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Embassy of India, Kichenfeldstr 28, 3005 Berne, Switzerland XXII No. 2 Embassy of India, Kichenfeldstr 28, 3005 Berne, Switzerland TEL: 031/351 15 57, FAX: 031 / 351 15 57, www.indembassybern.ch, E-MAIL: [email protected], [email protected] XXII No. 2 August 3, 2004 NEWS ON INDIA IS AVAILABLE ON THE FOLLOWING WEBSITES ON THE INTERNET http: www.meaindia.nic.in http: www.samachar.com (contain links to all Indian newspapers/ magazines) ALLOCATION OF PORTFOLIOS AMONG THE MEMBERS OF THE COUNCIL OF MINISTERS CABINET MINISTERS Shri Pranab Mukherjee Defence Shri Arjun Singh Human Resource Development Agriculture, Food & Civil Supplies, Consumer Affairs and Shri Sharad Pawar Public Distribution Shri Lalu Prasad Railways Shri Shivraj Patil Home Shri Ram Vilas Paswan Chemicals & Fertilizers; Steel Shri Ghulam Nabi Azad Parliamentary Affairs; Urban Development Shri Jaipal Reddy Information & Broadcasting; Culture Shri Sis Ram Ola Labour & Employment Shri P. Chidambaram Finance Shri Mahavir Prasad Small scale, Agro & Rural Industries Shri P.R. Kyndiah Tribal Affairs; Development of North East Shri T.R. Baalu Road Transport & Highways Shri S. Vaghela Textiles Shri Natwar Singh External Affairs Shri Kamal Nath Commerce & Industry Shri H.R. Bhardwaj Law & Justice Shri P.M. Sayeed Power Dr. Raghuvansh Prasad Singh Rural Development Shri P.R. Dashmunsi Water Resources Shri Mani Shankar Aiyar Petroleum & Natural Gas; Panchayati Raj Shri Sunil Dutt Youth Affairs & Sports Smt. Meira Kumar Social Justice & Empowerment Shri K. Chandra Shekhar Rao Shipping Shri A. Raja Environment & Forests Shri Dayanidhi Maran Communication & Information Technology Dr. Anbumani Ramdoss Health & Family Welfare MINISTERS OF STATE (INDEPENDENT CHARGE) Shri Santosh Mohan Dev Heavy Industries & Public Enterprises Shri Jagdish Tytler Non-Resident Affairs India News, Vol. XXII , Nr. 1, January 13, 2004 Shri Oscar Fernandes Statistics & Programme Implementation Smt. Renuka Choudhury Tourism Shri Subodh Kant Sahai Food Processing Shri Kapil Sibal Science & Technology; Ocean Development Shri Vilas Muttemwar Non-Conventional Energy Sources Kumari Selja Urban Employment & Poverty Alleviation Shri Praful Patel Civil Aviation Shri Prem Chand Gupta Company Affairs MINISTERS OF STATE Shri E. Ahamed External Affairs Shri Suresh Pachauri Personnel; Parliamentary Affairs Shri B.K. Handique Defence; Parliamentary Affairs Smt. Panabaka Lakshmi Health & Family Welfare Dr. Dasari Narayan Rao Coal & Mines Shri Shaqeel Ahmed Communications & Information Technology Shri Rao Inderjit Singh External Affairs Shri Naranbhai Rathwa Railways Road Transport & Highways Shri K.H. Muniappa Shri M.V. Rajashekharan Planning Agriculture, Food & Civil Supplies, Consumer Affairs & Public Shri Kantilal Bhuria Distribution Shri Manik Rao Gavit Home Affairs Shri Sri Prakash Jaiswal Home Affairs Shri Prithviraj Chavan Prime Minister’s Office Shri Taslimuddin Heavy Industries & Public Enterprises Smt. Suryakanta Patil Rural Development; Parliamentary Affairs Shri Md. Ali Ashraf Fatmi Human Resource Development Shri A. Narendra Rural Development Shri R. Velu Railways Shri S.S. Palanimanikkam Commerce & Industry Shri S. Regupathy Home Affairs Shri K. Venkatapathy Law & Justice Smt. Subbulakshmi Jegadeesan Social Justice & Empowerment Shri E.V.K. Elangovan Petroleum & Natural Gas Smt. Kanti Singh Human Resource Development Shri Namo Narayan Meena Environment & Forests Shri Jay Prakash Narayan Yadav Water Resources Agriculture, Food & Civil Supplies, Consumer Affairs & Public Shri Akhilesh Singh Distribution Ministries that have remained unallocated will be looked after by the Prime Minister. NEW FOREIGN SECRETARY Mr. Shyam Saran has taken over as the new Foreign Secretary in the Government of India from 2nd August 2004. MAJOR ECONOMIC NEWS:- BUDGET HIGHLIGHTS 2004 • Service tax raised from eight to ten per cent • Centvat on powerlooms and handlooms withdrawn Page 2 / 7 India News, Vol. XXII , Nr. 1, January 13, 2004 • Gift tax loopholes plugged • More services brought under tax net • 20% tax on corporate unit holders of MFs • Equity related Mutual Fund will continue to be exempt from Dividend Tax. • Companies doing R&D in biotech to enjoy duty exemption for 10 years • 0.15% tax on transaction on securities will be levied • Full duty exemption on computers • Tax on transaction at 0.15% • Duty on CVD, typewriters, crutches lifted • Excise duty on meat, poultry items down • Customs duty on tractors, dairy items lifted • Customs duty on non-alloy steel down, excise duty on steel up • Customs duty on minerals like mica, graphite to come down • Peak rate of customs duty to be maintained • No fresh dividend tax. But corporates to pay more for MF incomes • Short-term capital gains tax down to 10% • 150% tax exemption for auto R&D • New agro processing units to pay no tax for 5 years • No interest income on NRE bank accounts • No change in other tax slabs • No income tax for those earning up to Rs 1 lakh a year • Defence allocation raised to Rs 77,000 cr • Plan expenditure estimated at Rs 1,47,590 cr • Defence allocation raised to Rs 77,000 cr • A fund for backward states with Rs 25,000-cr corpus • Special economic package for Bihar, J&K and NE states • Bill to regulate Special Economic Zones soon • No change in small savings rates • Savings scheme for senior citizens offering 9% interest • 85 more items taken off the SSI list • Rs 10,000 cr hike in plan allocation over Interim Budget • Government to set up board for revamping PSUs • Funds to be provided to restructure Hind Antibiotic, ITI • FII investment cap in debt market raised to $1.75 bn • Govt to provide support of Rs 14,194 cr to PSUs • FDI in civil aviation, insurance hiked to 49% • FDI in telecom hiked to 74% • To establish Investment Commission • Airports, sea ports and tourism to be growth areas • FIPB to be made a one-stop service centre • Rs 8,000 cr for Rural Infrastructure Development fund • Rs 1,000 cr provided for use of biotech for farm sector • Foodgrain production to touch 300 mn tonnes by '11-12 • Students can borrow up to Rs 7.5 lakh without collateral • To wipe out revenue deficit by 2008-09 • Revive Rural Infrastructure Development Fund • Aims at doubling agriculture credit in three years • To hike subsidy under the Health Insurance Scheme • Minor irrigation, water harvesting for people • Food subsidy at Rs 25,800 cr • Education cess to yield Rs 4000-5000 cr a year • Electricity for all, more housing for the poor • Govt to set up 500 ITIs. • 2% education cess introduced • Work started on National Employment Guarantee Act. • Micro finance to be stepped up • Government to ensure a child has 8 years of school Five-year road-map for implementing CMP • Improve industrial production • To wipe out revenue deficit by 2008-09 • Planning Commission to reorient its approach to planned development • Gross budgetary support raised to Rs 10,000 cr • Budget to ensure 100 days employment. • To create jobs for poor through higher investment • Cabinet clears budget minutes before its presentation • Aims to maintain growth rate of 7-8% • Budget to ensure 100 days employment Page 3 / 7 India News, Vol. XXII , Nr. 1, January 13, 2004 WAY PAVED FOR ANOTHER GREEN REVOLUTION Finance Minister P. Chidambaram has kicked off the promised second green revolution, with a big boost to rural capital formation, focus on completion of last mile irrigation schemes, R&D and incentives for forward linkages such as agro-processing. The strategy to boost agri growth is many-faceted. Rural credit is being planned to double within the next three years through active and pointed delivery by public sector and private sector banks, RRBS and cooperative banks. Nabard, the IBA and others have already been harnessed towards lowering interest and changing the NPA schedules for the farm sector and the Task Force to reform the cooperative banking system will submit its report by October 31. Irrigation (AIBP) has been restructured and got Rs 2,800 crore to complete possible projects by March 2005. The LNJPN rural infrastructure fund has been wound up and the RIDF, guidelines revived, will now get a corpus of Rs 8,000 crore for this year. An already getting-revamped Farm Insurance Income Programme (FIIP) will now be extended to 19 districts even in Kharif 2004 but farm insurance as a whole is set for a good overhaul, with economic viability as the cornerstone. Another key area, agri research including the bio-tech frontier espoused by noted agronomist Dr Swaminathan, has received a long pending bounty of Rs 1000 crore. HIKES IN FDI IN KEY SECTORS The Government has announced hikes in foreign direct investment (FDI) limits in telecom, civil aviation and insurance. The FDI cap on the telecom sector has risen from 49% to 74%; in civil aviation from 40% to 49% with overseas companies now allowed 49% stake in an Indian venture instead of 26%; in insurance from 26% to 49%. This move is aimed to attract long-term funds to invest in India and permit Indian players to raise finances through the equity route. According to industry experts, by hiking FDI limits, India’s money-guzzling telecom sector is expected to consolidate as domestic players sell their majority stakes at a premium to global telecom players. IT NEWS NASSCOM TO ORGANISE IT SUMMIT IN MUMBAI Industry body Nasscom will organise the second 'IT User Awards and CIO Summit' in Mumbai on August 31 as part of its efforts to promote the domestic IT industry and boost demand for software products and services. According to Nasscom President Kiran Karnik, the IT User Awards are aimed at rewarding IT excellence for promoting usage of information technology for driving maximum business value across processes, people and projects. The summit is an initiative to boost the domestic demand for IT software and services, which is expected to grow by 25 per cent to 4.2 billion dollar in 2004-05. The theme for this year's summit is 'Technology as a Differentiator: Evaluation and Integration'. BIGGER EU MAY BLOCK INDIAN IT PROS The question is being debated as to whether the enlargement of the EU , which came into effect from May 1, will affect the fortunes of Indian IT professionals.
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