$194 MILLION WORLD BANK LOAN FOR INDIA

The World Bank has announced approval of $ 194 million credit to India for sodic lands reclamation II project in northern state of Uttar Pradesh. The state has been faced with declining agricultural output in the past decade, primarily due to severe agricultural land degradation. The project aims to reverse this process by reclaiming barren and low-yielding crop land and boost income of the rural poor. It would focus on increasing crop yields and intensity in the most hard-hit areas of the state. About 3,75,000 farm families in 10 districts of Uttar Pradesh covering 150,000 hectares will benefit from the project, a World Bank statement said. Project task manager, World Bank's South Asia rural development unit, Jeeva A Perumalpillai-Essex said the first project had developed successful models for land reclamation with strong participation of farmers in some of the poorest regions of the state. He said the new project will help to consolidate efforts not only to reclaim degraded land but also to ensure more sustainable management of natural resources. Total project cost is $ 286.6 million, to which Uttar Pradesh government would contribute $US 44.8 million beneficiaries would also contribute to the project cost. The $ 194 million interest-free credit would be provided by the bank's concessionary lending affiliate International Development Association (IDA).

INVESTMENT PROMOTION BOARD TO FACILITATE INVESTMENT: ADVISORY COUNCIL

The Prime Minister's advisory council on trade and industry has recommended setting up of a commercial insolvency tribunal to deal with winding up of companies and an investment promotion board to facilitate investments in the country. The task force on administrative and legal simplifications appointed by the advisory council also suggested introduction of the companies bill and setting up of an inter-state council to resolve inter-state disputes. The task force headed by industrialist Kumar Mangalam Birla said the investment promotion board in India would be quite different in form and features from the Foreign Investment Promotion Board at present. It also called for changes in the present labor laws to allow companies to close down and rationalize manpower subject to payment of certain compensation to employees. On environment, the task force said ministry of environment and forests should simplify formats for environmental clearance and a national forest fund should be created through compensation from projects, which affect forests.

RUSSIA TO IMPORT FOOD & MEDICAL EQUIPMENT FROM INDIA

Russian finance ministry has decided to allocate a massive Rs 27,000 million for import of food stuffs, medicines and medical equipment from India for state requirements, government sources said. This will be roughly equal to half of the Rs 57,000 million funds accumulated through old Soviet debt repayments by India in 1998-99, they said. Russian first deputy prime minister Yuri Maslyukov had declared at the fifth session of the Indo-Russian inter-governmental commission on trade and Cooperation (IGC) in November that the Primakov government would utilize 50 per cent of the Rupee funds for the "benefit of the state and revival of industries." The rest of the money will be auctioned to promoted private sector trade, he had said. The Russian government has already allocated Rupee funds equivalent of $US 100 million to the health ministry for the import of life-saving drugs from India. Rupee equivalent of $US 400 million have been allocated to Moscow city administration for import of foodstuffs from India as the massive United States and European Union humanitarian aid comes with the condition that it will not be used in Moscow and other large cities in central Russia.

BANGLADESH INVITES INDIA FOR JV IN PETROCHEMICALS

Bangladesh has invited India to set up joint ventures in the petrochemicals sector and offered special facilities for Indian investment in priority areas like computer software, cement plants and textile yarns. At a meeting with the Confederation of Indian Industry - an apex industry chamber - Bangladeshi additional secretary, ministry of energy and additional resources, Syed Tanvir Hussain said it was interested in joint ventures with IPCL and expressed interest in exporting LNG to India. However on the issue of export of gas to India, Bangladesh would like to meet its own requirement first and then frame a policy for gas export, it said. The two sides also discussed setting up JVs in fertilizer plants and export processing zones, opening bonded warehouses, tariff rate reduction from 40 per cent to 25 per cent for raw materials and components imported from India and granting of zero tariff by India to substantive Bangladesh exports.

INDIA, ROMANIA TO BOOST ECONOMIC TIES

India and Romania have agreed to make efforts to boost economic ties to generate trade and investment flows between the two countries. Commerce Minister Ramakrishna Hedge in a meeting with Romanian finance minister Remes at Bucharest gave an overview of the Indian liberalization and economic reforms program. Mr. Hedge, who is currently on a visit to Romania said that the current high tariff structure of Romania was affecting Indian exports to it and emphasized the need to boost the sluggish trade between the two countries. The Commerce Minister is on an official visit to Romania to participate in the 13th session of the joint commission meeting on economic, technical, scientific cooperation on 15-16 December at Bucharest. He said the strength of the Indian economy as indicated in its fundamentals provided an assurance and tremendous opportunities to the foreign investments and collaborations in the form of joint-ventures. In the meeting, Romanian minister assured that he would look into the tariff structure for modifications to boost trade between the two countries.

GENERAL MOTORS AGREES TO BRING $50 MILLION INTO INDIA

General Motors of United States, has finally signed an agreement with the Indian government after the company agreed to bring in the stipulated foreign equity of $US 50 million. GM, which has an equal partnership with India's C K Birla group, had earlier expressed inability to meet the equity condition laid down in the auto policy as the domestic promoter was not willing to chip in with a matching portion, official sources said. After protracted discussions between the company and commerce ministry, GM committed to invest $US 30 million more in the next three years as the company had already pumped in about $US 20 million in the joint venture, General Motors India Ltd (MIL) sources said. With this GMIL became the eighth company to sign the MOU with Directorate General of Foreign Trade (DGFT). As per the auto policy that came into effect towards the fag end of last year, foreign companies operating in India were required to sign the MoU with the DGFT. However, GM had contended that it was not bound to meet the foreign equity stipulation as it had entered India much before the contentious auto policy came into force. Besides, GM also argued that the clause was applicable only in joint ventures where the foreign partner had a majority stake.