SAARC

Indian Govt. need to stress on core sector for 9% growth : CII

The government must give thrust on infrastructure and financial sectors reforms to achieve a nine percent GDP growth on a sustained basis, said the Confederation of Indian Industry.

However, it maintained that nine percent growth rate for 20 years would be required to fight the poverty effectively in the country.

The confederation says that the government in its budget for 2001-02 should give an added thrust to the infracture sector including tax holidays to spur investment.

The chamber in its pre-budget memorandum said that the government should consider giving upto 15 year tax holiday to certain infrastructure projects as the present tax shield is inadequate to jump-start investments in critical areas of infrastructure.

CII suggested that around one-third of the $5.5 billion proceeds from the Indian Millennium Deposit scheme (IMD) should be invested in the infrastructure sector.

It suggested that $2 billion of the proceeds of IMD should be directed to financing infrastructure. This can be done by creating five years bonds at 12.5 percent with a call option on the third and the fourth year, the chamber said.

The chamber further said that three major development financial institutions - ICICI, IDBI and IFCI should be allowed to create 8-9 percent tax free bonds with a minimum tenure of seven years for financing infrastructure.

It also suggested that tourism should be given the status of infrastructure industry to enable it to get the tax benefits including a 100 percent tax holiday for the first ten years and a 30 percent tax holiday for the next five years.

The chamber also underlined the need for fiscal incentives to step up domestic savings, especially in the from of long term debt instruments that are vital for financing infrastructure.

FICCI seeks 5 year tax holdday for software

Federation of Indian Chambers of Commerce and Industry (FICCI) has called for five years tax holiday for the software industry, to allow the industry to concentrate fully on its business and plough back its resources for further development in the area of e-commerce.

In order to promote the continued export of computer software and related services, FICCI has said that gradual phasing out of section 80 HHE must be stopped for sometime.

The benefits give to computer software development should not be phase out for at least 2-3 years time. If need be, its should be phase out only after 2003 under section 80HHE.

Indian jute sector seeks CVD levy on Bangladesh imports

The Indian jute industry sought levy of countervailing duty (CVD) on import of jute goods from Bangladesh, claiming it had evidence that Dhaka was offering a cash subsidy of ten percent to its manufactures.

"We have just received a copy of a circular issued by the Bangladesh Bank Foreign Exchange (Policy Division). Dhaka confirming that government of Bangladesh have decided to continue the grant of ten percent subsidy on export of all items of jute goods between July 2000 and June 2001. "Indian Jute Mills Association Chairman Sanjay Kajaria said.

The Association has forwarded the 'evidence' to the Centre and urged imposition of a ten percent countervailing duty, on import of all jute goods including sacking material from Bangladesh, Mr. Kajaria said. "This will neutralise the benefit of ten percent subsidy which the mills/exporters there are getting and will put an effective check on large-scale import of jute goods from Bangladesh to India, which have posed a real threat to the Indian jute Industry." He said.

In the light of documents available, the Centre could easily take measures under anti-dumping laws without violating section 7 of Agreement on Safeguards (AOS), Mr. Kajaria claimed. He said the cash subsidy enabled the jute mills and exporters in Bangladesh to sell jute goods in all export markets, including India. At a price considerably lower than that of India.

Bangladesh achieves 6.03% GDP

Bangladesh's economic growth reached 6.03 percent in the year to June 2000, a government document made available to AFP recently said. The gross domestic product (GDP) growth rate, which was earlier estimated by the central bank at 5.5 percent, is the highest in the past 25 years, according to a draft of a speech by Bangladesh president Shahabuddin Ahmed due to be delivered at the opening of parliament on January 11.

The economy grew 4.9 percent in the year to June 1999.

Asked about the new figure, Finance Minister Shah Kibria said: The growth figure came out after the final computation (of economic performance), with the agriculture sector being the highest contribution as usual."

Bangladesh forms high power IT Task Force

Prime Minister Sheikh Hasina will head a 15 member task force for development of information technology in Bangladesh.

The committee of experts and businessmen will make policies and guidelines to promote the country's fledgling it industry, S.A. Samad, principal secretary to the Prime Minister, told.

"The potentials of IT industry have remained heavily under utilized in Bangladesh. We can't wait any longer", Samad said.

Bangladesh earns only a few million dollars from software exports.

But this annual income could reach dlrs 2 billion, the amount Bangladesh each year gets in foreign aid and loans, Samad said.

Bangladesh trade deficit with India

Bangladesh's trade deficit with neighboring India amounted to 768.12 million dollars in the year to June 2000, Commerce Minister Abdul Jalil told recently.

He said the government was taking all possible initiatives to reduce the trade gap with its giant neighbor.

Pakistan renegotiates foreign debt.

Pakistan has renegotiated 1.7 billion dollars (1.8 billion euros) in payments on its huge public debt to Paris Club creditor nations, Finance Minister Shaukat Aziz said recently.

"The debt rescheduling is covering maturates and arrears up to September of this year, and the total amount is 1.7 billion dollars," he told reporters after signing a deal with creditors.

"The entire debt and arrears have been capitalised; payments have been' drawn into a rescheduling agreement".

Paris Club creditors had agreed to deal with the debt under socalled Houston terms, which entail long-term rescheduling of payments, the finance minister said.

"This accord will significantly improve the economic outlook and will support reform efforts and the reduction of poverty" in Pakistan, the Paris Club announced in a statement.

Aziz said Pakistan was on target to meet the benchmarks set with the International Monetary Fund late last year in exchange for a 10 month, 596-million dollar standby facility to help stave off default on its crippling 38 billion dollars in foreign debt.

Islamabad has received the first installment of 192 million dollars from the IMF, the first assistance to Pakistan from the fund since 1998, when programmes were suspended due to missed economic targets.

Sri Lanka - Tourism falls by 22.6%

Sri Lanka, where tourism is a major foreign currency earner, has registered a sharp 22.6% fall in tourist arrivals.

About 32,469 tourists arrived in Sri Lanka in November 2000, a fall of 22.6 percent from 41,952 in the same period of 1999, the Ceylon Tourist Board said. The figure for November is the latest available.

Arrivals dropped sharply since April, mainly due to intensified fighting between government troops and Tamil Tiger rebels in the northestern part of the country.

Although the capital, Colombo, and the southern beaches-the main destination of most of the tourists-were not directly affected by the war, the rebels sometimes carry out assassinations or bombings in the capital to dramatize their 17 year campaign for a separate homeland.