely an agreement in any form will cause a relief rally for equities,” said global head of sales trading at Dahlman Rose in New York.

“Coming on the heels of overall pretty good earnings numbers and some sort of resolution in Greece and that could make for a rally in the market,” he said.

But on the other side of the coin, the prolonged and partisan dispute over solving the country’s debt crisis means there is still a big downside risk.

“Who knows where that is going to go,” as per an analyst at MF Global in Chicago. “We’re vulnerable to a buyers’ strike if we don’t get any news.”

In addition, the corporate earnings season suggests other risks could dog the market. Despite generally good results so far, there have been some worrisome signs. The S&P 500 rallied 6% in the run-up to reporting season, but earnings misses from big industrial names like Rockwell Collins and Caterpillar Inc weighed on the Dow and S&P 500 on Friday.

Earlier in the week several big consumer names such as Whirlpool and Pepsi warned about sluggishness in developed markets, sending their shares sharply lower.

“The market still has a high degree of skepticism in it,” said the analyst, summing up the earnings season so far.

As per him, he will be closely following earnings from sector and economic bellwethers next week. Those include the package delivery company UPS, chipmaker Texas Instruments, and online retailer Amazon.

Around 30 percent of the S&P 500’s USD 12.3 trillion market caps have reported earnings so far. They have outpaced consensus estimates by 3.8%, and only 7% have missed estimates, according to data from Morgan Stanley.

But share prices of those that have fallen short of estimates have taken a severe beating. Given the fragile sentiment a few more prominent misses could derail the market.

“The market is punishing these misses more than it is rewarding beats, an asymmetry we have been calling for and we forecast will continue,” wrote Morgan Stanley’s US equity strategist in a note to clients.

“Our view remains that first half of the year numbers are achievable but the second half of the year looks challenged,” he said.

Next week is also a big week for economic data. Fears of a slowdown in the economy have been a large driver of market volatility over the last few months, and the coming releases will be parsed very closely.

They include early regional manufacturing data from Chicago and New York, a reading of consumer sentiment, and a first reading of US growth for the second quarter, expected to show the economy grew just 1.9% in the period.

Bob Doll, chief equity strategist at Blackrock, one of the world’s largest fund managers with around USD 1.6 trillion of equities under management, said this week that the US economy is at a critical juncture.

Doll points out that since 1960 every time year-on-year growth has fallen under 2% the US economy has gone into recession.

“Our bottom line view is that investors should maintain a reasonably constructive bias toward risk assets, but should also be prepared to scale back exposure if evidence of economic growth acceleration does not materialize.”

Always Yours — As Usual —- Saurabh Singh

Note: Compiled from published News and Views

OIL POLITICS, SPECULATION, CHAIN REACTION AND MANAGEMENT

It requires quantum of intelligence, to infer from what is happening in the markets, or politico-socio-economic across the globe, to why it is happening. Things are never as simple as they seem to be. This would become comprehendible and evident as soon as one reads, relates and analyses the instances mentioned hereunder:

“Crude oil prices peaked to US $ 100 – 115 a barrel in April and May 2011 and moved downwards after that to touch a rate of US $ 90 – 92 per barrel in June 2011. In such a scenario, price increase by the Union Government should have been announced in April – May 2011, but the same did not occur. The Government found June 2011 to be the auspicious time for announcing price hike when the prices had nearly normalized. What could have been the motive for doing so? Simple answer is that April – May 2011 was the time when five states were going to elect the assembly members. The states being, West Bengal, Tamil Nadu, Assam, Kerala and Puducherry. ”

“If one goes by what the campaign managers of Congress had to say on the Rahul Gandhi’s much publicized kisan padyatra-(which as claimed was undertaken to champion the cause of the farmers of the region) –  was conceived to detract the public attention from the issue of hike in petroleum products and their possible spiraling effect on inflation. This yatra detracted the lot of electronic media attention from the campaign that opposition forces such as BJP and Left were seeking to build up on the oil price hike related issues. ”

“Since the Oil shock of 1973, USA strategically took measures to control the oil market by keeping continued focus on West Asian Region. In 1980, Jimmy Carter, the then President of USA declared Persian Gulf an exclusive zone of American influence and created a rapid deployment of forces, which latter turned into what is known as US Central Command or CENTCOM.  ”

“As is being believed by majority that skirmish in Libya is behind recent spurt in prices, should correct their facts. Libya produces less than 3 per cent of global petroleum output. Where as Saudi Arabia has already made up for the current shortfall and its excess stocks are more than that of Libya and Algeria put together. In fact in present situation too oil production at many of Libyan facilities continues even in civil war there. ”

“The argument being forwarded by few is that rising demand from China and India has forced an upward trend in oil prices is also unjustified. Though these two countries do account for growing share of global demand, but then same is counterbalanced by slower demand from USA and Europe.”

“There is still a wide spread perception that cartel of Oil Exporting Countries can manipulate and influence the prices by changing the level of their supplies. Reality today is much different. The OPEC has turned from being a cartel to being a minor player today. Non OPEC countries now account for increasingly significant proportion of global supply. Russia has already snatched the title of being largest supplier of crude oil from Saudi Arabia since 2009.  ”

Many more such instances may be quoted. It’s not being quoted in anticipation that the variety of above instances is good enough to comprehend that nearly none of the factors assumed or arguments forwarded are capable of forcing any kind of hike in prices of the crude oil.

 

Then what is it, which is responsible for hike in crude oil price?

 

…….any guesses, if not, then storm your grey matter and keep visiting this place in hope of getting answer to this simple question.

 

Always Yours — As Usual —- Saurabh Singh

 

 

Pakistan’s ISI spy agency has ‘militant links’ — Says US Military’s Top Officer

The US military’s top officer, Adm Mike Mullen, has accused Pakistan’s spy agency of having links with militants targeting troops in Afghanistan.

He said Pakistan’s Inter-Services Intelligence (ISI) had a “long-standing relationship” with a militant group run by Afghan insurgent Jalaluddin Haqqani.

The comments came as he held talks in Islamabad on Wednesday. Pakistani officials are also in the US for talks.

Pakistan routinely rejects charges of collusion with militants.

The BBC’s M Ilyas Khan in Islamabad says that US officials have in the past spoken anonymously or in circumspect terms about associations between the Pakistani establishment and insurgents.

But that with this blunt statement Adm Mullen has for the first time claimed a clear link between the two, our correspondent says.

“It’s fairly well known that the ISI has a long-standing relationship with the Haqqani network,” Adm Mullen told Pakistan’s Dawn newspaper.

“Haqqani is supporting, funding, training fighters that are killing Americans and killing coalition partners. And I have a sacred obligation to do all I can to make sure that doesn’t happen.”

He said the spy agency’s support of the network remained at the “core … and the most difficult part of the relationship” and that he would take it up with Pakistan’s army chief Gen Ashfaq Kayani.

‘Negative propaganda’

But a senior Pakistani intelligence official told the Reuters news agency that the accusation was unfounded.

“If he means we’re providing them with protection, with help, that’s not correct,” the official, who wished to remain unnamed, told Reuters.

A statement from Gen Kayani, released after their meeting, rejected what it termed as “negative propaganda of Pakistan not doing enough”.

But the statement also said that the strategic relationship between the countries was important for their mutual security.

On Thursday Pakistan’s Foreign Secretary Salman Bashir is scheduled to hold talks with US State Department officials in Washington, in what is being billed as an effort to improve relations.

US-Pakistan ties have struggled to recover following the row over CIA contractor Raymond Davis – who was arrested and later released after shooting dead two Pakistani men in Lahore. The case stoked anti-American feeling across Pakistan and led to angry demonstrations

Recent reports following a meeting between the heads of the countries’ spy agencies in Washington, suggested that Pakistan had demanded certain restrictions to the CIA’s activities in Pakistan.

Anti-US sentiment has also been exacerbated by US drone strikes targeting militants in the north-west of the country.

Drone anger

US drone attacks have escalated in north-west Pakistan since President Barack Obama took office. But they are hugely unpopular with the Pakistani public. Many militants, some of them senior, have been killed in the raids, but hundreds of civilians have also died.

The US does not routinely confirm it is conducting drone operations in Pakistan, but analysts say only American forces have the capacity to deploy such aircraft in the region.

Analysts believe that Haqqani’s insurgent network has been based in Pakistan since 2001, and that the ISI still exerts considerable influence over it.

The group has been blamed for some of the deadliest attacks on foreign troops across the border in Afghanistan.

Though the Pakistani military has routinely rejected any ties with the militants operating in Afghanistan, many analysts believe collaboration between the two is an open secret, our correspondent says.

Indeed analysts argue that Pakistan has always maintained links with some militant groups in order to try to influence events in neighbouring Afghanistan..

The timing of these remarks, our correspondent adds, suggests that the US is stepping up pressure on Pakistan to relinquish any links with Afghan militants ahead of the US forces’ impending withdrawal from Afghanistan.

Always Yours — As Usual — Saurabh Singh

Source: BBC

Budget 2011- 12 under Scanner

Already having presented the facts prior to budget, as to what I as a country man expected in the budget to be presented on February 28, 2011, and following the same by publishing salient features in the budget, probably now it’s time to comment upon it. It’s not due to the reasons that it required so much of time for analysis, but is just due to waiting for the dust to settle down, so as to get a clear glimpse of the events.

Having said and done all the things earlier, now I can say that ‘budget or no budget’, things would have remained more or less the same.  The fundamental feature of budget lacks any focus or any strategy of any kind (Chandrasekhar, 2011). Even on the crucial issue like that of ‘financial inclusion’, only lip service has been paid, rather it could be blamed to be biased more towards ‘financial consolidation’.

Expenditure as a ratio to GDP as proposed in Budget

Plan Expenditure when compared with that of 2009 – 10 rose from 4.6 per cent to 5.0 per cent in 2010 – 11 and has been budget to come down to 4.9 per cent in 2011 – 12. On the other hand non – plan expenditure in the same period has come down from 11 per cent to 10.4 per cent and projected in budget to carry on the downward trend and reach a figure of 9.1 per cent.

Reality: Decrease will automatically be forced to be much larger

This is being said due to the reasons that non tax revenue in FY 2010 – 11 which stood at Rs. 2, 20, 148 crore had received a contribution of the tune of Rs. 72,000 Crore from sale of 3G and wireless broadband spectrum. Deducting this amount, the non tax revenue of FY 2010 – 11 will rest at Rs. 1, 25, 435 crore only.

Discussion:

In presence of such a crystal clear scenario, which clearly projects fall in aggregate revenue [due to fall in non – tax revenue], how come the budget expects to see it rising to Rs. 7, 89, 892 crore in 2011 – 12 against Rs. 7, 83,833 crore in 2010 – 11.

Even this partial increase fails to directly point towards a source from where it will accrue. Though, it seems to be, projected out of an increase in tax revenue collection. This is being said as projected tax revenue collection stands at Rs. 6, 64, 457 crore in 2011 – 12 against Rs. 5, 63, 685 crore in 2010 – 11.

While a glimpse of budget exposes that while union finance minister proposes to raise additional revenue of RS. 11, 300 crore from increase in indirect taxes, he is giving away Rs. 11, 500 crore in way of direct tax relief. These figures expose a negative contribution of Rs. 200 crore in aggregate tax revenue.

This discussion is being stopped at moment simply after discussing a single issue. There are more issues like inflation towards which this budget seems to be contributing positively, Increasing credit supply to agriculture but reducing public investment in agriculture etc. are many other important issues that require discussion.

 

Note: I am now not writing it as part one or two as my experience says that before I could think of discussing next part of story, some new event important in nature gets born.

Always Yours—As Usual— Saurabh Singh

THE JASMINE REVOLUTION–Part – I

At times, few events, though not very often noticed, normally not even thought worth being covered by national media, but when the acts happen to be of SUPREME SACRIFICE or same order, change course of not alone history but geography too. The attempt is not to dub an act of self immolation as an act of bravery, and normally hundreds of cases of self immolation and attempts of self immolation get reported in media every year, besides lot many which even fail to find space in news media in nearly all the corners of the world which without fuelling in a minor change in governance.

The name “Mohamed Bouazizi” is not a famous or well known name even today, and thus indirectly gives an impression that history in due course of time may even forget to contain any record of this name for reference of future generations. The act of self immolation by this Tunisian Street Vendor to protest against the corruption is an apt example of helplessness being faced by common men, irrespective of him being a citizen, subject, at mercy of any dictator, fascist or Junta or probably any other form of Structure of Governance.

Strange are ways things are destined, much beyond human vision and imagination, it seems if  21^st Century were a Century of Convergence of Scale for nearly every sphere of human related activities. A Century standing witness to Convergence of Communication Technology and Tools, Convergence of Economies of Nations, Convergence of Trade, Convergence of Financial Governance, and perhaps even Convergence of Revolutions against Governance Structures across various nations and probably the list continue…s, neither can it be covered in this deliberation nor will it be attempted.

Till a couple of months back, the individual of the day was busy in himself thinking that all the problems could happen and will happen with others only, aptly defined selfish by Adam Smith and the league, was thinking of governance all around the globe being cool, calm and pleasant except the places messed up by United States of America. Perhaps still the individuals will remain individuals and will rarely form a society or nation; as people aware of history know very well that even the phenomenon or concept of nation is a gift of as recent as nineteenth century.

Connecting back, it was morning of December 17, 2010 when Mohamed Bouazizi, a 26 years old street vendor of Tunisia immolated himself protesting against corruption, an event of the magnitude often not even noticed by world media, the Arab World has not remained the same as it was till hours before of this act on the same day. It has left whole geo-political area simmering and inhabitants rumbling.  It has initiated a chain reaction.

The chain reaction, that has already made twenty three years old rule of Zine El Abidine Ben Ali, (in power since 1987) now a chapter in history of Tunisia. It did not stop here itself. It perhaps turned a torchbearer for other nations of geopolitical area often called as Gulf (British call it as Middle East), or as the author calls it, the Middle West. It did not stop at Tunisia. The next link in chain turned out to be Egypt. In Egypt, the war hero of Egypt Israel War of 1973 that made Egypt a power centre in Middle West and one time air force officer Hosni Mubarak was shown door after his thirty year rule. To world it may look a silent transition made success by people of Egypt but sources say that at least 300 people lost their life and another 3000 suffered injuries. Reality about real causalities is not known due to initial crack down on media and still no real transition to any new form of governance taking place. It is probably still another Hosni Mubarak just individual may differ, as no real transition to any form of governance has taken place, but junta in control.

“The phenomenon being deliberated, as on date, has come to be known as SIDI BOUZID REVOLT in Arab World and as JASMINE REVOLUTION elsewhere.”

Similar turmoil, protests against governments in place, in numerous other nations of gulf is being seen and also the ruthlessness and lack of human emotions with which they are being suppressed and retaliated by various governments in place. It is the same story today in Algeria, Bahrain, Jordan, Libya and Yemen.

Probably crossing the borders of a nation or two, some simmer is being felt in China too. The world that is networked today with Internet or World Wide Web (normally first place to face fire and wrath of unpopular governments) is now witness to call for Jasmine Revolution that has spread through Internet in China and Chinese police could be seen in high alert cracking down on expected activists oriented towards democracy in Beijing and Shanghai.

Always Yours — As Usual — Saurabh Singh

Egypt: Now without Hosni Mubarak in Control of Affairs– For Other Nations a Caveat Issued Against Facebook and Likes…..

A Brief Introduction to Hosni Mubarak & His Journey

Hosni Mubarak has ruled the country Egypt for 30 years, which by far is the most powerful in the Arab world. It all started on October 6, 1981. Egypt was shaken when its President Anwar Sadat was assassinated by right-wing Arab groups during a military parade before the world’s eyes. Mubarak, who was then the vice president, was wounded in the attack. Terrified he stood there and by the time stunned security police began firing back, killing two of the assassins, Sadat was already dying.

Mubarak was a natural successor. He took control of the government on October 14, 1981 and has held it, by various means, ever since. While this is looked at as his first appearance on the global stage, one cannot overlook the crucial role he played in 1973.

He is still credited with winning the war that changed the course of Arab Israeli relations in October 1973, when he was Air Chief, under Sadat’s presidency. The victory over Israel brought him personal glory too.

In April 1975, Mubarak was appointed as the vice president of the Egyptian republic and he loyally served Sadat’s policies. He became a popular representative of the President and had numerous meetings with foreign leaders.  Mubarak’s political significance as vice president can be seen from the fact that at a conversation held on June 23, 1975 between Egypt Foreign Minister Fahmy and United States Ambassador Hermann Eilts, Fahmy said to Eilts that “Mubarak is, for the time being at least, likely to be a regular participant in all sensitive meetings”. He advised the ambassador not to antagonise Mubarak, as he was Sadat’s personal choice.

Mubarak may be considered largely unpopular today, but as President, he allied with the West and an anchor of stability in the Middle East. Taking over as President, he moved quickly to crush an Islamic uprising and jailed over 2,500 members of militant Islamic groups engaging in violence. Mubarak retained most of Sadat’s foreign and domestic policies, and Sadat’s close ties to the United States. All the Arab states but three had criticised Egypt for the treaty with Israel, so Mubarak tried to rebuild relations with Jordan, Iraq, Saudi Arabia, and Palestine Liberation Organisation leader Yasir Arafat. It was Mubarak who encouraged Arafat to compromise and recognise Israel’s rig ht to exist.

Throughout the 1980s Mubarak increased the production of affordable housing, clothing, furniture, and medicine. He also kept a close eye on his officials, firing ministers at the first hint of wrong-doing and fining members of Parliament for unnecessary absences. Egypt’s heavy dependence on US aid and her hopes for US pressure on Israel for a Palestinian settlement continued under Mubarak. He improved relations with the former Soviet Union. In 1987, Mubarak won election to a second six-year term. In 1989, eight years after Sadat’s assassination, Egypt was re-admitted as a full member the Arab League. Its membership was suspended after Sadat’s peace treaty with Israel, but Mubarak rebuilt the bridges.

Mubarak was angered over the 1990 Iraqi invasion of Kuwait. When the US was hunting for a military alliance to force Iraq out of Kuwait, Egypt’s President joined without hesitation. After the war, his reward was that America, the Arab states of the Persian Gulf, and Europe forgave Egypt around $14 billion of debt. He won America’s support and Egypt enjoyed massive amounts of military and economic aid over the last three decades.

The Wave of Change

However, as years went by Mubarak became more authoritarian. He throttled meaningful political evolution and curbed the freedom of expression. Plots to assassinate Mubarak had surfaced in 1992, 1993, and 1995 and he is known to have survived six assasination attempts. But Mubarak continued his tough stance. His crackdown led to charges against his government of torture, threats to the press, and other human rights abuses

Political corruption in the Mubarak administration rose dramatically. Such corruption has led to the imprisonment of political figures and young activists without trials, illegal undocumented hidden detention facilities and rejecting universities, mosques, newspapers staff members based on political inclination.
And all of this worsened in 2005. After increased domestic and international pressure for democratic reform in Egypt, Mubarak asked the largely rubber stamp Parliament on February 26, 2005 to amend the constitution to allow multi-candidate presidential elections by September 2005.

On July 28, 2005, Mubarak announced his candidacy, as he had been widely expected to do. The election which was scheduled for September 7, 2005 was widely seen as heavily rigged.

Votes were bought for Mubarak in poor suburbs and rural areas. It was also reported that thousands of illegal votes were allowed for Mubarak from citizens who were not registered to vote. On September 8, 2005, Ayman Nour, a dissident and candidate for the El-Ghad Party, contested the election results, and demanded a repeat of the election. In a move widely seen as political persecution, Nour was convicted of forgery and sentenced to five years on December 24, 2005.

Even the Muslim Brotherhood, which has a wide cadre base in Egypt, fielded candidates as independents due to their illegality as a political party. They won 88 seats to form the largest opposition bloc, but only after the arrests of hundreds of Brotherhood members. A constitutional amendment adopted by the National Democratic Party-dominated Parliament has made it virtually impossible for independents like former IAEA chief Mohamed El-Baradei to run for president.

Soon after, Mubarak appointed his son Gamal as the general secretary of the ruling NDP, a move that convinced many of his unwillingness to let go of power.

As Mubarak tried to tighten his grip over Egypt, anti-government protests strengthened in 2005 giving rise to the Kifaya (enough) movement, the unofficial moniker of the Egyptian Movement for Change.

It first came to public attention in the summer of 2004, and achieved a much greater profile during the 2005 constitutional referendum and presidential election campaigns. Since then it has opposed Mubarak’s presidency and over the years the voices have only grown louder.Now the final outcome this gradual but sure approach is in open — Mubarak Stepped Down.

Role of Social Media

In one of my earlier posts posted on this blog dated February 04, 2011, I wrote an article with title as mentioned below, but found rare buyers of the concept. Probably now its no more a secret and known to all. I did not emphasize much thereafter on role of social media because one of my teacher taught me a lession that can mentioned as  “People can believe only on the things, creations and thoughts and other things of the same kind, only to the extent if they are capable of even imagining such phenomenon in their wildest dreams. Else they will laugh at you and will say the things that you may not love to listen. Let them be mature, but do not kill your vision just for the reasons that other are suffering from vision myopia.”

THE FACE BOOK IS WORKING TO GET CHANGE IN GOVERNMENT OF A NATION: YES, I MEAN IT– IT’s EGYPT –Saurabh Singh

Adding to the dicussion further I would like to state what’s even more interesting  and that is the role played by Social Media tools like the use of Twitter, Facebook, and YouTube to speed the process of protests in Egypt. There has been some backlash about the use of social media, with some pundits calling it a “Facebook Revolution,” as if without Facebook this wouldn’t be happening.

The revolt still would have happened, even if the Social Media tools were not there. but their presence added fuel to fire of revolution. Today’s era of real-time communication made the “words of the January 25 protests” spread more quickly and gained momentum that would have been hard to achieve without the social networks.

But it also leads oneto wonder…is the use of the Internet, and social media, a human right?

The best testimony about social media’s role in these events has to be the efforts of the Tunisian and Egyptian governments to thwart or completely cut off the Internet. The chart published on Mashable, the Internet became a critical communications point leading up to the events of the past few days. It’s no wonder that the autocratic Mubarek regime sought to protect its own power by cutting the Internet.

It should be noted that the protests have significantly escalated since the proverbial kill switch was hit on the Egyptian Internet. So at best social’s role can only be painted as a catalyst, and not the ultimate factor.

Leaving the discussion on Role of Social Media to Political Pundits.. will follow If find their or comments from my audiences on the topic.

 

Post Mubarak Situation in Egypt : A State of Uncertain Transition

Some have termed the departure of Egyptian President Hosni Mubarak from office on Friday as a resignation. Some others have called it waiving the office or powers of the president. The Egyptian constitution provides for both contingencies.

When a president resigns, the constitution requires that he should address his letter of resignation to the president (speaker) of the parliament. When he stops exercising the powers of the president, he addresses his letter to the vice-president.

Article 82 provides for this interesting contingency of the president leaving office without formally resigning. It says: “If on account of any temporary obstacle the president of the republic is unable to carry out his functions, he shall delegate his powers to a vice-president.”

Mubarak, while leaving office much to the jubilation of the protesters, did not inform the president of the parliament and submit a formal letter of resignation as required under the constitution.

Nor did he ask Vice-President Omar Suleiman to take over. Instead, he asked the Supreme Council of the Armed Forces to take over. It is a coup without seeming to be a coup.

One can go on analysing the circumstances of Mubarak’s departure. Whatever be the circumstances, Mubarak is gone from office for ever. It is time to discuss what next. Egypt is now in a state of transition under the leadership of the Supreme Council of the Armed Forces, which consists of the following:

Field Marshal Mohamed Hussein Tantawi, who has been the minister of defense and commander-in-chief of the Egyptian Armed Forces since 1991.

He has been a field marshal since 1989. After the protests broke out on January 25, Mubarak promoted him as deputy prime minister and asked him to continue to hold the defence portfolio.

He visited the Tahrir Square on February 4 and met the troops deployed there as well as the protesters. He is the chairman of the Supreme Council.

Air Marshal Reda Mahmoud Hafez Mohamed, the chief of the air force since March 20, 2008.

Lieutenant General Sami Hafez Anan, chief of staff of the army.

Lt Gen Abd El Aziz Seif-Eldeen, commander of air defense.

Vice Admiral Mohab Mamish, chief of navy.

Is Lt Gen Omar Suleiman, the vice-president, who made the televised announcement regarding Mubarak leaving office after handing over his powers, a member of the Supreme Council? The position is not clear.

Al Jazeera says he is. Others do not say so. However, since he is only a lieutenant general and since the Supreme Council is headed by a field marshal, it stands to reason that Suleiman may have to work under the orders of the Supreme Council and not vice versa.

What next? The present constitution has become untenable since the post-Mubarak transitional arrangements are not in accordance with the constitution.

This gives rise to the possibility that the Supreme Council may suspend the constitution and dissolve the parliament. Mohamed El Baradei has said that Egypt will now have a provisional constitution.

What will be the duration of the transitional arrangements? Till September when the election of a new president is due or for a longer period?

The political elements, who participated in the protest movement, are already saying that it may not be possible for the Supreme Council to restore political and economic normalcy before September and, hence, according to them, it should be for a longer period.

El Baradei has been quoted by the BBC as stating as follows: “What I have been proposing is a transitional period of one year. We will have a provisional constitution. We’ll have a transitional government, hopefully a presidential council, including a person from the army and a couple of civilians.”

“The main idea is that the army and the Egyptian people will work together in a systematic way for a year to reach the point where we can hold a genuine free and fair election, a parliamentary election and a presidential election. I think the people of Egypt, who have been suppressed for at least 30 years, are ready to wait for a year as they see things are going in the right direction,” Baradei said.

The younger non-political elements, who played a leading role in the revolution, have not clearly indicated their view on this subject apart from expressing their trust in the army.

Wael Ghonim, the Egyptian Google executive, who is credited with rallying many young people behind El Baradei, has tweeted to his followers as follows: “The military statement is great. I trust our Egyptian army”.

The armed forces’ statement to which he had referred said the Supreme Council would lift the country’s emergency law but only “as soon as current circumstances end”.

It also said, “Armed forces make a commitment to caring for the people’s legitimate demands, and to seeking to follow their implementation within the time frames with full precision and resolution, until the complete transfer of power, and the achievement of the democratic free society which the people aspire to”.

It pledged not to prosecute ‘the honest men who called for an end to corruption and for reform.’

While it spoke of time-frames for the transition, it refrained from specifying those time-frames. If Ghonim comes out ultimately in support of El Baradei’s call for a longer transition, will other youth leaders support him?

Who will be in any transitional government or council that may be constituted? Everybody wants that it should be a civilian council possibly headed by El Baradei and including a representative of the armed forces.

It is not yet clear whether the Supreme Council would accept a transitional council of which the Muslim Brotherhood is a member.

The MB has been supportive of El Baradei till now. He has been advocating a role for the MB in the transitional set-up, but the MB has said it does not want any role. The youth leaders are not opposed to it. The Supreme Council has not yet spelt out its views.

Always Yours —- As Usual — Saurabh Singh

 

 

 

 

THE FACE BOOK IS WORKING TO GET CHANGE IN GOVERNMENT OF A NATION: YES, I MEAN IT– IT’s EGYPT –Saurabh Singh

Face Book message that started it all

A 26-year-old woman worried about the state of her country wrote on Facebook: “People, I am going to Tahrir Square”. The message was soon to snowball into a movement to oust Egyptian President Hosni Mubarak.

The Facebook appeal by Asmaa Mahfouz led to popular protests that saw tens of thousands congregating at Tahrir Square to demand an end to Mubarak’s unbridled 30-year rule. Mubarak has said he is ready to step down at the end of his term in September, but has refused to quit immediately now.

Violent clashes during the protests have left six dead and over 800 injured. Asmaa Mahfouz told Al-Mihwar TV the first activity was on Facebook. “Yes. I was angry that everybody was saying that we had to take action, but nobody was doing anything. So I wrote on Facebook: ‘People, I am going to Tahrir Square today’. This was a week before January 25.”

“I wrote that I was going to demand the…rights of my country. I wrote that I was 26 years old…,” the Middle East Media Research Institute quoted her as saying.

Asmaa said she wrote on Facebook that whoever is worried about Egypt should accompany her to Tahrir Square. “There were lots of messages saying: Wait until January 25. I said: There is no reason to wait for the 25th. I went to Tahrir Square and raised a sign,” she recounted. That snowballed into the unrest which has rocked Egypt for the past 10 days.

Egypt braces for Mubarak’s ‘day of departure’ rallies

Egyptians fighting to oust President Hosni Mubarak hoped to rally a million people on Friday as the

United States worked to convince the 82-year-old leader to begin handing over power.

A senior US official, who declined to be named, said on Thursday Washington was discussing with Egyptians different scenarios, including one in which Mubarak resigned immediately.

Mubarak, however, speaking in an interview with ABC on Thursday, said he believed his country still needed him.

“If I resign today, there will be chaos,” Mubarak, who has promised to step down in September, said. Asked to comment on calls for him to resign, he said: “I don’t care what people say about me. Right now I care about my country.”

In Cairo’s Tahrir Square — the hub of protests now into their 11th day — thousands who had defied a curfew and attacks on Wednesday by pro-Mubarak supporters — were preparing for a rally they had dubbed the “Friday of Departure”.

Organisers called on people to march from wherever they were towards the square, the state television building and the parliament building — all within around a mile of one another.

By daybreak, shouts of “Let Mubarak fall … Let Mubarak fall … Let Mubarak fall” pulsed across the square.

With the unprecedented challenge to Mubarak’s 30-year-rule turning increasingly violent, Washington has been urging Egypt to begin the transition of power and move towards elections.

US in talks over possible Mubarak exit

A senior official in the administration of President Barack Obama said various options were being discussed with Egyptian officials, including one in which Mubarak resigned immediately.

“That’s one scenario,” he said, speaking on condition of anonymity. “There are a number of scenarios, but (it is) wrong to suggest we have discussed only one with the Egyptians.”

The New York Times cited US officials and Arab diplomats as saying Washington was discussing a plan for Mubarak to hand over power to a transitional government headed by Vice President Omar Suleiman with the support of the Egyptian military.

“They should mind their own business”

However, it also quoted a senior Egyptian official as saying the constitution did not allow this. “That’s my technical answer,” he added. “My political answer is they should mind their own business.”

Suleiman also hinted at irritation with US interference in a television interview on Thursday.

“There are some abnormal ways by which foreign countries have intervened through press declarations and statements. This was very strange, given the friendly relations between us and them,” he said.

Obama and his top aides have carefully avoided calling for Mubarak’s resignation, instead insisting that an orderly transition “must begin now”.

An estimated 150 people have died in the unrest which was inspired in part by protests in Tunisia which forced Tunisian strongman Zine al-Abidine Ben Ali to flee last month and which have since spread to other parts of the Middle East.

In the most dramatic spike in violence, pro-Mubarak supporters attacked protesters in Tahrir Square on Wednesday and pitched battles broke out between the two sides. The government denied accusations by the protesters and international activists that they had instigated the attack.

The government has offered talks on reforms, but that has failed to satisfy protesters who want Mubarak to leave now.

The opposition — which includes the liberal figurehead Mohamed ElBaradei and the Islamist Muslim Brotherhood — has rejected talks until Mubarak resigns.

They say they want democracy rather than Mubarak’s replacement by another leader drawn from the army, which has dominated Egypt since it toppled the monarchy in 1952.

The United States supplies the Egyptian army with about $1.3 billion in aid annually.

Egypt, which signed a peace treaty with Israel in 1979, has been a key US ally in the Middle East. Mubarak had also justified his use of emergency rule as needed to curb Islamist militancy in a country where al-Qaida had its ideological roots.

Mubarak described Obama as a very good man, but when asked by ABC if he felt that the United States had betrayed him, he said he told the US president: “You don’t understand the Egyptian culture and what would happen if I step down now.”

 

Khamenei Calls it:Arab uprisings & sign of ‘Islamic awakening

A wave of uprisings in Arab countries is a sign of an “Islamic awakening” which was envisaged when the 1979 Iranian revolution took place, Iran’s supreme leader Ayatollah Ali Khamenei said on Friday.

“Today’s events in North Africa, Egypt and Tunisia and some other countries have different meanings for us,” Khamenei, the commander-in-chief and spiritual guide of Iran, said in a sermon at Tehran university during the Muslim weekly prayers.

“This is what was always talked about as the occurrence of Islamic awakening at the time of the Islamic revolution of the great Iranian nation and is showing itself today.”

Khamenei’s remarks were received by cheering crowds of worshippers who, raising their hands, chanted “Death to America! Death to Israel!”

The sermon marked the first time in seven months that Khamenei has addressed the weekly Friday prayers and came as protesters were massing in Egypt for sweeping “departure day” demonstrations to force President Hosni Mubarak to quit.

Top Iranian officials have backed the revolt in Egypt and have warned Tehran’s arch-foe Washington against “interfering” in the what they say is a movement of the people.

Always Yours — As Usual—- Saurabh Singh

 

 

A 26-year-old woman worried about the state of her country wrote on Facebook: “People, I am going to Tahrir Square”. The message was soon to snowball into a movement to oust Egyptian President Hosni Mubarak.

The Facebook appeal by Asmaa Mahfouz led to popular protests that saw tens of thousands congregating at Tahrir Square to demand an end to Mubarak’s unbridled 30-year rule. Mubarak has said he is ready to step down at the end of his term in September, but has refused to quit immediately now.

Violent clashes during the protests have left six dead and over 800 injured. Asmaa Mahfouz told Al-Mihwar TV the first activity was on Facebook. “Yes. I was angry that everybody was saying that we had to take action, but nobody was doing anything. So I wrote on Facebook: ‘People, I am going to Tahrir Square today’. This was a week before January 25.”

“I wrote that I was going to demand the…rights of my country. I wrote that I was 26 years old…,” the Middle East Media Research Institute quoted her as saying.

Asmaa said she wrote on Facebook that whoever is worried about Egypt should accompany her to Tahrir Square. “There were lots of messages saying: Wait until January 25. I said: There is no reason to wait for the 25th. I went to Tahrir Square and raised a sign,” she recounted. That snowballed into the unrest which has rocked Egypt for the past 10 days.

 

Source URL: http://timesofindia.indiatimes.com/world/middle-east/Egypt-braces-for-Mubaraks-day-of-departure-rallies/articleshow/7423241.cms

India Joined the Select Club of Countries making a Fighter Jet from Scratch with TEJAS

India on Monday joined the select club of countries making a fighter jet from scratch when Indian Air Force flew for the first time the lightweight indigenous multi-role Light Combat Aircraft (LCA) Tejas in a clear wintry sky here for initial operational clearance (IOC).

Defence Minister A. K. Antony handed over the service certificate of the world’s smallest military aircraft to Chief of Air Staff Air Chief Marshal P V Naik in the presence of top defence and government officials.

The supersonic fourth generation fighter will form a 200-strong fleet for the IAF to replace the ageing Russian-made MiG-21 fleet and increase the squadron strength as a potent strike force by 2012.

“This is the first time an indigenously designed and developed military fighter aircraft has been certified for air force operations,” state-run Defence Research and Development Organisation (DRDO) official K Jayaprakash Rao said.

The IOC involves specific process, including validation tests to determine the aircraft’s various operational functions including avionics, subsystems, thrust, aerodynamics, propulsion and radar.

The certificate was given by the Regional Centre for Military Airworthiness (RCMA) of the Centre for Military Airworthiness and Certification (Cemilac), a lab of the defence research organisation.

The fly-by-wire Tejas, which was beset by chronic delays and cost overruns, has been developed by the state-run Aeronautical Defense Agency (ADA) and manufactured by the Hindustan Aeronautics Ltd (HAL) in Bangalore in partnership with a host of public-private aerospace firms.

The successive delays caused by multiple factors, including sanctions by the US over a decade ago against India for conducting the second nuclear test in May 1998, led the project cost to rise to a whopping Rs 5,778 crore from the initial estimate of Rs 3,300 crore in the mid-1980s.

“This is a historic day for the burgeoning Indian aerospace industry and military aviation, as IOC signifies a major milestone in the design and development of the LCA,” Rao said on the margins of the event.

“Initially pilots fly four aircraft to check all its parametres, including flight controls, Mach speed and weaponisation for final operational clearance (FOC) and induction into the fleet as frontline fighter jets,” a senior air force official said.

“The majestic display of the lean-and-mean flying machine demonstrated the integration of all sensors and weapons, besides safety and reliability within the specified flight envelope,” Rao noted.

The ADA and HAL conducted 1,500 test flights involving 11 aircraft, including five prototypes in the past decade, after its maiden flight Jan 4, 2001 as a technology demonstrator.

Under the limited series production, HAL is manufacturing eight aircraft for clearance flights and will take up the air force’s initial order to deliver 20 jets to form the first Tejas squadron. It will be based at the Sulur air base near Coimbatore in Tamil Nadu.

The IAF has also placed an additional order in 2010 for 20 more Tejas for the second squadron to be raised at Kayathir near Tuticorin in the southern state where the air force is setting up a new base this decade.

SOME FACT ABOUT INDIA: THE SECOND FASTEST GROWING MARKET IN ASIA

DOING BUSINESS IN INDIA

The Indian market with its one billion plus population, presents lucrative and diverse opportunities for U.S. exporters with the right products, services, and commitment.  India’s requirements for equipments and services for major sectors such as energy, environmental, healthcare, high-tech, infrastructure, transportation, and defense will exceed tens of billions of dollars in the mid-term as the Indian economy further globalizes and expands.  India’s GDP, growing at 6.7% (for 2008-09), makes it one of the fastest growing economies in the world and the second fastest in Asia.  India has potential for a sustained growth of 8-10% for the next couple of years.  Now is the time for U.S. companies to enter the rising Indian market.

BRIEF PROFILE & KEY ECONOMIC INDICATORS

Official Name: Republic of India

Location: Southern Asia, bordering the Arabian Sea and the Bay of Bengal, between Burma and Pakistan

Population: 1.16 billion (May 2009)

Languages: Hindi (national language primary tongue of 30% of population); English enjoys associate status but is the most important language for national, political, and commercial communications

Currency: Indian Rupee (Rs)

Capital City: New Delhi

Financial Center: Mumbai (formerly known as Bombay)

GDP: $1.16 trillion

Per Capita (PPP): $4,139 (2007-08)

NOT SO EMPHASIZED FACTS ABOUT INDIA…….

– is the world’s second largest small car market

– is one of only three countries that make its own supercomputers

– is the fourth largest economy in the world (measured in terms of purchasing power parity)

– is one of six countries that launch its own satellites

– 100 of the Fortune 500 have R & D facilities in India

– has the second largest group of software developers after the U.S.

– lists 6,600 companies on the Bombay Stock Exchange; only the NYSE has more

– is the world’s largest producer of milk, and second largest producer of food, including fruits and vegetables

– sends more students to the U.S. colleges than any other country in the world, as in 2008, over 94,563 Indian students enrolled in the USA

– Indian pharmaceutical industry is the world’s second largest after China

INDIAN HERITAGE – CONCEPTS & VALUES TO KNOW

In a diverse and complex country like India, it’s difficult to impart generic conclusions that could be used by those wanting to do business here. Regionalism, religion, language and caste are all factors that need to be taken into account when doing business in India. Behavior, etiquette and approach are all modified depending on whom you are addressing and the context in which they are being addressed.

Unlike western societies, in India religion, fatalism and collectivism are all components of daily life and they need to be respected for healthy and successful business relationships. Despite the traditional caste system being dismantled, remnants may still be witnessed in the Indian hierarchical structure of business practices and decision-making. There is a strong sense of tradition tied into daily business practices. Yet, signs of change are becoming more evident. Ever since the economic reforms began in 1991, India’s market is growing rapidly. With its geographical positioning in the Indian Ocean, a major international trade route, and with its rich mineral and agricultural resources, India’s economy is witnessing increased inflows of foreign investments. India is also recognized for its competitive education system and vast pool of highly skilled laborers, making it an attractive market for foreign businesses.

No matter what the industry is, foreign businesses should expect some degree of differences in business norms in India. Included below are some basic business etiquettes that the U.S. companies should follow when developing and maintaining relationship with Indian businesses.

BUSINESS ETIQUETTE

• Do use titles to address your Indian counterparts, such as “Professor” or “Doctor”. If he/she does not have a title, use “Mr”, “Mrs”, or “Miss”.
• Do wait for a female business colleague to initiate a greeting whether it is verbal or physical. Indian men do not generally shake hands with women out of respect.
• Do remain polite and honest at all times in order to prove that your objectives are sincere.
• Don’t be aggressive in your business negotiations – it can be interpreted as a sign of disrespect.
• Don’t take large or expensive gifts as this may cause embarrassment? If you do take a gift make sure you present the gift with both hands.
• Don’t refuse any food or drink offered to you during business meetings as this may cause offence (sample small portions at least). In addition, it is useful to keep in mind that traditionally, and religiously, majority of Indians are vegetarians and do not drink alcohol or smoke.

MARKET ENTRY

Key factors to doing business successfully in India include: finding good partners who have knowledge of the local market and procedural issues; good planning; aggressive due diligence and follow up; and patience and commitment.

India by itself offers customized solutions to help your business enter and succeed in the Indian market. Our India-wide network of trade specialists will work one-on-one with you through every step of the exporting process, helping you to:

• Target the best markets
• Promote your products and services to qualified buyers
• Meet the best distributors and agents for your products and services

Market Entry Strategy

• Finding partners and agents: New businesses must address issues of sales channels, distribution and marketing practices, pricing and labeling and protection of intellectual property. Relationships and personal meetings with the potential agents are extremely important. Due diligence is strongly recommended.
• Geographic diversity: U.S. companies, particularly small and medium-sized enterprises, should consider approaching India’s market on a local level. Good localized information is a key to success in such a large and diverse country. U.S. Commercial Service posts in New Delhi, Mumbai, Chennai, Ahmadabad, Bangalore, Hyderabad, and Calcutta provide indispensable local information and advice and are well plugged in with local business and economic leaders. Often multiple agents are required to serve each geographic market in the country.
• Market entry options: Options include using a subsidiary relationship, a joint venture with an Indian partner, or using a liaison, project, or branch office.

TO LOOK FOR

1.      Indian Ministry of Commerce & Industry

2.      Central Board of Excise & Customs

3.      Indian Government Website Directory

4.      Credit Rating

5.      Information Service of India

6.      Business Standard

7.      Economic Times

8.      Financial Express

9.      Business World

SOME USEFUL LINKS

1. http://commerce.nic.in/
2. http://www.cbec.gov.in/
3. http://goidirectory.nic.in/
4. http://www.crisil.com/
5. http://www.business-standard.com/
6. http://www.economictimes.com/
7. http://www.financialexpress.com/
8. http://www.businessworld.in/

—–Always Yours — As Usual—Saurabh Singh

Source: American Description of Business Environment of India