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INDIA-L  May 1998, Week 1

INDIA-L May 1998, Week 1

Subject:

India News Network Digest _ May. 6, 98. Special Report.

From:

India News Editor <[log in to unmask]>

Reply-To:

[log in to unmask]

Date:

Wed, 6 May 1998 16:05:31 -0400

Content-Type:

TEXT/PLAIN

Parts/Attachments:

Parts/Attachments

TEXT/PLAIN (810 lines)

India News Network Digest   Wed,  6 May 98       Volume 2 : Issue 1641

Today's Topics:

#1. FOCUS-Curfew imposed in Kashmir town after killing
#2. Government workers plan strike in India's Assam
#3. India's Bangalore to get World Trade Centre
#4. EU to encourage further investment in India
#5. Pakistan says has edge on India with new missile
#6. FOCUS-India says committed to improving China ties
#7. India trade victim of world slump, S.E. markets
#8. India to change patent law, but guard interests
#9. India moves to mollify China over defence minister
#10. India to launch locally built training aircraft
#11. Indian minister sounds conciliatory note on China
#12. India-Tibet
#13. Air Canada stops India flights June-Sept
#14. Indian panel charts course for banking reforms
#15. FOCUS-China blasts Indian defence minister
#16. Static India wheat productivity to trigger imports
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Date: Wed, 6 May 98 13:03:39 EDT
From: 06-May-1998 1304 <[log in to unmask]>
Subject: News 5/6/98

#1. RTw 05/06 1221 FOCUS-Curfew imposed in Kashmir town after killing

Copyright, 1998 Reuters Ltd.  All rights reserved. The following news
report may not be republished or redistributed, in whole or in part,
without the prior written consent of Reuters Ltd.

 (adds curfew, number missing, official comments)
     JAMMU, India, May 6 (Reuters) - Separatist guerrillas have shot dead
13 Hindus in three separate incidents since Monday in India's troubled
state of Jammu and Kashmir, police said on Wednesday.
     Militants opposed to New Delhi's rule in the Himalayan province
barged into a house at Surankote, some 245 km (155 miles) north of Jammu,
the state's winter capital, on Tuesday night and opened fire, police said.
Four people died on the spot.
     Police said Surankote was tense on Wednesday after an angry crowd
torched two government jeeps and damaged two government buildings, and an
indefinite curfew had been imposed.
     In another incident, at least four members of a village defence
committee formed to combat guerrillas died in an attack late on Monday by
Moslem separatists.
     The attack took place near Manchar village near Doda, 165 km (100
miles)  east of Jammu, police said.
     As villagers returned from cremating the victims, militants opened
fired again, killing four civilians and one policeman. Police said 10
people were unaccounted for.
     One militant, believed to be a foreign mercenary, was killed by
return fire during the ambush and the bodies of two militants were dug out
of the snow in the same area, police said.
     A Jammu and Kashmir government statement quoted the state's chief
minister as saying the killings had been instigated by Pakistan.
     "Describing these as another barbaric act of killers at the behest of
Pakistan, the chief minister, Farooq Abdullah said that the mercenaries
have no faith in religion or human values," the statement said.
     India accuses Pakistan of aiding separatists and encouraging foreign
Islamic mercenaries to oppose Indian rule in the province, the only
Moslem-majority state in mainly-Hindu India.
     Islamabad denies the charge and says it provides only moral support.
     More than 25,000 people have died and over 300,000 Kashmiri Hindus
have fled their homes since the rebellion erupted in 1990. REUTERS

#2. RTw 05/06 1217 Government workers plan strike in India's Assam

Copyright, 1998 Reuters Ltd.  All rights reserved. The following news
report may not be republished or redistributed, in whole or in part,
without the prior written consent of Reuters Ltd.

    NEW DELHI, May 6 (Reuters) - More than half a million government
workers in India's northeastern state of Assam will go on strike next week
over pay, representatives said on Wednesday.
     Assam government workers have asked for wages in line with those
given to federal government employees, but this would set the state
government back by 10 billion rupees ($252 million) each year.
     A pay rise announced earlier by the state government for its
employees would increase the wage bill by seven billion rupees, officials
said.
     But government workers in oil and tea rich Assam rejected the
package.
     "Under any circumstances we will not accept the new pay structure
because it's a downward revision," Charan Deka, leader of the employees,
said.
     The Assam government has been struggling to manage its finances. It
shoulders an annual deficit budget of more than seven billion rupees and
has spent about 5.4 billion rupees in counter-insurgency operations over
the last eight years.
     "It is the problem of the state government to manage funds for our
salaries," Deka said.
     Several insurgent groups in Assam are fighting for either greater
autonomy or secession from India. ($1 - 39.7)

#3. RTw 05/06 1214 India's Bangalore to get World Trade Centre

Copyright, 1998 Reuters Ltd.  All rights reserved. The following news
report may not be republished or redistributed, in whole or in part,
without the prior written consent of Reuters Ltd.

    BANGALORE, India, May 6 (Reuters) - A World Trade Centre (WTC) will be
built in the south Indian city of Bangalore, close to an international
technology park, forming a new focus for India's computer software hub,
its builders said on Wednesday.
     Officials said the city, whose leadership in computer software
facilities is being challenged by other Indian centres like Hyderabad, was
expected to receive a boost with the trade centre, to be built in a
15-acre area 20 km (12 miles) from the city.
     The existing International Technology Park houses several global
firms.
     "The setting up of a WTC in Bangalore signifies the city's entry into
international trade," M.P.K. Nair, chairman, WTC India Ltd, told
reporters.
     "It will expand exports and develop into a primary resource centre
for business opportunities in the region," he said.
     Built at a cost of three billion rupees ($75 million), the centre
will be a part of a larger, integrated township, and will be constructed
by Shantiniketan, a joint venture of developers Unitech Ltd and Chaitanya
Properties Pvt. Ltd.
     The residential and commercial township will be spread over an area
of 139 acres and is expected to cost about 20 billion rupees, officials
representing the builders said.
     The Bangalore WTC will be part of the New York-based WTC Association
Inc.  that functions in 257 cities worldwide.
     India's commercial capital Bombay has a WTC, while a second one is
under construction in Calcutta. New Delhi has an affiliate WTC.
     Nair said WTC India had plans to set up centres in the southern
cities of Madras, Hyderabad, Cochin and Coimbatore.
     The WTC usually provides its members with information services, hosts
international trade missions and organises international visits.
     It also offers meeting and conference facilities, education services,
exhibition space, office space, a business club and other amenities like
banks and hotels.
     Bangalore has been under pressure to improve infrastructure
facilities like power supply, roads and transport, which have been
strained by a rush of investment into the city after India embarked on
economic liberalisation seven years ago.
     Of late, Bangalore has been facing competition from Hyderabad in the
neighbouring state, which has been wooing investment, especially in the
information technology sector.
  ($1-39.8 rupees)

#4. RTw 05/06 1151 EU to encourage further investment in India

Copyright, 1998 Reuters Ltd.  All rights reserved. The following news
report may not be republished or redistributed, in whole or in part,
without the prior written consent of Reuters Ltd.

     NEW DELHI, May 6 (Reuters) - The European Union hopes to boost
investment in India by encouraging alliances with the country's small and
medium enterprises, its ambassador to India said on Wednesday.
     "We are not content with the pace of investment (in India) from the
European Union. We would like to step it up," Michael McGeever said at a
seminar to announce a EU-India business meeting next March.
     Called a "partnerariat," the meeting will bring together 400 Indian
companies and an equal number of European firms to discuss joint ventures,
alliances and collaborations, he said.
      EU companies invested $256 million in India in 1997, a small amount
in terms of India's actual needs, he said.
     "India will become a much greater investment target for European
investors and we would like to promote the EU's participation through
economic co-operation," he added.
     The meeting, to be held on March 15 and 16, will cover chemicals and
plastics processing, electronics and information technology hardware,
environmental technology, food processing and packaging, light
engineering, software and services.

#5. RTw 05/06 1151 Pakistan says has edge on India with new missile

Copyright, 1998 Reuters Ltd.  All rights reserved. The following news
report may not be republished or redistributed, in whole or in part,
without the prior written consent of Reuters Ltd.

    By Tahir Ikram
     ISLAMABAD, May 6 (Reuters) - Foreign Minister Gohar Ayub said on
Wednesday Pakistan had gained an edge over India in missile technology
after Islamabad developed a new medium-range surface to surface missile.
     "In the missile race we have overtaken them," Ayub said in an
interview with Reuters Television.
     By developing the new 1,500-km (937-mile) range Ghauri missile
Pakistan had shattered the "myth" of India's strategic depth and could
reach any Indian city, Ayub said.
     India's Prithvi missile had a much smaller range of around 200 km
(125 miles), he added.
     "Their Prithvi is 200 km. It's a crude weapon. Our Ghauri has a range
of 1500 km and goes straight into the stratosphere 350 km up and then
comes straight down and hits a target at 1500 km in 12 minutes," Ayub
said.
     Indian claims that Prithvi was capable of reaching anywhere in
Pakistan constituted a disguised nuclear threat, he said.
     "Actually what they are talking is they are talking of using nuclear
weapons against our towns, an open threat to Pakistan, a grave threat.
     "But Pakistan has very few large cities, and our small towns are too
small.  On the other hand India has very, very large cities with huge
populations."
     Ayub said if Pakistan marked Indian cities, the way Indians had every
Pakistani city in their range, massive destruction could take place.
     "Terrible devastation which should never be talked about, discussed
or thought about and it should never come to this. Pakistan can absorb the
attacks of Prithvi but India will never be able to absorb the attacks of
Ghauri," he added.
     Pakistan and India are both seen as nuclear threshold powers. India
carried out a nuclear test in 1974 and Pakistan says it can make nuclear
weapons but has chosen not to do it.
     Last month India's Defence Minister George Fernandes accused China of
providing Pakistan with military technology after Islamabad announced it
had successfully test fired the Ghauri.
     Beijing, which enjoyed a close military relationship with Pakistan,
denied the allegation.
     India and Pakistan have fought three wars since independence in 1947
from Britain. Two of these have been over the disputed Himalayan territory
of Kashmir, two thirds of which is controlled by New Delhi and the rest by
Islamabad.
     Ayub said key to normalisation of relations with India was the
resolution of Kashmir issue and decrease in border clashes between each
other's armies, which occur on a regular basis.
     "There is no conflict of interest with India. If we solve our problem
on Kashmir we will live like very good friends."
     Ayub says he wants to leave the Foreign Ministry because it keeps him
away from the country, leaving him no time for his electorate.
     Last week Prime Minister Nawaz Sharif had accepted his request to
relieve him from give him another portfolio. But on Tuesday the prime
minister's office said that Sharif had asked Ayub to continue for the time
being.
     Local newspaper reports said Ayub had asked for the change because of
a reported row with deputy foreign minister Mohammad Siddique Khan Kanju,
who is closer to Sharif. REUTERS

#6. RTw 05/06 1149 FOCUS-India says committed to improving China ties

Copyright, 1998 Reuters Ltd.  All rights reserved. The following news
report may not be republished or redistributed, in whole or in part,
without the prior written consent of Reuters Ltd.

 (Recasts with foreign ministry statement)
     By Sanjeev Miglani
     NEW DELHI, May 6 (Reuters) - India on Wednesday sought to mollify
China over remarks made by Defence Minister George Fernandes which have
strained relations between the giant neighbours, saying it was committed
to improving ties.
     "Government of India remains committed...to the development of a
friendly, cooperative, good neighbourly and mutually beneficial
relationship with China, our largest neighbour," a foreign ministry
spokesman said in a statement.
     Fernandes, a former socialist firebrand, also softened his rhetoric
after provoking an angry reaction from Beijing and said he was committed
to dialogue with China.
     "It appears that there is a feeling in certain circles that I am not
keen on an India-China dialogue," Fernandes said in a statement from
India's Andaman Islands where he was on a two-day visit.
     "During the Krishna Menon Memorial Lecture on May 3...my emphasis was
precisely on creating peace and amity between India and China and between
India and Pakistan," the statement said.
     Fernandes, whose regional group is a key partner in the fledgling
Hindu nationalist-led coalition government, said in the lecture that
China's military "encirclement" of India was cause for concern.
     He said China had built a sophisticated electronic surveillance base
in Myanmar's Coco islands and was upgrading airfields in Tibet to take
supersonic fighter jets capable of striking at India's borders.
     But the Indian foreign ministry said there had been steady
improvement in ties with China -- a process which it said started in 1977
when Prime Minister Atal Behari Vajpayee was foreign minister.
     "It will be recalled that the prime minister as Minister of External
Affairs in the government of 1977-79 had taken a personal and active
interest in the normalisation of relations with China," the foreign office
statement said.
     Beijing sharply reacted to Fernandes' comments and said these could
sabotage friendly ties.
     India and China fought a brief war in 1962 but since signing an
agreement to maintain peace on their disputed Himalayan border in 1993
both sides have sought to rebuild ties.
     "Both sides have agreed to build a constructive and cooperative
relationship oriented towards the 21st century," the spokesman said.
     There were differences between the world's two most populous nations,
but the aim should be to eliminate such differences, he said.
     "We see our relationship as one in which the two sides would be
responsive to each other's concerns. Eliminating differences and promoting
understanding would contribute to the development of good neighbourly
relations..." the ministry said.
     Analysts said India was moving to limit the damage caused by
Fernandes's statements on China.
     The Tribune newspaper quoted government sources as saying that a
damage control exercise was under way and that Vajpayee was again seeking
to rein in his defence minister, who in the past has campaigned against
Chinese rule in Tibet.
     Fernandes has been criticised by opposition parties which have said
the remarks risked jeopardising efforts to mend fences with China.
     India's communist parties asked for the defence minister's
resignation for trying to disrupt ties with China, a local news agency
said.
     "In the interest of the country and friendly relations with
neighbours, it is imperative that George Fernandes step down as defence
minister," the Communist Party of India (Marxist) was quoted as saying.
     Fernandes said he had sought to put a spotlight on "the contentious
issues with our neighbours" in his lecture to make the Indian people
conscious of national security matters. REUTERS

#7. RTw 05/06 1131 India trade victim of world slump, S.E. markets

Copyright, 1998 Reuters Ltd.  All rights reserved. The following news
report may not be republished or redistributed, in whole or in part,
without the prior written consent of Reuters Ltd.

    By Hari Ramachandran
     NEW DELHI, May 6 (Reuters) - A fall in world trade and a currency
crisis in Southeast Asian markets took its toll on Indian exports in
1997/98 (April-March)  and it was too early to predict export growth in
the current year, experts said on Wednesday.
     Commerce Minister Ramakrishna Hegde said a sharp turnaround in
exports was expected in 1998/99, but analysts said a fall in the rupee's
value against the U.S. dollar was needed to boost exports.
     "World exports have been down in 1996/97 and 1997/98 -- so India has
also lost out," Rajesh Chadha of the independent National Council of
Applied Economic Research told Reuters.
     "The only bright spot is that imports have not increased much,"
Chadha added.
     Earlier on Wednesday, the government said India's trade deficit
widened to $6.8 billion in fiscal 1997/98 (April-March) from $5.4 billion
in 1996/97.
     It said exports in 1997/98 grew marginally by 2.64 percent to $33.98
billion from $33.11 billion in 1996/97. Imports in 1997/98 rose 5.79
percent to $40.78 billion from $38.55 billion in 1996/97, it said.
     But Commerce Minister Hegde told Reuters that the picture was not
gloomy and he was confident that exports would grow by 20 percent in
1998/99.
     "We have put an export target of 20 percent and we will achieve it,"
Hegde said.
     India's four-week-old Hindu nationalist-led government last month
unveiled a modified trade policy introducing changes in a five-year regime
announced last year. It promised to unshackle bureaucratic controls and
strengthen infrastructure to boost the nation's sagging exports.
     "Exports are not expected to do much better because the world trade
scenario is down, but we need some currency readjustment," said Kamal Sen,
economist with DSP Merrill Lynch.
     Sen expected the trade deficit to rise in 1998/99 which was not
worrisome provided there were enough capital inflows to finance the trade
deficit.
     "Sharp currency devaluation in some Southeast Asian countries which
compete with the Indian exports in some of the third world markets has
also impacted our exports," Sen said.
     Amit Mitra, secretary-general of the Federation of Indian Chambers of
Commerce and Industry (FICCI), said it was difficult to predict when a
turnaround would take place.
     "We are at a very difficult stage. It's very difficult to say when
the turnaround will take place. We will have to look at the global trade
scenario for that."
     Chadha said India's exports were not competitive after the fall in
the value of several Southeast Asian currencies.
     "The (rupee-dollar) exchange rate has not moved the way it should
have. The rupee should have been at a level of 44-45 to the dollar,"
Chadha said.
     The Indian rupee ended on Wednesday at 39.775/785 against the
previous close of 39.76/77.
     Raghabendra Jha, economist at the Indira Gandhi Institute of
Development Research, said imports would rise with a recovery in
industrial activity.
     But exports might not pick up to the same extent in view of the stiff
competition from the Southeast Asian countries, he said.
     "So our trade deficit is likely to worsen," Jha said. REUTERS

#8. RTw 05/06 0847 India to change patent law, but guard interests

Copyright, 1998 Reuters Ltd.  All rights reserved. The following news
report may not be republished or redistributed, in whole or in part,
without the prior written consent of Reuters Ltd.

    By Narayanan Madhavan
     NEW DELHI, May 6 (Reuters) - India's new government will amend the
country's patent law to honour commitments to the World Trade Organisation
(WTO), but will take steps to safeguard national interests, officials said
on Wednesday.
     "We have to adopt a new patent law and it should be and it would be
to honour our international commitments and also to safeguard our national
interests," Science and Technology Minister Murali Manohar Joshi told a
news conference.
     "The Industry Ministry is already on the job," he said.
     The Hindu nationalist Bharatiya Janata Party (BJP), which leads the
minority coalition that took office six weeks ago, had as an opposition
group led protests against proposed changes in patent laws, saying the
proposals compromised national interests.
     Although India has joined the WTO and is committed to abide by its
rules, parliamentary opposition has stalled the passage of a new patent
law to change 1970 legislation that recognises patents on manufacturing
processes, but not on products.
     Indian critics say product patents would aid multinational
competitors at the expense of domestic pharmaceutical firms which have
been relying on patenting manufacturing processes.
     Asked if the government was ready to adopt product patents, Joshi
said: "We can do it provided we design and chart out certain methods."
     India has until April 1999 under the WTO's schedule to bring in a new
law to replace the existing one.
     Joshi said he would brainstorm for two days next week with experts
from the Council for Scientific and Industrial Research in Bangalore to
decide on a strategy to help Indian industry become competitive with the
help of technological innovations.
     The meeting on May 11 and 12 will also discuss emerging opportunities
in biotechnology, efforts to preserve traditional knowledge and scientific
innovations to help common people, he said.
     Joshi said the government was keen to take a number of steps to
encourage interaction between the fields of education, scientific research
and industry.
     "We have decided now to have a strong linkage between these three
components which will propel the engine of economic growth," he said.
     In response to a question, Joshi said the government wanted to boost
expenditure on science and technology from a "miserably low" 0.8 percent
of gross national product (GNP) but added that the funds for this must
essentially come from private firms.
     He said in the United States, as much as 70 percent of research
spending came from industry while the rest came from the government.
REUTERS

#9. RTw 05/06 0839 India moves to mollify China over defence minister

Copyright, 1998 Reuters Ltd.  All rights reserved. The following news
report may not be republished or redistributed, in whole or in part,
without the prior written consent of Reuters Ltd.

    NEW DELHI, May 6 (Reuters) - India on Wednesday sought to mollify
China over remarks by Defence Minister George Fernandes which have
strained relations between the giant neighbours, saying it was committed
to improving bilateral ties.
     "Government of India remains committed to...the development of a
friendly, cooperative, good-neighbourly and mutually beneficial
relationship with China, our largest neighbour," a foreign ministry
spokesman said in a statement.  Fernandes, a former socialist firebrand
whose regional group is a key partner in the fledgling Hindu
nationalist-led coalition government, said last weekend that China's
military encirclement of India was cause for concern. Beijing reacted
sharply to his comments.
     The foreign ministry spokesman said: "Both sides have agreed to build
a constructive and cooperative relationship oriented towards the 21st
century."
     The statement said there were differences between the world's two
most-populous nations, but the aim should be to eliminate such
differences.
     "We see our relationship as one in which the two sides would be
responsive to each other's concerns. Eliminating differences and promoting
understanding would contribute to the development of good neighbourly
relations...," the ministry said. REUTERS

#10. RTw 05/06 0716 India to launch locally built training aircraft

Copyright, 1998 Reuters Ltd.  All rights reserved. The following news
report may not be republished or redistributed, in whole or in part,
without the prior written consent of Reuters Ltd.

    NEW DELHI, May 6 (Reuters) - India will test fly next week a two-seat
training aircraft billed as the nation's first civilian model built of
carbon-fibre composite, Science and Technology Minister Murali Manohar
Joshi said on Wednesday.
     A private firm, Taneja Aerospace and Aviation Ltd, has built the
aircraft, which the minister said could be used for training,
surveillance, sports, aerial photography and environment monitoring.
     He said its first test flight of the piston-engine propeller aircraft
would be on May 11, ahead of commercial production.
     "This will be the first composite aircraft designed and built in the
country," Joshi told a news conference.
     The model, called Hansa-3, would cost $90,000 and is expected to be
cheaper than international competitors costing $110,000, he said.
     "There have already been enquiries (for exports) from certain
countries, particularly Australia, Latin America and Europe," he said.
"The day we are in the market, the prices of many aircraft will come
down."
     Officials said the aircraft could be on the market within four
months, by which time it was expected to be certified under European
aviation standards.
     India's state-run National Aerospace Laboratories, based in
Bangalore, has provided the technology to build the aircraft.
     Officials said they planned to produce 12 aircraft per year but could
immediately double production if required. REUTERS

#11. RTw 05/06 0415 Indian minister sounds conciliatory note on China

Copyright, 1998 Reuters Ltd.  All rights reserved. The following news
report may not be republished or redistributed, in whole or in part,
without the prior written consent of Reuters Ltd.

    By John Chalmers
     NEW DELHI, May 6 (Reuters) - India's controversial defence minister,
softening his rhetoric after provoking an angry reaction from Beijing,
said on Wednesday he was committed to dialogue with China.
     Minister George Fernandes said comments he made in a lecture at the
weekend on the military threat posed by China appeared to have been
misunderstood.
     "It appears that there is a feeling in certain circles that I am not
keen on an India-China dialogue," Fernandes said in a statement from
India's Andaman Islands, where he was on a two-day visit.
     "During the Krishna Menon Memorial Lecture on May 3...my emphasis was
precisely on creating peace and amity between India and China and between
India and Pakistan," the statement said.
     Fernandes, a former socialist firebrand whose regional group is a key
partner in the fledgling Hindu nationalist-led coalition government, said
in the lecture that China's military "encirclement" of India was cause for
concern.
     He said China had built a sophisticated electronic surveillance base
in Myanmar's Coco islands and was upgrading airfields in Tibet to take
supersonic fighter jets capable of striking at India's borders.
     On Tuesday, Myanmar denied that China had put a surveillance base on
its islands and China's foreign ministry expressed "utmost regret and
resentment"  over Fernandes' comments.
     Chinese foreign ministry spokesman Zhu Bangzao said the minister's
comments "would seriously sabotage the favourable atmosphere for
developing friendly relations."
     However, the minister said in his statement on Wednesday that he
shared China's commitment to bilateral dialogue and believed it would lead
to "a satisfactory settlement."
     India fought a brief and disastrous border war with China in 1962.
Both sides have sought to rebuild ties since signing an agreement to
maintain peace on their disputed Himalayan border, but mutual suspicions
have lingered.
     Fernandes said he had sought to put a spotlight on "the contentious
issues with our neighbours" in his lecture to make the Indian people
conscious of national security matters.
     Last month Fernandes accused China of providing Pakistan with
military technology after Islamabad announced it had tested a missile
capable of reaching targets deep inside India. Beijing, which enjoyed a
close military relationship with Pakistan, denied the allegation.
     Fernandes also said last month that he believed the Chinese sometimes
intruded into Arunachal Pradesh -- a remote northeastern state of India
that has not been formally recognised by Beijing -- and may have built a
helipad there.
     Prime Minister Atal Behari Vajpayee was quick to deny the helipad
comment and local media reports said he had told the outspoken minister to
be more restrained.
     The Tribune newspaper quoted government sources as saying that a
damage control exercise was under way and that Vajpayee was again seeking
to rein in his defence minister, who in the past has campaigned against
Chinese rule in Tibet.
     Fernandes' comments have been lashed by opposition parties in India,
which have said the remarks risk jeopardising efforts to mend fences with
China.  REUTERS

#12. APn 05/05 1016 India-Tibet

Copyright, 1998. The Associated Press. All rights reserved.

The information contained in this news report may not be published,
broadcast or otherwise distributed without the prior written authority of
The Associated Press.

By KRISHNAN GURUSWAMY
 Associated Press Writer
   NEW DELHI, India (AP) -- Monks chanted Buddhist hymns and lit oil lamps
today in special prayers for a Tibetan who burned himself to death in a
protest that highlights the growing frustration among Tibetan exiles in
India.
   The service marked the first week since Thupten Ngodup, a 50-year-old
former monk, doused himself in gasoline and set himself ablaze to protest
the police breakup of hunger strike by six other Tibetan exiles protesting
China's rule of their homeland.
   Ngodup's self-immolation April 27 was the most dramatic incident in
nearly 40 years of peaceful protests by Tibetan exiles in India.
   "We're praying that his soul rests in peace," said Karma Yeshe, vice
president of the Tibetan Youth Congress, which organized the prayers and
the hunger strike. He said prayers will be held each week for the next
seven weeks, in keeping with Buddhist custom.
   Five other Tibetan exiles have begun a hunger strike in a tent in New
Delhi to demand a U.N. debate on China's 1959 annexation of Tibet. The
protesters also want the United Nations to appoint a human rights observer
for Tibet and to supervise a referendum on whether Tibetans want
independence, greater autonomy or some other option.
   About 120,000 Tibetan refugees live in India, where their spiritual
leader, the Dalai Lama, runs a government-in-exile.
   The Dalai Lama has said the hunger strike and self-immolation, which he
believes violate Buddhist teachings of nonviolence, reflect frustration
over the failure of his more moderate approach of lobbying heads of state.

#13. RTw 05/05 0854 Air Canada stops India flights June-Sept

Copyright, 1998 Reuters Ltd.  All rights reserved. The following news
report may not be republished or redistributed, in whole or in part,
without the prior written consent of Reuters Ltd.

    NEW DELHI, May 5 (Reuters) - Air Canada will suspend flights to and
from India between June 1 and September 30, 1998, a senior official of the
airline said on Tuesday.
     "This is a temporary suspension as the load factor from Canada to
India during this period is low," Geoffrey Beckett, Air Canada's general
manager for India, told a news conference in New Delhi.
     He said Air Canada started operations to Delhi in November 1993,
before which it flew to Bombay.
     An Air Canada statement said that during the suspension, the airline
would work with its alliance partners, United Airlines and Lufthansa, to
provide Canada-bound passengers convenient connections via London and
Frankfurt.
     It added that passengers already booked to travel on Air Canada
during the suspension period would be switched to flights of these
airlines. REUTERS

#14. RTw 05/05 0627 Indian panel charts course for banking reforms

Copyright, 1998 Reuters Ltd.  All rights reserved. The following news
report may not be republished or redistributed, in whole or in part,
without the prior written consent of Reuters Ltd.

    By Sabyasachi Mitra
     NEW DELHI, May 5 (Reuters) - A panel set up to map out a second round
of banking reform in India has recommended the reduction of government
holdings in state-owned banks and the creation of a watchdog body for
regulation and supervision.
     The panel, known as the Committee on Banking Sector Reforms and
headed by former central bank Governor M. Narasimham, also suggested
boosting banks' capital funds to make them stronger.
     "Those banks which are in a position to access the capital market at
home or abroad should, therefore, be encouraged to do so," the report
said.
     A summary of the report was published on April 23, but the full
report was made available to Reuters on Tuesday.
     The panel said that the minimum holding by the government or the
central Reserve Bank of India (RBI) in the equity of state-owned banks
should come down to 33 percent.
     The current norms require the government to own at least 51 percent
in public-sector banks and the RBI not less than 55 percent in the
nation's largest commercial bank, the State Bank of India.
     The panel said it was not necessary for the government or the RBI to
divest their holdings in the state-owned banks.
     "A reduction in their shares would come about through additional
subscription by the market to their enhanced capital," it said.
     The panel said a reduction of non-performing assets or bad loans
would go a long way to improving the profitability of state-run banks.
     It said the government should review the minimum capital adequacy
standard for banks, increasing it gradually to 9.0 percent by 2000 and 10
percent by 2002 from the current 8.0 percent.
     Citing the example of the crisis-hit East and Southeast Asian
economies, it called for prudent standards for banks through prescribed
exposure limits to sectors sensitive to asset price fluctuations such as
the stock market and real estate.
     The Narasimham committee, as it is popularly called, favoured
continuing the policy of granting licences for setting up private banks
but asked for a review of the start-up capital requirement of one billion
rupees.
     The panel said foreign banks may also be allowed to set up
subsidiaries or joint ventures in India but wanted the minimum start-up
capital requirement to be raised to $25 million from the present $10
million.
     India allows foreign banks to operate only as branches but permits
them or finance companies to invest up to 20 percent in a private bank as
a collaborator or technical partner.
     Keeping in view the rapid consolidation of the domestic financial
sector, the panel suggested that development financial institutions
convert themselves to banks.
     "There would then be only two forms of intermediaries, viz, banking
companies and non-banking companies," the panel said.
     The panel also recommended setting up a separate regulatory and
supervisory panel to oversee the activities of banks, financial
institutions and non-banking financial companies.
     "The functions of regulation and supervision are organically linked
and we propose that this agency be renamed as the Board for Financial
Regulation and Supervision," it said. REUTERS

#15. RTw 05/05 0552 FOCUS-China blasts Indian defence minister

Copyright, 1998 Reuters Ltd.  All rights reserved. The following news
report may not be republished or redistributed, in whole or in part,
without the prior written consent of Reuters Ltd.

 (Adds comments by diplomats)
     BEIJING, May 5 (Reuters) - China on Tuesday expressed "utmost regret
and resentment" at comments by India's defence minister over the military
threat posed by Beijing and warned they could sabotage friendly relations.
     Defence Minister George Fernandes said on Sunday that China had built
a sophisticated electronic surveillance base in Myanmar's Coco Islands and
was upgrading airfields in Tibet to take supersonic fighters capable of
striking at India's borders.
     "China expresses utmost regret and resentment," foreign ministry
spokesman Zhu Bangzao said on Tuesday in China's first official reaction.
     "China does not pose any threat to neighbouring countries," he told a
news conference.
     The comments would "seriously sabotage the favourable atmosphere for
developing friendly relations," Zhu said.
     Fernandes, a former socialist firebrand whose Samata Party is a key
partner in the Hindu nationalist-led ruling coalition, said India had long
focused on the threat from Pakistan while ignoring the equal danger posed
by China.
     Zhu poured scorn on Fernandes using unusually strong language.
     "His so-called view that China constitutes the principle threat to
India is absolutely ridiculous and not worthy of refutation," Zhu said.
     "His accusation concerning China's relations with relevant countries
is utterly fictitious and has no basis in facts," he added.
     Beijing-based diplomats said Zhu's sharp comments represented a
warning to India to rein in its outspoken defence minister before he
caused more damage.
     They said China regarded the accusations as particularly offensive
since it had worked hard in recent years to settle border quarrels with
all its neighbours, including India.
     China fought a brief border war with India in 1962, but relations
have now warmed.
     "They're puzzled and annoyed at the Indians for coming out with this
sort of thing," said one diplomat.
     "The Chinese have been doing everything they can over the last two or
three years to calm the Indians down."
     "They have been going round their borders trying to patch things up
with everyone. And they think the Indians ought to be doing a little bit
more to acknowledge this."
     By delivering a "slap on the wrist" to Fernandes, China was "hoping
that his own government will call him to order," the diplomat added.
     In April, Fernandes accused China of providing Pakistan missile
technology after Islamabad announced it had tested its longest-range
missile capable of striking targets deep inside India. Beijing denied the
allegation.
     On Monday, India's opposition Congress party lashed out at Fernandes
over his remarks.
     "The defence minister...once again made observations about our
relations with China which, both in letter and spirit, go against our
trying to widen, deepen and strengthen our relations with China," party
spokesman Salman Khurshid said in a statement.
     Fernandes delivered his comments at the 101st anniversary of the
birth of V.K. Krishna Menon, who was India's defence minister in 1962 and
was forced to resign as a result of the war with China that became a
disaster for New Delhi.
     "We've decided that we are very strong and can take on Pakistan and
the subject ends there," Fernandes said. "But we forget that from 1950,
when China invaded Tibet, we ought to have been concerned equally about
China." REUTERS

#16. RTw 05/05 0249 Static India wheat productivity to trigger imports

Copyright, 1998 Reuters Ltd.  All rights reserved. The following news
report may not be republished or redistributed, in whole or in part,
without the prior written consent of Reuters Ltd.

    By Hari Ramachandran
     NEW DELHI, May 5 (Reuters) - India, the world's second largest wheat
producer, has little scope for increasing its wheat productivity or
acreage and might need imports to feed its growing population, analysts
said.
     Indian wheat productivity was already high, they said.
     Output hit a record 68.71 million tonnes in 1996/97 (July-June),
surpassing the United States and second only to China's 109 million to 110
million tonnes.
     "In five years' time a situation may arise when incremental demand
may outstrip incremental supplies," said a Bombay-based commodities
analyst.
     "Beyond five years we may have to depend on wheat imports."
     But C.R. Hazra, Agriculture Commissioner at the Ministry of
Agriculture, discounted the possibility of large imports.
     "The present growth rate of wheat production at two percent could be
maintained or could be a little higher..." said Hazra, noting that
population growth was 1.8 percent or so.
     He said increased productivity would take care of the growing
domestic need for foodgrains, so imports would not be required.
     India cultivates wheat in an area of about 25.9 million hectares (64
million acres), the same as the United States.
     Analysts said Indian wheat, in terms of area planted, had reached
saturation point and chances of an increase were slim, with farmers
preferring other crops such as soybean.
     They said India's wheat yield, at 2.7 tonnes per hectare, compared
well with a world average of 3.0 tonnes.
     "Our productivity is at par, or more-or-less, with the United
States," said Mangala Rai, deputy director general of the Indian Council
of Agriculture Research (ICAR).
     ICAR was reasonably confident of being able to develop a few better
varieties to improve yields, Rai said.
     Hazra said ICAR was developing hybrid wheat varieties that might be
in use in six to seven years' time.
     "Then we will get a quantum jump in production," he said.
     Agriculture ministry officials said India had projected a wheat
output of 75 million tonnes by 2000/01 and were hopeful of achieving the
target.
     India immediately consumes nearly 90 percent of the wheat it grows.
The remainder is kept as stocks and released as required.
     The northern states of Punjab and Haryana are major wheat producing
states.  Wheat is also grown in the states of Madhya Pradesh, Gujarat,
Rajasthan and Uttar Pradesh.
     Analysts said India might continue to be a player in the wheat import
market, depending on international prices, irrespective of the size of its
output.
     Sumiter Broca, an agriculture expert at the National Council of
Applied Economic Research (NCAER), said in India wheat needed to be
transported long distances from the north.
     If the cost of storage and shipping and the strain on railways and
infrastructure were added up, imports could be a cheaper proposition, he
said.
     "India is a unit politically, but transportation in a huge country
has its own problems," said Broca. "So there is a case for imports, but it
depends on prices."
     S.M. Virmani, an agro-economist at the Hyderabad-based International
Crop Research Institute for the Semi-Arid Tropics (ICRISAT), said wheat
output and productivity were unlikely to get a boost unless the government
came out with super wheat or hybrid varieties.
     He said India had concentrated very heavily on wheat and rice and
should move to maize, sorghum and soybean, which have better nutritional
value, so as to meet growing needs. REUTERS

--------------------------------
End of India News Network Digest
******************************

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