Nuclear power is one of the fastest growing power-generation industries in India. As of 2008, India has 17 nuclear power plants in operation generating 4,120 MW while 6 other are under construction and are expected to generate an additional 3,160 MW. The Nuclear Power Corporation of India plans to generate 20,000 MW of power by 2020. Currently, India stands 9th in the world in terms of number of nuclear power reactors.
India, being a non-signatory of the Nuclear Non-Proliferation Treaty, has been subjected to a defector nuclear embargo from members of the Nuclear Suppliers Group (NSG) cartel. This has prevented India from obtaining commercial nuclear fuel, nuclear power plant components and services from the international market, thereby forcing India to develop its own fuel, components and services for nuclear power generation. The NSG embargo has had both negative and positive consequences for India's Nuclear Industry. On the one hand, the NSG regime has constrained India from freely importing nuclear fuel at the volume and cost levels it would like to support the country's goals of expanding its nuclear power generation capacity to at least 20,000 MW by 2020. Also, by precluding India from taking advantage of the economies of scale and safety innovations of the global nuclear industry, the NSG regime has driven up the capital and operating costs and damaged the achievable safety potential of Indian nuclear power plants. On the other hand, the NSG embargo has forced the Indian government and bureaucracy to support and actively fund the development of Indian nuclear technologies and industrial capacities in all key areas required to create and maintain a domestic nuclear industry. This has resulted in the creation of a large pool of nuclear scientists, engineers and technicians that have developed new and unique innovations in the areas of Fast Breeder Reactors, Thermal Breeder Reactors, the Thorium fuel cycle, nuclear fuel reprocessing and Tritium extraction & production. Ironically, had the NSG sanctions not been in place, it would have been far more cost effective for India to import foreign nuclear power plants and nuclear fuels than to fund the development of Indian nuclear power generation technology, the building of India's own nuclear reactors, and the development of domestic uranium mining, milling and refining capacity.
The Indian nuclear power industry is expected to undergo a significant expansion in the coming year’s thanks in part to the expected passing of The Indo-US nuclear deal. This agreement is expected to allow India to carry out trade of nuclear fuel and technologies with other countries and significantly enhance its power generation capacity. If the agreement goes through, India is expected to generate an additional 25,000 MW of nuclear power by 2020, bringing total estimated nuclear power generation to 45,000 MW.
India has already been using imported enriched uranium and is currently under International Atomic Energy Agency (IAEA) safeguards, but it has developed various aspects of the nuclear fuel cycle to support its reactors. Development of select technologies has been strongly affected by limited imports. Use of heavy water reactors has been particularly attractive for the nation because it allows Uranium to be burnt with little to no enrichment capabilities. India has also done a great amount of work in the development of a Thorium centered fuel cycle. While Uranium deposits in the nation are limited (see next paragraph) there are much greater reserves of Thorium and it could provide hundreds of times the energy with the same mass of fuel. The fact that Thorium can theoretically be utilized in heavy water reactors has tied the development of the two. A prototype reactor that would burn Uranium-Plutonium fuel while irradiating a Thorium blanket is under construction at the Madras/Kalpakkam Atomic Power Station.
Uranium used for the weapons program has been separate from the power program, using Uranium from indigenous reserves. This domestic reserve of 80,000 to 112,000 tons of uranium (approx 1% of global uranium reserves) is large enough to supply all of India's commercial and military reactors as well as supply all the needs of India's nuclear weapons arsenal. Currently, India's nuclear power reactors consume, at most, 478 metric tones of uranium per year. Even if India were quadruple its nuclear power output (and reactor base) to 20GWe by 2020, nuclear power generation would only consume 2000 metric tones of uranium per annum. Based on India's known commercially viable reserves of 80,000 to 112,000 tons of uranium, this represents a 40 to 50 years uranium supply for India's nuclear power reactors (note with reprocessing and breeder reactor technology, this supply could be stretched out many times over). Furthermore, the uranium requirements of India's Nuclear Arsenal are only a fifteenth (1/15) of that required for power generation (approx. 32 tones), meaning that India's domestic fissile material supply is more than enough to meet all needs for it strategic nuclear arsenal. Therefore, India has sufficient uranium resources to meet its strategic and power requirements for the foreseeable future.
Nuclear power plants
Currently, seventeen nuclear power reactors produce 4,120.00 MW (2.9% of total installed base).
Power station
Operator
State
Type
Units
Total capacity (MW)
Kaiga
NPCIL
Karnataka
PHWR
220 x 3
660
Kakrapar
NPCIL
Gujarat
PHWR
220 x 2
440
Kalpakkam
NPCIL
Tamil Nadu
PHWR
220 x 2
440
Narora
NPCIL
Uttar Pradesh
PHWR
220 x 2
440
Rawatbhata
NPCIL
Rajasthan
PHWR
100 x 1, 200 x 1, 220 x 2
740
Tarapur
NPCIL
Maharastra
BWR (PHWR)
160 x 2, 540 x 2
1400
Total
4120
The projects under construction are:
Power station
Operator
State
Type
Units
Total capacity (MW)
Kaiga
NPCIL
Karnataka
PHWR
220 x 1
220
Rawatbhata
NPCIL
Rajasthan
PHWR
220 x 2
440
Kudankulam
NPCIL
Tamil Nadu
VVER-1000
1000 x 2
2000
Kalpakkam
NPCIL
Tamil Nadu
500 x 1
500
Total
3160
Wednesday, November 19, 2008
Carbon Tax
CARBON TAX:Is Imposition of Carbon Tax An Effective Tool To fight Global Warming ?
What Is Carbon Tax ?
A carbon tax is an environmental tax on emissions of carbon dioxide and other greenhouse gases. The primary purpose of a carbon tax is to discourage the inefficient use of fossil fuels, which when burnt release carbon dioxide and other greenhouse gases into the atmosphere and contribute to global warming.
Motive Of Carbon Tax:
In addition to discouraging the use of fuels that contribute to global warming, the intention of a carbon tax is to, by extension, encourage the use of non-combustion energy sources, such as wind, sunlight, hydropower, and nuclear, which do not directly emit greenhouse gases into the atmosphere and contribute to global warming.
Pertinent Questions That Government, World Regulators (UN,WTO,etc), Businessmen, Environmentalists, Economists, Citizens, and Humanity should try to address:
The main question confronting governments is: should governments adopt a carbon tax system as part of their comprehensive plans to combat global warming?
Additional questions help frame the debate: Is a tax a good way to incentivize reductions in greenhouse gas emissions?
Can a carbon tax have a major impact on global warming? In this regard, how does a carbon tax compare to its main market-based approach - emissions trading or cap-and-trade systems?
What are the economic implications of a carbon tax?
Will it harm businesses and industries? Will it harm consumers?
Are emissions-trading schemes a more efficient and economically-friendly way to reduce emissions?
Is a carbon tax simple to understand and implement, particularly when compared to cap-and-trade systems?
Will a carbon tax require much government oversight?
How about a cap-and-trade system?
Is a carbon tax more feasible and manageable? How might the revenues generated by a carbon tax be spent?
Overall, is a carbon tax system fair? Can it be implemented equitably and without political biases?
Are there any other alternatives?
Examples of Countries practising carbon tax system:
While the European Union considered a carbon tax covering its member states, it ultimately initiated an emissions trading scheme in 2005. The United Kingdom, however, unilaterally introduced a range of carbon taxes and levies to accompany the EU ETS trading regime. For the rest of the world, the question of whether to adopt any of these approaches, and which one, remains an open question.
Emissions: Is a carbon tax effective at lowering emissions and combating global warming?
Carbon tax adds a clear cost to pollution that incentivizes reductions: The higher prices for the most damaging fuels would encourage people and companies to use them less and more of other types of energy, including nuclear, solar, wind and bio fuels. This approach also would affect all sources — not just cars, which account for only one-fifth of all U.S. carbon dioxide emissions."
A carbon tax helps symbolize political will to fight global.
A carbon tax helps reduce emissions in all industries: A carbon tax applies to all industries, broadening the scope of emissions reductions. This compares favourably to emissions trading schemes, which sometimes only cover a select group of industries.
A carbon tax can be implemented immediately.
A carbon tax provides superior incentives for green innovation.
Criticism:
Cap-and-trade systems ensure emissions reductions to the set cap: In a cap-and-trade carbon market, total emissions are guaranteed to go down. The cap is the cap, and assuming some reasonably effective enforcement mechanism, not a pound more carbon can be emitted. A carbon tax, on the other hand, merely encourages people to emit less by making it more expensive to do so. And in the case of fossil fuels, people seem perversely resistant to financial incentives.
Carbon trading incentivizes companies to cut emissions: A cap-and-trade system provides companies with credits if they are able to reduce their emissions below an established level. They can then sell these credits for a profit. So, if a company takes action to reduce its carbon emissions below the designated level, than it can make a profit. This is a powerful market incentive that is more likely to cause companies to invest money in finding ways to reduce their carbon emissions. A carbon tax, conversely, only provides the incentive of cutting costs, and does not offer this important profit motive.
Fairness: Is a carbon tax fair?
A carbon tax fairly treats all carbon emissions as "bad": A carbon tax essentially considers all carbon emissions harmful to the environment, and warranting of equal punishment. A cap-and-trade system only punishes carbon emissions above a certain level, treating only certain kinds of emissions as "bad". A carbon tax, therefore, sends a strong message to polluters that all their emissions are harmful, that they should be phased out, and that they should invest in environmentally-friendly sources of energy. This dramatic message may be particularly important if we view global warming to be a serious crisis.
Revenue from a carbon tax can be used to fund global aid programs: The advantage of a carbon tax is that it generates revenue that can be used for good. It converts a social bad, pollution, into a social good.
Economics: Is a carbon tax economical?
A carbon tax is less volatile than a cap-and-trade system A carbon tax is predictable, as are most simple tax systems. A cap-and-trade system, on the other hand, is subject to market fluctuations, speculation, and volatility. This could have a bad effect on energy prices. Additionally, predictability is a trait desired by corporations.
A carbon tax would better distribute the costs of carbon emissions A carbon tax will distribute the costs to all companies that emit greenhouse gases. It will not discriminate. There is much more room in a cap-and-trade system for discrimination.
Carbon taxes are simple and easy to understand Like most taxes, a carbon tax is very straight forward, assigning a specific cost to the emission of greenhouse gases
Criticism:
A carbon tax would damage an economy "Carbon tax to hit miners". The Australian. 5 Feb. 2007: "A $25 per tonne carbon tax would cost the state's alumina industry more than $200 million a year."
A carbon tax is "regressive". A "regressive" tax is one that disproportionately burdens poorer groups. Energy consumption generally makes up a larger portion of the personal budgets of poorer groups. Because energy consumption would be taxed equally across social groups with a carbon tax (it's a "flat tax"), the costs of the tax would disproportionately affect poor groups.
A carbon tax passes costs onto consumers. A carbon tax makes it more expensive for companies to do business. To compensate, businesses will raise the price of the products they are selling, which diminishes the pockets of the consumer. The consumer, therefore, pays a significant portion of a carbon tax. In this way, a carbon tax does not merely punish polluting businesses, but ordinary citizens as well.
A carbon tax requires substantial government monitoring In a carbon tax, emitters would pay a tax for every ton of carbon emitted. This requires that the government know precisely how much carbon is being emitted by energy producers. This is not easy to determine, and requires that a government put in place monitoring mechanisms. Deploying these mechanisms universally would be very complicated, expensive, and require much administration. Then, ensuring that all these monitoring devices operate properly and that all energy producers comply with the tax would also involve a substantial administrative burden. This would be equally as complicated as a cap-and-trade system.
Conclusion:
Carbon Tax or NO Carbon Tax.....World or Humanity should understand the ramification of Global Warming and instead of debating, the matter concerning global warming, they should undertake steps to control Global Warming initially, and then gradually reduce pollution levels to zero. Otherwise, the writing is ON THE WALL and sooner rather than latter, there might not be any wall for us to write “GLOBAL WARMING”.
What Is Carbon Tax ?
A carbon tax is an environmental tax on emissions of carbon dioxide and other greenhouse gases. The primary purpose of a carbon tax is to discourage the inefficient use of fossil fuels, which when burnt release carbon dioxide and other greenhouse gases into the atmosphere and contribute to global warming.
Motive Of Carbon Tax:
In addition to discouraging the use of fuels that contribute to global warming, the intention of a carbon tax is to, by extension, encourage the use of non-combustion energy sources, such as wind, sunlight, hydropower, and nuclear, which do not directly emit greenhouse gases into the atmosphere and contribute to global warming.
Pertinent Questions That Government, World Regulators (UN,WTO,etc), Businessmen, Environmentalists, Economists, Citizens, and Humanity should try to address:
The main question confronting governments is: should governments adopt a carbon tax system as part of their comprehensive plans to combat global warming?
Additional questions help frame the debate: Is a tax a good way to incentivize reductions in greenhouse gas emissions?
Can a carbon tax have a major impact on global warming? In this regard, how does a carbon tax compare to its main market-based approach - emissions trading or cap-and-trade systems?
What are the economic implications of a carbon tax?
Will it harm businesses and industries? Will it harm consumers?
Are emissions-trading schemes a more efficient and economically-friendly way to reduce emissions?
Is a carbon tax simple to understand and implement, particularly when compared to cap-and-trade systems?
Will a carbon tax require much government oversight?
How about a cap-and-trade system?
Is a carbon tax more feasible and manageable? How might the revenues generated by a carbon tax be spent?
Overall, is a carbon tax system fair? Can it be implemented equitably and without political biases?
Are there any other alternatives?
Examples of Countries practising carbon tax system:
While the European Union considered a carbon tax covering its member states, it ultimately initiated an emissions trading scheme in 2005. The United Kingdom, however, unilaterally introduced a range of carbon taxes and levies to accompany the EU ETS trading regime. For the rest of the world, the question of whether to adopt any of these approaches, and which one, remains an open question.
Emissions: Is a carbon tax effective at lowering emissions and combating global warming?
Carbon tax adds a clear cost to pollution that incentivizes reductions: The higher prices for the most damaging fuels would encourage people and companies to use them less and more of other types of energy, including nuclear, solar, wind and bio fuels. This approach also would affect all sources — not just cars, which account for only one-fifth of all U.S. carbon dioxide emissions."
A carbon tax helps symbolize political will to fight global.
A carbon tax helps reduce emissions in all industries: A carbon tax applies to all industries, broadening the scope of emissions reductions. This compares favourably to emissions trading schemes, which sometimes only cover a select group of industries.
A carbon tax can be implemented immediately.
A carbon tax provides superior incentives for green innovation.
Criticism:
Cap-and-trade systems ensure emissions reductions to the set cap: In a cap-and-trade carbon market, total emissions are guaranteed to go down. The cap is the cap, and assuming some reasonably effective enforcement mechanism, not a pound more carbon can be emitted. A carbon tax, on the other hand, merely encourages people to emit less by making it more expensive to do so. And in the case of fossil fuels, people seem perversely resistant to financial incentives.
Carbon trading incentivizes companies to cut emissions: A cap-and-trade system provides companies with credits if they are able to reduce their emissions below an established level. They can then sell these credits for a profit. So, if a company takes action to reduce its carbon emissions below the designated level, than it can make a profit. This is a powerful market incentive that is more likely to cause companies to invest money in finding ways to reduce their carbon emissions. A carbon tax, conversely, only provides the incentive of cutting costs, and does not offer this important profit motive.
Fairness: Is a carbon tax fair?
A carbon tax fairly treats all carbon emissions as "bad": A carbon tax essentially considers all carbon emissions harmful to the environment, and warranting of equal punishment. A cap-and-trade system only punishes carbon emissions above a certain level, treating only certain kinds of emissions as "bad". A carbon tax, therefore, sends a strong message to polluters that all their emissions are harmful, that they should be phased out, and that they should invest in environmentally-friendly sources of energy. This dramatic message may be particularly important if we view global warming to be a serious crisis.
Revenue from a carbon tax can be used to fund global aid programs: The advantage of a carbon tax is that it generates revenue that can be used for good. It converts a social bad, pollution, into a social good.
Economics: Is a carbon tax economical?
A carbon tax is less volatile than a cap-and-trade system A carbon tax is predictable, as are most simple tax systems. A cap-and-trade system, on the other hand, is subject to market fluctuations, speculation, and volatility. This could have a bad effect on energy prices. Additionally, predictability is a trait desired by corporations.
A carbon tax would better distribute the costs of carbon emissions A carbon tax will distribute the costs to all companies that emit greenhouse gases. It will not discriminate. There is much more room in a cap-and-trade system for discrimination.
Carbon taxes are simple and easy to understand Like most taxes, a carbon tax is very straight forward, assigning a specific cost to the emission of greenhouse gases
Criticism:
A carbon tax would damage an economy "Carbon tax to hit miners". The Australian. 5 Feb. 2007: "A $25 per tonne carbon tax would cost the state's alumina industry more than $200 million a year."
A carbon tax is "regressive". A "regressive" tax is one that disproportionately burdens poorer groups. Energy consumption generally makes up a larger portion of the personal budgets of poorer groups. Because energy consumption would be taxed equally across social groups with a carbon tax (it's a "flat tax"), the costs of the tax would disproportionately affect poor groups.
A carbon tax passes costs onto consumers. A carbon tax makes it more expensive for companies to do business. To compensate, businesses will raise the price of the products they are selling, which diminishes the pockets of the consumer. The consumer, therefore, pays a significant portion of a carbon tax. In this way, a carbon tax does not merely punish polluting businesses, but ordinary citizens as well.
A carbon tax requires substantial government monitoring In a carbon tax, emitters would pay a tax for every ton of carbon emitted. This requires that the government know precisely how much carbon is being emitted by energy producers. This is not easy to determine, and requires that a government put in place monitoring mechanisms. Deploying these mechanisms universally would be very complicated, expensive, and require much administration. Then, ensuring that all these monitoring devices operate properly and that all energy producers comply with the tax would also involve a substantial administrative burden. This would be equally as complicated as a cap-and-trade system.
Conclusion:
Carbon Tax or NO Carbon Tax.....World or Humanity should understand the ramification of Global Warming and instead of debating, the matter concerning global warming, they should undertake steps to control Global Warming initially, and then gradually reduce pollution levels to zero. Otherwise, the writing is ON THE WALL and sooner rather than latter, there might not be any wall for us to write “GLOBAL WARMING”.
The Indian Slowdown
The Indian economy is plummeting with weakening export markets, higher inflation and shortage of talented workforce. Besides, the industrial growth has fallen to a disappointing low as wholesale prices inch higher. The double-digit inflation has been causing sleepless nights to the Finance Ministry. Standard and Poor’s, the global Rating agency, confirmed the economic downfall and warned that it might lower India’s sovereign rating of BBB-(investment grade status) due to the country’s deteriorating credit profile over the last 12 months. According to the Economist Intelligence Unit, economic growth will slow down to 7.7% in the current fiscal from 9%in the previous year and growth will be primarily driven by domestic consumption and demand.
The devil called Inflation
Asian countries are facing the inflation spiral, which was brought on by multiple upward pressures on prices compounded by supply constraints. The skyrocketing food and fuel prices are strong factors behind this surge in the rate of inflation; structural factors are also being at work. A report from Asian development Bank (ADB) suggests that behind the economic slowdown of the Asian region, infrastructure bottlenecks and skill shortages that are forcing up wages and prices are also playing a major part. At the same time , in some countries , money supply is expanding because of burgeoning current account surpluses and the accumulation of foreign reserves.
Inflation pressure is not limiting to Asia alone, it has become a global phenomenon. ADB urges policymakers to tackle inflation at its roots. For some economies it could mean a more flexible exchange rate. In others, fiscal spending and priorities could be scrutinized or measures taken to ease supply bottlenecks that are adding to cost pressures.
India’s steps
In the recent past RBI has raised interest rates repeatedly to restraint inflation and tightened bank’s reserve requirements. Interest rates at a six-year high impacted industrial production and restrained consumption demand. A slowdown in the industrial sector is serious as a healthy industrial sector is needed for better employment. Meanwhile, high interest rates have led to a stronger currency, making the country’s exports more expensive in the world markets. Export growth deceleration is very significant in rupee terms; 5.34% in the first half of this fiscal. Thus, going forward, further slowdown impacts the country’s GDP badly.
There is a great concern that the credit market crisis may make it tougher for the FIIs to invest in India. A slowdown in FDI investment on account of tightening global liquidity and higher domestic rate of interest are affecting the current investment boom. Also, the restrictions on easy accessibility of foreign funds and political uncertainty arising from the forthcoming elections are not conducive for investment demand. Besides, fears of global slowdown are bound to have an adverse impact on India.
Further….
China’s economic growth is driven by exports, while India’s growth is driven mostly by domestic demand. The government is still hopeful that the strong fundamentals of the economy would continue to attract significant investments in equity market from abroad. Attention could be paid to improve the infrastructure and make public sector –driven fundamental issues such as education and human resources more effective to sustain high growth. India’s infrastructure has so far been predominantly public-financed. The need of the hour is greater incentives towards public and private partnerships for infrastructure projects.
US recession implications
The recent World Bank report reveals that the economies of developing countries will not be directly affected over the next two years by either the US subprime mortgage crisis or a US economic recession. Developing countries would feel the impact , but it would be overshadowed by the domestic dynamism that we are seeing in countries such as India, China and other Asian countries. Like in India, technology is responsible for the strong economic performance. On the whole , a slowdown in the developed economies may not have a major impact on the domestic economy. On, the flip side, the pressure on prices of oil, food and other raw materials is likely to continue making inflation management a challenging task this current fiscal.
The way Ahead
India expanded at an average of 8.6% over the past 4 years. It is much less dependant on the external markets than the Chinese economy. While some export demand compression is likely to put an additional burden on the exports of goods and services , it is unlikely to be significant as to depress growth. Despite a surge of value in the rupee against the dollar, higher interest rates and record global crude oil prices, policy makers are confident of maintaining growth momentum. On the other hand, the economy is slowing down faster than what was expected 2 months ago. For the current fiscal, even achieving a 7% growth would be a challenge. It is going to be tightrope walk for the finance ministry to sustain the pace of growth while controlling inflation.
The devil called Inflation
Asian countries are facing the inflation spiral, which was brought on by multiple upward pressures on prices compounded by supply constraints. The skyrocketing food and fuel prices are strong factors behind this surge in the rate of inflation; structural factors are also being at work. A report from Asian development Bank (ADB) suggests that behind the economic slowdown of the Asian region, infrastructure bottlenecks and skill shortages that are forcing up wages and prices are also playing a major part. At the same time , in some countries , money supply is expanding because of burgeoning current account surpluses and the accumulation of foreign reserves.
Inflation pressure is not limiting to Asia alone, it has become a global phenomenon. ADB urges policymakers to tackle inflation at its roots. For some economies it could mean a more flexible exchange rate. In others, fiscal spending and priorities could be scrutinized or measures taken to ease supply bottlenecks that are adding to cost pressures.
India’s steps
In the recent past RBI has raised interest rates repeatedly to restraint inflation and tightened bank’s reserve requirements. Interest rates at a six-year high impacted industrial production and restrained consumption demand. A slowdown in the industrial sector is serious as a healthy industrial sector is needed for better employment. Meanwhile, high interest rates have led to a stronger currency, making the country’s exports more expensive in the world markets. Export growth deceleration is very significant in rupee terms; 5.34% in the first half of this fiscal. Thus, going forward, further slowdown impacts the country’s GDP badly.
There is a great concern that the credit market crisis may make it tougher for the FIIs to invest in India. A slowdown in FDI investment on account of tightening global liquidity and higher domestic rate of interest are affecting the current investment boom. Also, the restrictions on easy accessibility of foreign funds and political uncertainty arising from the forthcoming elections are not conducive for investment demand. Besides, fears of global slowdown are bound to have an adverse impact on India.
Further….
China’s economic growth is driven by exports, while India’s growth is driven mostly by domestic demand. The government is still hopeful that the strong fundamentals of the economy would continue to attract significant investments in equity market from abroad. Attention could be paid to improve the infrastructure and make public sector –driven fundamental issues such as education and human resources more effective to sustain high growth. India’s infrastructure has so far been predominantly public-financed. The need of the hour is greater incentives towards public and private partnerships for infrastructure projects.
US recession implications
The recent World Bank report reveals that the economies of developing countries will not be directly affected over the next two years by either the US subprime mortgage crisis or a US economic recession. Developing countries would feel the impact , but it would be overshadowed by the domestic dynamism that we are seeing in countries such as India, China and other Asian countries. Like in India, technology is responsible for the strong economic performance. On the whole , a slowdown in the developed economies may not have a major impact on the domestic economy. On, the flip side, the pressure on prices of oil, food and other raw materials is likely to continue making inflation management a challenging task this current fiscal.
The way Ahead
India expanded at an average of 8.6% over the past 4 years. It is much less dependant on the external markets than the Chinese economy. While some export demand compression is likely to put an additional burden on the exports of goods and services , it is unlikely to be significant as to depress growth. Despite a surge of value in the rupee against the dollar, higher interest rates and record global crude oil prices, policy makers are confident of maintaining growth momentum. On the other hand, the economy is slowing down faster than what was expected 2 months ago. For the current fiscal, even achieving a 7% growth would be a challenge. It is going to be tightrope walk for the finance ministry to sustain the pace of growth while controlling inflation.
The Wall Street.
Wall Street's acid test
Is this the financial apocalypse the world has been dreading since the subprime crisis first hit the global economy more than a year ago? Or is there more to come? That’s the question uppermost on most minds as nothing the US administration does, including the once-unthinkable nationalisation of two big financial institutions, Fannie Mae and Freddie Mac, seems able to stem the slide. If only we could be sure this is indeed apocalypse then maybe we could hope the worst is behind us and expect things to improve. Unfortunately the world has no such luxury — instead there is mind-numbing uncertainty about how many more financial giants may finally go down (and drag economies down with them) as the crisis unravels. Monday’s announcements by Lehman Brothers Holdings, once the bluest of investment banks, that it would file for Chapter 11 bankruptcy protection, and by Bank of America that it had agreed to buy Merrill Lynch in an all-stock deal worth $50 billion only add to the sense of foreboding. It remains to be seen whether the sale of Merrill and the controlled demise of Lehman will be enough to finally turn the tide in the financial crisis that has crippled Wall Street. Reports that American International Group, (AIG) the largest US insurer by assets and Washington Mutual, the largest S&L institution are also seeking Fed support suggest it might not. There is also the danger that the winding down of the 158-year-old investment bank could expose other banks to losses on Lehman’s assets, risking more bank failures even as the Federal Deposit Insurance Corporation exhausts its reserves, raising the spectre of a repeat of the savings and loan meltdown. The only difference is that this time the rest of the world is hitched on to the US economy in a way that was not the case earlier. Inevitably the ripple effects are being felt in markets round the world. The sensex dropped more than 5% in the first 15 minutes of trading (the market finally closed 470 points down at 13,531) and the rupee fell to 46.08 as US financial woes added to fear psychosis created by bomb attacks in the Capital on Saturday. Fortunately many Asian markets were closed, else the carnage might have been much worse. How events will finally pan out is hard to predict but they are bound to hit the broader US economy and the world, including India, pretty hard.
Rescue act
On Tuesday the Reserve Bank of India joined the global rescue act mounted by central banks across the world. Unlike the US Fed which is in the ignominious position of having to bail out one financial institution after another, the latest being insurance giant AIG, RBI’s rescue act was far less drastic. It is aimed at addressing liquidity fears. Thus banks in need of funds will be allowed to borrow more from the RBI, if necessary by holding less than the mandated 25% of deposits that banks need to hold in approved (primarily government) securities, or SLR (statutory liquidity ratio). Banks will also be given temporary access to additional funds through a second LAF (liquidity adjustment facility) auction. At the same time, in a bid to check downward pressure on the rupee that ended Tuesday at 46.93 to the dollar, it assured market players it would ensure adequate supply of dollars. Its move to raise the interest ceiling on non-resident deposits, both rupee and dollar-denominated is of a piece with this since higher rates will increase inflows from non-residents. On paper, its multi-pronged attack has the right touch, aimed at calming frazzled nerves without going overboard. But whether it will have to be followed up with more aggressive steps (a cut in interest rates a la the People’s Bank of China) remains to be seen. Much will depend on whether the US government’s bid to contain the ongoing financial tsunami succeeds. The decision to shore up AIG by agreeing to lend up to $85 billion in emergency funds in return for a stake of 79.9% and effective control of the world’s largest insurer is a marked departure from the hands-off approach to Sunday’s collapse of Lehman Bros. But then the US administration had no choice. Whether this will reduce ‘already significant levels of financial market fragility’ and ward off ‘materially weaker US economic performance’ remains to be seen. The Fed is clearly hopeful, which is why it held the Fed funds rate (indicative overnight interbank rate) unchanged at 2% in its meeting on Tuesday. Unfortunately, it has been wrong-footed before. For the moment, then, the RBI will have to wait and watch.
Is this the financial apocalypse the world has been dreading since the subprime crisis first hit the global economy more than a year ago? Or is there more to come? That’s the question uppermost on most minds as nothing the US administration does, including the once-unthinkable nationalisation of two big financial institutions, Fannie Mae and Freddie Mac, seems able to stem the slide. If only we could be sure this is indeed apocalypse then maybe we could hope the worst is behind us and expect things to improve. Unfortunately the world has no such luxury — instead there is mind-numbing uncertainty about how many more financial giants may finally go down (and drag economies down with them) as the crisis unravels. Monday’s announcements by Lehman Brothers Holdings, once the bluest of investment banks, that it would file for Chapter 11 bankruptcy protection, and by Bank of America that it had agreed to buy Merrill Lynch in an all-stock deal worth $50 billion only add to the sense of foreboding. It remains to be seen whether the sale of Merrill and the controlled demise of Lehman will be enough to finally turn the tide in the financial crisis that has crippled Wall Street. Reports that American International Group, (AIG) the largest US insurer by assets and Washington Mutual, the largest S&L institution are also seeking Fed support suggest it might not. There is also the danger that the winding down of the 158-year-old investment bank could expose other banks to losses on Lehman’s assets, risking more bank failures even as the Federal Deposit Insurance Corporation exhausts its reserves, raising the spectre of a repeat of the savings and loan meltdown. The only difference is that this time the rest of the world is hitched on to the US economy in a way that was not the case earlier. Inevitably the ripple effects are being felt in markets round the world. The sensex dropped more than 5% in the first 15 minutes of trading (the market finally closed 470 points down at 13,531) and the rupee fell to 46.08 as US financial woes added to fear psychosis created by bomb attacks in the Capital on Saturday. Fortunately many Asian markets were closed, else the carnage might have been much worse. How events will finally pan out is hard to predict but they are bound to hit the broader US economy and the world, including India, pretty hard.
Rescue act
On Tuesday the Reserve Bank of India joined the global rescue act mounted by central banks across the world. Unlike the US Fed which is in the ignominious position of having to bail out one financial institution after another, the latest being insurance giant AIG, RBI’s rescue act was far less drastic. It is aimed at addressing liquidity fears. Thus banks in need of funds will be allowed to borrow more from the RBI, if necessary by holding less than the mandated 25% of deposits that banks need to hold in approved (primarily government) securities, or SLR (statutory liquidity ratio). Banks will also be given temporary access to additional funds through a second LAF (liquidity adjustment facility) auction. At the same time, in a bid to check downward pressure on the rupee that ended Tuesday at 46.93 to the dollar, it assured market players it would ensure adequate supply of dollars. Its move to raise the interest ceiling on non-resident deposits, both rupee and dollar-denominated is of a piece with this since higher rates will increase inflows from non-residents. On paper, its multi-pronged attack has the right touch, aimed at calming frazzled nerves without going overboard. But whether it will have to be followed up with more aggressive steps (a cut in interest rates a la the People’s Bank of China) remains to be seen. Much will depend on whether the US government’s bid to contain the ongoing financial tsunami succeeds. The decision to shore up AIG by agreeing to lend up to $85 billion in emergency funds in return for a stake of 79.9% and effective control of the world’s largest insurer is a marked departure from the hands-off approach to Sunday’s collapse of Lehman Bros. But then the US administration had no choice. Whether this will reduce ‘already significant levels of financial market fragility’ and ward off ‘materially weaker US economic performance’ remains to be seen. The Fed is clearly hopeful, which is why it held the Fed funds rate (indicative overnight interbank rate) unchanged at 2% in its meeting on Tuesday. Unfortunately, it has been wrong-footed before. For the moment, then, the RBI will have to wait and watch.
SAAS `software as a service' model’
Can you imagine changing your car every quarter?" the car buyer generally keeps the same model for at least half a decade. This is regarded as a sound investment as the user takes ownership of the car for a long term.
Software, however, changes every three months. So it would make sense for the provider to license the software only for three or more months at a lower price, and allow the user the freedom to look for better software or choose an update from the provider
Enter SaaS or `software as a service.' SaaS is a method of selling software in which a vendor or service provider hosts the applications and makes them available to customers as a service, rather than as a product. The fundamental idea remains constant: instead of buying and installing expensive packages (enterprise applications), users can now access them over a network, with an Internet browser being the only absolute necessity. Termed as an irreversible phenomenon, this model is set to flip India's software makers on their side and give the consumer control. For it allows you to do all the work that you ever do on your regular computer (home or office) using any computer in the world as long as it is connected to the Internet.
Portal to your data
"It is the portal to your enterprise data: your browser is now the only thing you need to access all critical office information," says Jeremy Cooper, vice-president, marketing, Asia-Pacific, Salesforce.com, a Web site that offers enterprise resource planning (ERP) and customer relationship management (CRM) applications online.
Enterprises that need CRM had to previously spend lakh on licenses, training and implementation. Now, with a few clicks, they can get under way, thanks to Web-based firms such as Salesforce.com that host the software at their offices, allowing the buyer to access the information over the Internet, using a browser.
With high economic growth perceived in the small and medium segments, coupled with large enterprises consolidating their IT investments, software licenses will soon have to vie for attention alongside software as a service, adds Kiran Datar, Managing Director, WebEx Communications India.
WebEx offers conferencing applications online and is one of the pioneering firms offering software via this model. Tata Consultancy Services is also adopting the software as a service model. Initiatives include the offer of a core-banking system (FNS) for cooperative and regional rural banks online and plans to extend the model to its suite of products in the insurance, healthcare and retail spaces.
Opportunities in India
India and China have been ranked as having the greatest potential in the mid to long-term future by `software as a service' application vendors. The market for this is expected to grow to $48 million by 2008
Application areas
Currently, the software as a service model is gaining traction in both generic applications such as CRM, HR/Payroll as well as the more specialized chip design industry.
"It is expected that the market for enterprise resource planning, supply chain management and human resources applications will grow significantly, opening up new opportunities for on-demand vendors," say analysts. E-learning and conferencing are also expected to take off with its adoption. Online banking and share trading would offer an opportunity to use the SaaS model. One of the innovative trends noticed by experts is the use of software as a service in publishing. With the increasing availability of e-books that can be bought and read on the Internet, this concept would probably see book lovers opting for the online medium.
Saving on costs
By adopting SaaS-based applications for certain business processes, small and medium businesses can reduce capital investment (which they might incur in terms of setting up huge infrastructure, resources, software licenses, maintenance/upgrade costs and skilled IT manpower, if they buy and run similar applications within their premises)
Feedback mechanism
An advantage of the concept highlighted by Datar of WebEx is the ingrained feedback mechanism giving more power to the lay user: SaaS users can constantly provide a stream of feedback on what's working and what's not. With `software as a service', the average Indian can use custom versions of the big software packages at affordable costs. One example is TCS's webhealthcenter.com, which offers professional medical advice reachable to anybody with access to a PC. The Rent-a-software model is bound to work as it did in other markets — from real estate to cars to video-cassettes and DVDs
Benefits of 'Software as a Service'
Software as a Service (SaaS) is an emergent mechanism of delivering software applications to customers over the Internet. Software as a Service or On Demand software can be implemented rapidly and eliminates the infrastructure and ongoing costs that traditional applications require. cyn.in offers all the following advantages of Software as a Service.
Low cost of entry
As opposed to on premise software, SaaS is delivered to organizations as a subscription model, usually billed on a per user per month basis. This means that the costs are granular in nature and are incurred only as long as benefits are achieved. This does away with the enormously large upfront payments and massive annual license fees. cyn.in offers a simple pay as you go pricing with no long term contractual requirements.
Zero Infrastructure - Reduced Overheads
Since the application is hosted by the service provider, investing in expensive infrastructure is no longer required. All large initial investments on hardware, licenses, databases, ongoing overheads of employing and training IT staff, software and hardware maintenance and upgrades are minimized.
Cost-effective Infinite Scalability
The pay as you go model of SaaS, gives the customer the freedom to adapt to the changing usage of the software, on demand. For example: You can buy the application for two employees to start with and then after a few months decide to adapt it for a department of 10 people, and on achieving measurable benefits, the software can be provided to the entire organization of say 5,000 users. Software delivered as services provide all of this scalability, without requiring customers to plan for it.
Focus internal IT initiatives only on direct, line of business technology
SaaS strategy not only eliminates the need for additional IT infrastructure spends, it substantially takes the burden off your internal IT staff. With the SaaS advantage, your staff does not have to manage upgrades, troubleshoot problems for generic software applications. This helps the company to direct limited in-house IT resources towards more business oriented initiatives.
Platform Independence
SaaS based solutions are hosted centrally with the service provider. No software to be installed at the customer€™s premises. The software can be accessed on the Internet via a browser only. On Demand applications can be used by Windows, Linux or Mac users, providing true platform independence.
Software, however, changes every three months. So it would make sense for the provider to license the software only for three or more months at a lower price, and allow the user the freedom to look for better software or choose an update from the provider
Enter SaaS or `software as a service.' SaaS is a method of selling software in which a vendor or service provider hosts the applications and makes them available to customers as a service, rather than as a product. The fundamental idea remains constant: instead of buying and installing expensive packages (enterprise applications), users can now access them over a network, with an Internet browser being the only absolute necessity. Termed as an irreversible phenomenon, this model is set to flip India's software makers on their side and give the consumer control. For it allows you to do all the work that you ever do on your regular computer (home or office) using any computer in the world as long as it is connected to the Internet.
Portal to your data
"It is the portal to your enterprise data: your browser is now the only thing you need to access all critical office information," says Jeremy Cooper, vice-president, marketing, Asia-Pacific, Salesforce.com, a Web site that offers enterprise resource planning (ERP) and customer relationship management (CRM) applications online.
Enterprises that need CRM had to previously spend lakh on licenses, training and implementation. Now, with a few clicks, they can get under way, thanks to Web-based firms such as Salesforce.com that host the software at their offices, allowing the buyer to access the information over the Internet, using a browser.
With high economic growth perceived in the small and medium segments, coupled with large enterprises consolidating their IT investments, software licenses will soon have to vie for attention alongside software as a service, adds Kiran Datar, Managing Director, WebEx Communications India.
WebEx offers conferencing applications online and is one of the pioneering firms offering software via this model. Tata Consultancy Services is also adopting the software as a service model. Initiatives include the offer of a core-banking system (FNS) for cooperative and regional rural banks online and plans to extend the model to its suite of products in the insurance, healthcare and retail spaces.
Opportunities in India
India and China have been ranked as having the greatest potential in the mid to long-term future by `software as a service' application vendors. The market for this is expected to grow to $48 million by 2008
Application areas
Currently, the software as a service model is gaining traction in both generic applications such as CRM, HR/Payroll as well as the more specialized chip design industry.
"It is expected that the market for enterprise resource planning, supply chain management and human resources applications will grow significantly, opening up new opportunities for on-demand vendors," say analysts. E-learning and conferencing are also expected to take off with its adoption. Online banking and share trading would offer an opportunity to use the SaaS model. One of the innovative trends noticed by experts is the use of software as a service in publishing. With the increasing availability of e-books that can be bought and read on the Internet, this concept would probably see book lovers opting for the online medium.
Saving on costs
By adopting SaaS-based applications for certain business processes, small and medium businesses can reduce capital investment (which they might incur in terms of setting up huge infrastructure, resources, software licenses, maintenance/upgrade costs and skilled IT manpower, if they buy and run similar applications within their premises)
Feedback mechanism
An advantage of the concept highlighted by Datar of WebEx is the ingrained feedback mechanism giving more power to the lay user: SaaS users can constantly provide a stream of feedback on what's working and what's not. With `software as a service', the average Indian can use custom versions of the big software packages at affordable costs. One example is TCS's webhealthcenter.com, which offers professional medical advice reachable to anybody with access to a PC. The Rent-a-software model is bound to work as it did in other markets — from real estate to cars to video-cassettes and DVDs
Benefits of 'Software as a Service'
Software as a Service (SaaS) is an emergent mechanism of delivering software applications to customers over the Internet. Software as a Service or On Demand software can be implemented rapidly and eliminates the infrastructure and ongoing costs that traditional applications require. cyn.in offers all the following advantages of Software as a Service.
Low cost of entry
As opposed to on premise software, SaaS is delivered to organizations as a subscription model, usually billed on a per user per month basis. This means that the costs are granular in nature and are incurred only as long as benefits are achieved. This does away with the enormously large upfront payments and massive annual license fees. cyn.in offers a simple pay as you go pricing with no long term contractual requirements.
Zero Infrastructure - Reduced Overheads
Since the application is hosted by the service provider, investing in expensive infrastructure is no longer required. All large initial investments on hardware, licenses, databases, ongoing overheads of employing and training IT staff, software and hardware maintenance and upgrades are minimized.
Cost-effective Infinite Scalability
The pay as you go model of SaaS, gives the customer the freedom to adapt to the changing usage of the software, on demand. For example: You can buy the application for two employees to start with and then after a few months decide to adapt it for a department of 10 people, and on achieving measurable benefits, the software can be provided to the entire organization of say 5,000 users. Software delivered as services provide all of this scalability, without requiring customers to plan for it.
Focus internal IT initiatives only on direct, line of business technology
SaaS strategy not only eliminates the need for additional IT infrastructure spends, it substantially takes the burden off your internal IT staff. With the SaaS advantage, your staff does not have to manage upgrades, troubleshoot problems for generic software applications. This helps the company to direct limited in-house IT resources towards more business oriented initiatives.
Platform Independence
SaaS based solutions are hosted centrally with the service provider. No software to be installed at the customer€™s premises. The software can be accessed on the Internet via a browser only. On Demand applications can be used by Windows, Linux or Mac users, providing true platform independence.
M-COMMERCE-----Making life faster and smooth.
Rohit was returning to Kolkata from Mumbai completing a tour. Suddenly, it struck in his mind that tomorrow is their first wedding anniversary and he has not got anything for his love. He was directly going to home and has not got enough time to buy anything. He then took out his mobile and browsed through the options and ordered a beautiful necklace to be delivered by tomorrow at his address.
-----End of scene 1.
Mayank was leaving for an important meeting some other day while he remembered that it’s the last day to pay the premium of the Life Insurance of this quarter including the penalty period. He cannot afford to cancel the meeting or rely on somebody else to pay the premium. He then took out his mobile and using it paid the premium while on the move.
-----End of scene 2.
Anu was returning from Singapore to kolkata and she wanted to attend her sister’s wedding the next day at Lucknow. She desperately wanted to book a ticket of the flight. She took out her mobile and simply booked the ticket.
-----End of scene 3.
This is a very small view of the power of M-Commerce or Mobile commerce that the India vis-à-vis the whole world is going to enjoy very soon. Now let me throw some light on the various aspects of M-Commerce.
What is M-Commerece?
M-Commerce or Mobile Commerce is any transaction, involving the transfer of ownership or rights to use goods and services, which is initiated and/or completed by using mobile access to computer-mediated networks with the help of an electronic device.
Fields of application :
Mobile purchase
Mobile banking
Mobile ticketing
Information services
Content purchase and delivery
Mobile brokerage
Auctions
---These are only a few applications to name……in fact you can imagine anything you like to add in this list,that is the power of M-Commerce,which is why it is sometimes rightly called U-Commerce or Ubiquitous commerce.
Mobile Purchase: Mobile purchase allows customer to shop online anytime, in any location using a mobile phone.Customers can browse order and pay using their mobile phone or any other mobile device.
It will be a safe transaction. The features of such transaction will be ----
Unique username/password
Flexible subscription period
External authentication option
Simple integration
Secure authentication of users
Cross service marketing
Simple opt-out for customers
Mobile Banking : Banks are also exploring the use of M-Commerce to allow their customer to transact also apart from checking the status of the accounts only.
Mobile Ticketing: The on the move booking of tickets will make the traveling much faster, flexible and hustle free. Tickets can be sent to mobile phones using a variety of technologies . Users are then able to use their tickets immediately by presenting their phones at the venue. Moreover, the tourism industry will flourish better than ever using this mantra of m-commerce.
Mobile Brokerage: Stock market services offered via mobile devices have also become more popular and are known as Mobile Brokerage. They allow the subscriber to react to market developments in a timely fashion and irrespective of their physical location.
Information services : A wide variety of information services can be delivered to mobile phone users in much the same way as it is delivered to PCs. These services include:
news services
stock data
sports results
financial records
traffic data and information
Particularly, more customized traffic information, based on users' travel patterns, will be multicast on a differentiated basis, instead of broadcasting the same news and data to all Users. This type of multicasting will be suited for more bandwidth-intensive mobile equipment.
Auctions : Over the past three years mobile reverse auction solutions have grown in popularity. Unlike traditional auctions, the reverse auction (or low-bid auction) bills the consumer's phone each time they place a bid.
Future of M-Commerce :
The m-commerce service at the very outset requires 3G or more mobile service,which is getting started in India in mid 2009.And there are more than 300 million existing mobile users in the market place.It is expected that the number is going to increase over 500 million by 2010.So,we can see how large and promising the market can be.More over this m-commerce can create employment. That is emerging entrepreneurs can include their products or concepts in the m-commerce chain,which will cause them to grow more and create employment in turn.
Conclusion :
M-Commerce is taking the world of commerce and economy to the next level,a much faster and flexible world of trade.But to make it all successful a perfect balance and synchronization between application developers, financial institution and mobile phone network is elemental.A very well supported infrustructure is also neede for its boom.Lastly,simplicity coupled with the idea of developing the trust with audiences is the key to proliferation of M-Commerce.
-----End of scene 1.
Mayank was leaving for an important meeting some other day while he remembered that it’s the last day to pay the premium of the Life Insurance of this quarter including the penalty period. He cannot afford to cancel the meeting or rely on somebody else to pay the premium. He then took out his mobile and using it paid the premium while on the move.
-----End of scene 2.
Anu was returning from Singapore to kolkata and she wanted to attend her sister’s wedding the next day at Lucknow. She desperately wanted to book a ticket of the flight. She took out her mobile and simply booked the ticket.
-----End of scene 3.
This is a very small view of the power of M-Commerce or Mobile commerce that the India vis-à-vis the whole world is going to enjoy very soon. Now let me throw some light on the various aspects of M-Commerce.
What is M-Commerece?
M-Commerce or Mobile Commerce is any transaction, involving the transfer of ownership or rights to use goods and services, which is initiated and/or completed by using mobile access to computer-mediated networks with the help of an electronic device.
Fields of application :
Mobile purchase
Mobile banking
Mobile ticketing
Information services
Content purchase and delivery
Mobile brokerage
Auctions
---These are only a few applications to name……in fact you can imagine anything you like to add in this list,that is the power of M-Commerce,which is why it is sometimes rightly called U-Commerce or Ubiquitous commerce.
Mobile Purchase: Mobile purchase allows customer to shop online anytime, in any location using a mobile phone.Customers can browse order and pay using their mobile phone or any other mobile device.
It will be a safe transaction. The features of such transaction will be ----
Unique username/password
Flexible subscription period
External authentication option
Simple integration
Secure authentication of users
Cross service marketing
Simple opt-out for customers
Mobile Banking : Banks are also exploring the use of M-Commerce to allow their customer to transact also apart from checking the status of the accounts only.
Mobile Ticketing: The on the move booking of tickets will make the traveling much faster, flexible and hustle free. Tickets can be sent to mobile phones using a variety of technologies . Users are then able to use their tickets immediately by presenting their phones at the venue. Moreover, the tourism industry will flourish better than ever using this mantra of m-commerce.
Mobile Brokerage: Stock market services offered via mobile devices have also become more popular and are known as Mobile Brokerage. They allow the subscriber to react to market developments in a timely fashion and irrespective of their physical location.
Information services : A wide variety of information services can be delivered to mobile phone users in much the same way as it is delivered to PCs. These services include:
news services
stock data
sports results
financial records
traffic data and information
Particularly, more customized traffic information, based on users' travel patterns, will be multicast on a differentiated basis, instead of broadcasting the same news and data to all Users. This type of multicasting will be suited for more bandwidth-intensive mobile equipment.
Auctions : Over the past three years mobile reverse auction solutions have grown in popularity. Unlike traditional auctions, the reverse auction (or low-bid auction) bills the consumer's phone each time they place a bid.
Future of M-Commerce :
The m-commerce service at the very outset requires 3G or more mobile service,which is getting started in India in mid 2009.And there are more than 300 million existing mobile users in the market place.It is expected that the number is going to increase over 500 million by 2010.So,we can see how large and promising the market can be.More over this m-commerce can create employment. That is emerging entrepreneurs can include their products or concepts in the m-commerce chain,which will cause them to grow more and create employment in turn.
Conclusion :
M-Commerce is taking the world of commerce and economy to the next level,a much faster and flexible world of trade.But to make it all successful a perfect balance and synchronization between application developers, financial institution and mobile phone network is elemental.A very well supported infrustructure is also neede for its boom.Lastly,simplicity coupled with the idea of developing the trust with audiences is the key to proliferation of M-Commerce.
Tuesday, November 18, 2008
123 Agreement
123 Agreement: What is it?
Section 123 of the United States Atomic Energy Act of 1954, titled "Cooperation With Other Nations", establishes an agreement for cooperation as a prerequisite for nuclear deals between the US and any other nation.Such an agreement is called a 123 Agreement. To date, the U.S. has entered into roughly twenty-five 123 Agreements with various countries.
India proposed for Indo-US 123 act in 2005 for the transfer of nuclear energy and nuclear fuels for civil use.
History so far……..
In the year 1968 NPT (Non Proliferation Treaty) was signed between 5 nuclear power holding countries – USA,Soviet Union,Great Britain,France and China and some of other countries which do not had nuclear power.Their vision was to ensure that the devastating power should not be handed over to any other freak country.But this treaty had the seed of problems of the future.This treaty enabled the five nuclear power holding countries to test more ,but other countries lost that power.India did not sign that treaty for this kind of unequal conditions.
Activity by India :
India tested nuclear weapon POKHRAN-1 first in 1974.Immidietly other countries of the world formed a group named Nuclear Supplier’s Group(NSG) and excluded India from any kind of exchange of nuclear knowledge or nuclear fuels.Even after that India tested for the second time POKHRAN-2 in the year 1998.Whole world specially USA was against it.Indian PM Mr. Atal Bihari Vajpayee then announced a moratorium on nuclear test depicting that India already have enough nuclear knowledge.But after that also the banning by NSG was not lifted.
The after effect of 9/11……
India was also in a clear shortage of nuclear fuels as it was needed for production of power and India do not have enough nuclear fuel to serve its own long term needs.So after 9/11 while US was in a clear threat from terrorism and economic threat from china,they wanted to get India as a friend to capture the market of easten civilization .India also utilised this situation and in the year of 2005 in the US tour,Indian PM Mr. Manmohan Singh proposed for the supply of nuclear energy and knowledge to US. The Hyde Act, a 2006 bill that gave preliminary approval to the Indo-US pact, officially requires that Congress be in 30 days of continuous session to consider the deal. But Congress cannot take up the agreement until the NSG passes it.
Response of rest of the world…..
America agreed to the proposed plan by India and requested the other countries to make an exception in case of India .But other countries of NPT and NSG strongly protested as India was still a country outside NPT ,and so it has the power to test nuclear weapon at any time.USA fought for India to these countries citing two main view points-
1.Economic point of view : India is a very fast developing countrywith mammoth population.So Indian market was very lucrative for every other country of the world.
2.Strategic point of view: India is out of NPT ,so other countries do not have any countrol over India,but after 123 agreement at least they will be forming some pressure over India.
Even after that 6 countries --- Austria,Ireland,Netherlands,Switzerland,Norway and New Zealand was against the notion of supplying the nuke power to India.
NSG’s Vienna meet…….
On 6th Septeber’08, at NSG’s vienna meet after strong arguments India got the waiver from NSG.Indo-US nuke deal got the approval of NSG..India became the first country of the world to get the NSG waiver without signing the NPT.
What India got?
1.The rare position of becoming the only country to get the waiver from NSG without signing the NPT.
2.The ever increasing demand of nuclear power in various fields of India seems to get a solution.
3.The mental step up to be a more important country.
4.Coming out of the brace in whch rest of the world used to put India and Pakistan within.
What India lose?
Foreign Minister Mr. Pranab Mukherjee has reiterated voluntery moratorium on nuclear testing,i.e India will not be able to conduct the nuclear tests anymore,though it is not mentioned any where in the NSG waiver that in case India does so, it will automatically end the waiver.So, the deal was clear a win win position for India.
What next?
The 123 agreement will be brought to US congress.The US congress will end on 28th of September’08.By US rule to say yes or no there should be a 30 days time limit.But there is US presidential election on 4th of November.There is not enough time to call for a new congree,so it’s a special request by US president Mr. George Bush to take the agreement to consider before 30 days .It is expected that on his US tour On 27-28th of September MR. Manmohan Singh will sign the agreement and make the deal final provided the US congress pass the agreement befor that.
Conclusion:
The need for the nuclear energy was inevitable.With the increasing demand of the power in India,it would have been a colossal problem to confront in future.So we definitely needed the NSG to approve the deal.Now presently India is at upper hand as for not signing in the NPT or CTBT(Comprehensive Test Ban Treaty),but at the same time getting the approval of NSG.And we may hope for a better future economically too as India in turn taking a step now in becoming one of the global economic leader in coming years.
Section 123 of the United States Atomic Energy Act of 1954, titled "Cooperation With Other Nations", establishes an agreement for cooperation as a prerequisite for nuclear deals between the US and any other nation.Such an agreement is called a 123 Agreement. To date, the U.S. has entered into roughly twenty-five 123 Agreements with various countries.
India proposed for Indo-US 123 act in 2005 for the transfer of nuclear energy and nuclear fuels for civil use.
History so far……..
In the year 1968 NPT (Non Proliferation Treaty) was signed between 5 nuclear power holding countries – USA,Soviet Union,Great Britain,France and China and some of other countries which do not had nuclear power.Their vision was to ensure that the devastating power should not be handed over to any other freak country.But this treaty had the seed of problems of the future.This treaty enabled the five nuclear power holding countries to test more ,but other countries lost that power.India did not sign that treaty for this kind of unequal conditions.
Activity by India :
India tested nuclear weapon POKHRAN-1 first in 1974.Immidietly other countries of the world formed a group named Nuclear Supplier’s Group(NSG) and excluded India from any kind of exchange of nuclear knowledge or nuclear fuels.Even after that India tested for the second time POKHRAN-2 in the year 1998.Whole world specially USA was against it.Indian PM Mr. Atal Bihari Vajpayee then announced a moratorium on nuclear test depicting that India already have enough nuclear knowledge.But after that also the banning by NSG was not lifted.
The after effect of 9/11……
India was also in a clear shortage of nuclear fuels as it was needed for production of power and India do not have enough nuclear fuel to serve its own long term needs.So after 9/11 while US was in a clear threat from terrorism and economic threat from china,they wanted to get India as a friend to capture the market of easten civilization .India also utilised this situation and in the year of 2005 in the US tour,Indian PM Mr. Manmohan Singh proposed for the supply of nuclear energy and knowledge to US. The Hyde Act, a 2006 bill that gave preliminary approval to the Indo-US pact, officially requires that Congress be in 30 days of continuous session to consider the deal. But Congress cannot take up the agreement until the NSG passes it.
Response of rest of the world…..
America agreed to the proposed plan by India and requested the other countries to make an exception in case of India .But other countries of NPT and NSG strongly protested as India was still a country outside NPT ,and so it has the power to test nuclear weapon at any time.USA fought for India to these countries citing two main view points-
1.Economic point of view : India is a very fast developing countrywith mammoth population.So Indian market was very lucrative for every other country of the world.
2.Strategic point of view: India is out of NPT ,so other countries do not have any countrol over India,but after 123 agreement at least they will be forming some pressure over India.
Even after that 6 countries --- Austria,Ireland,Netherlands,Switzerland,Norway and New Zealand was against the notion of supplying the nuke power to India.
NSG’s Vienna meet…….
On 6th Septeber’08, at NSG’s vienna meet after strong arguments India got the waiver from NSG.Indo-US nuke deal got the approval of NSG..India became the first country of the world to get the NSG waiver without signing the NPT.
What India got?
1.The rare position of becoming the only country to get the waiver from NSG without signing the NPT.
2.The ever increasing demand of nuclear power in various fields of India seems to get a solution.
3.The mental step up to be a more important country.
4.Coming out of the brace in whch rest of the world used to put India and Pakistan within.
What India lose?
Foreign Minister Mr. Pranab Mukherjee has reiterated voluntery moratorium on nuclear testing,i.e India will not be able to conduct the nuclear tests anymore,though it is not mentioned any where in the NSG waiver that in case India does so, it will automatically end the waiver.So, the deal was clear a win win position for India.
What next?
The 123 agreement will be brought to US congress.The US congress will end on 28th of September’08.By US rule to say yes or no there should be a 30 days time limit.But there is US presidential election on 4th of November.There is not enough time to call for a new congree,so it’s a special request by US president Mr. George Bush to take the agreement to consider before 30 days .It is expected that on his US tour On 27-28th of September MR. Manmohan Singh will sign the agreement and make the deal final provided the US congress pass the agreement befor that.
Conclusion:
The need for the nuclear energy was inevitable.With the increasing demand of the power in India,it would have been a colossal problem to confront in future.So we definitely needed the NSG to approve the deal.Now presently India is at upper hand as for not signing in the NPT or CTBT(Comprehensive Test Ban Treaty),but at the same time getting the approval of NSG.And we may hope for a better future economically too as India in turn taking a step now in becoming one of the global economic leader in coming years.
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