India: The way forward

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India: The way forward

Given the enormous implications of the nuclear deal with the US (United States), it was natural that it hogged all headlines and editorial comments in the papers. The fortnight saw India and the US seal the landmark nuclear deal that holds a beacon of light for power–starved India. In addition, the two countries signed agreements on subjects ranging from cooperation in space to disaster management to agriculture. To give a fillip to bilateral trade, the US–India CEO forum has proposed an Infrastructure Development Fund to be a vehicle for the US investment into Indian infrastructure, with a target corpus of $5 billion, called for technology exchange in agriculture and nanotechnology, skills development, an Indo–US centre for industrial research and development, and a dispute–resolution mechanism. India and the US have agreed to New Delhi's participation in the $950–million FutureGen project. The US government–sponsored project is part of a global public–private initiative for designing, building, and operating the world's first 275–MW coal–fired emission–free power plant.

The Union Budget 2006/07, presented by the finance minister, Mr P Chidambaram on 28 February 2006, was overall perceived as another growth–oriented one. All economic indicators are showing good signs of growth: the GDP (gross domestic product) is expected to grow at 8%, the manufacturing at 9%, the gross domestic saving increased to 29.1% of GDP, the rate of gross capital formation increased to 30.1% of the GDP, and the fiscal deficit is under control. Keeping in tune with its focus on spurring growth, the Union Budget has made efforts to accelerate the pace of development in crucial social sectors. Outlays under various heads in the social sector encompassing education, health, water supply, and rural employment have been enhanced. To achieve higher growth, there is a need for sufficient energy. Recognizing this, the government has proposed providing tax benefits for ultra mega power projects, and allotting coal blocks with 20 billion tonne reserves for the sector. While presenting the Budget, the finance minister announced a slew of measures, including constitution of an empowered committee of state chief ministers and power ministers to speed up power sector reforms.