what is next for Indian

New Delhi has always been the political Mecca for Nepal .As we all know the incumbent Prime minister had his political training in India . But the land slide victory of Maoist Party in Nepal has confused all the political gurus and pundits in both Nepal and neighbouring India. SO how will Moaist coming to power will effect India and its Foreign Policy???

I found a interesting article by Arvinda Deo former ambassador to Nepal from India :

The Maoists are likely to emerge as the single largest party when the final count comes in, but they might decide to opt for a coalition with one, if not both, of the larger parties in the interests of a stable government and also to cobble together a government of national consensus which would facilitate the task of drafting a new constitution for the country.

In the words of Kanak Mani Dixit, editor of Himal magazine and a highly respected Nepali commentator on South Asian issues: “Nepali politics will never be the same again. To begin with, on the Nepali monarchy, if the Maoists do not have other plans and do work with the mainstream-left Communist Party of Nepal (Unified Marxist-Leninist) and the Nepali Congress (NC), the collective decision to establish a ‘Federal Republic of Nepal’ will be irreversible.”

What would be the likely contours of the new government’s policy? The Maoists have succeeded in carrying out their revolutionary agenda and are now in a position to mould the destiny of Nepal. In the course of their struggle, the Maoists had made several fiery statements defining their vision of a new Nepal — a republican, federal and secular democratic state. Many Indian commentators have voiced their apprehensions that Nepal’s relations with India might undergo a tectonic shift. First indications from the Maoists supremo Prachanda are that, to a great extent, it would be business as usual.

Talking to an Indian journalist on Sunday, Prachanda recalled that Nepal has a “historical relationship with India, with which it shares open borders”. “It is very important to have good relations with India. We will further develop our close ties with India,” he said. “We will maintain equal distance from India and China in political terms.” Our own reaction as articulated so far also suggests that India will be ready to continue its traditional policy of multi-faceted cooperation with the government in Kathmandu.

The victory of the Maoists has surprised many analysts of Nepali politics in Kathmandu. First, the turnout: an impressive 67 per cent. That means two out of three voters exercised their right to vote. Several political stalwarts were knocked down by the voters. The Rashtriya Prajatantra Party has been wiped out of the political landscape. Madhav Nepal, general secretary of Communist Party of Nepal (Unified Marxist-Leninist), also lost, along with five members of the party’s central committee. The story of the Nepali Congress is a little different. Prime Minister G.P. Koirala’s daughter Sujata and nephew Shekhar were defeated as was the incumbent home minister, K.P. Sitaula.

Some Indian analysts who have followed very closely the twists and turns in Nepal’s Maoist struggle are not sanguine about the future course of Indo-Nepal relations. They figure that the course is likely to be bumpy. Elated by their victory in their armed struggle in Nepal, the Maoists might act as catalysts for their fellow revolutionaries in India and elsewhere (specifically in Bhutan). The agitation for Gorkhaland might receive a new impetus. Revanchist demands would be put forward to redefine Indo-Nepal relations, which might include not only the 1950 treaty but even the Treaty of Sugawlee (1815). The best course for Indian policy-makers would be to watch every step the new dispensation in Kathmandu takes and react with dignity and polite firmness.

Given Nepal’s geopolitical situation, it is inevitable that its destiny should be intricately, one could even say organically, linked with India’s. What is important to remember is that such linkage is mutual. Policy-makers in each country need to realise that they cannot act in a manner which the other side would regard as adverse to its vital security concerns and interests. For this a continuing dialogue is necessary at the highest political level and, to achieve maximum success, such interaction must maintain a high measure of confidentiality.

Although India has always expressed interest in assisting Nepal to harness its immense water resources, little has been achieved on the ground since 1964. This is because of different perceptions at the technical bureaucratic level and even more so at the political level. Policy-makers in India must remember at all times that India cannot remain a land of prosperity if its neighbours remain in economic distress. India’s neighbours have a rapidly expanding population and by 2050 Nepal’s population is likely to exceed 60 million people from it present 26-27 million. The Indo-Nepal border is open and easily accessible on either side in the southern stretches. Economic migrants will flood India in the not too distant future unless India ensures that there is “real” economic development on the Nepal side of the border.

The Maoists had made brave assertions about economic policies in their original 40-point agenda but the compulsions of managing the state and ensuring effective governance will soon bring Nepal’s new rulers face to face with realities. It is then that India would need to be sagacious rather than clever in handling Nepali demands. That would be the single most challenge before the Indian establishment.

Relationship between tourism in Nepal and Indian economy

This is a research in which I am currently working on .Trying to employee a regression model to find a relationship between out bound tourism of India and how does it contribute to Nepal's economy... suggestion and comments will be appreciated



The World tourism organization has fore casted India is expected to be one of the biggest sources of overseas tourists by 2020, According to the survey in 2004 India was one of the top 25 countries to spend on outbound tourism. International tourism receipts represented in 2003 approximately 6 per cent of worldwide exports of goods and services (as expressed in US$). When considering service exports exclusively, the share of tourism exports increases to nearly 30 per cent.

Tourism is the largest industry of Nepal and one of the main sources of foreign reserves and revenue .For the last few years the tourism had plunged due to geo political instability in the region, but recently after the peace accord between the Maoist and the Government, tourism industry has once again started flourishing. According to Nepal tourism board the tourist arrival in 2007 grew more than 27% in 2006 .As the result GDP grew at the rate of 2.5% in compare to -2.00% in the previous year, Which was also followed by the bearish out look of the hotel companies listed in Nepalese stock exchange . Increase in the number of tourist has increase the confidence of local business and enterprises.

This case study is to analysis what are the various economical, political and geographical factors of Nepal and its booming neighbor India that can possibly help the demand for Nepal tourism industry . Land of Himalayas Nepal is surrounded 3 sides by economical power house India , growing at Annual the rate of 8.4%. India is one of the fastest growing economies in the world and is the biggest market for Nepali tourism. Tourism demand depends on the strong economical conditions in major generating market, when economies grow level of disposable income increase and large part of the discretionary income will be spent in tourism, particular in the case of emerging economies. Price is generally regarded as one of the major variable of demand of tourist destination, and there are two element of the price .The cost of travelling to the destination and the cost of living in the destination (Martin and Witt -87).Generally CPI is use to measure the cost of living .Price is also an important factor for substitutes in the demand for out bound tourism. Gary (1966: 86 ) have pointed out that many travelers have a high elasticity of substitution among the countries they want to travel, so that higher than budgeted price for one country may result in changing to a country will lower expenses . Nepal shares an open border with India ,Citizen of both the nation do not require to hold a passport or visa while traveling across these two countries ,International standards high ways connects two countries and high frequency of flights are schedule every day between various cities in India and Nepal. Which means travelling and living cost to Indian Citizen in Nepal will be relatively low.

Second important variable for the demand for tourism in Nepal will be the foreign exchange rate between two countries. Nepal had dual currency system in late 18Th and early 19th century both Indian and Nepali currencies were used as a medium of exchange in Nepal. Till now Indian currency dominates most part of Nepal. Nepali currency is also pegged with Indian currency (1 Indian rupee = 1.6Nepali rupee).Since the exchange rate is fixed there for cost of living and cost of traveling to Nepal for Indian tourist is relatively cheaper

Third variable will be personal disposable income in India. Economist have predicted over next two decades Indian’s middle class population will grow from about 6% of the population at present to 40% of the total population and will be the world’s fifth largest consumer spender . In 2005 the private spending of Indian was about $372 billion dollar. Higher the private spending of the country higher the likelihood of travelling. Fourth important variables will be cost of travelling by surface .Since Nepal has a open border with Indian , People do not require visa to travel .

Fifth variable will be the famous religious pilgrimage sites in Nepal. Temple of Pasupathi in Kathmandu is considered one of the most scared temple for Hindus and Nepal is also the birthplace of lord Buddha . Since 80% of the population in India are Hindus .There is a high chances for people to travel to Nepal even if it is for a religious purpose . Since people with high disposable income spend more in religious purpose.

GLOBAL FOOD CRISIS

These days I am cutting on my Crabohydrates Intake and running at least 45 min every day so that I can built up my six pac abs and impress the ladies this summer .But this is not the case else where .Riots has sparked and people are running all round the city no to built a six pac abs but to protest against the hike of commodity prices ,especially primary source of Carbohydrates Rice .According to World Bank President Robert Zoellick price of rice has gone up 75% since 2005.......

Finance ministers gathered this weekend to grapple with the global financial crisis also struggled with a problem that has plagued the world periodically since before the time of the Pharaohs: food shortages.

Surging commodity prices have pushed up global food prices 83% in the past three years, according to the World Bank -- putting huge stress on some of the world's poorest nations. Even as the ministers met, Haiti's Prime Minister Jacques Edouard Alexis was resigning after a week in which that tiny country's capital was racked by rioting over higher prices for staples like rice and beans.


As food prices soar, protests are breaking out around the world, including this riot Saturday in Port-au-Prince, Haiti.
Rioting in response to soaring food prices recently has broken out in Egypt, Cameroon, Ivory Coast, Senegal and Ethiopia. In Pakistan and Thailand, army troops have been deployed to deter food theft from fields and warehouses. World Bank President Robert Zoellick warned in a recent speech that 33 countries are at risk of social upheaval because of rising food prices. Those could include Indonesia, Yemen, Ghana, Uzbekistan and the Philippines. In countries where buying food requires half to three-quarters of a poor person's income, "there is no margin for survival," he said.

Many policy makers at the weekend meetings of the International Monetary Fund and World Bank agreed that the problem is severe. Among other targets, they singled out U.S. policies pushing corn-based ethanol and other biofuels as deepening the woes.

"When millions of people are going hungry, it's a crime against humanity that food should be diverted to biofuels," said India's finance minister, Palaniappan Chidambaram, in an interview. Turkey's finance minister, Mehmet Simsek, said the use of food for biofuels is "appalling."

James Connaughton, chairman of the White House's council on environmental quality, said biofuels are only one contributor to rising food prices. Rising prices for energy and electricity also contribute, as does strong demand for food from big developing countries like China.

But beyond taking shots at the U.S., there was little agreement this weekend on what should be done. Mr. Zoellick pushed the ministers to focus on the food issue in a dramatic Thursday news conference at which he held up a 2-kilogram (4.4-pound) bag of rice, which he said would now cost poor families in Bangladesh half their daily income. He kept up the pressure over the weekend. In a Sunday news briefing, he said, "We have to put our money where our mouth is now -- so that we can put food into hungry mouths."

But the weekend's meeting produced few concrete results. Mr. Zoellick recently urged rich nations to contribute another $500 million to the United Nation's World Food Program, but he said that the U.N. has received commitments for only about half the money.

Integrated Response

Meanwhile, the IMF's board of governors -- basically, the world's finance ministers, who run both the IMF and World Bank -- urged the IMF to work with the World Bank for "an integrated response through policy advice and financial support."

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• The Outlook: Higher Food Prices May Be Here to Stay1
• Haiti Seeks Leader to Tackle Food Prices2
• Vote: Are you surprised by the food prices you're paying?3On Sunday, the committee that oversees the World Bank noted that "large groups of poor people are severely affected by high food and energy prices across the developing world." The committee echoed the IMF committee's call for "timely policy and financial support to vulnerable countries" and urged rich countries to be more generous in "immediate support for countries most affected by the high food prices."

The World Bank plans to nearly double its agricultural lending to Africa next year to $800 million, and is urging members to ramp up relief for hard-pressed nations. The World Bank, IMF and big industrialized nations also are pushing for the completion of the Doha global trade talks, though cutting food subsidies in the U.S. and Europe under a trade deal would boost prices of food for impoverished importing nations.

Last week, British Prime Minister Gordon Brown urged the G7 nations -- the U.S., Britain, Canada, France, Germany, Italy and Japan -- to develop a comprehensive strategy for the food problem, encompassing trade, agricultural productivity, technology, biofuels and short-term aid for poor countries. In the past, Britain has taken the lead in pushing the G7 to write off the debts of the world's poorest nations.

The situation in Haiti underscored some of the problems afflicting the world's poorest countries. Haiti has enough food in the marketplace to feed its populace, but prices have increased beyond the means of many of the urban poor to pay for it, said Michael Hess, an administrator in the U.S. Agency for International Development's Bureau for Democracy, Conflict and Humanitarian Assistance. "People are making two bucks a day," he said. "And we're seeing food prices go up around the world."

Wave of Protectionism

In the Philippines, the world's biggest importer of rice, a shortage of the grain has become acute. The government is considering a moratorium on converting agricultural land to construction of housing developments and golf courses. The government also is urging fast-food restaurants to offer half-portions of rice to slash the country's rice bill.

Aggravating the problem, in some countries food inflation has prompted a wave of protectionism. Countries usually impose trade barriers to imports to protect local industries and try to boost exports. But food-trade protectionism works the opposite way. Recently at least a dozen of 58 countries surveyed by the World Bank have reduced tariffs to food imports and erected barriers to exports in hopes of restraining food prices domestically and moving toward "self-sufficiency."


India, home to more than half the world's hungry, is restricting grain exports, including a ban on the export of non-basmati rice. Taxes on edible oils, corn and butter have been decreased or eliminated.

Egypt similarly halted rice exports for six months as of April 1. The price of cereals and bread there has climbed by nearly 50% over the past 12 months. Eleven people have died in the past two months in incidents related to lengthening bread lines. The shortage compelled President Hosni Mubarak to order the army to bake additional loaves.

The global effect of export barriers, however, is to drive food prices even higher than they would be otherwise. Such policies "distort global prices," said Mr. Simsek, the Turkish finance minister, in an interview. Rather than erect barriers, he said, Turkey plans to pick up the pace of constructing irrigation canals near dams in Anatolia, in southeastern Turkey.

Arvind Subramanian, a former senior IMF researcher, said that when countries adopt restrictive trade policies regarding food, "it becomes a bizarre kind of beggar-thy-neighbor. You're not trying to sell more to the other guy; you're trying to keep more in your own country."

With the international financial institutions working on a slow track, countries have been cutting their own deals. Ukrainian President Viktor Yushchenko said on Tuesday that he had agreed to let Libya grow wheat on 247,000 acres of land in the Ukraine. In exchange, Libya promised to include the former Soviet republic in construction and gas deals.

Brazil recently invited Egypt's minister of commerce to discuss a possible trade deal which would have a strong agriculture component. China also cut its first free-trade deal with a rich country, picking New Zealand, a major food exporter, and is talking about a pact with Australia, another big agricultural producer.

Meanwhile, Uganda plans to sell more coffee, milk and bananas to India. "Our problem is too much food and little market," Uganda President Yoweri Kaguta Museveni told reporters, according to news reports,

About 18 of the countries sampled by the World Bank also are boosting consumer subsidies and instituting price controls. That prompted a warning from U.S. Treasury Secretary Henry Paulson to "resist the temptation of price controls and consumption subsidies that are generally not effective and efficient methods of protecting vulnerable groups." He said, "They tend to create fiscal burdens and economic distortions while often providing aid to higher-income consumers or commercial interests other than the intended beneficiaries."

Better-Targeted Subsidies

Instead, the World Bank's Mr. Zoellick urged countries to look at better-targeted subsidies -- such as providing food in exchange for work, or increasing school-lunch programs for poor families, so that children can take food home to their families.

During informal conversations and interviews, ministers mainly agreed that the U.S. policies on biofuels were especially harmful. U.S. ethanol is made from corn, which, ministers said, could be exported to feed the hungry, and benefited from tariffs that block Brazilian ethanol, which is produced much more efficiently from sugar cane.

The White House's Mr. Connaughton said the U.S. is working on developing "second generation" biofuels that would use varieties of grass or agricultural wastes -- not food -- as source material. "That's where we need to get to go," he said.

The World Bank also has blamed the boom in biofuels for the rise in global food prices. That has put Mr. Zoellick in a ticklish position. Before taking his job at the World Bank, he was U.S. Trade Representative, and defended U.S. agricultural positions. In his Thursday news briefing, he didn't mention the U.S. by name, but he praised sugar-based ethanol of the sort made in Brazil and questioned whether tariffs to block the fuel -- such as the U.S. uses -- make "economic sense."