EARLY INNINGS:

India's Olive Branch (Ruth David, 03.01.06, Forbes)

There might be good news for General Motors in India's latest budget--but only if it can think small.

In a bid to encourage international carmakers, including GM and Ford Motor, to offer smaller cars, the budget released on Wednesday proposed a 33% cut on the excise duty on smaller vehicles. It was just one of a series of customs and tax breaks outlined for the makers of cars, packaged foods and life-saving drugs. Foreign investors could also get a boost, but software makers will have to reboot their lobbying efforts.

This year's budget focused more on organic growth than on reforms that would draw more foreign firms to India. Finance Minister Palaniappan Chidambaram did not relax labor laws, which multinationals accuse of being archaic, and retained hefty domestic subsidies. Communism lives on in India, and the communist-backed coalition made it difficult to plug such reforms.