4th Dec 07

ATTN: MR CHANDIMA UDABAGE RUNDOWN THE STATE OF BUSINESS – 4TH DEC, 2007 SWEDEN FUNDING

FLASH

CHAMINDA

BOI

CARD

NILANTHA

PORT

VTR

SAMANTHA

TOURISM

VTR

RAVI

BREAK 1 - ADD STATE OF BUSINESS BRIDGE CORE INFLATION

VTR

RIYAD

BREAK 2 - STOCK WATCH STOCK UPDATE CURRENCY

CARDS CARDS

01.30 00.20

LINE UP EDITOR ANCHOR

- ANOUK/ NISHANI - DAKSHITHA

HEADLINES 1. TIMELY SHIPPING- WINDOW BERTHING POLICY IMPLEMENTED AT COLOMBO PORT, AND 2. TAKING IN THE SIGHTS- EXPERTS SAY KANDY’S TOURISM POTENTIAL IS YET TO BE FULLY TAPPED 1.SLUG:PORT–VTR THE SRI LANKA PORTS AUTHORITY HAS IMPLEMENTED A WINDOW BERTHING POLICY AT THE COLOMBO HARBOR IN AN ATTEMPT TO ENHANCE THE EFFICIENCY OF SERVICES BETWEEN THE PORT OF COLOMBO AND THE INDIAN SUB-CONTINENT. THE SLPA’S NEW WINDOW BERTHING SCHEME WILL INITIALLY COVER THE CHENNAI AND TUTICORIN SECTORS, WITH TWO BERTHS BEING RESERVED AT THE JAYA CONTAINER TERMINAL AND THE UNITY CONTAINER TERMINAL. ROLL VTR 2. SLUG:SWEDEN FUNDING – FLASH THE GOVERNMENT OF SWEDEN HAS PROVIDED 91.9 MILLION DOLLARS FOR THE SRI LANKAN GOVERNMENT TO ESTABLISH WASTE WATER TREATMENT FACILITIES FOR NEARLY 334 INDUSTRIES AND 60000 RESIDENTS. ACCORDINGLY, THIS INTEREST FREE LOAN AMOUNTING TO APPROXIMATELY 10.1 BILLION RUPEES WILL BE USED TO BUILD WASTE WATER TREATMENT PLANTS IN THE RATMALANA, MORATUWA, JA-ELA AND EKALA AREAS. THE PLANT WILL BE DESIGNED TO COLLECT INDUSTRIAL AND DOMESTIC WASTE WATER WHICH WILL BE DIVERTED TO A CENTRAL TREATMENT PLANT. THE LOAN AGREEMENT WAS SIGNED AT THE MINISTRY OF FINANCE TODAY WITH REPRESENTATION FROM BOTH THE SWEDISH GOVERNMENT AND FINANCE MINISTRY OFFICIALS. READ ON … 3.SLUG:BOI-CARD

THE BOARD OF INVESTMENT HAS SIGNED AGREEMENTS FOR 11 NEW PROJECTS RECENTLY, OF WHICH THE ESTIMATED INVESTMENT IS 14 MILLION U.S. DOLLARS. CARD IN: THE 11 PROJECTS ARE TO DO WITH SOFTWARE, PROPERTY DEVELOPMENT, CLOTHING, BOAT MANUFACTURING AND WAREHOUSE AND LOGISTICS DEVELOPMENT. THE BIGGEST INVESTMENT COMES FROM LAUGFS PROPERTY DEVELOPERS WHO ARE INVESTING 5 MILLION U.S. DOLLARS FOR THE CONSTRUCTION OF AN APARTMENT COMPLEX AT COLOMBO 6. MEANWHILE, NOR-DAN BOATS ASIA ALSO SIGNED AN AGREEMENT TO MANUFACTURE BOATS FOR THE EXPORT MARKET. THE 3 MILLION U.S. DOLLAR INVESTMENT IS SPONSORED BY NORWEGIAN NOR-DAN BOATS. THE PROJECT LOCATED AT THIMBIRIGASKATTUWA IS EXPECTED TO PROVIDE EMPLOYMENT OPPORTUNITIES FOR 50 PEOPLE. READ ON. 4.SEGMENT:KANDY-VTR NOW JOIN OUR SPECIAL SEGMENT DESTINATION SRI LANKA, WHICH IS DESIGNED TO FOCUS ON LOCAL TOURIST DESTINATIONS. ROLL THEME KANDY HAS BEEN ONE OF THE MOST POPULAR TOURIST DESTINATIONS IN THE COUNTRY FOR CENTURIES. BUT THE HILL CAPITAL, WHICH IS BLESSED WITH HISTORIC VALUE AND RELIGIOUS HERITAGE HAS ONLY BEEN ABLE TO ATTRACT TOURISTS TO VERY FEW DESTINATIONS WITHIN THE CITY IN RECENT TIMES. IT IS IN THIS BACKDROP THAT THE KANDY HOTELIERS URGE THE TOURISM AUTHORITY TO PUT DOWN A COMPREHENSIVE PLAN TO PROMOTE DESTINATIONS IN KANDY THAT HAVE NOT YET BEEN EXPLOITED TO FULL POTENTIAL. RAVI GUNAWARDENA HAS THE STORY

ROLL VTR BREAK 5.SLUG:INFLATION-VTR SOARING INFLATION HAS BEEN THE NAGGING PROBLEM FOR POLICY MAKERS DESPITE MAKING GENEROUS INROADS TO ECONOMIC GROWTH IN THE PAST FEW YEARS. TOP GOVERNMENT OFFICIALS SAY CURRENT INFLATION LEVELS ARE OVER EMPHASIZED BY THE ANCIENT CCPI INDEX WHICH RELIES ON OUT DATED DATA. THIS WAS STATED AT A BUSINESS FORUM ORGANIZED BY CITI BANK LAST WEEK. ROLL VTR BREAK

STOX THE MARKET EXPERIENCED A DULL DAY OF TRADING ACTIVITY LEVELS. BOTH INDICES ENDED IN THE RED.

WITH

LOW

TWO CROSSINGS TOOK PLACE FOR THE DAY AS 100,000 SHARES OF SAMPATH BANK CHANGED HANDS AT 122 WHILE 956,000 SHARES OF VALLIBEL MOVED AT 21 RUPEES THE DAY’S VOLUMES LIST WAS TOPPED BY VALLIBEL WHICH TRADED 0.98 MILLION SHARES WHILE TESS AGRO AND LANAKA CEMENT FOLL0WED SAMPATH BANK INJECTED THE MAJOR SHARE TO TURN OVER OF 37 AND A HALF MILLION FOLLOWED BY VALLIBEL WHICH PUMPED IN 20.7 MILLION AND DOCKYARD – 16.1 MILLION FOREIGN BUYING FOR THE DAY AMOUNTED TO AND FOREIGN SALES TO CARD 1 THE ALL SHARE PRICE INDEX DROPPED 11.55 POINTS TO 2,517.87 WHILE THE MILANKA ENDED THE DAY AT 3,309.11 AFTER LOSING 6.86 POINTS THE DAY’S TURN OVER WAS RECORDED AT 172.6 MILLION RUPEES CARD 2 TOPPING THE DAY’S GAINERS LIST WERE LAKE HOUSE PRINTERS, SINGER, ARPICO, KAHAWATTE AND CEYLON GLASS CARD 3 WHILE THE LOSERS WERE LED BY ROYAL PALMS, MULLERS, BLUE DIAMONDS NON VOTING, ASIAN ALLIANCE AND ABANS CARD 4 COMMERCIAL BANK OF CEYLON LIMITED MADE AN INTERIM DIVIDEND ANNOUNCEMENT FOR THE DAY FORES RATES CARD 5 CARD 6

SEGMENT: DATE: REPORTER: SLUG:

MAIN 04 / 12 / 2007 CHAMINDA SWEDEN FUNDING – CARD

THE GOVERNMENT OF SWEDEN HAS PROVIDED 91.9 MILLION DOLLARS FOR THE SRI LANKAN GOVERNMENT TO ESTABLISH WASTE WATER TREATMENT FACILITIES FOR NEARLY 334 INDUSTRIES AND 60000 RESIDENTS. CARD IN ACCORDINGLY, THIS INTEREST FREE LOAN AMOUNTING TO APPROXIMATELY 10.1 BILLION RUPEES WILL BE USED TO BUILD WASTE WATER TREATMENT PLANTS IN THE RATMALANA, MORATUWA, JA-ELA AND EKALA AREAS. THE PLANT WILL BE DESIGNED TO COLLECT INDUSTRIAL AND DOMESTIC WASTE WATER WHICH WILL BE DIVERTED TO A CENTRAL TREATMENT PLANT. CARD OUT THE LOAN AGREEMENT WAS SIGNED AT THE MINISTRY OF FINANCE TODAY WITH REPRESENTATION FROM BOTH THE SWEDISH GOVERNMENT AND FINANCE MINISTRY OFFICIALS. READ ON …

CARD TEXT “US$ 91.9 Million from Sweden to establish waster water treatment plants” - Ministry of Finance

SEGMENT: MAIN DATE: 04/12/07 REPORTER: NK SLUG: BOI - CARD THE BOARD OF INVESTMENT HAS SIGNED AGREEMENTS FOR 11 NEW PROJECTS RECENTLY, OF WHICH THE ESTIMATED INVESTMENT IS 14 MILLION U.S. DOLLARS. CARD IN: - BOI SIGNS AGREEMENTS FOR 11 NEW PROJECTS THE 11 PROJECTS ARE TO DO WITH SOFTWARE, PROPERTY DEVELOPMENT, CLOTHING, BOAT MANUFACTURING AND WAREHOUSE AND LOGISTICS DEVELOPMENT. THE BIGGEST INVESTMENT COMES FROM LAUGFS PROPERTY DEVELOPERS WHO ARE INVESTING 5 MILLION U.S. DOLLARS FOR THE CONSTRUCTION OF AN APARTMENT COMPLEX AT COLOMBO 6. THIS PROJECT LIMITED.

IS

SPONSORED

MEANWHILE, NOR-DAN BOATS AGREEMENT TO MANUFACTURE MARKET.

BY

ASIA BOATS

LAUGFS

HOLDINGS

ALSO SIGNED AN FOR THE EXPORT

THE 3 MILLION U.S. DOLLAR INVESTMENT IS SPONSORED BY NORWEGIAN NOR-DAN BOATS. THE PROJECT LOCATED AT THIMBIRIGASKATTUWA IS EXPECTED TO PROVIDE EMPLOYMENT OPPORTUNITIES FOR 50 PEOPLE. MINISTER OF ENTERPRISE DEVELOPMENT AND INVESTMENT PROMOTION DOCTOR SARATH AMUNUGAMA FORMALLY PRESENTED THE INVESTORS WITH BOI CERTIFICATES OF REGISTRATION.

READ ON.

SLUG: REPORTER: DATE: SEGMENT:

MAIN RAVI 03/12/2007 KANDY - VTR

KANDY HAS BEEN ONE OF THE MOST POPULAR TOURIST DESTINATIONS IN THE COUNTRY FOR CENTURIES. BUT THE HILL CAPITAL, WHICH IS BLESSED WITH HISTORIC VALUE AND RELIGIOUS HERITAGE HAS ONLY BEEN ABLE TO ATTRACT TOURISTS TO VERY FEW DESTINATIONS WITHIN THE CITY IN RECENT TIMES. IT IS IN THIS BACKDROP THAT THE KANDY HOTELIERS URGE THE TOURISM AUTHORITY TO PUT DOWN A COMPREHENSIVE PLAN TO PROMOTE DESTINATIONS IN KANDY THAT HAVE NOT YET BEEN EXPLOITED TO FULL POTENTIAL. ROLL VTR Cyril Perera – President Kandy Hoteliers’ Association Sri Lal Mendis Assistant Vice President JKH Group ‘VISIT KANDY’ “Kandy should be promoted among countries in Far East Asia” - Mendis “Tourist board was never involved marketing strategy before.” - Mendis

in

a

comprehensive

VOICE OVER / SRI LANKAN / RAVI / 03/12 THE CITY OF KANDY LIES AT AN ALTITUDE OF 488.6 METERS ABOVE SEA LEVEL IN THE CENTER OF THE ISLAND SITTING COZILY AMIDST A VISTA OF MOUNTAINS. IT IS THE LAST ROYAL CAPITAL OF SRI LANKA AND IS STILL VERY MUCH THE FOCAL POINT OF SRI LANKAN CULTURE. THEREFORE KANDY HAS ALSO BEEN ONE OF THE MOST POPULAR TOURIST DESTINATIONS IN THE COUNTRY, EVEN THOUGH IT IS YET TO REAP ITS FULL POTENTIAL. DESPITE ITS OWN SHORTFALLS IN ACHIEVING THE DESIRED NUMBERS IN TOURISTS ARRIVALS, THIS HISTORIC KINGDOM HAS ALSO TAKEN A BEATING BY THE RECENT TOURISM SLUMP EXPERIENCED BY SRI LANKA. VC -MENDIS 20:01 TOURIST IN KANDY WHICH WAS IN THE VERY LOW END COUPLE OF MONTHS BACK, WHERE MOST OF THE HOTELS WERE BELOW 50% HAS SLIGHTLY IMPROVED IN THE LAST 2, 3 MONTHS. BUT WE R NO WAY NEAR WHAT WE HAD 2, 3 YEARS AGO. 20:21 ++ 27:25 THE LAST 6 MONTHS THERE IS AN IMPROVEMENT ARE BEST MONTH IS GOING TO BE DECEMBER WITH THE TOURIST COMING WITH THE MATCH. BUT WE HOPE IT WILL CONTINUE TILL APRIL WHERE THE SEASON IS. 27:44 CYRIL PERERA, THE PRESIDENT OF THE KANDY HOTELIERS ASSOCIATION SAYS THAT THEY HAVE BEEN EXPLORING A DIFFERENT STRATEGY TO SURVIVE DURING THIS ROUGH PERIOD. VC –CYRIL 53:32 KANDY HOTELIERS R TRYING THEIR BEST TO PROMOTE WITH THE SRI LANKANS SINCE LESS AMOUNT OF TOURISTS COME TO KANDY DUE TO THE SITUATION. BUT WE ARE DOING LITTLE BETTER THAT THE LAST YEAR WITH LOCAL TOURISTS. 54:02 ++ 54:26 WE HAVE TO GET THE PEOPLE WHO ARRIVE AT THE BEACH HOTELS TO KANDY SO THAT WE HAVE BETTER OCCUPANCIES. 54:39

BUT AS USUAL, IT SEEMS THAT IT IS THE MISTAKEN PERCEPTION THAT SRI LANKA IS AN UNSAFE DESTINATION THAT IS KEEPING VISITORS AWAY FROM THE ISLAND. VC - TOURIST 10:00 I THINK IT’S A SHAME THAT LOTS OF TOURIST DON’T COME BECAUSE THEY ARE AFRAID. BUT UP TO NOW I THINK IT’S SECURE. 10:09 ++ 10:19 THAT’S JUST THE PROBLEM. IN THE PAPERS THEY READ ABOUT THINGS AND THEIR SCARED TO COME. 10:26 DESPITE THIS SAD SITUATION HOWEVER, THIS TOURIST FROM ENGLAND SAYS THAT SHE ENJOYED HER STAY IN SRI LANKA AND WAS ESPECIALLY CONTENT WITH HER HOLIDAY IN KANDY. 07:29 WE WENT TO THE ELEPHANT ORPHANAGE WHICH WAS AMAZING TO SEE THAT AMOUNT OF ELEPHANT IN ONE PLACE. IT WAS FANTASTIC. 07:45 ++ 08:20 THE HOTEL FEE IS GOOD. YOU GET ENGLISH FOOD OR LOVELY SRI LANKAN CURRY. THE RATES AND EVERYTHING IS VERY GOOD. 08:34 HOWEVER IN SPITE OF THESE POSITIVE COMMENTS, THE TEMPLE OF THE TOOTH RELIC, THE KANDY PERAHARA AND THE 147 ACRE BOTANICAL GARDENS HAVE BEEN THE ONLY MAJOR TOURIST ATTRACTIONS IN KANDY FOR A LONG TIME, WITH OTHER LOCATIONS OF HISTORIC OR CULTURAL VALUE WITHIN THE CITY BEING VIRTUALLY IGNORED. VC - MENDIS 22:55 I THINK EVERYONE SHOULD GET TOGETHER AND MAKE KANDY NOT ONE NIGHT DESTINATION. AT THE MOMENT KANDY IS KNOWN ONLY FOR DALADA MALIGAWA GARDENS AND PEREHARA. BUT WE HAVE MANY THINGS TO OFFER. THE SCENERIES, DEVELOPING KNUCKLES, GOLF LINKS AT VICTORIA, KOTMALE AND EXERTIONS FROM KANDY WILL DEFINITELY HELP. 23:38 AND AS SUCH, INFRASTRUCTURE DEVELOPMENT COMPLEMENT THESE UNIQUE ATTRACTIONS.

IS

A

MUST

TO

VC - MENDIS 25:12 MOST IMPORTANT FACTOR TO DEVELOP KANDY IS THE INFRASTRUCTURE. KANDY IS GETTING A CONGESTED CITY THERE IS NO PROPER ROAD WAY SYSTEM, NO PROPER PARKING WHICH HAS TO BE DEVELOPED. THE ACCESS ROAD TO KANDY FOR THE PEOPLE TO COME WITHIN 3 HOURS. 25:46 SO IT SEEMS LIKE THE LEISURE SECTOR IN KANDY HAS BEEN ON A ROLLER-COASTER IN RECENT TIMES. BUT THOSE INVOLVED IN THE HOSPITALITY AND LEISURE SECTOR IN THIS MAJESTIC DESTINATION ARE NOW TIRED OF THE RIDE DOWNHILL AND ARE LOOKING TO AUTHORITIES FOR SOME RESPITE, WHICH THEY HOPE WILL COME SOONER RATHER THAN LATER. END/

SEGMENT: DATE: REPORTER: EDITOR: SLUG:

MAIN 4TH DECEMBER 2007 NK. ANOUK T. COLOMBO PORT – VTR

THE SRI LANKA PORTS AUTHORITY HAS IMPLEMENTED A WINDOW BERTHING POLICY AT THE COLOMBO HARBOR IN AN ATTEMPT TO ENHANCE THE EFFICIENCY OF SERVICES BETWEEN THE PORT OF COLOMBO AND THE INDIAN SUB-CONTINENT. THE SLPA’S NEW WINDOW BERTHING SCHEME WILL INITIALLY COVER THE CHENNAI AND TUTICORIN SECTORS, WITH TWO BERTHS BEING RESERVED AT THE JAYA CONTAINER TERMINAL AND THE UNITY CONTAINER TERMINAL. ROLL VTR ‘WINDOW BERTHING POLICY’ “This move is expected to enhance the service efficiency..” – SLPA IN: OUT:

VOICE OVER – COLOMBO PORT UNDER THE NEW SYSTEM, A CALLER IS PROVIDED A SPECIFIC TIME WINDOW WITHIN WHICH THE VESSEL WILL BE BERTHED UPON ARRIVAL AND DELAY WILL BE PENALIZED. THE SLPA SAYS THIS SYSTEM HAS BEEN IMPLEMENTED PORTS AROUND THE GLOBE TO ENSURE EFFICIENCY.

IN

MOST

THE SLPA ALSO SAYS SAILING BETWEEN TWO PORTS THAT OPERATE WINDOW-BERTHING SYSTEMS ALLOWS FASTER ROTATION OF SHIPS, THEREBY STREAMLINING THE SERVICE PROVIDED TO CUSTOMERS. IT PLANS TO EXPAND THIS SYSTEM GRADUALLY TO CALLERS WHO REQUEST WINDOW BERTHING FACILITIES.

COVER

ALL

THE COLOMBO HARBOR LAST YEAR HAD HANDLED AROUND 3 MILLION CONTAINERS WITH 4200 VESSELS HAVING BERTHED THERE. THE SLPA BELIEVES THIS YEAR THEY WOULD EXCEED 3.3 MILLION CONTAINERS TO BE HANDLED AT THE PORT. ENDS/

STOX THE MARKET EXPERIENCED A DULL DAY OF TRADING ACTIVITY LEVELS. BOTH INDICES ENDED IN THE RED.

WITH

LOW

TWO CROSSINGS TOOK PLACE FOR THE DAY AS 100,000 SHARES OF SAMPATH BANK CHANGED HANDS AT 122 WHILE 956,000 SHARES OF VALLIBEL MOVED AT 21 RUPEES THE DAY’S VOLUMES LIST WAS TOPPED BY VALLIBEL WHICH TRADED 0.98 MILLION SHARES WHILE TESS AGRO AND LANAKA CEMENT FOLL0WED SAMPATH BANK INJECTED THE MAJOR SHARE TO TURN OVER OF 37 AND A HALF MILLION FOLLOWED BY VALLIBEL WHICH PUMPED IN 20.7 MILLION AND DOCKYARD – 16.1 MILLION FOREIGN BUYING FOR THE DAY AMOUNTED TO AND FOREIGN SALES TO CARD 1 THE ALL SHARE PRICE INDEX DROPPED 11.55 POINTS TO 2,517.87 WHILE THE MILANKA ENDED THE DAY AT 3,309.11 AFTER LOSING 6.86 POINTS THE DAY’S TURN OVER WAS RECORDED AT 172.6 MILLION RUPEES CARD 2 TOPPING THE DAY’S GAINERS LIST WERE LAKE HOUSE PRINTERS, SINGER, ARPICO, KAHAWATTE AND CEYLON GLASS CARD 3 WHILE THE LOSERS WERE LED BY ROYAL PALMS, MULLERS, BLUE DIAMONDS NON VOTING, ASIAN ALLIANCE AND ABANS CARD 4 COMMERCIAL BANK OF CEYLON LIMITED MADE AN INTERIM DIVIDEND ANNOUNCEMENT FOR THE DAY FORES RATES CARD 5 CARD 6

SEGMENT: DATE: REPORTER: EDITOR: SLUG:

MAIN 4TH DECEMBER 2007 RIYAD R. NISHANI CORE INFLATION

SOARING INFLATION HAS BEEN THE NAGGING PROBLEM FOR POLICY MAKERS DESPITE MAKING GENEROUS INROADS TO ECONOMIC GROWTH IN THE PAST FEW YEARS. TOP GOVERNMENT OFFICIALS SAY CURRENT INFLATION LEVELS ARE OVER EMPHASIZED BY THE ANCIENT CCPI INDEX WHICH RELIES ON OUT DATED DATA. THIS WAS STATED AT A BUSINESS FORUM ORGANIZED BY CITI BANK LAST WEEK. ROLL VTR Super Amal Sadaratne CEO Frontier Research Dr. P. B. Jayasundara Secretary Ministry of finance and Planning TAG ‘CORE INFLATION’

VOICE OVER / CORE INFLATION / RIYAD / 4TH DECEMBER 2007 / VTR TREASURY SECRETARY DR. P. B. JAYASUNDARA STATED THAT INFLATION IN SRI LANKA IS AN ILLUSION AS THE COUNTRY’S OFFICIAL INFLATION DENOMINATOR IS AN OUTDATED INDEX THAT INCLUDES ADMINISTRATIVE PRICE CHANGES WHICH PUSHES INFLATION UP. DR. JAYASUNDARA NOTED THAT THE COUNTRY SHOULD MOVE INTO MORE EFFECTIVE NEW INFLATION INDEXES AS USED IN DEVELOPED COUNTRIES. 6.53 DR. PB IF YOU REMOVE THESE THINGS AS WE ARE TRYING TO DO DEVELOPING CORE INFLATION IS WHAT IS KNOWN IN MANY COUNTRIES SUCH AS UK, U.S. AND MANY COUNTRIES AS USING WHAT WE CALL UNDERLINE INFLATION, IS AROUND 11-12%. 7.12 ACCORDING TO THE NEW CORE INDEX WHICH WAS INTRODUCED THIS MONTH, INFLATION WAS ON AN ANNUAL AVERAGE BASIS OF 14.7% AS AT NOVEMBER 2007. HOWEVER, CORE INFLATION DOES NOT COMPUTE THE MONTHLY VOLATILITIES SUCH AS OIL AND MILK POWDER PRICE REVISIONS.

5.24 AMAL LOT OF OTHER COUNTRIES DO HAVE THE CONCEPT OF A MORE INDEX AND A CORE INDEX, THEIR HAS ALWAYS BEEN A OPPOSITION TO SAYING THAT CORE INFLATION HAS BEEN MEASURE TO REDUCE THE LEVEL OF INFLATION AND WHETHER THAT’S ACTUALLY TRUE OR NOT DEPENDS ON THE ACTUAL BASE THE COMPUTATION THAT INDEX SO THE DETAILS ARE VERY IMPORTANT 5.39 NOW IN THESE COUNTRIES PEOPLE FIND TO USE BOTH INDEXES, DIFFERENT GRAPHS WILL USE FOR DIFFERENT PURPOSES SOMETIMES THEY USE BOTH IN CONJUNCTION IN FORECASTING AND DECIDING ON POLICY 5.56 EXPERTS SAY THE CORE INFLATION MANTRA WOULD BE SHORT TERM, AS IT WILL FOLLOW THE MAIN INDICATORS DIRECTION, IF THE CORRECT BASKETS AND WEIGHTS ARE USED. GRAPH IN IN THE LAST 5 MONTHS THE OLD CCPI AND THE NEW CCPI HAVE FOLLOWED ALMOST THE SAME ROUTE AS THE POINT TO POINT INFLATION BETWEEN THE 2 IS JUST AN INSIGNIFICANT 0.3%. 4.42 AMAL THE CORE INDEX RIGHT NOW IS SHOWING A LOWER LEVEL OF INFLATION THAT IS RIGHT NOW BECAUSE SOME OF THAT ADJUSTED PRICES ARE HAVING A BIGGER IMPACT ON THE MAIN INDEX 4.52 BUT OVER THE LONG RUN YOU ARE GOING TO FIND THAT THE OVERALL LEVEL OF INFLATION IN THE COUNTRY WILL GET REFLECTED IN THE CORE INDEX ON THE LONGER RUN 4.59 IT WILL TEND TO BE A MORE LAGGING INDICATOR TO THE MAIN CCPI. 5.06 ENDS/