Ahead of the crucial IAEA meeting, the US today said it was confident of making "a very good case" before the UN atomic watchdog and NSG for the nuclear deal with India because of New Delhi's impressive non-proliferation record and would "expeditiously" push the agreement in the Congress.
"The civil nuclear deal is important for the United States, important for India, but also important in helping to advance the nonproliferation framework, the regime in which countries are operating," US Secretary of State Condoleezza Rice told reporters in Perth.
"I think that's why the deal has received the support of Mohamed El Baradei (chief) of the IAEA because India has a very good record on proliferation," Rice said at a joint press meet with Australian Foreign Minister Stephen Smith who gave the clearest indication so far that his country is ready to back the deal at the NSG despite its refusal to sell Uranium to India, asserting that they were two different issues.
In her first public comments after Manmohan Singh government won the trust vote, Rice said "we welcome the parliamentary vote." Rice said the US will continue to consult with countries of the IAEA Board of Governors and with the Nuclear Suppliers' Group (NSG). "But I think we can make a very good case that this is a not just a landmark deal, but a positive landmark deal," the top US official said.
Asked whether the deal will go through before the end of the Bush Administration's term in January, Rice said "it's certainly our hope that we can get through all of the processes and get this done in the Congress. And were going to work very expeditiously toward that goal." PTI
Friday, July 25, 2008
BANGALORE BLASTS: 2 DEAD, 6 INJURED
At least two persons died and six were injured when eight blasts triggered by a timer device hit Bangalore's central business district and other crowded areas.
Bangalore City Police Commissioner Shankar M Bidari and Union Home Secretary Madhukar Gupta confirmed that seven blasts shook Bangalore.
The first blast took place near Madiwala checkpost at around 1330 hrs IST with Additional Commissioner of Police, Bangalore, Gopal Hosur, confirming that a timer device was used to trigger the blasts.
All the blasts took place with 15 minutes of each other.
The crude bombs, stuffed with nuts and bolts, exploded at Madiwala, Adugodi, Nayandahalli, Pantharapalya and Vittal Mallya Road.
Laxmi, a garment factory worker, was killed while waiting at a bus stop in Madiwala on the Bangalore-Hosur Road. Her husband and another person were seriously injured.
The other dead person has been indentified as Anbu, a labourer.
Police claim to have recovered gelatin sticks, mainly used in quarry operations, from one of the blast sites.
Bomb disposal squads have been rushed to the blast sites and telephone network have been jammed to stop the spread of rumours.
Bangalore Police Commissioner Shankar M Bidari said, "We are monitoring the situation and request all residents to continue with their normal routine. The bomb squad and explosives experts are on the spot. We will deal with the situation."
All the injured have been taken to Mallya Hospital near Rajaram Mohan Rai circle.
Bangalore was rocked by a major terrorist attack in December, 2005 when some unidentified extremists opened fire in the Indian Institute of Science complex killing an Indian Institute of Technology-Delhi professor MC Puri.
Bomb disposal squads and forensic experts have rushed to the blast spots for investigations
Bangalore City Police Commissioner Shankar M Bidari and Union Home Secretary Madhukar Gupta confirmed that seven blasts shook Bangalore.
The first blast took place near Madiwala checkpost at around 1330 hrs IST with Additional Commissioner of Police, Bangalore, Gopal Hosur, confirming that a timer device was used to trigger the blasts.
All the blasts took place with 15 minutes of each other.
The crude bombs, stuffed with nuts and bolts, exploded at Madiwala, Adugodi, Nayandahalli, Pantharapalya and Vittal Mallya Road.
Laxmi, a garment factory worker, was killed while waiting at a bus stop in Madiwala on the Bangalore-Hosur Road. Her husband and another person were seriously injured.
The other dead person has been indentified as Anbu, a labourer.
Police claim to have recovered gelatin sticks, mainly used in quarry operations, from one of the blast sites.
Bomb disposal squads have been rushed to the blast sites and telephone network have been jammed to stop the spread of rumours.
Bangalore Police Commissioner Shankar M Bidari said, "We are monitoring the situation and request all residents to continue with their normal routine. The bomb squad and explosives experts are on the spot. We will deal with the situation."
All the injured have been taken to Mallya Hospital near Rajaram Mohan Rai circle.
Bangalore was rocked by a major terrorist attack in December, 2005 when some unidentified extremists opened fire in the Indian Institute of Science complex killing an Indian Institute of Technology-Delhi professor MC Puri.
Bomb disposal squads and forensic experts have rushed to the blast spots for investigations
Google Says Google News Not Priceless
Despite no ads or any obvious revenue generation, Google News is worth $100 million to Google, according to VP Marissa Mayer.
How does zero equal $100 million? As one of Google's many for free peripheral services, enough people sort of ride the Google wave over to the search engine from the News page. In Google's estimation, all that referral traffic is worth a pretty penny.
An angle like that sort of puts in perspective what the search giant gets out of its colossal new product fail rate: a few things that stick and send people over to the money pot. Google's a portal (a media portal, at that), as many have argued for years, and portals require some side activities to keep the consumer engaged.
Hot Trends, for example, even gives you the terms to search for. Smart, eh?
Google Health? Consider that a branding freebie; Google decided correctly contextual ads for Preparation H next a hemorrhoids diagnosis wouldn't just bring bad PR, but was also a little creepy. Need a lawyer for the mesothelioma problem?
Yeah, probably good Google said no thanks to that. Internally, they probably figure Google Health helps facilitate searches on the users' own terms.
Hard to say what it means exactly, but Mayer's valuation is also interesting considering the rumored price tag on Digg.com. If Digg sells to Google for $200 million, is that an admission Digg's worth twice as much Google News?
How does zero equal $100 million? As one of Google's many for free peripheral services, enough people sort of ride the Google wave over to the search engine from the News page. In Google's estimation, all that referral traffic is worth a pretty penny.
An angle like that sort of puts in perspective what the search giant gets out of its colossal new product fail rate: a few things that stick and send people over to the money pot. Google's a portal (a media portal, at that), as many have argued for years, and portals require some side activities to keep the consumer engaged.
Hot Trends, for example, even gives you the terms to search for. Smart, eh?
Google Health? Consider that a branding freebie; Google decided correctly contextual ads for Preparation H next a hemorrhoids diagnosis wouldn't just bring bad PR, but was also a little creepy. Need a lawyer for the mesothelioma problem?
Yeah, probably good Google said no thanks to that. Internally, they probably figure Google Health helps facilitate searches on the users' own terms.
Hard to say what it means exactly, but Mayer's valuation is also interesting considering the rumored price tag on Digg.com. If Digg sells to Google for $200 million, is that an admission Digg's worth twice as much Google News?
Thursday, July 24, 2008
Knol: Google does a pedia
Knol doesn’t rely on just anybody to create its collection of knowledgeable articles. You get to be the author, the buck stops here byline on a contribution, and if you write it, you kind of own it. Unlike Wikipedia, which it is compared to, Knol has a commercial bent. You get to run ads, too, and, in theory, make some money off of your expertise. It’s not a new concept, but it is a Google concept, and that’s about all it takes for the world domination theorists to come out of the woodwork. But, does it have legs?
After months of teasing and internal testing, Google officially launched its eagerly-anticipated online encyclopedia announced in December . The service dubbed Knol aims to organize the collective knowledge of Internet users into a searchable, browsable service that has been compared to Wikipedia. However, this is where similarity with world's famous online encyclopedia stops. At first glance, Knol feels more inviting and Web 2.0-like, which may attract those put off by the academic appeal of Wikipedia. But, ultimately, it will come down to content and Google thinks it got it right with Knol.
"Knols are authoritative articles about specific topics, written by people who know about those subjects," explained Knol product manager Cedric Dupont and software engineer Michael McNally in a Google blog post Wednesday. You will not have to be a rocket scientist to post a knol because everyone can become an author. And you also get a chance to earn some money on content you post, if you opt to run.
Similarly to the Facebook culture, Google will try to persuade authors to use their real names (although this will not be a requirement) and to stand behind their work, unlike Wikipedia where mostly anonymous authors post articles. Google says it will provide optional author identity confirmation via telephone or credit card verification. Verified authors will have a "verified" stamp added to their knols.
With Knol, multiple authors will be able to write about the same topic. "The key principle behind Knol is authorship. Every knol will have an author (or group of authors) who put their name behind their content. It's their knol, their voice, their opinion. “We expect that there will be multiple knols on the same subject, and we think that is good," said Google.
It remains to be seen if Knol will have more fact-checked content than stuff on Wikipedia, where entries are sometimes gamed for nefarious purposes, limiting its efficacy at times. Readers can suggest edits to a knol but its author always remains in charge able to accept, reject or modify a reader's suggestions before their contribution becomes visible. Google thinks this fact alone can mean a world of difference to the authority of its offerings. Readers will also have the opportunity to submit comments, rate or write a review of a knol.
Google didn't forget about the fun factor either so it inked an agreement with the New Yorker magazine to allow an author to add one cartoon per knol from the magazine's cartoon repository. Another interesting features allows knol authors to choose between two licensing methods for their work: the ubiquitous, and open Creative Commons or a full copyright license which reserves all rights to the author.
Analysts think that Knol's success will be determined by its ability to achieve a critical mass of contributors and readers. "It's a long shot, if you had to give it odds on whether this will change the world or not," said Gartner analyst Andrew Frank. The analyst explains that there are not many companies that have the resources and courage to challenge Wikipedia. "It's interesting and certainly shows how Google is one of the few companies with the scale to be able to do an experiment like this without being intimidated by Wikipedia," he said.
Most of the content on Knol at launch iwas medical articles. Interestingly enough, on the same day, Harvard Medical School, the Stanford School of Medicine, the University of Michigan Medical School and the University of California Berkeley School of Public Health were all supporting the launch of The Medpedia Project . It's kind of bizarre that Google does a lot of things that are passive-aggressive acts of competition. Or maybe they just get fed up of sending all that traffic to Wikipedia, and not seeing any ad money coming back. Damn those world domination theorists!
After months of teasing and internal testing, Google officially launched its eagerly-anticipated online encyclopedia announced in December . The service dubbed Knol aims to organize the collective knowledge of Internet users into a searchable, browsable service that has been compared to Wikipedia. However, this is where similarity with world's famous online encyclopedia stops. At first glance, Knol feels more inviting and Web 2.0-like, which may attract those put off by the academic appeal of Wikipedia. But, ultimately, it will come down to content and Google thinks it got it right with Knol.
"Knols are authoritative articles about specific topics, written by people who know about those subjects," explained Knol product manager Cedric Dupont and software engineer Michael McNally in a Google blog post Wednesday. You will not have to be a rocket scientist to post a knol because everyone can become an author. And you also get a chance to earn some money on content you post, if you opt to run.
Similarly to the Facebook culture, Google will try to persuade authors to use their real names (although this will not be a requirement) and to stand behind their work, unlike Wikipedia where mostly anonymous authors post articles. Google says it will provide optional author identity confirmation via telephone or credit card verification. Verified authors will have a "verified" stamp added to their knols.
With Knol, multiple authors will be able to write about the same topic. "The key principle behind Knol is authorship. Every knol will have an author (or group of authors) who put their name behind their content. It's their knol, their voice, their opinion. “We expect that there will be multiple knols on the same subject, and we think that is good," said Google.
It remains to be seen if Knol will have more fact-checked content than stuff on Wikipedia, where entries are sometimes gamed for nefarious purposes, limiting its efficacy at times. Readers can suggest edits to a knol but its author always remains in charge able to accept, reject or modify a reader's suggestions before their contribution becomes visible. Google thinks this fact alone can mean a world of difference to the authority of its offerings. Readers will also have the opportunity to submit comments, rate or write a review of a knol.
Google didn't forget about the fun factor either so it inked an agreement with the New Yorker magazine to allow an author to add one cartoon per knol from the magazine's cartoon repository. Another interesting features allows knol authors to choose between two licensing methods for their work: the ubiquitous, and open Creative Commons or a full copyright license which reserves all rights to the author.
Analysts think that Knol's success will be determined by its ability to achieve a critical mass of contributors and readers. "It's a long shot, if you had to give it odds on whether this will change the world or not," said Gartner analyst Andrew Frank. The analyst explains that there are not many companies that have the resources and courage to challenge Wikipedia. "It's interesting and certainly shows how Google is one of the few companies with the scale to be able to do an experiment like this without being intimidated by Wikipedia," he said.
Most of the content on Knol at launch iwas medical articles. Interestingly enough, on the same day, Harvard Medical School, the Stanford School of Medicine, the University of Michigan Medical School and the University of California Berkeley School of Public Health were all supporting the launch of The Medpedia Project . It's kind of bizarre that Google does a lot of things that are passive-aggressive acts of competition. Or maybe they just get fed up of sending all that traffic to Wikipedia, and not seeing any ad money coming back. Damn those world domination theorists!
Facebook's portal for the masses
This week, Facebook took a number of strategic steps toward its goal of giving people the "power to share and make the world more open and connected." That's how founder and CEO Mark Zuckerberg described the mission statement for Facebook.
With that mission statement, similar to Google's mission to "organize the world's information and make it universally accessible and useful," Facebook is highlighting its noble aspirations, but underneath the "make the world a better place" is the fact that both Facebook and Google, as well as Yahoo, Microsoft, MySpace, and others want to be the portal for the masses.
(Credit: (CC) Brian Solis )
By portal, I mean more than just a place to share content with friends, search or wire up a social graph. If the Web is becoming social at its core, Facebook (90 million and growing at hundreds of thousands per day) and its competitors want to be the center of their members' lives in the same way that MyYahoo became a personalized home base for millions of users over the last decade.
As evidence of Facebook's portal ambitions, the company introduced Facebook Connect, which will let users access and feed their Facebook profiles and friends on any Web site. Facebook is the identity system and portal through which the content from other sites flows--all roads leading to Facebook, which is distinct from what Google's more open and distributed approach with Friend Connect. Facebook Connect is not yet generally available, but demos from Digg and Six Apart, among others, indicate that it has substance.
Om Malik extrapolates from Facebook Connect that Facebook is building a money machine:
You are essentially telling Facebook's proverbial brain what topics -- blogs or specific posts -- with which you like to engage. In other words, you just told the system a little bit about yourself. Now imagine such information coming from dozens of Facebook Connect partners.
Each service adds a few more data points about you inside the Facebook brain, which is quite aware of your activities inside the Facebook ecosystem. The brain can then crunch all that information and build a fairly accurate image of who you are, what you like and what might interest you. With all that information at its disposal, Facebook can build a fairly large cash register.
The cash register is an advertising platform, a follow on to Beacon, that leverages the social graph and each member as a potential marketing engine. With all the data and user permissions, ad targeting could be more precise. Zuckerberg has also talked about a payments system, a la PayPal, for the platform. After getting Chat launched, Facebook is likely working on making its e-mail application more robust as part of building out the portal.
Microsoft is poised to bring its Web search and paid search results into Facebook's U.S. site.
With 400,000 developers, according to Facebook, working on the platform, thousands of applications--from e-commerce to games--and widgets with any kind of feed will be available for each user's Facebook portal.
Facebook also has more than 10 million users of its mobile services, which is the next major frontier for building user portals. For example, Facebook Connect for Mobile, due for release in the fall, will allow members to hook up with friends over mobile devices to play games with friends and learn which friends downloaded applications of shared interest.
Challenges for Facebook are scaling to support the increased amount of data pouring into its servers and adapting to different geographies. More than two-thirds of Facebook users are outside of the U.S., but all of Facebook's servers are inside the U.S. Decreasing latency, which leads to increased page views, will be a key to Facebook's ability to keep up with demand.
If Facebook can continue to roll out new features, maintain its growth pace and improve site performance, it will be on a collision course with the Web portal giants who were born in the 20th century. Of course, one of those Web giants may pay mega-billions to consolidate the market, but it's unlikely that Facebook will give up its independence any time soon.
With that mission statement, similar to Google's mission to "organize the world's information and make it universally accessible and useful," Facebook is highlighting its noble aspirations, but underneath the "make the world a better place" is the fact that both Facebook and Google, as well as Yahoo, Microsoft, MySpace, and others want to be the portal for the masses.
(Credit: (CC) Brian Solis )
By portal, I mean more than just a place to share content with friends, search or wire up a social graph. If the Web is becoming social at its core, Facebook (90 million and growing at hundreds of thousands per day) and its competitors want to be the center of their members' lives in the same way that MyYahoo became a personalized home base for millions of users over the last decade.
As evidence of Facebook's portal ambitions, the company introduced Facebook Connect, which will let users access and feed their Facebook profiles and friends on any Web site. Facebook is the identity system and portal through which the content from other sites flows--all roads leading to Facebook, which is distinct from what Google's more open and distributed approach with Friend Connect. Facebook Connect is not yet generally available, but demos from Digg and Six Apart, among others, indicate that it has substance.
Om Malik extrapolates from Facebook Connect that Facebook is building a money machine:
You are essentially telling Facebook's proverbial brain what topics -- blogs or specific posts -- with which you like to engage. In other words, you just told the system a little bit about yourself. Now imagine such information coming from dozens of Facebook Connect partners.
Each service adds a few more data points about you inside the Facebook brain, which is quite aware of your activities inside the Facebook ecosystem. The brain can then crunch all that information and build a fairly accurate image of who you are, what you like and what might interest you. With all that information at its disposal, Facebook can build a fairly large cash register.
The cash register is an advertising platform, a follow on to Beacon, that leverages the social graph and each member as a potential marketing engine. With all the data and user permissions, ad targeting could be more precise. Zuckerberg has also talked about a payments system, a la PayPal, for the platform. After getting Chat launched, Facebook is likely working on making its e-mail application more robust as part of building out the portal.
Microsoft is poised to bring its Web search and paid search results into Facebook's U.S. site.
With 400,000 developers, according to Facebook, working on the platform, thousands of applications--from e-commerce to games--and widgets with any kind of feed will be available for each user's Facebook portal.
Facebook also has more than 10 million users of its mobile services, which is the next major frontier for building user portals. For example, Facebook Connect for Mobile, due for release in the fall, will allow members to hook up with friends over mobile devices to play games with friends and learn which friends downloaded applications of shared interest.
Challenges for Facebook are scaling to support the increased amount of data pouring into its servers and adapting to different geographies. More than two-thirds of Facebook users are outside of the U.S., but all of Facebook's servers are inside the U.S. Decreasing latency, which leads to increased page views, will be a key to Facebook's ability to keep up with demand.
If Facebook can continue to roll out new features, maintain its growth pace and improve site performance, it will be on a collision course with the Web portal giants who were born in the 20th century. Of course, one of those Web giants may pay mega-billions to consolidate the market, but it's unlikely that Facebook will give up its independence any time soon.
Nuclear pact: India does its part
Washington Post commented on Indo-US nuclear deal yesterday. Excerpts:
Until recently, it seemed that an ambitious Bush administration bid to restore nuclear cooperation between the United States and India might be dead, a victim of domestic Indian politics. Anti-American Communist parties that support Prime Minister Manmohan Singh’s centrist government were blocking the deal. But Singh took a bold risk to salvage the pact, trading Communist support for that of a smaller regional party in hopes of assembling a new majority. This week the gamble paid off, as Singh’s government survived a parliamentary no-confidence vote. Now, the question is whether the pact can survive the American political process.
There isn’t much time; under US law, Congress must be in session continuously for 30 days to consider the deal. Before that clock can start, the International Atomic Energy Agency (IAEA) and the 45-nation Nuclear Suppliers Group must give India a green light. While those approvals are likely, they won’t happen instantaneously. And because of the long August recess, there may not be more than 30 “legislative days” left before Congress adjourns on Sept. 26. The deal raises many legitimate questions. But, on balance, it is in the United States’ interest, and Congress should find the time to say yes — in a lame-duck session after the November election, if necessary. US nuclear cooperation with India ceased when India, which had refused to sign the 1968 Non-Proliferation Treaty, exploded a nuclear “device” in 1974.
Until recently, it seemed that an ambitious Bush administration bid to restore nuclear cooperation between the United States and India might be dead, a victim of domestic Indian politics. Anti-American Communist parties that support Prime Minister Manmohan Singh’s centrist government were blocking the deal. But Singh took a bold risk to salvage the pact, trading Communist support for that of a smaller regional party in hopes of assembling a new majority. This week the gamble paid off, as Singh’s government survived a parliamentary no-confidence vote. Now, the question is whether the pact can survive the American political process.
There isn’t much time; under US law, Congress must be in session continuously for 30 days to consider the deal. Before that clock can start, the International Atomic Energy Agency (IAEA) and the 45-nation Nuclear Suppliers Group must give India a green light. While those approvals are likely, they won’t happen instantaneously. And because of the long August recess, there may not be more than 30 “legislative days” left before Congress adjourns on Sept. 26. The deal raises many legitimate questions. But, on balance, it is in the United States’ interest, and Congress should find the time to say yes — in a lame-duck session after the November election, if necessary. US nuclear cooperation with India ceased when India, which had refused to sign the 1968 Non-Proliferation Treaty, exploded a nuclear “device” in 1974.
Wednesday, July 23, 2008
India Takes A Free-Market Turn
Indian stocks rallied on Wednesday, after the Congress Party-led government won a crucial vote of confidence in the lower house of Parliament.
The market is counting on the government, newly unencumbered by leftist coalition partners, bringing in a stream of reforms to the financial sector and pressing ahead with a nuclear-energy deal with the United States that should help relieve the country's energy shortage.
The Bombay Stock Exchange's Sensex Index soared on Wednesday, to close up 5.9%, at 14,942.28, after the government of Manmohan Singh won the vote late on Tuesday. The news also gave strength to the rupee, with a dollar falling to 42.1600 rupees late on Wednesday from 42.6076 rupees in late Tuesday trade in New York. In late New York trading WisdomTree India Earnings Fund (nyse: EPI - news - people ), an exchange-traded fund that invests in Indian shares, was up 4.1%, or 81 cents, to $20.76.
The vote came at the end of two days of heated debate and was marred by allegations of the bribery, but Congress and its allies won by a larger margin than had been expected, giving it a mandate to proceed with reforms advocated by the finance minister, Palaniappan Chidambaram. In December, Chidambaram promised to remove a cap that restricts foreign voting rights in a company to 10.0% and vowed to raise the limit for foreign direct investment in the insurance sector to 49.0% from 26.0%. However, owing to differences with Congress's Communist coalition partners at the time, there was little hope that the reforms would actually go through. Now the Communist parties are no longer part of the government, having withdrawn support and triggered the confidence vote.
"Now that the government has proven its majority it could press ahead with the reforms," said Kumar Nathani, fund manager of Taurus Mutual Fund in Mumbai.
Financials were the top performers on the stock exchanges Wednesday, with ICICI Bank (nyse: IBN - news - people ) closing up 11.6%. Engineering and energy stocks were also up, including power equipment maker Bharat Heavy Electricals, which ended the day up 10.9%, on hopes that the government will be able to press ahead with a nuclear energy deal struck with the United States, which the Communist parties had opposed.
Singh has contended that the nuclear-power deal is crucial if India wants to increase economic growth and reduce poverty, but for years had been unable to gain access to the Nuclear Suppliers Group, which controls the export of supplies for nuclear energy production because it hadn't signed up to the Nuclear Non-Proliferation Agreement. Now, India has reached an agreement with the United States, which would give it access to the group if it gets the go-ahead from the International Atomic Energy Agency and the approval of Congress.
While the nuclear deal is likely to go ahead, market observers noted that there were no guarantees that reforms would take place. According to Dharmakirti Joshi, chief economist at Crisil in Mumbai, the government's first priority is likely to be tackling double-digit inflation, in preparation for the general election that must be held by next April or May, at the latest. (See "No Sign Of Change In India" )
The Sensex has been underperforming European and the American markets, falling 26.9% since the start of the year, against the 15.2% drop in Britain's FTSE 100, as foreign investors pulled out more than $4.0 billion, draining liquidity from the market.. The unstable political environment had dashed hopes of any major reforms, including privatization and opening up the retail sector to foreign investors. Meanwhile, the Reserve Bank of India is expected to remain hawkish since inflation shows little sign of dampening.
The market is counting on the government, newly unencumbered by leftist coalition partners, bringing in a stream of reforms to the financial sector and pressing ahead with a nuclear-energy deal with the United States that should help relieve the country's energy shortage.
The Bombay Stock Exchange's Sensex Index soared on Wednesday, to close up 5.9%, at 14,942.28, after the government of Manmohan Singh won the vote late on Tuesday. The news also gave strength to the rupee, with a dollar falling to 42.1600 rupees late on Wednesday from 42.6076 rupees in late Tuesday trade in New York. In late New York trading WisdomTree India Earnings Fund (nyse: EPI - news - people ), an exchange-traded fund that invests in Indian shares, was up 4.1%, or 81 cents, to $20.76.
The vote came at the end of two days of heated debate and was marred by allegations of the bribery, but Congress and its allies won by a larger margin than had been expected, giving it a mandate to proceed with reforms advocated by the finance minister, Palaniappan Chidambaram. In December, Chidambaram promised to remove a cap that restricts foreign voting rights in a company to 10.0% and vowed to raise the limit for foreign direct investment in the insurance sector to 49.0% from 26.0%. However, owing to differences with Congress's Communist coalition partners at the time, there was little hope that the reforms would actually go through. Now the Communist parties are no longer part of the government, having withdrawn support and triggered the confidence vote.
"Now that the government has proven its majority it could press ahead with the reforms," said Kumar Nathani, fund manager of Taurus Mutual Fund in Mumbai.
Financials were the top performers on the stock exchanges Wednesday, with ICICI Bank (nyse: IBN - news - people ) closing up 11.6%. Engineering and energy stocks were also up, including power equipment maker Bharat Heavy Electricals, which ended the day up 10.9%, on hopes that the government will be able to press ahead with a nuclear energy deal struck with the United States, which the Communist parties had opposed.
Singh has contended that the nuclear-power deal is crucial if India wants to increase economic growth and reduce poverty, but for years had been unable to gain access to the Nuclear Suppliers Group, which controls the export of supplies for nuclear energy production because it hadn't signed up to the Nuclear Non-Proliferation Agreement. Now, India has reached an agreement with the United States, which would give it access to the group if it gets the go-ahead from the International Atomic Energy Agency and the approval of Congress.
While the nuclear deal is likely to go ahead, market observers noted that there were no guarantees that reforms would take place. According to Dharmakirti Joshi, chief economist at Crisil in Mumbai, the government's first priority is likely to be tackling double-digit inflation, in preparation for the general election that must be held by next April or May, at the latest. (See "No Sign Of Change In India" )
The Sensex has been underperforming European and the American markets, falling 26.9% since the start of the year, against the 15.2% drop in Britain's FTSE 100, as foreign investors pulled out more than $4.0 billion, draining liquidity from the market.. The unstable political environment had dashed hopes of any major reforms, including privatization and opening up the retail sector to foreign investors. Meanwhile, the Reserve Bank of India is expected to remain hawkish since inflation shows little sign of dampening.
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