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Former premier Benazir Bhutto was killed by the impact of a suicide blast and not by a gunshot, Britain's Scotland Yard said in its probe report, backing the Pakistan government's version of the assassination.

The report, handed over to interim Interior Minister Hamid Nawaz, an executive summary of which was released by the British High Commission, also concluded that a lone attacker fired shots at Bhutto and then detonated explosives at a rally in Rawalpindi on 27th December.

"The only tenable cause for the rapidly fatal head injury in this case is that it occurred as the result of impact due to the effects of the bomb-blast," UK Home Office pathologist, Dr Nathaniel Cary was quoted in the report as saying.

"In essence, all the evidence indicates that one suspect has fired the shots before detonating an improvised explosive device. At the time of the attack this person was standing close to the rear of Ms Bhutto's vehicle," the British detectives concluded.

"The blast caused a violent collision between her head and the escape hatch area of the vehicle, causing a severe and fatal head injury," said the report, signed by Detective Superintendent John MacBrayne.

Cary also said, "in my opinion Mohtarma Benazir Bhutto died as a result of a severe head injury sustained as a consequence of the bomb-blast and due to head impact somewhere in the escape hatch of the vehicle."

Bhutto died of injury after head hit vehicle hatch: Yard Rezaul H Laskar

Britain's Scotland Yard today backed the Pakistan government's conclusion that former premier Benazir Bhutto died due to injuries suffered by her head hitting the escape hatch of her vehicle and not to bullet wounds.

"In my opinion, Mohtarma Benazir Bhutto died as a result of a severe head injury sustained as a consequence of the bomb blast and due to head impact somewhere in the escape hatch of the vehicle," a report of the Metropolitan Police's Counter-Terrorism Command said quoting Dr Nathaniel Cary, UK Home Office pathologist.

The report, which may come as a huge relief to the establishment headed by President Pervez Musharraf, was signed by John MacBrayne, detective superintendent, counter-terrorism command.

The Scotland Yard was roped in by President Musharraf after his government came under attack for suggesting that she died due to the head injuries suffered by the former prime minister when she ducked after a suicide bomber set off a blast after her election rally in the garrison city of Rawalpindi on 27th December.

Under severe criticism, Musharraf also said she may have been shot.

The team said that the blast triggered by the suicide bomber "caused a violent collision between (Bhutto's) head and the escape hatch area of (her armoured) vehicle, causing a severe and fatal head injury".

The executive summary of the report released by the British High Commission said that available evidence suggests there was no gunshot injury.

The report said the task of establishing exactly what happened was complicated by the lack of an extended and detailed search of the crime scene, the absence of an autopsy, and the absence of recognised body recovery and victim identification processes.

"Nevertheless, the evidence that is available is sufficient for reliable conclusions to be drawn. Within the overall objective, a particular focus has been placed on establishing the actual cause of death, and whether there were one or more attackers in the immediate vicinity of Bhutto," it said.

Considerable reliance was placed upon the X-rays taken at Rawalpindi General Hospital following Bhutto's death.

Given their importance, the X-rays have been independently verified as being of Bhutto by comparison with her dental X-rays.

Additionally, a valuable insight was gained from the accounts given by the medical staff involved in her treatment, and from those members of Bhutto's family who watched her body before her burial.

The report further said that "Bhutto's only apparent injury was a major trauma to the right side of the head.

"The UK experts all exclude this injury being an entry or exit wound as a result of gunshot. The only X-ray records, taken after her death, were of Bhutto's head", the report said.

"However, the possibility of a bullet wound to her mid or lower trunk can reasonably be excluded. This is based upon the protection afforded by the armoured vehicle in which she was traveling at the time of the attack, and the accounts of her family and hospital staff who examined her."

"The limited X-ray material, the absence of a full post mortem examination and CT scan, have meant that the UK Home Office pathologist, Dr Nathaniel Cary, who has been consulted in this case, is unable categorically to exclude the possibility of there being a gunshot wound to the upper trunk or neck", the report said.

"However when his findings are put alongside the accounts of those who had close contact with Ms Bhutto's body, the available evidence suggests that there was no gunshot injury.

Importantly, Cary excludes the possibility of a bullet to the neck or upper trunk as being a relevant factor in the actual cause of death, when set against the nature and extent of her head injury", it added.

At least 46 Tamil Taigers militants and three Sri Lankan soldiers were killed in fierce clashes in the island nation's embattled north as the security forces captured a strategic one sq km area in the north-western Mannar.

Bangladesh authorities said on Friday that they had culled over 450,000 birds even as experts warned of grave birdflu dangers that the nation's poultry markets faced due to absence of minimum biosecurity measures there.

North Korea warned the United States that pressuring the communist nation over its nuclear weapons programmes will only aggravate the standoff and could lead to an "explosive crisis".

Deposed prime minister Thaksin Shinawatra will return to Thailand from a self-imposed exile before May, the kingdom's new foreign minister said on Friday.

Underlying the Chad conflict is a struggle to control the country's oil resources, which while not extensive are nonetheless vital to the future of one of Africa's most impoverished nations.

A survivor of Cambodia's Khmer Rouge publicly confronted the regime's "Brother Number Two" at a UN-backed genocide tribunal on Friday, marking the first time victims have faced a senior cadre in court.

Ahead of the Olympics, special teams would conduct daily safety checks of the vast water network in the water problem-hit host city of Beijing.

Patrol staff and maintenance workers would carry out round-the-clock checks and maintenance of water pipelines and ground water systems, the official with the Beijing Municipal Bureau of Water Affairs said.

The Games will be held in August, which is the annual flood season in Beijing.

The routine checks will cover sound drainage of rain water, especially in the sports venues, the official Yu Yaping was quoted as saying by the news agency.

Water safety has been identified by authorities as a key factor in the success of hosting the prestigious event in Beijing, which faces water supply problems but has to guarantee sufficient water for the Olympics.

Water diverted through the country's south-north diversion project will reach Beijing by March.

Beijing's neighboring province, Hebei, would contribute its reservoir water to back up the national capital's supply.

Many large "waterscapes" have also sprung up as part of efforts to beautify Beijing for the big event.

The bureau is also responsible for detecting groundwater pollution

Rescue teams searched for nine missing people after fishermen found eight survivors of a boat accident off the southern coast of Indonesia's Papua province on Friday.

he head of the Anglican church has sparked a political and religious controversy in UK after he called for adoption of some aspects of Islamic Sharia law in Britain.

"It seems inevitable that elements of the Muslim law, such as divorce proceedings, would be incorporated into British legislation," Rowan Williams, also the Archbishop of Canterbury, said on Thursday’s night.

The Archbishop provoked the row by saying Britain had to "face up to the fact" that some citizens did not relate to this country's legal system and argued that officially sanctioning Sharia law would improve community relations.

He said there was an argument that aspects of Sharia law, such as those involving divorce, financial transactions and the settling of disputes, could be accommodated with British legislation.

The Archbishop's comments came in for criticism by Downing Street, religious groups and MPs from all sides.

The head of the equality watchdog denounced his claims while several high profile Muslims attacked him.

Prime Minister Gordon Brown's spokesman has distanced the premier from remark, saying, "The Prime Minister believes British law should apply in this country, based on British values."

Home Secretary Jacqui Smith said, "I think there is one law in this country and it's the democratically determined law."

"That's the law and I will uphold and that's the law that is at the heart actually of the values that we share across all communities in this country," Smith said.

Speaking before a speech on the issue - delivered last night - Williams said, "Nobody in their right mind would want to see in this country the kind of inhumanity that has sometimes been associated with the practice of the law in some Islamic states. But there are ways of looking at marital disputes, for example which provide an alternative to divorce courts as we understand them."

"The Archbishop's thinking here is muddled and unhelpful," said Trevor Phillips, the chairman of the Equality and Human Rights Commission.

Baroness Warsi, the shadow minister for community cohesion and social action, said, "The Archbishop's comments are unhelpful and may add to the confusion that already exists in our communities."

"All British citizens must be subject to British laws developed through Parliament and the courts."

Sharia is the body of Islamic law implemented in some Muslim countries, including Saudi Arabia, Libya and Sudan. Even the Muslim Council of Britain insisted that most members of the community did not want Sharia and emphasised that it had not discussed the issue.

Britain has 1.6 million Muslim population, some 2.7 percent of the total population, according to the 2001 national census report.

An estimated 7,000 British infantrymen are unfit to fight, leaving front-line troops "dangerously exposed", a media report said on Monday.

One in 14 soldiers is sick or injured at a time when every regiment of 600 faces a shortfall of 100 men because of problems with recruitment and the numbers leaving the Army, The Daily Telegraph reported.

Troop shortages are so acute that at least six battalions are being sent to do the job of four battalions when the next brigade deploys to Afghanistan this spring, it said.

The report comes after a parliamentary committee warned last week that pressure on Britain's military to meet its commitments in Afghanistan and Iraq has battered the morale of experienced officers, who are leaving in large numbers.

There are currently 7,700 British troops in Afghanistan, with a further 4,500 in Iraq.

For at least a year, military chiefs have been aware that the strain of two substantial missions in Iraq and Afghanistan would prove a massive drain on manpower and now the Armed Forces are at the very limit of being able to provide personnel for the frontline, the report said.

The Army is already 3,800 short of it desired manning level because of soldiers leaving.

An Army spokesman said, "The forces pride themselves on their fitness and are well known for it but there will always be a small element suffering from sickness or injury and not fit to deploy to an operational theatre."

A gunman opened fire at a US city council meeting in Kirkwood, killing two police officers and three other people before law enforcers fatally shot him.

It wasn't immediately clear whether the mayor was hit, but at least two people were.

Kirkwood police fatally shot the gunman.

The gunman killed one officer outside the city hall, then walked into the chambers and shot another, Panus said.

He continued firing in the chambers, killing three attendees and wounding two others.

Dozens of people have injured when an explosion and fire at a sprawling sugar refinery has rattled Savannah suburb in US while no deaths have been reported immediately.

Pakistani authorities briefly took Aaj Television, a private news channel off cable networks in several cities as it was airing a show hosted by an anchor who has been critical of President Pervez Musharraf's regime.

Aaj television went off the air in Islamabad, Rawalpindi and several nearby areas without any prior notice being given by the government at 10.30 PM on Wednesday night, an official of the channel said.

"There was no intimation or warning of the blackout," he said.

The channel was restored to cable networks early Thursday morning. This was the second time Aaj was taken off the air, the first being after Musharraf proclaimed emergency in November last year.

Aaj vanished from cable networks while it was beaming the popular news and current affairs show "Live With Talat" hosted by Talat Hussain, an anchor who had earlier run afoul of the military regime for his criticism of Musharraf.

One of the guests on Hussain's programme was senior journalist Nusrat Javed, whose show "Bolta Pakistan" has already been taken off the air by the authorities.

Despite its name, Hussain's programme is no longer aired live and is beamed after being recorded in the studio. Aaj reportedly rebuffed pressure from the Pakistani authorities to take Hussain off the air.

Musharraf shut down all foreign and Pakistani news channels after he imposed emergency on 3rd November.

Iraqi and UN officials have toured a bomb-damaged Shiite shrine in the northern Iraq as workers took the first steps in a long-delayed reconstruction nearly two years after the attack on the famed golden dome sparked a vicious cycle of sectarian violence.

Relentless bloodletting between Shiite and Sunni extremists claimed tens of thousands of lives and lurched Iraq dangerously close to civil war.

A second bomb attack this year on 13th June toppled the surviving twin minarets, prompting Shiite clerics to step up calls for the reconstruction of the Askariya shrine.

The complex contains the tombs of two ninth century imams who were descendants of the Prophet Muhammad, and Shiites consider them to be among his successors.

An envoy for Iraq's Shiite-led government, Haq al-Hakim, described the USD 16 million rebuilding effort as a symbol of national unity at a time when violence is decreasing across most of Iraq.

But the morgue count yesterday showed how quickly bloodshed can return.

Iraqi police reported at least 30 people killed or found dead around the country, including eight beheaded bodies found in the volatile Diyala province northeast of the capital.

It was one of the highest daily tolls in weeks

Crews have been searching for more victims of deadly tornadoes that killed at least 55 people and injured hundreds more as they tore across five US states, ripping off a shopping mall roof, demolishing mobile homes and blowing apart warehouses.

It was the country's deadliest barrage of twisters in almost 23 years. Dozens of tornadoes plowed across Mississippi, Arkansas, Tennessee, Kentucky and Alabama.

The storms flattened entire streets, smashed warehouses and sent tractor-trailers flying.

Houses were reduced to splintered piles of lumber. Some looked like life-size dollhouses, their walls sheared away.

Crews going door-to-door to search for bodies had to contend with downed power lines, snapped trees and flipped-over cars.

"We had a beautiful neighbourhood. Now it's hell," said Bonnie Brawner, 80, who lives in Hartsville, Tennessee, a community about an hour from Nashville where a natural gas plant that was struck by a twister erupted in spectacular flames up to 120 metres high.

"It looks like the Lord took a Brillo (scouring) pad and scrubbed the ground," said Tennessee Governor Phil Bredesen, who surveyed the damage from a helicopter.

Hundreds of houses were damaged or destroyed. Authorities had no immediate cost estimate of the damage.

President George W Bush gave assurances his administration stood ready to help.

Teams from the Federal Emergency Management Agency were sent to the region and activated an emergency centre in Georgia.

The defence ministry has said that Israel has begun cutting back energy supplies to the Gaza Strip, in a move slammed by rights groups as collective punishment and a violation of the laws of war.

"The Israeli electricity company yesterday evening reduced by about one per cent electricity supplied by high tension line to the Gaza Strip," defence ministry spokesman Shlomo Dror told a news agency on Thursday.

Ahead of the reduction the New York-based Human Rights Watch (HRW) group said in a new report that the planned "cuts of fuel and electricity to Gaza, amount to collective punishment of the civilian population."

Israel began reducing the amount of fuel it supplied to Gaza in late October after declaring the coastal strip a "hostile entity" following its takeover by Hamas, an Islamist movement pledged to the destruction of the Jewish state.

The defence ministry on Thursday said it would reduce by five per cent the amount of electricity it supplies to Gaza in one of 10 lines, with similar cuts in other lines to follow in the coming weeks.

Israel says the measures are aimed at stopping Gaza militants from firing rockets into Israel and has pledged not to allow a humanitarian disaster in the territory where most of the population depends on foreign aid.

Finance Minister P Chidambaram has expressed "some disappointment" at the lower than anticipated economic growth projections by CSO, but exuded confidence that the GDP may finally grow close to 9 pc in the current fiscal.

"There is some disappointment, but I am not too despondent. I am pretty confident that we may achieve economic growth rate of close to nine per cent," Chidambaram told reporters after the Central Statistical Organisation put out advance estimates of economic growth rate of 8.7 percent this fiscal against 9.6 percent in 2006-07.

Attributing the projected moderation in economic growth rate this fiscal to lower estimates of agriculture expansion, Chidambaram said the Ministry of Agriculture did not share figures put out by CSO.

The CSO estimates have projected agriculture to grow at 2.6 percent during the current fiscal.

In the first half of the year, farm and allied sector grew at 3.7 percent.

"I have spoken to the Ministry of Agriculture. It did not share the assessment that the growth rate in agriculture for the whole year would only be 2.6 percent," Chidambaram said.

Meanwhile, according to a press note issued by the Agriculture Ministry on Thursday, foodgrain production in the country is estimated to be at an all time high of 219.32 million tonne during 2007-08.

"It could, therefore, turn out that estimates of 2.6 percent for agriculture for the whole year may be on the lower side," the Finance Minister said.

Besides agriculture, the base of 2006-07 has also increased to 9.6 percent from the original 9.4 percent, he said, adding this may also have an impact on the GDP growth rate for the current fiscal.

Pointing out that CSO, CMIE, NCAER and CRISIL have more or less agreed that services will grow at double digits this fiscal and industry at over 9 percent, the Finance Minister said there is a vast difference in estimates of agriculture.

Against the CSO estimates, CMIE projected the farm sector growth at 3.9 percent, NCAER at 3.8 percent and CRISIL at 3.4 percent.

He said only 0.2 percent more growth is required to push up the economic growth rate to 8.9 percent than what is projected by CSO.

"Let us see how agriculture comes out to be finally. We might still get growth rate close to 9 percent. Like all estimates, these estimates are usually revised upwards, because these are conservative estimates... I take this bit of news with a sense of disappointment... I think final news should be better," he said.

He said the CSO estimates should not affect the target of average nine percent growth rate per annum for the Eleventh Five Year Plan, culminating into 10 percent growth rate in the final year.

According to the advance estimates of national income released by the govt GDP is likely to moderate to 8.7% in the current fiscal due to slow expansion in industrial output.

The industrial output has been hit by high interest rates and sluggish agriculture.

The Gross Domestic Product (GDP) had grown at 9.6 per cent in 2006-07, which was the highest in 18 years.

"GDP at factor cost at constant (1999-2000) prices in the year 2007-08 is likely to attain a level of Rs 31,14,452 crore as against Rs 28,64,310 crore in 2006-07," according to the advance estimates of national income released by the government on Thursday.

The GDP grew at 9.1 per cent during the first half of this fiscal. It grew at 9.3 per cent in the first quarter and 8.9 per cent in the next three-month period. The advance estimates showed a further moderation during the rest of the year.

The estimated growth rate is slightly higher than the conservative RBI projection of 8.5 per cent, but less than 9.1 per cent, projected by economic think tank NCAER.

Finance Minister P Chidambaram had earlier exuded confidence that the economy will grow close to 9 per cent during 2007-08.

High interest rates have pushed up cost of producing industrial goods and reduced demand for consumer goods, affecting manufacturing growth.

The manufacturing sector is likely to grow at 9.4 per cent during the fiscal as against 12 per cent last year.

The advance estimates revealed that agri and allied activities will likely expand at 2.6 per cent as against 3.8 per cent in the previous year.

Analysts expressed concern over the slowdown in farm sector despite good monsoons, saying it will affect prices of agricultural produce.

"Agriculture is the only major worry. Slowdown in agriculture growth does not augur well for prices of farm products," CRISIL Principal Economist D K Joshi said.

In the industrial sector, mining and quarrying sector is estimated to grow at 3.4 per cent as compared to 5.7 per cent in the previous financial year.

Construction activities are projected to moderate to 9.6 per cent as against 12 per cent. Electricity, gas and water supply would be the only saving grace in the industrial activities as they are shown to be growing at 7.8 per cent against six per cent.

Joshi said it is a good opportunity for the Finance Minister to cut indirect taxes in the coming Budget on industrial goods as it would spur their production as well as reduce their prices to boost demand.

Taking a cautious approach, the RBI had retained the key interest rates in its quarterly review of the monetary policy last month. Some banks have already reduced interest rates on some categories of loans.

Among the booming services sector, trade, hotels, transport and communication activities are likely to expand by 12.1 per cent from 11.8 per cent last year.

Community, social and personal services are estimated to grow at 7 per cent, against 6.9 per cent.

However, finance, real estate and business services are estimated to grow at 11.7 per cent as against 13.9 per cent.

According to the estimates, an Indian, on an average, is likely to have 11.8 per cent more money at Rs 33,131 this year, against Rs 29,642 in 2006-07. National income is likely to grow at 9.1 per cent (Rs 27,60,325 crore) in 2007-08 as compared to 9.7 per cent (Rs 25,30,495 crore) last fiscal.

FM confident of close to 9 pc growth

Finance Minister P Chidambaram, while reacting to advance GDP estimates of national income released on Thursday, sounded confident that the economy will grow at close to 9 percent rate this fiscal.

"I am reasonably confident that figures may be revised and economy will grow at close to nine per cent," Chidambaram said.

"The Central Statistical Organisation figures are lower than what I had anticipated. We are disappointed but not despondent," he said.

Poor figures are mainly because of projected low rate in the agriculture sector, he said.

The government has approved an interim grant of Rs 200 crore to the ailing Fertilizers and Chemicals Travancore Ltd to help it sustain operations till the end of this fiscal.

The one-time interim grant for Fertilizers and Chemicals Travancore Ltd (FACT) was approved by the Cabinet Committee on Economic Affairs (CCEA), according to an official release.

"This would help FACT to recover the losses due to inadequate compensation for input costs and fertiliser products." it said.

FACT, the only fertiliser company operating in Kerala, has been facing tough times for many years.

Earlier, the government had said it was planning to revive certain public sector units by restructuring and modernising them and FACT was one of the companies selected for revival.

Less than a year after the empowered Group of Ministers had imposed a land ceiling of 5,000 hectare on Special Economic Zones, Commerce and Industry Minister Kamal Nath has strongly favoured lifting the cap stating many states want large sized SEZs.

"We are looking at it (the 5000 hectare land ceiling). There are some states who want large SEZs. One cannot have a port SEZ in Madhya Pradesh. Likewise one cannot have a similar policy in Kerala as you have in Madhya Pradesh. There cannot be a 'one-size-fits-all' policy in the nature of the our states," Nath said.

The empowered Group of Ministers, headed by External Affairs Minister Pranab Mukherjee, had imposed a 5000 hectare ceiling on SEZs last year following widespread protests over land acquisition.

The meeting of the eGoM, scheduled for February 4 to review the land ceiling was cancelled.

Lifting of the land ceiling would help big developers like Reliance Industries, DLF, Omaxe and Ascendas which had planned mega multi-product SEZs.

The Commerce Ministry had earlier submitted a proposal before the EGoM favouring relaxation of rules on land size arguing that concerns over displacement have been addressed in the legislation-backed resettlement and rehabilitation policy.

Asked why protests over land acquisition continued despite the Centre coming out with the R&R policy, Nath put the ball in the court of the states.

"States must ensure what they are doing is acceptable to the people. There is no issue in so many states on SEZ at all," Nath said adding the land issue was not restricted to the SEZs but concerned all the industries.

For instance, the Tata project in Singur in West Bengal was not an SEZ but faced protests.

"The Tatas' Nano project in Singur is not an SEZ....the same political party (CPI-M) in Kerala is putting up an SEZ. There is the same party in West Bengal. What are they doing?" he said.

Ruling out any changes in the SEZ policy, Nath said "there is nothing wrong with the policy".

Nath contested the Finance Ministry's contention that there would be big revenue loss on account of the tax-free enclaves.

He said the ICRIER study commissioned by the Finance Ministry pointed to the contrary. "I have the report and it says that there is revenue gain and phenomenal economic activity through the SEZs. It says SEZs have been one of the biggest engines of growth," Nath said.

He said over Rs 50,000 crore worth of investment has been made in the SEZs with direct employment of 150,000 people.

The government has so far given formal approval to 404 SEZs and notified 193 zones.

Driven by increased use of technology by small and mid-sized businesses, the country's information and communication technology market is estimated to grow 20.3 pc annually to reach USD24.3 bn by 2011, industry research firm Gartner said.

"The growth will be driven by chief information officers (CIOs) continuing to build and consolidate the basic IT infrastructure, in addition to small and mid-size businesses increasingly leveraging technology to drive business growth and efficiency," it said.

The total Indian ICT market was 9.6 billion dollar in 2006, including hardware and software.

Though worldwide IT budgets are expected to increase by 3.3 percent in 2008, slightly higher than 2007, the Indian firms would report stronger-than-average IT budget increases of around 13 percent.

"This increased spending by Indian CIOs is directed primarily towards building new business capabilities, with 30 percent of IT spend allocated for business growth and 19 percent towards business transformation," the firm said.

The Indian technology landscape was evolving rapidly, driven by continued growth in the offshore services sector with strong domestic growth.

Indian firms are spending their budgets more on hardware and software than on people, Gartner said, adding this is significant as Indian firms continue to build out their infrastructure.

The HR component of the IT budget would grow as the emphasis shifts from implementing standard (generic) solutions to creating unique products and services, it added.

India is likely to emerge unscathed from the financial crisis sweeping the globe, thanks to the structure of its economy, exports and financial markets, feels a senior official of the IMF.

"India is increasingly a part of the global economy and so it cannot be de-coupled and it does move in sync with rest of the world... In our view, there are a few things going on in India that will likely insulate it from the worst of the effects that would be felt in other countries," IMF Senior Adviser and Mission Chief for India Kalpana Kochar said in response to a question.

"Domestic demand in India is very strong, where you still have investments that are growing very strongly. Consumption, especially of durables, has come off a little bit as interest rate has increased from last year and are beginning to bite, Kochar said in a teleconference.

Investments, which overtook consumption as the key driver of economic growth in 2003-04, has increased 20 percent from last year's level.

"But we do think that overall domestic demand growth is strong and that is going to keep growth going," she added.

“India is plugged into the world trading system but Indian exports have been diversified both in terms of goods and markets... On service exports... we don't have a whole lot of strong evidence but we do believe that impact could go either way”, Kochar noted.

"If in fact US companies are looking to cut costs, it could mean they outsource more. So, India could benefit from that," Kochar maintained.

"Overall in the spectrum of countries that are likely to be affected by this crisis, India is probably a bit further down," she added.

Another senior official of the IMF stressed that the strength of the Indian rupee is pegged to the strong fundamentals and that the Fund is more concerned about the "costs" of intervention by the central banks.

"The strength of the rupee reflects the strength of the Indian economy which is one of the fastest growing economies. It has one of the highest rates of productivity growth in the region, if not worldwide," said Charles Kramer, the Division Chief for the Asia-Pacific.

India has excellent prospects in terms of growth and a very strong corporate sector...which has shown a significant degree of resilience," Kramer added.

"The intervention (by the RBI) is basically to smoothen adjustments in exchange rates... Our concern with the intervention has more to do with the costs," Kramer said.

"When the RBI intervenes or the central banks intervene, generally they accumulate foreign exchange assets and carrying these assets has costs. While the cost is not very high right now, eventually the cost could increase in an environment where the authorities are trying to make progress... on the fiscal side. That could be undesirable," Kramer maintained.

The official said the prospect is bright for India in terms of economic growth -- about 8.75 percent this year and about 8.25 percent for the next fiscal year.

"The main driver of growth now is domestic demand, especially on the investment front. We have seen evidence of things slowing down a bit, but there are a lot of fundamental underlying strengths there -- strengthened corporate profits and certainly a lot of appetite for investment on the corporate sector side," Kramer remarked.

Potential gains for India from the Doha deal could be wiped out if the country binds its agricultural tariffs at levels that cannot cushion the global price hikes, a new study by a US think-tank has said.

"Even a 25 percent decrease in the price of rice has negative effects on all major components of the Indian economy, including private consumption, investment, exports, and imports," the study by Carnegie Endowment for International Peace has said.

As much as 78 percent of households would experience real income losses from such a price change and the distributional impact would be regressive, with the poorest households losing the most," it said.

Based on simulations of changes from the Doha pact, the report said that for instance a 50 percent decrease in the world price of rice could have a negative impact on India's real income as large as the positive impact of the entire Doha agreement.

These results suggest the Indian government's concern over the potential negative effects of a Doha agreement on poverty and rural development is well founded, says the study 'India's Trade Policy Choices'.

"... it has been correct to seek provisions such as a special product designation for agricultural products that are important to livelihoods and a special safeguard mechanism to allow it to shield domestic producers from sharp negative price shocks to key commodities," the report said.

The report has been prepared by the Trade, Equity, and Development Program of the Carnegie Endowment for International Peace.

However, the gains of Doha deal would be greater than that from free trade agreements with any of its major trading partners, including the EU, the United States, and China, it noted.

The study even though trade liberalisation, especially through multilateral agreements, could contribute to the country's future growth, the gains are likely to be modest.

"Trade agreements must be negotiated with great care if they are to contribute to the country's development and broadly improve the living standards of its people."

On the other hand, a multilateral agreement at the WTO is expected to have a much larger impact on the Indian economy than bilateral trade agreements with the EU, the United States or China.

"Overall, India's real income would increase by about six times as much under a Doha agreement compared with the gain from the most beneficial bilateral agreement. Still, the gain would amount to only about 1.2 billion dollars, or one-quarter of one percent of the current economy," it said.

According to the economic simulations, exports would increase by about 4 percent, while imports would grow by about 3 percent.

Further, domestic production would rise by about 4.5 billion dollars , or one-half of one percent.

Focusing on employment in the country, the report said that all the trade pacts simulated in this study would induce small increases in demand for unskilled labour, with a Doha agreement increasing demand by 0.9 percent (about 4 million jobs based on current employment levels).

"An India-EU FTA would increase demand by 0.5 percent (about 2.3 million jobs), an India-US FTA by 0.3 percent (1.4 million jobs), and an India-China FTA by 0.2 percent (900,000 jobs)," it added.

The US Senate overwhelmingly approved its own version of a giant economic stimulus plan sought by the White House amid mounting fears that the economy could be falling into a recession.

The body structure of the new Rs.one lakh Tata Nano car will be built by NRI industrialist Lord Swraj Paul-owned Caparo Group at a new facility in Singur.

Selected inner structural panels will be pressed and assembled by Caparo at a new facility in Singur, adjacent to the Tata Nano manufacturing plant in West Bengal.

Caparo, the manufacturer of the world's highest performance road-capable hyper car, the Caparo T1, will supply 60 per cent of these assemblies, with the rest being manufactured in-house by Tata.

To meet Tata's ambitious cost targets, Caparo has installed a new semi-automated production line with zero fault forward quality control systems.

"The body technology is relatively conventional, but the manufacturing technology is the result of very sophisticated analysis to ensure high-quality, low-cost production," Caparo Group CEO Angad Paul said on Friday.

Tata chose Caparo for this substantial contract because of the firm's success with a similar contract to supply the Suzuki Maruti 800.

"We have been delivering to plants in India at zero ppm for three years," said Caparo India country head Sunil Pahilajani.

"Quality at this level is a tremendous complement to our people," he said.

Caparo also supplies Indian plants for Ashok Leyland, Eicher Motors, JCB, John Deere and Hero Honda, as well as most manufacturers of two and three-wheeled vehicles.

The Tata Nano is a four-door, five-seat car that will cost Rs one lakh (1,300 pounds) when it enters showrooms in India later this year.