Washington, November 18
Post independence, India lost a staggering $462 billion in illicit financial flows due to tax evasion, crime and corruption, a research and advocacy group has said in a report. The report released by Washington-based Global Financial Integrity (GFI) found that the faster rates of economic growth since economic reform started in 1991 led to a deterioration of income distribution which led to more illicit flows from India

According to the primary findings of the report titled 'The Drivers and Dynamics of Illicit Financial Flows from India: 1948-2008', India lost a total of $213 billion in illicit financial flows (or illegal capital flight).

These illicit financial flows were generally the product of: tax evasion, corruption, bribery and kickbacks, and criminal activities. “The present value of India's total illicit financial flows (IFFs) is at least $462 billion. This is based on the short-term US Treasury bill rate as a proxy for the rate of return on assets. India's aggregate illicit flows are more than twice the current external debt of $230 billion," the report said.

"This report puts into stark terms the financial cost of tax evasion, corruption, and other illicit financial practices in India," said Global Financial Integrity director Raymond Baker.

"It also shows that these illicit outflows contribute to stagnating levels of poverty and an ever widening gap between India's rich and poor," he said.

From 1948 through 2008 the Indian private sector shifted away from deposits into developed country banks and moved more of its money into offshore financial centres (OFCs). The share of OFC deposits increased from 36.4 per cent in 1995 to 54.2 per cent in 2009, the report said.

"In this report we clearly demonstrate how India's underground economy is closely tied to illicit financial outflows," said, GFI lead economist and report author, Dr Dev Kar.

"The total present value of India's illicit assets held abroad accounts for approximately 72 per cent of India's underground economy. This means that almost three-quarters of the illicit assets comprising India's underground economy-which has been estimated to account for 50 per cent of India's GDP (approximately $640 billion at the end of 2008)-ends up outside of the country," Kar said. — PTI

New Delhi, November 18
Bharti Airtel today said it will launch 3G services next month. Having crossed the 200-million subscription mark worldwide and nearly 150 million users in the domestic market, the company unveiled a new logo to mark the achievement. The new logo was more global, the company said.

Bharti Airtel CMD Sunil Mittal said, “We are on track to launch 3G services by the end of this year.”

Bharti has licences to provide 3G in 13 of India 's 22 telecoms zones, in an auction, which saw bids at much higher levels than expected.

Bharti and its peers spent a more than Rs 60,000 crore on the licenses. Making the first video call on the beta version of 3G, Mittal said the industry hopes to see some improvement in margins as the new services will increase data uasge.

Bharti’s competitor, Tata DoCoMo, the GSM arm of Tata Teleservices has already launched 3G services in nine circles, where it has spectrum at 0.66 paise per second.

State-owned firms BSNL and MTNL are already offering 3G services in the country.

"For far too long, this industry has been under severe pressure," Mittal said. "I believe we are entering into a new era in telecommunications," he said, referring to the upcoming 3G services.

Already facing stiff competition from Tata DoCoMo, Mittal said they would also ensure that 3G services are "affordable", without elaborating.

Bangalore, November 18
In terms of microfinance penetration, North India ranks third among the four regions of the country, Anal Jain, Advisor of Sa-Dhan, the national association of the country’s microfinance sector, has told the Tribune.

He added micro-finance institutions were most widespread in the South, followed by the Eastern states. These are least present in the states in Western India, Jain said.

Expressing concern at the ordinance passed by the Andhra Pradesh government last month to clampdown on microfinance institutions (MFIs), Jain said it has sparked off a crisis in the microfinance industry in India.

In a lecture at the Bangalore International Centre, Jain said in Andhra Pradesh - where MFIs had made a bigger impact than any other state in the country - the sector had been dealt a crushing blow by the ordinance. Elsewhere in India, also the banks had developed cold feet about advancing money to microfinance institutions, Jain said.

He said in Andhra Pradesh, MFIs were painted with the same black brush after some suicides committed by farmers were linked to the alleged strong-arm tactics used by MFIs to recover loans.

Jain, however, refuted the theory that coercion by MFIs had forced the farmers to take their lives.

He pointed out that the SKS Microfinance operating in Andhra Pradesh stated that 17 out of 57 farmers who committed suicides during that period were their clients, but none of them were loan defaulters. He said a crucial issue before the microfinance sector was whether to operate on a not-for-profit basis and face stunted growth or run their operations in a commercial format. Commercial operations attract private investments and help MFIs grow but also entail encountering various pitfalls of a profit making enterprise, he said.

He said MFIs in the country - both the Grameen Bank variety and the India’s own Self Help Group model -had seen tremendous growth in the recent past. The scenario would change in the future, he said. There would be merger and acquisitions in the MFI sector, he said and added that new credit bureaus proposed by the Reserve Bank of India would check multiple lending by MFIs to one and the same group.

Jain said the splendid loan recovery record of MFIs was in-built in the system - as loan was advanced to groups and people with bad reputation of repaying loans are not admitted in the group by others who know each other well.

New Delhi , November 18
The government today said that the country’s leading telecom operators Bharti Airtel and Vodafone were still to submit documents in full, needed for verifying their gross revenues, to the government auditor CAG.

Minister of State for Communications Sachin Pilot said in a written reply to the Rajya Sabha, "Bharti Airtel, Reliance Communications, Vodafone and Tata Teleservices and their group companies have been selected by the CAG of India for the current year. The operators were asked to provide relevant accounting records for three years commencing 2006-07 by DoT.” Of these four companies, RCom and TTSL have submitted most of the information, while Vodafone and Bharti Airtel have not fully complied with the requirements, he added.

Pilot said, "The CAG (Comptroller and Auditor General) has taken up the verification of correctness of the Gross Revenue (GR) computed by the service providers for calculation of revenue share to be credited to government accounts.

Amritsar, November 18
Operations at the temporary perishable cargo centre at Sri Guru Ramdas (SGR) International Airport has been severly affected as exporters are now Delhi Airport to reach London and Toroto. As reported by the Tribune yesterday, Air India has discontinued its direct Amritsar-London-Toronto flight since October 30.

The national carrier has replaced the Amritsar-London-Toronto flight, utilizing Boeing 777 aircraft, with a hub-and-spoke model by introducing four daily flights on Amritsar Delhi circuit in a smaller A-321 aircraft. As against Boeing 777 with 24 tonnes perishable cargo capacity and almost equal for the ordinary cargo, the A-321 is a pigmy one as it has two tonnes for cargo and three tonnes for bag and baggage of passengers

Officials at the Council for Value Added Horticulture (CVAH), operating the temporary perishable cargo center, said this month only one consignment of 680 kg for London by Qatar Airways has been dispatched.

The emerging scenario has placed the Union government’s grant of Rs 18.25 crore for setting up a permanent perishable cargo centre in limbo.

General Manager, Namdhari Farm Fresh, Sunil Awari, said his company had no choice other than routing vegetables to the Delhi Airport for export as the hub-and-spoke model now on offer was unviable.

He said the discontinuation was a blow to the expansion plan of the company in Punjab and Himachal Pradesh.

General Manager, Field Fresh Food, RPS Dhaliwal, said since exporting the perishable cargo from the Amritsar Airport involves multiple handling it would heighten the risk of quality deterioration for which European government and companies had zero tolerance.

Most exporters send their produce by road to Amritsar. In case of any break down on the way from Ludhiana to Amritsar, they could salvage the produce by pressing in an alternate container.

Exporters are apprehensive that the input cost in delivering the cargo from farms to the Perishable center at the Delhi Airport would escalate the cost of their produce.

Ludhiana, November 18
An unprecedented rise in the prices of cotton yarn, polyester yarn and acrylic yarn has knitwear production, which has dipped 40%. Cotton yarn prices have almost trebled to Rs 250-290 a kg from Rs 105-110 a kg last year. Polyester yarn is being Rs 140 a kg from Rs 80 a kg.

Ajit Lakra, president, Ludhiana Knitters Association, said rising prices had made it tough to run factories. Lakra added that inventory had doubled and the factory owners were running short of money. Even, banks were not ready to extend financial help.

Lakra said that they had written to the Prime Minister and other ministries to ban the export of raw cotton and also restrict the export of cotton yarn. Lakra alleged that traders, investors and farmers were creating artificial scarcity of cotton, whereas the country was surplus in cotton.

Lakra added that cotton yarn was cheaper in southern states and said the state government must stop charging entry tax.

SP Oswal, Chairman, Vardhman Group said that international prices of cotton and cotton yarn were higher this year and spinning mills were not responsible for the price rise.

Oswal said there was no shortage of cotton or cotton yarn. ‘If the international prices of cotton are high, farmers must benefit, this is the logic of the government,’ he added.

He added that last year 600 million kg of cotton yarn was exported. This year the government had permitted the export of fifty lakh bales (1,000 million kg).

Lakra added that panic-buying of cotton and cotton yarn by China was also responsible for the spurt in cotton prices.

New Delhi, November 18
India's annual food inflation eased for the 5th consecutive week in early November, probably due to new crop arrivals in the market, lending support to expectations that the central bank would hold rates steady in the near term.

The food price index in the year to November 6 rose 10.30 per cent, compared with 12.30 per cent in the previous week, as prices of rice, milk, vegetables and pulses eased, government data on Thursday showed. The fuel price index in early November climbed 10.57 per cent compared with the prior week's 10.67 per cent reading.

"The latest food inflation numbers give a short-term relief confirming to the expectation that the RBI may pause on rate hike for the next three months, though there is an upside risk on many commodities," said Jyotinder Kaur, an economist at HDFC Bank. Analysts expect food inflation to further ease with the arrival of new crops in markets this month, apart from the impact of previous monetary actions that work with a time lag.

Hyderabad, November 18
The Defence Research and Development Organisation (DRDO) has drawn up ambitious plans to augment production of high-tech missiles and develop hypersonic aircraft engine testing facilities involving an investment of over Rs 1,000 crore over five years.

The DRDO’s missile manufacturing facility at Hyderabad will see a major expansion at a cost of Rs 600 crore to produce high-tech strategic systems and calibrate missiles, its Director General VK Saraswat said.

He was interacting with the media on the occasion of the three-day international aviation conclave which opened here today.

Outlining the activities of DRDO, he said "Around Rs 600 to Rs 650 crore will be spent on missile manufacturing augmentation, Rs 300-Rs 350 crore will be spent on hypersonic wind tunnel programme for testing scramjet engine, which will be six times faster than sound velocity, and the remaining will be invested on radio frequency testing centre."

The missile augmentation and other programmes were being taken up in collaboration with other agencies like Bharat Dynamics Ltd, Saraswat, who is also scientific advisor to Defence Minister, said.

Asked about Regional Transport Aircraft (RTA-70) programme - the country's first-ever effort to develop a 70-110 seat aircraft for the civil aviation market, Saraswat said the project report would be completed by 2011.

"This will a public-private-partnership and international aviation giants like Bombardier and GE Aviation have also evinced interest in the project," he said.