IT was celebration time on Thursday last at Dalal Street, the narrow, but bustling road in the heart of south Mumbai, which is home to the 28-storeyed Phiroze Jeejeebhoy Towers, headquarters of the Bombay Stock Exchange.

The Sensex, the benchmark index on the exchange, crossed another milestone, when it breached the 8,000-mark for the first time. It was only as recently as June that the BSE had crossed the 7,000-mark, and bull operators on Dalal Street were last week gleefully speculating as to whether the 10,000-level would be pierced by the end of the year.

The Sensex, which tracks 30 leading shares, has gained by almost 20 per cent this year, fuelled by a ceaseless in-flow of funds from foreign institutional investors (FIIs). While last year, FIIs injected about $8.5 billion into the Indian stock markets, this year they have ploughed in about $7 billion so far, and at the current rate, their in-flow could as well top the $10 billion mark.

Japanese and South Korean institutional investors have been leading the charge over the past few months, gobbling up many of the shares that comprise the Sensex. The index features top listed companies including infotech giants Infosys, Tata Consultancy and Wipro, public sector majors ONGC, NTPC and State Bank of India, private behemoths Reliance Industries, Tata Motors and Tata Steels, pharmaceutical firms Cipla, Dr Reddy’s and Ranbaxy, finance majors HDFC, HDFC Bank and ICICI, and multinationals like Maruti Suzuki and Hindustan Lever.

Though the Bombay Stock Exchange began operations way back in 1875 – as the Native Share and Stock Brokers Association – the Sensex was compiled only in 1986. It crossed the 1,000-mark in 1990, and has been yo-yoing over the past 15 years, surviving two major scams, and several other tumultuous events.

Last year, after the United Progressive Alliance government came to power with the backing of leftists, the Sensex fell by a record 565 points on May 17. However, the ‘dream-team’ of Prime Minister Manmohan Singh and Finance Minister P. Chidambaram have over the past 16 months, through their economic policies, steered a phenomenal turnaround in the fortunes of the Indian stock markets.

Asia’s oldest stock exchange is also undergoing major structural changes. For a start, at the behest of the government, it was ‘demutualised’ last month, when it changed over from an association of brokers to a corporate entity. BSE Ltd, as it is now known, plans to tie-up with strategic investors from abroad, and also go in for an initial public offering (IPO) over the next few months.

According to Rajnikant Patel, CEO, BSE Ltd, brokers’ stake in the exchange will be reduced from 100 per cent to 49 over the next 12 months. The exchange, which has seen a sharp decline in its business following the setting up of the National Stock Exchange in 1993, wants to diversify into the financial services sector.

THE growing hunger for steel in India from the automobile, white goods and industrial sectors has resulted in the unveiling of mega projects by steel producers, both domestic and international.

Mumbai-based Tatas, the country’s premier industrial house (and its oldest steel producers) last week announced a $10 billion investment in the mineral-rich, though backward state of Jharkhand. While Tata Iron and Steel Company (TISCO) already has a five million tonne steel plant in Jamshedpur in the state, it now plans to double the capacity, besides setting up a 12 million tonne greenfield project.

The Mittals, the London-based Indian-origin business family – who are also the world’s largest steel producers – also plan to set up a 12 million-tonne plant in Jharkhand at a cost of over $11 billion. And South Korean giant Posco – the world’s fifth largest steel maker – had recently signed a deal with the neighbouring state of Orissa for a $12 billion steel project.

One reason for the flurry of investment proposals in Jharkhand and Orissa is the presence of vast quantities of coal and iron ore deposits. India has the world’s third largest deposits of coal and iron ore. And demand for steel is growing, as the economy expands at a brisk 7.0 per cent annual rate.

Indian steel makers, however, are worried that international producers like the Mittals and Posco might export iron ore from the country for their overseas projects. The Mittals are keen to export iron ore from Jharkhand, while Posco has been given mining rights for 600 million tonnes of iron ore for its Orissa plant.

But the Jharkhand government is not willing to allow steel producers to export iron ore from the state, which has reserves of an estimated three billion tonnes of the mineral, representing a third of the country’s total reserves. Arjun Munda, the chief minister, wants value addition to take place in the state itself.

The Tatas have promised to set up mega power plant, industrial training institutes and also an integrated township in Jharkhand, and are likely to be given long-term leasing rights over the Chiria mines.

Earlier in the month, Essar Steel – controlled by the Ruia brothers – set up its cold rolling mill in Hazira in the western state of Gujarat. According to Prashant Ruia, managing director, Essar Steel, the new 1.2 million tonne cold rolling complex would meet the growing demand for products from the automobile and white goods sector in India.

The Essar group, which has interests in steel, shipping, power, oil and gas, telecommunications and construction, produces about three million tonnes of steel annually. According to Ruia, despite the new investments that have been announced in east India, demand for steel will continue to soar.

At present, India requires about 32 million tonnes of steel every year; this is set to rise to 60 million tonnes by 2010, and over 100 million tonnes by 2015. Domestic production is unlikely to keep pace, and the metal may have to be imported. At present, companies like Essar export steel, especially to the Gulf and the Middle East.

Groups like the Tatas and Essar are also toying with the idea of acquiring steel plants abroad.

FOR the United Progressive Alliance government, the legislation of the National Rural Employment Guarantee Act (NREGA), which envisages provision of jobs to at least one member of a family for part of a year (in about 200 districts to begin with), has come as a major achievement.

But in Maharashtra, the only state that has implemented an Employment Guarantee Scheme for the last quarter century, the social security legislation continues to be riddled with corruption and bogus claims.

The latest scam to have surfaced appears to have embarrassed the government of chief minister Vilasrao Deshmukh, at a time when the federal government – both are dominated by the Congress – is boasting of its achievements. Deshmukh, instead of probing the scam further, is trying to push it under the carpet, and victimising the bureaucrat who exposed it.

Manisha Varma, the collector of Solapur district – a hardscrabble region perennially short of water – came across a shocking instance of government officials and contractors ripping off nearly Rs100 million from an employment scheme for the poor. The mafia had forged her signatures, as well as those of other district officials.

So entrenched was the scam that even the police refused to register a complaint that the district collector was making. She had to protest vociferously, refusing to leave the police station, before the cops acquiesced.

Varma then initiated a public reading of the musters, to find out exactly who had been paid. Activists also utilised the new Right to Information Act, and sought a public reading of musters in villages across the district. And they were shocked to find the massive extent of the scam.

Names of dead persons were listed in the muster as having been paid for the jobs. Many of the persons listed were not even living in the villages, but had been given money for the jobs undertaken.

Employees of the state’s agriculture department, who were looting the EGS funds, have built palatial homes in Solapur, while hundreds of thousands of jobless persons were being deprived of their dues. But instead of backing Varma, the state government was trying to brush aside her investigations, apparently at the behest of local politicians.

Deshmukh ordered officials to instruct Varma not to conduct public reading of the muster rolls, and the entire matter was taken out of her jurisdiction.