Unable to run Java Unit test using Appium on Andriod Device

I am unable to run the following sample Unit test using Appium on Windows machine.

I have the emulator turned on in eclipse and Appium also detects it but it would not install the apk and the only message i see on the appium console is Logcat capture failed: spawn ENOENT

Java

public class AndroidTest {

    private AppiumDriver driver;

    @Before
    public void setUp() throws Exception {
        File classpathRoot = new File(System.getProperty("user.dir"));
        File appDir = new File(classpathRoot, "../../../apps/ApiDemos/bin");
        File app = new File(appDir, "ApiDemos-debug.apk");
        DesiredCapabilities capabilities = new DesiredCapabilities();
        capabilities.setCapability("deviceName","Nexus4");
        capabilities.setCapability("platformVersion", "4.3");
        capabilities.setCapability("app", app.getAbsolutePath());
        capabilities.setCapability("appPackage", "io.appium.android.apis");
        capabilities.setCapability("appActivity", ".ApiDemos");
        driver = new AndroidDriver(new URL("http://ift.tt/1eWSHgW"), capabilities);
    }

    @After
    public void tearDown() throws Exception {
        driver.quit();
    }

    @Test
    public void apiDemo(){
        WebElement el = driver.findElement(By.name("Animation"));
        assertEquals("Animation", el.getText());
        el = driver.findElementByClassName("android.widget.TextView");
        assertEquals("API Demos", el.getText());
        el = driver.findElement(By.name("App"));
        el.click();
        List<WebElement> els = driver.findElementsByClassName("android.widget.TextView");
        assertEquals("Activity", els.get(2).getText());
    }

}

Appium Server Logs

> info: Console LogLevel: debug
> info: --> POST /wd/hub/session {"desiredCapabilities":{"app":"C:\\Tools\\WorkSpace\\AppiumTest\\..\\..\\..\\apps\\ApiDemos\\bin\\ApiDemos-debug.apk","appPackage":"io.appium.android.apis","appActivity":".ApiDemos","platformName":"Android","deviceName":"Nexus4","platformVersion":"4.3"}}
> info: Client User-Agent string: Apache-HttpClient/4.3.6 (java 1.5)
> info: [debug] Using local app from desired caps: C:\apps\ApiDemos\bin\ApiDemos-debug.apk
> info: [debug] Creating new appium session aed8845d-f962-46a7-b655-087af50b2a50
> info: Starting android appium
> info: [debug] Getting Java version
> info: Java version is: 1.7.0
> info: [debug] Using fast reset? true
> info: [debug] Preparing device for session
> info: [debug] Checking whether app is actually present
> info: [debug] Checking whether adb is present
> warn: The ANDROID_HOME environment variable is not set to the Android SDK root directory path. ANDROID_HOME is required for compatibility with SDK 23+. Checking along PATH for adb.
> info: [debug] executing cmd: where adb
> info: [debug] Using adb from C:\Tools\AndriodSDK\adt-bundle-windows-x86_64-20140321\sdk\platform-tools\adb.exe
> 
> info: Retrieving device
> info: [debug] Trying to find a connected android device
> info: [debug] Getting connected devices...
> info: [debug] executing cmd: "C:\Tools\AndriodSDK\adt-bundle-windows-x86_64-20140321\sdk\platform-tools\adb.exe" devices
> info: [debug] 2 device(s) connected
> info: Found device emulator-5554
> info: [debug] Setting device id to emulator-5554
> info: [debug] Waiting for device to be ready and to respond to shell commands (timeout = 5)
> info: [debug] executing cmd: "C:\Tools\AndriodSDK\adt-bundle-windows-x86_64-20140321\sdk\platform-tools\adb.exe" -s emulator-5554 wait-for-device
> info: [debug] executing cmd: "C:\Tools\AndriodSDK\adt-bundle-windows-x86_64-20140321\sdk\platform-tools\adb.exe" -s emulator-5554 shell "echo 'ready'"
> info: [debug] Starting logcat capture
> error: Logcat capture failed: spawn ENOENT
> info: [debug] Stopping logcat capture