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INDIA-L  May 1998, Week 1

INDIA-L May 1998, Week 1

Subject:

India News Network Digest - May. 3, 98. Special Report.

From:

India News Editor <[log in to unmask]>

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Date:

Sun, 3 May 1998 11:12:00 -0400

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TEXT/PLAIN

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TEXT/PLAIN (817 lines)

India News Network Digest   Sun,  3 May 98       Volume 2 : Issue 1641

Today's Topics:

#1. India: US firm helps Pakistan nuke plan
#2. India-Tibet Protest
#3. Indian monk breaks year-long fast
#4. Indian premier pulls out of G15 summit
#5. Bootleg liquor kills 21 people in India
#6. Vajpayee beats drum for Indian infrastructure
#7. India's telecom sector needs ``a dose of oxygen''
#8. India's BJP to wrestle with coalition woes
#9. Indian minister accuses Pakistan of shelling
#10. Pakistan rules out MFN trade status to India
#11. Indian RBI, govt seek ways of boosting weak banks
#12. India's central bank needs to adjust for growth
#13. Indian general says Pakistan missile no worry
#14. Dozens feared drowned in India after boat capsizes
#15. Productivity, new sources key to India oils output
#16. India auto sector awaits budget to trigger revival
#17. India, Nepal agree to raise power exchange
#18. Pakistan says Indian-planted bomb defused
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Date: Fri, 1 May 98 17:14:27 EDT
From: 01-May-1998 1715 <[log in to unmask]>
Subject: News 5/1/98

#1. UPn 05/01 1550 India: US firm helps Pakistan nuke plan

Copyright 1998 United Press International. The following news report may
not be republished or redistributed, in whole or in part, without the
prior written consent of United Press International.

By HARBAKSH SINGH NANDA
   NEW DELHI, India, May 1 (UPI) -- India says it will apprise the United
States of an American company clandestinely collaborating with Pakistan in
developing its nuclear program.
   Indian Foreign Secretary K. Raghunath will raise the issue with
Undersecretary of State Thomas Pickering in Washington later today.
   India's English daily, the Indian Express, reports that neighboring
Pakistan is making a nuclear weapons testing facility with the active help
of an American company, Holmes & Narver.
   The newspaper says the American company has participated in numerous
U.S.  government projects.
   According to the news report, the nuclear test site, technically
labeled as a "Contained Firing Facility" (CFF), is likely to be
commissioned soon.
   Designed by Holmes & Narver, the Pakistan CFF shares its blueprints
with a similar, but smaller, facility at the Lawrence Livemore National
Laboratory (LLNL) in California.
   The report says that scientists of Pakistani origin who have worked in
the seismic division at LLNL are supervising the construction.
   Earlier this week, India denied a New York Times report that Russia was
aiding New Delhi in building a sea-launched ballistic missile that could
carry a nuclear warhead and strike deep into neighboring Pakistan.
   Last month, Pakistan claimed to have tested a medium-range missile
capable of carrying a nuclear warhead anywhere in India.
   Both India and Pakistan deny having nuclear weapons but actively pursue
atomic energy programs.
   Western defense analysts say both India and Pakistan already have
nuclear arms or are capable of assembling them swiftly. New Delhi
conducted a successful nuclear test in 1974.
   Both India and Pakistan, which have fought three wars since 1947, have
refused to sign the Comprehensive Test Ban Treaty, and the region is
considered one of the world's most potentially explosive for a nuclear
conflict.

#2. APn 05/01 1342 India-Tibet Protest

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.

   DHARMSALA, India (AP) -- More than 5,000 Tibetan protesters turned the
funeral of a former monk who died after self-immolation into a rally
Friday against China's rule over their Himalayan homeland.
   Traffic halted for two hours as a slow, somber procession accompanied
Thupten Ngodup's body from a temple in Dharmsala to the cremation site.
Mourners chanted slogans against China and the police, and appealed to the
international community for help.
   Some mourners shouted "Shame, shame, United Nations!" to protest the
U.N.'s refusal to reopen a debate on China's occupation of Tibet.
   Ngodup, 50, died Wednesday, two days after he intentionally set himself
alight in New Delhi when Indian police forcibly ended a six-week hunger
strike by other pro-independence Tibetans.
   Five new Tibetans replaced the six fasting protesters who were
hospitalized against their will. Ngodup was to have been among the
replacement group.
   "China should free Tibet because it is our right," said Yang Chek Sekh
Dolker, a spokesman for the Tibetan Youth Congress.
   Friday's demonstration came a day after the Dalai Lama -- the religious
and spiritual leader for many Tibetans worldwide -- warned while visiting
the United States that other Tibetans might try desperate forms of protest
to wrest their homeland from 48 years of Chinese rule.
   After the funeral, demonstrators gathered at Dharmsala's town square
and demanded a plebiscite in Tibet. One young man stood in the middle of
the square and carved the words "Free Tibet" on his chest with a knife.
   Dharmsala, 250 miles north of New Delhi, has been the home of the Dalai
Lama since he fled Tibet in 1959 during an abortive anti-China uprising.
Ngodup also came to India the same year and worked for the Dalai Lama's
administration.
   The Dalai Lama visited Ngodup in a New Delhi hospital the day before he
died, saying he admired his determination. But he did not condone the
self-immolation and hunger strikes, which violate the Tibetan Buddhist
tradition of nonviolence.
   The hunger strikers vowed to fast until the U.N. General Assembly
reopens debate on China's 1959 annexation of Tibet. They also demand that
the United Nations appoint a human rights observer for Tibet and supervise
a referendum on whether Tibetans want independence, greater autonomy or
some other option.

#3. RTw 05/01 1301 Indian monk breaks year-long fast

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 Y.P. Rajesh
     BANGALORE, India, May 1 (Reuters) - A Jain monk who fasted
continuously for 365 days ended his penance in south India on Friday,
supporters said, consuming half a cup of warm water mixed with cloves,
saffron and some herbs.
     "Sri Sahajmuniji Maharaj decided to break his fast three and a half
hours after sunrise and did so in the presence of other monks," said
Manakchand Kothari, secretary of the Jain religious organisation where the
monk had fasted since May 1, 1997.
     Sahajmuniji, 65, clad in white robes and sitting cross-legged, said
he undertook the fast for self-purification that would spread peace and
brotherhood and influence people to shun casteism and regional
differences.
     He lived by drinking hot water -- once after sunrise and once before
sunset -- at the Jain religious centre in Bangalore, a city known more for
its software development facilities than pious monks.
     Leaders of political parties, including India's new Home Minister
L.K.  Advani, were among thousands of devotees who visited the monk to
seek his blessings.
     At least 30 million Indians practise Jainism, a religion that started
about 1,800 years ago and preaches peace, celibacy and austerity.
     Monks say it centres on sacrifice and self-mortification, contending
that strict discipline offers the only escape from a mundane world.
     The tightly-knit Jain community is dominated by a rich business class
with a large influence on India's economic activities.
     Fasting is not new for Sahajmuniji. He held his first fast in 1964 in
the northern Indian state of Haryana. In 1994, he abstained from food for
201 days in Bombay, India's commercial capital.
     Kothari said Sahajmuniji would gradually return to a normal diet over
two weeks, moving from water to milk and soft food before consuming solid
food.
     "The chances of his fasting again for more than 365 days are few. We
do not think anyone can fast beyond this," he added.
     Doctors say that, under normal circumstances, two months is about as
long as a human can survive without nourishment.
     "It has been possible probably due to the combination of his will
power and his experience of fasting," said Dr Prakash Chand, a consultant
radiologist and ultrasonologist, who helped to look over the monk's
health.
     The two doctors who examined Sahajmuniji in the morning said his
vital systems were normal, barring his pulse rate which rose after he
consumed herbal water.
     Sukumar Shetty, a general medicine consultant at Bangalore hospital,
said Sahajmuniji's long fast was "very very unusual and difficult to
explain medically."
     "It may be possible for a few weeks to live only on water and
practically impossible to maintain normal health. Water has no calories
and the body's reserves of fat and protein cannot last for one year,"
Shetty said.
     The doctors said Sahajmuniji's body had undergone several changes due
to fasting. His weight had dropped from 77 kg (173 pounds) before the fast
to 42 kg (95 pounds).
     "Protein levels have come down; his lipid profile shows a decrease in
levels and his fat deposits have been fully utilised. He is almost skin
and bone now," the doctors said.
     REUTERS

#4. RTw 05/01 0947 Indian premier pulls out of G15 summit

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 1 (Reuters) - Indian Prime Minister Atal Behari
Vajpayee has dropped out of a summit of 15 developing countries due to
start in Cairo later this month, officials said on Friday.
     Leaders of 15 countries in Asia, Africa and Latin America are
scheduled to meet in Cairo on May 11 to discuss, among other issues, the
financial crisis in Southeast Asia and the multilateral trading system.
     Vice-President Krishan Kant will represent India at the G15 (Group of
15)  summit, a foreign ministry statement said.
     No reasons were given for Vajpayee's decision to stay away, and a
foreign office spokesman said India believed that the G15 was an important
forum for strengthening cooperation with developing countries.
     "This (the prime minister's absence) in no way undermines the
importance we attach to the summit. The vice-president is going there," he
said.
     The vice-president filled in at last year's G15 summit in Kuala
Lumpur after the then-prime minister, Inder Kumar Gujral, pulled out
citing pre-occupation with affairs at home.
     Vajpayee took office in March at the head of a Hindu nationalist-led
coalition government that has been wracked by internal wrangling.
     The G15 groups Algeria, Argentina, Brazil, Chile, Egypt, India,
Indonesia, Jamaica, Malaysia, Mexico, Nigeria, Peru, Senegal and Venezuela
and Zimbabwe.  REUTERS

#5. RTw 05/01 0932 Bootleg liquor kills 21 people 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.

    LUCKNOW, India, May 1 (Reuters) - Twenty-one people died after
drinking methyl alcohol-tainted bootleg liquor in India's northern state
of Uttar Pradesh, officials said on Friday.
     The victims all drank liquor bought from the same store in Kushinagar
town on Wednesday night.
     "Twenty-one people died as a result of consumption of spurious
liquor...there was a rush of people to the local hospital with complaints
of all kinds of intestinal problems," District Magistrate V.K. Srivastava
told Reuters.
     Seven other people were in a critical condition in hospital after
drinking the liquor.
     Srivastava said a police investigation found that there was a high
content of methyl alcohol in the drink.
     Bootlegging is rampant in India because of huge demand for cheap
liquor.  The addition of methyl alcohol and even furniture varnish to such
liquors often makes them highly poisonous.
     Two months ago 19 people died in the same state due to consumption of
a similar concoction. REUTERS

#6. RTw 05/01 0849 Vajpayee beats drum for Indian infrastructure

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.

    RATNAGIRI, India, May 1 (Reuters) - Prime Minister Atal Behari
Vajpayee on Friday beat the drum for development of India's infrastructure
during a visit to a recently opened railway project linking the country's
western coastal strip.
     "The country has sufficient resources which have not been tapped,"
Vajpayee said in Ratnagiri, 300 kilometres (187 miles) south of Bombay, at
the ceremony to celebrate the newly inaugurated Konkan Railway Network.
     "Poor infrastructure development has made it difficult to tap them,"
Vajpayee said.
     The Konkan line will eventually link Bombay with Mangalore, 939
kilometres south in Karnataka state. So far, 760 kilometres of track has
been laid at a cost of 35.5 billion rupees ($894.2 million).
     Vajpayee said the Konkan rail link, along with major power projects
such as the Dhabol Power Project in western Maharashtra and U.S. firm
Congentrix Inc's proposed $1.1 billion 1,000 megawatt power project near
Mangalore will boost the region's fortunes.
     ($ - 39.7 rupees)

#7. RTw 05/01 0725 India's telecom sector needs ``a dose of oxygen''

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 Sanjit Singh
     NEW DELHI, May 1 (Reuters) - The chairman of India's
Telecommunications Commission, A.V. Gokak, said on Friday the telecom
sector needed an immediate boost to spur its development.
     "We have to move forward, taking cognisance of what has happened, and
modify the rules of the game...the industry needs a dose of oxygen
immediately,"  Gokak told a telecommunications convention organised by the
Confederation of Indian Industry.
     He said there had been strong growth in the sector, largely through
government spending, and more needed to be done to ensure private sector
firms also performed well.
     India began liberalising its telecommunications sector in 1992. In a
series of auctions, it licensed private operators for cellular, basic,
paging, VSAT (very small aperture terminal) data, and email services.
     But the growth of private operators has been hindered by high licence
fees.  Over a 15-year period, private operators' licence fees have
totalled more than 350 billion rupees ($8.8 billion).
     "The bidding for licences was done in an over-enthusiastic manner.
Operators quoted licence fees with their eyes wide open. These have turned
excessive...and incorrect assumptions have been made regarding growth rate
and the size of the market," Gokak said.
     "We will submit our recommendations to the government, based on a
report done by the Bureau of Indian Cost and Prices, in the next 10 to 15
days," he added.
     A lack of a level playing field has also kept private operators from
realising their potential and turning a profit.
     India's Department of Telecommunications was the licenser, operator
and regulator at the time of the auctions, and still continues to be the
licenser and the government operator.
     This has led to a situation where it heavily charges private
operators for a range of services, but provides these services free to its
own service units.
     The chairman of the Telecom Regulatory Authority of India (TRAI),
S.S.  Sodhi, said India's liberalisation of telecommunications fell short
of world standard. "Yards have been covered, with miles still to go," he
said.
     He said targets set in 1994's National Telecom Policy of achieving by
1997 a telephone on demand, full rural coverage and a public phone for
every 500 people in urban areas remained a distant goal.
     A government statement last month said only 295,000 of some 600,000
villages had been covered until the end of February 1998. The statement
did not say what the waiting list for phones was, or how many public
phones existed in India.
     Sodhi said it was no secret that the opening up of the telecom sector
was hasty and lacked adequate restructuring.
     "Our model for bringing in investment in the telecom sector, both
domestic and foreign, clearly requires a fresh look. We also need to work
out a mechanism to render viable the licences already granted," he said.
     Investor confidence was at the heart of liberalisation, Sodhi said,
adding that a level playing field was an essential prerequisite.

#8. RTw 05/01 0723 India's BJP to wrestle with coalition woes

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 Sanjeev Miglani
     NEW DELHI, May 1 (Reuters) - India's Hindu nationalists start a
conclave over the weekend aimed at strengthening their fledgling coalition
government, party officials said on Friday.
     Some 2,500 delegates of the Hindu nationalist Bharatiya Janata Party
will gather in Gandhinagar, capital of the western state of Gujarat, at a
time when the six-week-old government has been weakened by a public row
amongst its diverse constituents.
     "The challenge before the party is to lead the coalition," BJP
spokesman Venkaiah Naidu told Reuters ahead of the party's national
council session starting on Saturday.
     The BJP took power in April at the head of an unlikely alliance
comprising ambitious regional players and firebrand socialists, but its
image has been dented by a slanging match between federal ministers
belonging to different parties.
     Two ministers were eased out of the new government after courts
ordered them to stand trial on corruption charges.
     "These are teething troubles, the government is functioning and will
last the full term...," Naidu said.
     In Gandhinagar, BJP leaders will chart the course required for
expanding the party's support base.
     "This is a time for consolidation of gains made in the recent
election, but it is also time for expansion into new geographical and
social areas," the spokesman said.
     The BJP emerged as the single largest party in the spring elections,
but still short of majority. In eastern and southern India where its
influence is limited, the party relied on regional groups to pull in the
votes.
     The Hindu nationalists said they were also keen to break into new
social groups, such as Moslems. "We have to penetrate into weaker sections
of society, the scheduled castes and tribes and minorities. This is our
special target group," Naidu said.
     The BJP, which shot into prominence in the 1980s on a plank of Hindu
revivalism, has been accused by rivals of harbouring a bias against
India's Moslem minority. BJP leaders deny such a prejudice and say they
are committed to a secular India.
     In Gandhinagar, the BJP will formally install senior leader
Khushabhau Thakre as the new party president to succeed Lal Krishna
Advani.
     Thakre, a party general secretary and long-time member of the right
wing Hindu organisation Rashtriya Swayamsewak Sangh, was unanimously
elected party chief last month.
     Advani, now a federal minister, is widely credited with crafting the
political strategy that took the BJP to prominence from obscurity.
    REUTERS

#9. RTw 04/30 1457 Indian minister accuses Pakistan of shelling

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.

    SRINAGAR, India, April 30 (Reuters) - India's defence minister on
Thursday accused Pakistan of starting heavy artillery fire when he arrived
at a frontier area in the disputed territory of Kashmir.
     "Yesterday (Wednesday) we went to Siachen. As soon as we arrived at
Kumar Chowki, heavy shelling started across the border, and today I came
to know that one of our soldiers was wounded in the shelling," George
Fernandes told a news conference in Srinagar, summer capital of India's
Jammu and Kashmir state.
     Kumar Chowki is one of India's outposts on the Siachen Glacier.
"There was also shelling across the border a day before I arrived," said
Fernandes, on a four-day tour of the region.
     Indian and Pakistani troops face each other across a 720 km (450
mile)  "line of control" in Kashmir including the 80-km-long Siachen
Glacier, 6,400 metres (21,000 feet) up in the East Karakoram range of the
Himalayas.
     India and Pakistan frequently exchange fire across the line. India
governs about two-thirds of Kashmir and Pakistan the rest.
     "They fired at least 40 to 50 artillery shells at one post only. In
retaliation, we also fired shells. We have replied properly and it was
effective," Lieutenant General Krishan Pal told the news conference.
     "(Fernandes) was in a safe place but some shells could have come
there also," said Pal, the most senior Indian army official in Kashmir.
"It is difficult to say if there were any casualties on the other side,
but according to our information some of their bunkers were destroyed."
     Pal said there had been shelling on Thursday too.
     Fernandes restated his government's position that it would consider
the option of going nuclear after a National Security Council was set up.
     "Once it is set up, we shall undertake a strategic defence review
which has not been done for the last 50 years of freedom. Along with that,
we shall study whether India must go nuclear. If the study leads us to
that conclusion, we will take that decision," Fernandes said.
     He also reiterated that his government was ready to hold talks with
Kashmiri separatists to end an eight-year-old rebellion in the region. "We
are ready to hold talks with anybody in our country and under the
country's constitution," he said.
     Nearly a dozen militant groups are fighting New Delhi's rule in Jammu
and Kashmir, India's only Moslem-majority state.
     Police and hospitals say more than 25,000 people have been killed in
militancy-related violence since the rebellion broke out in 1990. REUTERS

#10. RTw 04/30 1454 Pakistan rules out MFN trade status to 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.

    ISLAMABAD, April 30 (Reuters) - The Pakistani government on Thursday
ruled out giving most favoured nation (MFN) status to arch-rival India in
trade -- a position New Delhi has already given Pakistan.
     Commerce Minister Ishaq Dar rejected suggestions at a news conference
that Prime Minister Nawaz Sharif's 14-month-old government could give MFN
status to India despite the dispute between the two countries over the
Himalayan region of Kashmir.
     "We have not given them MFN status," he said. "We have neither given
(this status) nor have intention to give it."
     Dar made the hard remarks while briefing reporters at the end of a
two-day commerce ministers' meeting of the South Asian Association for
Regional Cooperation (SAARC) that groups Bangladesh, Bhutan, India,
Maldives, Nepal, Pakistan and Sri Lanka.
     India has already granted MFN status -- under which two countries
undertake to give each other the maximum tariff concessions on their
mutual trade -- to all SAARC countries, including Pakistan.
     Dar said it was Pakistan's prerogative whether or not to reciprocate
India's decision but not mandatory to do the same.
     However, he said, facilities allowed by Pakistan's liberal trade
policy might not be much different from those allowed by India with the
MFN status.
     Dar said Pakistan had made no concessions to India and had added only
14 items to a list of 585 items already allowed for imports from there
under previous governments.
     Bilateral trade has been severely limited by political disputes
between India and Pakistan, which have fought three wars since their
independence from Britain in 1947, two of them over Kashmir, two-thirds of
which is ruled by New Delhi and the rest by Islamabad.
     Right-wing Pakistani political parties oppose trade with India.
     But the previous government of then prime minister Benazir Bhutto had
vowed to gradually dismantle trade barriers with India.

#11. RTw 04/30 1315 Indian RBI, govt seek ways of boosting weak banks

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.

    BOMBAY, April 30 (Reuters) - The Reserve Bank of India (RBI) on
Thursday said it would formulate a strategy to strengthen the nation's
weak banks in consultation with the federal government.
     "We have to approach the government on the issue of weak banks," RBI
Governor Bimal Jalan said. "We will consult with the government on how
fast and where we should proceed."
     Jalan was speaking at a seminar on the need for further reforms in
India's banking sector.
     In an address, former RBI Deputy Governor S.S. Tarapore said weaker
banks should be asked to become narrow institutions concentrating on
low-risk business such as investment in government securities.
     "The essence of this line of reasoning is that banks with very weak
credit management structures would merely involve more non-performing
assets," Tarapore added.
     "Thus, the narrow banking approach is essentially first an exercise
in damage containment and subsequently a strategy for consolidation and
recovery."
     Jalan said India's banking sector would have to prepare for the
second phase of reforms.
     "We have to move towards the second phase of reforms... we have to
move towards greater competition, a more vibrant and responsive financial
system...  there is an agreement on this in the banking sector and in the
government also,"  Jalan said.
     Reforms in India's bloated and inefficient banking sector began in
the early 1990s, as part of an economic reforms programme launched in
1991, but analysts say there is still much to be done.

#12. RTw 04/30 1300 India's central bank needs to adjust for growth

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
     BOMBAY, April 30 (Reuters) - The Indian central bank will have to
adjust its cautious credit policy stance to fall in step with the
government's priority to boost growth, analysts said on Thursday.
     Reserve Bank of India (RBI) Governor Bimal Jalan on Wednesday,
unveiling the credit and monetary policy for the first half of 1998/99
(April-March), cut the bank rate to nine percent from ten percent.
     Jalan, keeping an eye on inflation, kept his options open and said he
was prepared to loosen credit flow depending on the liquidity situation in
the financial system.
     The RBI chief said there was enough money available in the banking
system and the real constraint was demand.
     Jalan said he was willing to lower the banks' cash reserve ratio only
when demand for credit picked up.
     Analysts said the jury was not yet out and hoped Jalan would revisit
some key monetary issues after the government announced its federal
1998/99 (April-March) budget on June 1.
     "He is probably waiting for the budget," said D.H. Pai Panandikar,
corporate adviser to the RPG Group.
     But industry leaders and financial markets were nonplussed by Jalan's
maiden credit policy and slammed him for being conservative.
     "I think it does not match with government pronouncements," S.P.
Gupta, director of Indian Council for Research on International Economic
Relations, told Reuters.
     Finance Minister Yashwant Sinha last week told business leaders that
a "faulty" policy of keeping the inflation rate down through a tight money
policy was hurting growth.
     India's gross domestic product grew by just 5.0 percent in 1997/98
(April-March) compared with 7.5 percent in the previous year.
     Sinha said an increase in public spending, mainly on infrastructure,
was necessary to kickstart the sagging economy.
     But analysts said the RBI's latest policy statement failed to reflect
the government's outlook.
     "He (Jalan) fears more liquidity might lead to inflation," Panandikar
said.
     Some analysts believe Jalan is being too inflation conscious.
     And Jalan in an interview with Reuters on Wednesday said the
inflation risk from industrial revival was "very small."
     The RBI chief said inflation beyond 5.0 to 6.0 percent was
undesirable and warned of any complacency on the foreign exchange
situation.
     "It is a very passive, over-cautious approach. It looks like RBI has
been obsessed with the Southeast Asian crisis," Gupta said.
     Jalan, after he took over as RBI chief in November, faced with the
Asian crisis and domestic political turmoil was forced to reverse the easy
money policy measures of his predecessor C. Rangarajan.
     The RBI announced a slew of measures in January aimed at credit
tightening to stem the slide in the rupee.
     Only after the rupee had stabilised did the RBI begin loosening up
its policy a month ago.
     "This credit policy does not measure to the challenges that the
economy faces at the moment," said Panandikar.
     He said real interest rates were still high and the corporates were
short of funds for investment.
     Analysts felt a large projected fiscal deficit for the federal
government in 1998/99 was causing the RBI discomfort and gave it less
freedom to tinker with interest rates.
     A large fiscal deficit has forced the government to go in for a
massive borrowing programme, which analysts fear could crowd out private
investment and put pressure on interest rates.
     India expects its fiscal deficit as proportion of GDP to be 6.0
percent in 1998/99. The deficit stood at 6.1 percent in 1997/98 against a
targeted 4.5 percent. REUTERS

#13. RTw 04/30 0752 Indian general says Pakistan missile no worry

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, April 30 (Reuters) - India need not worry over arch-rival
Pakistan's new long-range missile, a local news agency quoted Indian army
chief Ved Prakash Malik as saying on Thursday.
     Pakistan earlier this month announced that it had successfully tested
the 1,500-km (935-mile) surface-to-surface missile, Ghauri.
     "The country should not bother with just a mere trial," United News
of India quoted Malik as telling reporters in Jaipur, capital of the
western state of Rajasthan.
     "...We have enormous capabilities in the form of size of our nation,
our economic and technological development, gross national product...,"
the general said.
     India, which exploded a nuclear device in 1974, has tested a range of
missiles, including the 2,500-km (1,500-mile) ballistic missile Agni.
     Since they won freedom from Britain in 1947, India and Pakistan have
fought three wars and continue to be tense neighbours.

#14. RTw 04/30 0738 Dozens feared drowned in India after boat capsizes

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.

    PATNA, India, April 30 (Reuters) - Dozens of people were feared
drowned in the eastern Indian state of Bihar on Thursday after a crowded
river boat capsized, officials said.
     The bodies of 22 people, including children, were recovered from the
river in the rural Khagaria area, District Magistrate K.K. Khandelwal told
Reuters.
     He said divers were searching for other victims.
     Denying an initial report that at least 75 people had died,
Khandelwal said that only 50-60 had been on board the vessel and 15 had
been rescued.
     Khandelwal said the boat, which had been heading from Rasauk village
to Burhwa Ghat, appeared to have capsized in the fast-flowing river
because it was waterlogged. REUTERS

#15. RTw 04/30 0557 Productivity, new sources key to India oils output

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 Anshuman Daga
     BOMBAY, April 30 (Reuters) - India must sharpen productivity and tap
non-traditional sources to bolster its oilseeds output, industry officials
and analysts say.
     But breaking the industry out of its near-stagnation will be a long
process, requiring the government's help, they said.
     India could produce more of its own edible oil if it had more
irrigation, better farm finance and policies that stopped encouraging the
planting of other crops.
     India's main oilseed crops are rapeseed, mustard, soybean and peanut
but officials said the industry should examine such alternatives as rice
bran and cotton seed.
     Even imported oilseeds, currently prohibited, would help fill unused
crushing capacity.
     Sandeep Bajoria, vice-president of the Solvent Extractors'
Association of India (SEAI), said the industry had to concentrate on
getting more out of its land.
     "Productivity is the key to increase oilseeds production, along with
better irrigation facilities as a majority of the area is rain-fed," he
told Reuters.
     "The government and industry is working towards it, but there is no
easy and immediate solution," said Bajoria, who is also managing director
at Bajoria Fats and Proteins Ltd.
     Oilseeds and their products are among India's largest industries,
accounting for about three percent of the country's gross domestic
product.
     India's annual oilseeds output has been stagnant over the years at
about 22 million tonnes a year. It fell to 21.33 million tonnes in the
1997/98 (Nov-Oct)  season from 21.63 million a year before.
     "Oilseeds productivity in India is about 850 kg per hectare against a
world average of 1.7 tonnes," Bajoria said.
     India has an oilseed-crushing capacity of over 36 million tonnes and
about 30 million tonnes of solvent-extraction processing capacity,
according to industry officials.
     The country harvests two oilseeds crops annually, with the bulk of
the output coming from the winter crop.
     "The demand for edible oils is moving up every year with the rise in
population and personal incomes. The shortage between output and
consumption is widening," said commodity analyst G.C. Iyer.
     India imports more than 1.5 million tonnes of edible oil annually,
the bulk of it from Malaysia.
     Iyer said the industry must try to tap non-traditional sources of oil
such as rice bran oil, cotton seeds oil and minor oilseeds to meet the
growing demand.
     "Oilseeds is rain-fed. There has been no major breakthrough in seeds
technology. Research in oilseeds is low," he said.
     B.V. Mehta, executive director of the SEAI, said oilseeds was losing
land to other crops.
     "In the last two to three years, excess imports of edible oils have
stagnated production of oilseeds -- since farmers are not getting
remunerative prices, they are switching over to other crops."
     Mehta said the government should permit imports of all oilseeds to
help the local industry and make optimal use of its crushing capacity.
     "Basically the problem has been due to government policies. More
incentives are being given for cultivation of foodgrains," said Kushal
Thacker, a commodity analyst and member of the Bombay Oilseeds and Oils
Exchange.
     "Farmers are not getting proper refinancing facility where oilseeds
are concerned and that is a major concern."
     A government technology mission on oilseeds had some years ago
identified oil palm as an alternative crop for the country's growing
edible oil needs, but industry officials said it would take a long time
before it developed on a large scale.
     India has identified about 800,00 hectares of land for oil palm
cultivation, but the cultivated area is only about 40,000 hectares.
     Cultivators have asked the government to declare palm oil a
plantation crop so that growing can be done on a commercial scale. Under
current rules, no farmer can hold land beyond a certain ceiling unless it
is declared a plantation crop.

#16. RTw 04/30 0509 India auto sector awaits budget to trigger revival

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 Sunil Kataria
     NEW DELHI, April 30 (Reuters) - Indian vehicle production and sales
took another battering in March due to the slowing economy, and analysts
said the industry was looking to the forthcoming budget for help.
     Figures released by the Association of Indian Automobile
Manufacturers (AIAM) on Thursday showed truck output in March dropped 40.5
percent from the same month a year earlier to 15,133 units.
     Car output fell 7.5 per4cent to 35,699 units.
     "The figures are on the expected lines. Everybody is looking at the
budget for some positive announcements to spur an economic revival," K.R.
Shan Bhag, an analyst at securities firm W.I. Carr, told Reuters.
     But analysts said there was uncertainty over how much room the
government had in which to manoeuvre because the ballooning fiscal deficit
may serve to curb a rise in infrastructure spending.
     The general budget for 1998/99 (April-March) is expected to be
presented to parliament at the end of May or early June.
     Earlier this week Prime Minister Atal Behari Vajpayee told an
industry meeting that his government was committed to increasing
investment and encouraging private-sector involvement in the country's
creaky infrastructure.
     Analysts said increased investment would help to kick-start the auto
sector.
     "The current state of the Indian auto sector is an indicator of the
state of the economy. The slump in the heavy commercial vehicle segment
indicates there is something wrong with the economy," AIAM Assistant
Director Shripad Bhat told Reuters.
     "There is hardly any economic activity to speak of, so who will buy
the vehicles?" Bhat said.
     He said the industry was now passing through a tough phase, but could
be headed for an upswing by the end of the year.
     "Perhaps by the end of 1998 you could start seeing some sort of a
revival as the wheel would have turned by then," he said.
     Indian gross domestic product growth fell to 5.0 percent in 1997/98
(April-March) after three years of 6.8 percent growth or higher. Indian
industrial growth was only 4.6 percent between April 1997 and February
1998 after 7.7 percent growth in the same period a year before.
     As a result, car production in 1997/98 shrank 1.6 percent compared
with growth of 17.2 percent the previous year.
     Truck production shrank 33 percent in 1997/98, compared with growth
of 10.6 percent in 1996/97.
     Bhat said demand for trucks had dropped because freight rates were
down and transporters were unwilling to invest.
     India's leading car maker, Maruti Udyog Ltd, a joint venture between
Japan's Suzuki Motor Corp and the Indian government, defied the general
trend to notch up higher production figures.
     Maruti, which dominates the smaller-car segment of the market, sold
32,491 cars in March 1998 compared with 30,141 units in March 1997.
     W.I. Carr's Shan Bhag said a strong performance by the two-wheeler
segment, which notched up growth of almost 10 percent in March 1998 over
the same month last year at 284,266 units, was the silver lining in the
cloud hanging over the industry.
     "Two-wheelers showed distinct signs of revival, especially in the
second half," Bhag said. "The downturn in two-wheelers lasted for about 18
months. You should see double-digit growth in this segment."
     "The revival starts with two-wheelers, followed by small cars,
mid-sized cars and then commercial vehicles," he said. "But it is
difficult to say when."
    REUTERS

#17. RTw 04/30 0259 India, Nepal agree to raise power exchange

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.

    KATHMANDU, April 30 (Reuters) - Nepal and India have agreed to
increase power exchanges to help meet gaps in demand in both countries,
Nepali officials said on Thursday.
     "The two countries have agreed to raise the electric power exchange
from 50 megawatts to 150 megawatts, under the 25-year-old power exchange
accord," said Kirti Chand Thakur, chief of the state-owned Nepal
Electricity Authority (NEA).
     Nepal and India, which share a 1,500 km (940 mile) border, regularly
exchange electric power at different points to meet local demand.
     "It is not a commercial arrangement," Thakur told Reuters. "The
exchange takes place as and when power is available and demand exceeds the
supply."
     Officials said Nepal currently imports 40 megawatts from India at
tariff rates which are mutually agreed.
     Nepali rivers originating in the Himalayas have the potential to
produce 83,000 megawatts of hydroelectric power.
     But a lack of funds and technical knowhow have left the potential
largely untapped, with the kingdom generating less than 0.5 percent of the
capacity.
     Only 15 percent of the poverty-stricken country's 22 million people
have access to electricity. The rest use firewood.
     Nepali officials said the kingdom's generating capacity would
increase by an additional 350 MW by the turn of the century. Kathmandu
would then have excess energy for export to India, they said.
     Kathmandu hopes to narrow its $318.1 million trade deficit with New
Delhi by selling hydroelectric power.
     However, it suffered a setback this month when U.S. energy giant
Enron Corp decided to scrap plans for a hydroelectric plant in western
Nepal which had been expected to generate up to 10,800 MW of power.
     Officials said the government has asked Enron to reconsider its
withdrawal from the project, which was slated to cost up to $6.0 billion.
REUTERS

#18. RTw 04/29 1550 Pakistan says Indian-planted bomb defused

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.

    ISLAMABAD, April 29 (Reuters) - Pakistani police on Wednesday defused
a bomb that they said had been planted by an Indian intelligence agency at
a bus station in the eastern border town of Sialkot, the official APP news
agency said.
     It said the five kg (11 lb) bomb, found in an unclaimed bag, had been
defused at 7 a.m. (0200 GMT), just 12 minutes before it would have
exploded and caused "heavy loss of life and property."
     APP called it an "attempt of sabotage by the terrorists of the Indian
intelligence agency RAW (Research and Analysis Wing)," which has been
often accused by Pakistani officials of sponsoring terrorism in Pakistan.
     India denies the charge. It accuses Pakistan's Inter-Service
Intelligence agency of doing the same in India. REUTERS

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

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