Rule #1...It's Golden
I grew up in Trenton, a west Tennessee town of five thousand people. I have wonderful memories of those first eighteen years, and many people in Trenton influenced my life in very positive ways. My football coach, Walter Kilzer, taught me the importance of hard work, discipline, and believing in myself. My history teacher, Fred Culp, is still the funniest person I've ever met. He taught me that a sense of humor, and especially laughing at yourself, can be one of life's greatest blessings.
But my father was my hero. He taught me many things, but at the top of the list, he taught me to treat people with love and respect...to live the Golden Rule. I remember one particular instance of him teaching this "life lesson" as if it were yesterday. Dad owned a furniture store, and I used to dust the furniture every Wednesday after school to earn my allowance. One afternoon I observed my Dad talking to all the customers as they came in...the hardware store owner, the banker, a farmer, a doctor. At the end of the day, just as Dad was closing, the garbage collector came in.
I was ready to go home, and I thought that surely Dad wouldn't spend too much time with him. But I was wrong. Dad greeted him at the door with a big hug and talked with him about his wife and son who had been in a car accident the month before. He empathized, he asked questions, he listened, and he listened some more. I kept looking at the clock, and when the man finally left, I asked, "Dad, why did you spend so much time with him? He's just the garbage collector." Dad then looked at me, locked the front door to the store, and said, "Son, let's talk."
He said, "I'm your father and I tell you lots of stuff as all fathers should, but if you remember nothing else I ever tell you, remember this...treat every human being just the way that you would want to be treated." He said, "I know this is not the first time you've heard it, but I want to make sure it's the first time you truly understand it, because if you had understood, you would never have said what you said." We sat there and talked for another hour about the meaning and the power of the Golden Rule. Dad said, "If you live the Golden Rule everything else in life will usually work itself out, but if you don't, your life probably will be very unhappy and without meaning."
I recently heard someone say, "If you teach your child the Golden Rule, you will have left them an estate of incalculable value." Truer words were never spoken.
Saturday, February 27, 2010
Budget India: Government is to spend Rs 11.1 lac crores, a whopping 2/3rds of which, or Rs 7.3 lac crores, is non plan.
Government in India Needs - financial reengineering
The good thing about the Union Budget was that there was no tinkering, introducing obnoxious taxes like the FBT or a tax on cash withdrawals. Stability in fiscal policy is very welcome. The bad thing about the Budget is that non plan expenditure, comprising mainly of interest payments on past debt, and subsidies given by Government, consume the larger chunk of tax revenues, and the amount left over to spend on building much needed hard assets is miniscule. Its time something was done about this; just like companies do financial reengineering, so should Government.
The Government is to spend Rs 11.1 lac crores, a whopping 2/3rds of which, or Rs 7.3 lac crores, is non plan. Interest outgo is Rs 2.5 lac crores, eating up 22% of the total expenditure. The capital expenditure on building assets is Rs 0.58 crores, which is less than a quarter of the interest bill. The market was relieved when the target for Government borrowing was lower than it anticipated; it should not be. Instead, there must be more pressure to try and reduce this mountain of debt.
One idea this columnist has been mooting is to have a scheme under which buyers of existing Government paper (choose any series of debt) can buy it from holders, ie banks, in an auction. The buyers would then forgo both repayment and servicing obligations on this debt, in return for which they would get a weighted deduction (say 3 times the face value?). The deduction can be worked out in a manner to make the scheme attractive for people with high tax rates (eg foreign banks) to bid for. In essence, the Government is swapping its debt obligations for a reduced tax revenue.
Firms like Goldman Sachs advised the Greek Government on how to do reengineering, for which it is now being, rightly, investigated, because the advice enabled the Greek Government to hide its spending. There is, however, enough talent and ideas, for honest reengineering, should the Government seek it, as it should.
The Government is, rightly, trying to control expenditure, but its attempts are too feeble. This is due to the sheer hypocrisy of all politicians. When Finance Minister Pranab Mukherjee tried to reduce the non plan expenditure of subsidies by raising excise on petrol and diesel by Rs 1/litre and restoring the cut of 5% in customs duty on crude oil, which was cut when crude prices were much higher, the opposition drowned his voice in a flurry of fake agitation. Simply because they are in opposition. One recalls when Yashwant Sinha was Finance Minister in a BJP Government, with Congress in opposition, it was the Congress who vociferously opposed a proposed but necessary hike by Rs 1/kg in urea prices. (The subsidy was degrading soil quality by encouraging the overuse of urea and underuse of non subsidised fertiliser).
Thus politicians of all hues are not looking at national interests. Are we, then, really a mature democracy?
The opposition then staged a walk out in protest (why don't they finish their morning walks in the morning only?). It seems that the Congress opposition in Gujarat State had staged a similar walk out when the state budget was being presented. One wonders if these are the leaders who can take India forward to become a global economy.
For if we have to assume global leadership as a nation then we must be also responsive to the environment. True, the Budget seeks to provide thrusts to renewable energy, which is welcome and necessary. We must, simultaneously, discourage the overuse of depleting fossil fuels. Not only should the entire polity have welcomed the hike in petrol and diesel prices, instead of walking out, but the Government ought really to do much more.
In response to the oil shock, the US had incorporated, in 1975, fuel efficiency norms called CAFE (Corporate Average Fuel Efficiency). We have none such, even in 2010. Why? A responsible Government would encourage, through lower excise duties, the sale of smaller vehicles meeting fuel efficiency standards and discourage, through higher excise duties, the larger cars that don't. Vehicles like Hummer, which are criminally wasteful guzzlers of gas purely to provide an ego trip to the owner, should be banned, or at least discouraged through expropriatory tax levels.
Simultaneously, now that India is finding gas, the Government must mandate the larger auto companies to offer at least one model with factory fitted CNG kits. At present car owners (such as Meru cabs) fit CNG kits, but bear the risk of it not performing. Why should they? Private auto companies are not going to show leadership in this; it has to be mandated.
Gas finds are going to be a significant contributor to the reduction in fiscal deficit, which is the main cause of investor concern. Reliance Industries has announced that the value of the gas produced in its KG basin in the past 10 months was $1.5b. This is with a production level of 60 mmscmd, against its capacity of 80. So it could produce some $2b. of gas annually. As per the production sharing contract, RIL gets 95% of this value, until the capital cost it has incurred is recovered fully; its share then goes down, and the Government's share goes up until it has recovered 250% of its cost after which the Government gets 85% of the value. There are more such gas finds, including from ONGC.
Not only are the petrol subsidies creating holes in the budget but also in the ozone layer. They are also creating big holes in balance sheets of Government companies, effectively destroying their values. Indian Oil Corporation, a navratna (one of nine jewels in the Government crown) faces a bill of Rs 12,000 crores because it has been illegally foisted with sharing such a burden. It is a wonder that minority shareholders have not taken legal recourse to a trampling of their rights in ONGC, GAIL, IOC, HPCL and BPCL.
Poor planning and strategy was also nearly the undoing of the follow on offer of RECL, a well managed financial institution. On the last day of the issue, the RBI announced a reduction in risk weightage of loans to power generators, thus freeing up more resources for lending. Foreign institutional investors came in and lapped up the issue, at a price higher than the Rs 203 floor. The market was sending false signals because immediately after the issue closed, the stock price rose sharply, ending the week at Rs 244.
From this it appears that perhaps existing large holders may have sold their stock in the cash market, bringing down the price, and simultaneously bough in the futures market, and made an application at the lower floor price of Rs 203. If this is, indeed, the case, then SEBI ought to consider shutting down the futures and options window for companies going to the market, for a month prior to the issue.
The sensex ended the week at 16429, for a weekly gain of 237 and the Nifty ended at 4922, up 77 over the week. The India story looks good, especially if the attempt to introduce the goods and services tax next April is successful. The better targeting of subsidies, using technology, is also a step in the right direction. Increased attention to improving agricultural yields, of harvesting water, of setting up cold storage chains, are all steps in the right direction.
The worry is the global toxic assets, which are still to be fully written off. Only half the estimated $3.4 trillion of toxic assets have been written off. Any failure of a large bank or financial institution, or, indeed, of a country such as Greece, could trigger panic and ‘flight to safety', ironically US T bills. Our domestic pool of savings is growing, thanks to a savings rate in the low 30s. Over time, our markets will become far less dependent on foreign capital flows than they are now. Until such time, we should keep an eye on global developments and pray there is no crisis. We should also pray that our politicians grow up. The first prayer is more likely to be answered!
By:J Mulraj
The good thing about the Union Budget was that there was no tinkering, introducing obnoxious taxes like the FBT or a tax on cash withdrawals. Stability in fiscal policy is very welcome. The bad thing about the Budget is that non plan expenditure, comprising mainly of interest payments on past debt, and subsidies given by Government, consume the larger chunk of tax revenues, and the amount left over to spend on building much needed hard assets is miniscule. Its time something was done about this; just like companies do financial reengineering, so should Government.
The Government is to spend Rs 11.1 lac crores, a whopping 2/3rds of which, or Rs 7.3 lac crores, is non plan. Interest outgo is Rs 2.5 lac crores, eating up 22% of the total expenditure. The capital expenditure on building assets is Rs 0.58 crores, which is less than a quarter of the interest bill. The market was relieved when the target for Government borrowing was lower than it anticipated; it should not be. Instead, there must be more pressure to try and reduce this mountain of debt.
One idea this columnist has been mooting is to have a scheme under which buyers of existing Government paper (choose any series of debt) can buy it from holders, ie banks, in an auction. The buyers would then forgo both repayment and servicing obligations on this debt, in return for which they would get a weighted deduction (say 3 times the face value?). The deduction can be worked out in a manner to make the scheme attractive for people with high tax rates (eg foreign banks) to bid for. In essence, the Government is swapping its debt obligations for a reduced tax revenue.
Firms like Goldman Sachs advised the Greek Government on how to do reengineering, for which it is now being, rightly, investigated, because the advice enabled the Greek Government to hide its spending. There is, however, enough talent and ideas, for honest reengineering, should the Government seek it, as it should.
The Government is, rightly, trying to control expenditure, but its attempts are too feeble. This is due to the sheer hypocrisy of all politicians. When Finance Minister Pranab Mukherjee tried to reduce the non plan expenditure of subsidies by raising excise on petrol and diesel by Rs 1/litre and restoring the cut of 5% in customs duty on crude oil, which was cut when crude prices were much higher, the opposition drowned his voice in a flurry of fake agitation. Simply because they are in opposition. One recalls when Yashwant Sinha was Finance Minister in a BJP Government, with Congress in opposition, it was the Congress who vociferously opposed a proposed but necessary hike by Rs 1/kg in urea prices. (The subsidy was degrading soil quality by encouraging the overuse of urea and underuse of non subsidised fertiliser).
Thus politicians of all hues are not looking at national interests. Are we, then, really a mature democracy?
The opposition then staged a walk out in protest (why don't they finish their morning walks in the morning only?). It seems that the Congress opposition in Gujarat State had staged a similar walk out when the state budget was being presented. One wonders if these are the leaders who can take India forward to become a global economy.
For if we have to assume global leadership as a nation then we must be also responsive to the environment. True, the Budget seeks to provide thrusts to renewable energy, which is welcome and necessary. We must, simultaneously, discourage the overuse of depleting fossil fuels. Not only should the entire polity have welcomed the hike in petrol and diesel prices, instead of walking out, but the Government ought really to do much more.
In response to the oil shock, the US had incorporated, in 1975, fuel efficiency norms called CAFE (Corporate Average Fuel Efficiency). We have none such, even in 2010. Why? A responsible Government would encourage, through lower excise duties, the sale of smaller vehicles meeting fuel efficiency standards and discourage, through higher excise duties, the larger cars that don't. Vehicles like Hummer, which are criminally wasteful guzzlers of gas purely to provide an ego trip to the owner, should be banned, or at least discouraged through expropriatory tax levels.
Simultaneously, now that India is finding gas, the Government must mandate the larger auto companies to offer at least one model with factory fitted CNG kits. At present car owners (such as Meru cabs) fit CNG kits, but bear the risk of it not performing. Why should they? Private auto companies are not going to show leadership in this; it has to be mandated.
Gas finds are going to be a significant contributor to the reduction in fiscal deficit, which is the main cause of investor concern. Reliance Industries has announced that the value of the gas produced in its KG basin in the past 10 months was $1.5b. This is with a production level of 60 mmscmd, against its capacity of 80. So it could produce some $2b. of gas annually. As per the production sharing contract, RIL gets 95% of this value, until the capital cost it has incurred is recovered fully; its share then goes down, and the Government's share goes up until it has recovered 250% of its cost after which the Government gets 85% of the value. There are more such gas finds, including from ONGC.
Not only are the petrol subsidies creating holes in the budget but also in the ozone layer. They are also creating big holes in balance sheets of Government companies, effectively destroying their values. Indian Oil Corporation, a navratna (one of nine jewels in the Government crown) faces a bill of Rs 12,000 crores because it has been illegally foisted with sharing such a burden. It is a wonder that minority shareholders have not taken legal recourse to a trampling of their rights in ONGC, GAIL, IOC, HPCL and BPCL.
Poor planning and strategy was also nearly the undoing of the follow on offer of RECL, a well managed financial institution. On the last day of the issue, the RBI announced a reduction in risk weightage of loans to power generators, thus freeing up more resources for lending. Foreign institutional investors came in and lapped up the issue, at a price higher than the Rs 203 floor. The market was sending false signals because immediately after the issue closed, the stock price rose sharply, ending the week at Rs 244.
From this it appears that perhaps existing large holders may have sold their stock in the cash market, bringing down the price, and simultaneously bough in the futures market, and made an application at the lower floor price of Rs 203. If this is, indeed, the case, then SEBI ought to consider shutting down the futures and options window for companies going to the market, for a month prior to the issue.
The sensex ended the week at 16429, for a weekly gain of 237 and the Nifty ended at 4922, up 77 over the week. The India story looks good, especially if the attempt to introduce the goods and services tax next April is successful. The better targeting of subsidies, using technology, is also a step in the right direction. Increased attention to improving agricultural yields, of harvesting water, of setting up cold storage chains, are all steps in the right direction.
The worry is the global toxic assets, which are still to be fully written off. Only half the estimated $3.4 trillion of toxic assets have been written off. Any failure of a large bank or financial institution, or, indeed, of a country such as Greece, could trigger panic and ‘flight to safety', ironically US T bills. Our domestic pool of savings is growing, thanks to a savings rate in the low 30s. Over time, our markets will become far less dependent on foreign capital flows than they are now. Until such time, we should keep an eye on global developments and pray there is no crisis. We should also pray that our politicians grow up. The first prayer is more likely to be answered!
By:J Mulraj
SHERPAS: The sturdy highlanders
(Subrata Chowdhury pays tribute to a people born to the kind of hardship only they can bear with a smile and contentment)
The word “sherpa” in Tibetan means “Eastern people”. They were said to have migrated from Tibet to Nepal around 1700 AD and their link with Nepal is deep-rooted. Being hard-working and adventurous, a good number of them have moved to neighbouring Sikkim and Darjeeling where they constitute a significant part of the populace.
Being adept in climbing, sherpas are an integral part of any mountaineering expedition in the Himalayas for quite some time now; even before Tenzing Norgay hauled Sir Edmund Hillary from a lower ledge to the top of Mount Everest in 1953. A physical study in sherpas being natural climbers in high altitudes established the uniqueness of their haemoglobin-binding enzymes, more than average nitric oxide production in their systems, the heart’s ability to utilise glucose and the lungs’ sensitivity to function in the event of a reduced supply of oxygen are the factors contributing to their special capabilities. Sherpas are habitants of Rolwaling and Helambu valleys north of Kathmandu, besides Sikkim and Darjeeling. But the oldest sherpa village in the northeast Himalayas is Pangboche in Nepal. Their language is akin to the dialect used in Tibet, namely the Lhasa vernacular. Accoring to the 2001 Census, as many as 93 per cent of sherpas are Buddhist. The rest are a mix of Hindus and Christians. Another hill tribe called Jirels, aboriginals of Jiri, owe their ethnicity to the sherpas as well.
It is a deplorable fact that in spite of being so hardworking and sturdy, the sherpas are mostly impoverished. A large number of them serve as porters over hill terrain though they prefer to proffer guide-jobs to the handful of tourists that come their way during the season.
Though being largely Buddhist, sherpas belong to the Nyingmapa sect where it is a ritual to worship many deities and demons mentioned in the Bon religion besides the Buddha. According to the Bon religion that was practised prior to Buddhism, the mountains and caves are believed to be inhabited by spirits who have to be appeased to avoid a disdainful curse. Mount Everest is worshipped as “Chomolungma”, meaning the “Mother of the World”, and Mount Makalu as Shankar (Shiva), “The Father”. The other high peaks have different divine identities. While the lamas are revered for performing day-to-day religious ceremonies, the shamas and soothsayers are invited to households to exorcise evil spirits and even act as healers of diseases by the sherpas.
The sherpas have their own monasteries or gompas where lamas, and in some cases, even nuns stay in seclusion. These sacred places are not open to the public except on invitation during annual ceremonies. These monasteries are mostly spread over the Solu-Khumbu region and the inmates practice strict celibacy.
The clothes worn by sherpas are customary and colourful. The conventionally ones consist of a long shirt and a pair of trousers, both woollen. A long robe, also of wool called bakhu, is is secured around the waist by a sash. High boots of coloured woollen uppers and hide soles are worn by the men and women. These are tied with garters of attractive hues. The womenfolk, in addition to these, wear multicoloured aprons from the waist down to the knees. While married women wear this both in the front and at the back, the unmarried ones wear it only at the back. Heavy ornaments and shyambhu (headgear) give the finishing touch.
A sherpa has quite a few heroes to be proud of apart from Tenzing Norgay. They are Jamling Tenzing Norgay, Tenzing’s son, who climbed Mount Everest too in 1996, and Pemba Dorjie and Lhakpa Gelu, who clocked a record 12 hours 46 minutes and 10 hours 46 minutes respectively to climb to the summit from the base camp in 2003. Apart from these, on 21 May 2009, Apa Sherpa created a record of climbing the world’s highest peak for the ninth time individually.
The mighty sherpas are mountain-borne and born to the kind of hardship only they can bear with a smile and contentment.
source: Statesman and Barun Roy
(Subrata Chowdhury pays tribute to a people born to the kind of hardship only they can bear with a smile and contentment)
The word “sherpa” in Tibetan means “Eastern people”. They were said to have migrated from Tibet to Nepal around 1700 AD and their link with Nepal is deep-rooted. Being hard-working and adventurous, a good number of them have moved to neighbouring Sikkim and Darjeeling where they constitute a significant part of the populace.
Being adept in climbing, sherpas are an integral part of any mountaineering expedition in the Himalayas for quite some time now; even before Tenzing Norgay hauled Sir Edmund Hillary from a lower ledge to the top of Mount Everest in 1953. A physical study in sherpas being natural climbers in high altitudes established the uniqueness of their haemoglobin-binding enzymes, more than average nitric oxide production in their systems, the heart’s ability to utilise glucose and the lungs’ sensitivity to function in the event of a reduced supply of oxygen are the factors contributing to their special capabilities. Sherpas are habitants of Rolwaling and Helambu valleys north of Kathmandu, besides Sikkim and Darjeeling. But the oldest sherpa village in the northeast Himalayas is Pangboche in Nepal. Their language is akin to the dialect used in Tibet, namely the Lhasa vernacular. Accoring to the 2001 Census, as many as 93 per cent of sherpas are Buddhist. The rest are a mix of Hindus and Christians. Another hill tribe called Jirels, aboriginals of Jiri, owe their ethnicity to the sherpas as well.
It is a deplorable fact that in spite of being so hardworking and sturdy, the sherpas are mostly impoverished. A large number of them serve as porters over hill terrain though they prefer to proffer guide-jobs to the handful of tourists that come their way during the season.
Though being largely Buddhist, sherpas belong to the Nyingmapa sect where it is a ritual to worship many deities and demons mentioned in the Bon religion besides the Buddha. According to the Bon religion that was practised prior to Buddhism, the mountains and caves are believed to be inhabited by spirits who have to be appeased to avoid a disdainful curse. Mount Everest is worshipped as “Chomolungma”, meaning the “Mother of the World”, and Mount Makalu as Shankar (Shiva), “The Father”. The other high peaks have different divine identities. While the lamas are revered for performing day-to-day religious ceremonies, the shamas and soothsayers are invited to households to exorcise evil spirits and even act as healers of diseases by the sherpas.
The sherpas have their own monasteries or gompas where lamas, and in some cases, even nuns stay in seclusion. These sacred places are not open to the public except on invitation during annual ceremonies. These monasteries are mostly spread over the Solu-Khumbu region and the inmates practice strict celibacy.
The clothes worn by sherpas are customary and colourful. The conventionally ones consist of a long shirt and a pair of trousers, both woollen. A long robe, also of wool called bakhu, is is secured around the waist by a sash. High boots of coloured woollen uppers and hide soles are worn by the men and women. These are tied with garters of attractive hues. The womenfolk, in addition to these, wear multicoloured aprons from the waist down to the knees. While married women wear this both in the front and at the back, the unmarried ones wear it only at the back. Heavy ornaments and shyambhu (headgear) give the finishing touch.
A sherpa has quite a few heroes to be proud of apart from Tenzing Norgay. They are Jamling Tenzing Norgay, Tenzing’s son, who climbed Mount Everest too in 1996, and Pemba Dorjie and Lhakpa Gelu, who clocked a record 12 hours 46 minutes and 10 hours 46 minutes respectively to climb to the summit from the base camp in 2003. Apart from these, on 21 May 2009, Apa Sherpa created a record of climbing the world’s highest peak for the ninth time individually.
The mighty sherpas are mountain-borne and born to the kind of hardship only they can bear with a smile and contentment.
source: Statesman and Barun Roy
HEAVY BACKLOG - Rental tax back to haunt retailers
Indian retail industry fears it will be set back by nearly Rs1,000 in backlog payments if crore in backlog payments if the government does not re- consider the service tax on rentals it has announced in the Union Budget for 2010-11.
"It will have a huge impact on the retail industry if it goes through," said Kumar Ra- jgopalan, chief executive of Retailers Association of India, which represents the indus- try.
He said the association would request the government to reconsider the pro- posal.
Then finance minister P.
Chidambaram had introduced a 12% service tax on renting of commercial space in June 2007.
But the Retailers Associa- tion went to the Delhi high court against it in 2008. Last year, the court ruled that rent- ing of commercial space does not constitute a service.
To circumvent the ruling, the government has declared in the 2010-11 Budget that the "activity of renting itself is a taxable service", and levied a 10% duty on it. It has also said the tax has to be paid with ret- rospective effect from June 2007.
Indeed, as "renting" itself has been made taxable, this could potentially affect not just retailers but firms across sectors that rent out space.
"It's going to be a signifi- cant one as we have to pay quite a lot of money," said C.B. Navalkar, chief financial officer at the country's second largest listed retailer Shop- per's Stop Ltd.
Navalkar said the tax would account for about 0.8% of the company's total revenue.
"The onus is on the landlords, but obviously they will recov- er the tax from us to pay mon- ey to the government," he added.
But India's biggest retailer, Pantaloon Retail (India) Ltd, said barring five cases, all the property lease agreements the company has signed specifi- cally mention that the land- lords would bear the tax if it is applicable.
"Wherever the agreement says the lessee has to pay, we have to provide for it," said Kishore Biyani, managing di- rector of Pantaloon. "It doesn't impact us much, but it creates disputes (with land- lords) and issues."
Indian retail industry fears it will be set back by nearly Rs1,000 in backlog payments if crore in backlog payments if the government does not re- consider the service tax on rentals it has announced in the Union Budget for 2010-11.
"It will have a huge impact on the retail industry if it goes through," said Kumar Ra- jgopalan, chief executive of Retailers Association of India, which represents the indus- try.
He said the association would request the government to reconsider the pro- posal.
Then finance minister P.
Chidambaram had introduced a 12% service tax on renting of commercial space in June 2007.
But the Retailers Associa- tion went to the Delhi high court against it in 2008. Last year, the court ruled that rent- ing of commercial space does not constitute a service.
To circumvent the ruling, the government has declared in the 2010-11 Budget that the "activity of renting itself is a taxable service", and levied a 10% duty on it. It has also said the tax has to be paid with ret- rospective effect from June 2007.
Indeed, as "renting" itself has been made taxable, this could potentially affect not just retailers but firms across sectors that rent out space.
"It's going to be a signifi- cant one as we have to pay quite a lot of money," said C.B. Navalkar, chief financial officer at the country's second largest listed retailer Shop- per's Stop Ltd.
Navalkar said the tax would account for about 0.8% of the company's total revenue.
"The onus is on the landlords, but obviously they will recov- er the tax from us to pay mon- ey to the government," he added.
But India's biggest retailer, Pantaloon Retail (India) Ltd, said barring five cases, all the property lease agreements the company has signed specifi- cally mention that the land- lords would bear the tax if it is applicable.
"Wherever the agreement says the lessee has to pay, we have to provide for it," said Kishore Biyani, managing di- rector of Pantaloon. "It doesn't impact us much, but it creates disputes (with land- lords) and issues."
ATTITUDE THAT ONE NEEDS TO DEVELOP:
ATTITUDE THAT ONE NEEDS TO DEVELOP:
1. When Snake is alive, Snake eats Ants.
When Snake is dead, Ants eat Snake.
Time can turn at any time.
Don't neglect anyone in your life......... ...
2. Never make the same mistake twice,
There are so many new ones,
Try a different one each day.
3. A good way to change someone's attitude is to change your own.
Because, the same sun that melts butter, also hardens clay!
Life is as we think, so think beautifully.
4. Life is just like a sea, we are moving without an end.
Nothing stays with us,what remains is just the memories of some people who touched us as Waves.
5. Whenever you want to know how rich you are?
Never count your currency,just try to Drop a Tear and count how many hands reach out to WIPE that- that is true richness.
6. Heart tells the eyes see less, because you see and I suffer lot.
Eyes replied, feel less because you feel and I cry a lot.
7. Never change your originality for the sake of others,
because no one can play your role better than you.
So be yourself, because whatever you are, YOU are the best.
8. Baby mosquito came back after 1st time flying.
His dad asked him "How do you feel?"
He replied "It was wonderful, Everyone was clapping for me!"
Now that’s a Positive Attitude.
1. When Snake is alive, Snake eats Ants.
When Snake is dead, Ants eat Snake.
Time can turn at any time.
Don't neglect anyone in your life......... ...
2. Never make the same mistake twice,
There are so many new ones,
Try a different one each day.
3. A good way to change someone's attitude is to change your own.
Because, the same sun that melts butter, also hardens clay!
Life is as we think, so think beautifully.
4. Life is just like a sea, we are moving without an end.
Nothing stays with us,what remains is just the memories of some people who touched us as Waves.
5. Whenever you want to know how rich you are?
Never count your currency,just try to Drop a Tear and count how many hands reach out to WIPE that- that is true richness.
6. Heart tells the eyes see less, because you see and I suffer lot.
Eyes replied, feel less because you feel and I cry a lot.
7. Never change your originality for the sake of others,
because no one can play your role better than you.
So be yourself, because whatever you are, YOU are the best.
8. Baby mosquito came back after 1st time flying.
His dad asked him "How do you feel?"
He replied "It was wonderful, Everyone was clapping for me!"
Now that’s a Positive Attitude.
5.4 magnitude tremor jolts northeast, Nepal, China
Guwahati: An earthquake measuring 5.4 on the Richter scale Friday rocked India's northeast as well as parts of China and Nepal, triggering panic and forcing people out of their homes.
According to the US Geological Survey, the tremor was felt at 10.15 a.m. in Assam and other northeastern states, besides in Nepal and China.
The epicentre was plotted in western Xizang in China's Tibet region, 164 km from Nepal capital Kathmandu and 219 km from the Sikkim capital Gangtok. The India Meteorological Department plotted the epicentreat latitude 28.5 degrees north and longitude 86.7 degrees east in its preliminary report.
The tremor jolted homes in Assam's main city Guwahati, besides several other places in the region.
The eight northeastern states of Assam, Meghalaya, Nagaland, Manipur, Tripura, Arunachal Pradesh, Mizoram, and Sikkim are considered by seismologists as the sixth major earthquake prone belt in the world.
The region experienced one of the world's worst earthquakes, measuring 8.7 on the Richter Scale, in 1897 that claimed the lives of more than 1,600 people.
Guwahati: An earthquake measuring 5.4 on the Richter scale Friday rocked India's northeast as well as parts of China and Nepal, triggering panic and forcing people out of their homes.
According to the US Geological Survey, the tremor was felt at 10.15 a.m. in Assam and other northeastern states, besides in Nepal and China.
The epicentre was plotted in western Xizang in China's Tibet region, 164 km from Nepal capital Kathmandu and 219 km from the Sikkim capital Gangtok. The India Meteorological Department plotted the epicentreat latitude 28.5 degrees north and longitude 86.7 degrees east in its preliminary report.
The tremor jolted homes in Assam's main city Guwahati, besides several other places in the region.
The eight northeastern states of Assam, Meghalaya, Nagaland, Manipur, Tripura, Arunachal Pradesh, Mizoram, and Sikkim are considered by seismologists as the sixth major earthquake prone belt in the world.
The region experienced one of the world's worst earthquakes, measuring 8.7 on the Richter Scale, in 1897 that claimed the lives of more than 1,600 people.
BUDGET REACTIONS
Fiscal consolidation gets stimulus, FM delivers goods: T K Arun
The finance minister has delivered the single-most significant expectation from the budget: fiscal consolidation. With this, India joins a select
band of countries that have begun to exit the extraordinary stimulus governments unleashed to combat the global crisis.
While partially reversing the tax giveaways, the government has unified the rates of tax on goods and on services, and expanded the scope of service tax a bit, achieving tax reform in the process and facilitating the proposed move to a goods and services tax (GST) next fiscal.
The FM proposes to bring the fiscal deficit down to 5.5% of GDP in 2010-11 and further down to 4.8% and 4.1% of GDP over the two subsequent years, and commits to follow the Finance Commission prescription to bring public debt down to 68% by 2014-15. He also proposes sharp cuts in non-Plan expenditure and rise in Plan spending.
Such earnest display of commitment to quantitative and qualitative fiscal responsibility is bound to impress foreign investors.
Rise in excise duties and petrol and diesel prices will upset consumers across the board, but the FM has bought peace with the vocal middle class by giving them unexpected income-tax concessions.
Moving to macro-economic balance and moving to tax and petro-price reforms are welcome; omission of other big reforms is a worry.
===============================================================
Not quite as good as it looks, Pranabda
Mythili Bhusnurmath, ET Bureau
On the face of it, Pranab Mukherjee’s first full Budget in the UPA government is an improvement over his July 2009 Budget. The main macro number,
fiscal deficit (FD)/GDP ratio, is a tad below the Budget estimate (BE) of 6.8%. Even better, it is slated to come down to 5.5% by March 2010.
Add to that the FM’s apparent willingness to move away from the smoke-and-mirrors practice of the past, and present more transparent accounts, widen personal income-tax slabs, set a more ambitious target for disinvestment, hold out the prospect of additional banking licences to private players and make a beginning in the direction of legal reform, and it would appear that the stock market is not the only one with reason to cheer.
On the flip side, there is the small (2%) roll back of the reduction in central excise duties allowed last year as part of the stimulus package, expansion of the service tax net to cover more services, increase in central excise duty on petrol and diesel and on non-smoking tobacco, and some unwanted tinkering with tax rates on a host of items.
But none of this takes away from the general sense of Budget 2010 being a workman-like, no-nonsense Budget; one that will set the economy back on the track of growth along with fiscal consolidation. Or so it seems.
Until you look a little closer at the assumptions underlying the Budget, particularly fiscal consolidation. To begin with, the improvement in fiscal health reflected in the lower FD/GDP ratio conceals the worsening in the quality of the FD, not only in the revised estimates (RE) for 2009-10 but also in the BE for 2010-11 compared to 2008-09.
Thus, the revenue deficit/fiscal deficit ratio (RD/FD), which shows how much of the borrowing is going to finance current consumption (rather than investment), has increased from just 41% in 2007-08 to 79% in 2009-10 (RE), and is to go down only marginally to 73% in 2010-11. What this means is that every Rs 100 the government borrows will have to be serviced from whatever it earns by investing Rs 27. The balance Rs 73 would be spent on consumption and will not earn anything. This is a nigh impossible task that means the government will have to borrow more and more just to keep its head above water.
Second, the improvement in the FD/GDP ratio is premised on a sharper-than-warranted increase in net revenue and a lower-than-warranted increase in expenditure, especially non-Plan expenditure. Net tax revenue to the Centre grew only 5% in the current year, according to revised estimates for 2009-10. Yet, Budget 2010 projects a far more robust growth of 15%. On the expenditure side, though non-Plan expenditure grew 16% over actuals in 2008-09, it is expected to grow by a far more modest (unrealistic?) 4% in the next fiscal year.
Last but not least, unless inflation comes to the government’s rescue, the GDP number for 2010-11 is likely to be an over-estimate. The reason is third-quarter GDP numbers released by the CSO on Friday show third-quarter growth at just 6%, which means the economy must register growth of about 8.8% in the fourth quarter if we are to live up to the CSO’s advance estimate of 7.2% for the year.
This looks a trifle far fetched at the moment, so the final GDP number for 2011 may be somewhat lower; in which case we may end up with an FD/GDP ratio of more than 5.5%, and the much-celebrated improvement in fiscal health will turn out to be no more than wishful thinking. In course of time, markets will wake up to that realisation. But till then, it is party time.
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Fiscal health gets a booster shot
Swaminathan S Anklesaria Aiyar , ET Bureau
It’s a middle-of-the-road budget,neither harsh nor soft, neither left nor right. Finance minister Pranab Mukherjee is neither a populist nor radical
reformer. Curbs on non-Plan spending rather than stiff taxation (net additional taxes are barely Rs 20,000 crore) will reduce fiscal deficit to 5.5% of GDP next year, with further reductions to 4.8% and 4.1% in the next two years.
This conforms to the targets of fiscal consolidation in last year’s budget. Banks are relieved that they will be able to fund the reduced borrowing requirement of the government. Disinvestment of public sector shares will fetch Rs 40,000 crore, and the 3G spectrum auction another Rs 35,000 crore or so.
This exceeded the markets’ low expectations, and the Sensex zoomed 175 points. Reliance Capital was a top gainer, after the finance minister’s statement that more private sector banking licences would be given out.
Conditions today were good for a reformist budget. Only one state election (in Bihar) occurs this year, and the current coalition partners lack the muscle to topple the government unlike the Left Front in the 2004-09 coalition.
But Mr Mukherjee avoided any significant reforms. FDI could have been allowed into retail and the FDI limit hiked in insurance; foreign investors could have been given voting power in line with their bank shareholding.
The budget assumes 8-8.5% real growth and 4% inflation, giving 12.5% nominal GDP growth. This very optimistic scenario assumes that the global economy will not slow down. If it does, all bets on deficit reduction are off.
The surcharge on corporate tax has been cut from 10% to 7.5% while the minimum alternative tax (MAT) has been raised from 15% to 18%. This will raise the overall effective tax rate. The tax break for software parks has not been extended, so the likes of TCS will now be taxable, but for the refuge they get in SEZs.
The aam aadmi will get more rhetoric than cash: NREGA gets just a marginal boost to Rs 40,100 crore from Rs 39,100 crore last year. The fiscal stimulus was rolled back very partially. Cenvat went from 8% to 10%, well short of the pre-stimulus 14%. Cenvat and service tax now stand unified at 10%, preparing for the transition to a single-rate goods and services tax next year.
Import and excise duty on crude and petroleum products were cut in 2008 when crude hit $112/barrel, and these cuts have been reversed in the budget. Petrol and diesel will go up in price by Rs 2.67/litre and Rs 2.58/litre, respectively. But petrol and diesel prices remain to be decontrolled.
The Economic Advisory Council recently said the fiscal stimulus comprised accelerated spending much more than tax cuts, suggesting that the rollback should focus on spending. Mr Mukherjee has followed this advice—non-Plan spending is up only 6%, and non-Plan outlays are actually down for several sectors, including defence, subsidies, police, economic services, social services and other general services. Plan spending is up 15%, a desirable trend change.
The middle class will be angry with the rise in petrol and diesel prices, and Mr Mukherjee has sought to mollify it with a widening of income-tax slabs, which will provide some relief. But inflation remains a major concern, and the budget hope that inflation will fall to 4% over the next year is a triumph of hope over experience.
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'Markets cheer Budget 2010', screamed one headline. 'Sensex salutes Union Budget', said the other. Clearly, bouquets far outweighed the brickbats in response to the Union Budget 2010 that was tabled in the parliament today. Count us amongst the one offering the bouquets! Of course, it would be too premature to pass any judgment right now. But the budget clearly showed that the Government is in no mood anymore to drive down the wrong path. Most of all, in the field of fiscal prudence. And it also showed that the previous two years were an aberration. An aberration that had arisen as a result of political compulsions and a severe global economic turmoil.
Absent any of these factors, the Government seemed quite intent to take the right steps. Steps that will put the economy on a structurally higher growth path and at the same time strive for financial inclusion.
And clearly, markets seem to have liked this positive gesture by the government. Most of us would remember that during the last budget, it was the ballooning of the fiscal deficit that had perhaps caused the maximum heart burn for the investors, resulting into the markets going into a tailspin on the budget day and the Sensex shedding a massive 870 points. But things were starkly different today. The FM promised that the Government would strive to shave off fiscal deficit by nearly 3% as a percent of GDP by FY13, thus helping lift investor spirits.
Fiscal deficit is not entirely bad in itself. But increasingly in India, more of it has been finding its way into wasteful expenditures that do nothing to improve the long term productivity and economic health of the country. Thus, with the same expected to come down, markets heaved a sigh of relief that money would now be spent towards more productive purposes, thus boosting economic growth.
In a nutshell, while the Finance Minister did nothing that could take away from the near term India growth story, it took further measures like showing a firm resolve to rein in the fiscal deficit that could do wonders to the long term India growth story and put us on a higher growth path. Was it a responsible budget? Tell us what you think.
Talking about fiscal deficit, the budget showed the government's commitment to revert back to the path of fiscal prudence in the coming years. The chart of the day shows the government's fiscal targets in the medium term. Fiscal deficit has reduced from 7.8% of GDP (including oil and fertiliser bonds) in FY09 to a target level of 5.5% in FY11E. This is due to disinvestment in public sector companies and reforms in government expenditure chiefly subsidies. In fact, the targets for FY12E and FY13E are improvements over the suggested roadmap by the 13th Finance Commission.
The budget was certainly not only about the fiscal deficit. The Finance Minister also chose to take away a lot less money from salaried professionals by way of taxes thus boosting their disposable income and further strengthening the Indian consumption story. Also, availability of credit, so very essential for big ticket purchases like auto and homes, is all set to improve what with the Government deciding to give away more banking and NBFC licenses and also strengthening the capital base of public sector banks.
It should be borne in mind that all these measures were over and above the ones that the Government has now started taking on a regular basis and the ones so very essential for the sustenance of the Indian growth story like focus on infrastructure, employment guarantee schemes, greater emphasis on education and health and the like.
What does all this mean for the investor? If one is looking to invest in the markets from a 3-5 year perspective, there is a strong chance that the returns in the region of 12%-15% annually that the investors have come to expect from Indian stock markets from a long term perspective, could well be surpassed. Of course, one will have to stick to companies favorably positioned to ride the India growth story run by a competent management team and available at reasonable valuations. The FM seems to have done his bit. Now, it is your turn to take advantage of it.
The power sector received a lot of attention in the budget. Plan allocation for power sector (excluding RGGVY) has been doubled to Rs 51 bn in FY11. That will aid new generation capacities that had been stalled for want of funds. Competitive bidding for allocating coal blocks will help bring about a level playing field in the sector as more and more generation companies are looking to have their own supplies of coal. Higher outlay for renewable energy will help power companies given the mandatory requirements to source a part of their power distribution requirements from clean fuel sources. However, the hike in the standard rate of excise duty to 10% to make equipments a bit more expensive that will impact the overall project costs for power companies.
Banking was another such sector that received its due importance in the Budget. The RBI will give additional branch licenses to private sector banks and NBFCs that meet the central bank's eligibility criteria. An additional sum of Rs 165 bn will be offered to the under-capitalized public sector banks to ensure that all PSU banks are able to attain a minimum 8% Tier-I capital by FY11. Banks' target for agricultural credit for the year FY11 has been enhanced to Rs 3,750 bn. By ensuring that the banks are adequately capitalized and have enough scope to grow their franchise and loan book, the budget ensured that banks play a major role in the economy's growth in the coming fiscals.
FY10 turned out to be the year when the Indian auto sector made a grand comeback. The Union Budget for the year 2010-11 did little to disrupt the growth story in the auto sector. Except for the 2% excise duty hike in passenger vehicles, it chose to keep most of the other duties intact and hence, did not roll back any of the stimulus measures. Also, higher allocation towards defence and infrastructure augurs well for the long-term growth story. On the direct tax front, while increase in weighted deduction on R&D expense to 200% was a positive, increase in MAT rates is likely to take some sheen away from it. All in all, a favorable budget for the auto sector.
The Union Budget 2010 brought some cheers to the Indian markets, which had been reeling under fear for the past few days with respect to the government's stimulus withdrawal. The BSE Sensex and NSE Nifty closed with gains of around 175 points (1.1%) and 65 points (1.4%) respectively. Among other key Asian markets, while China closed marginally in the red, Hong Kong (up 1%) and Japan (up 0.2%) were among the gainers. European markets have opened today on a positive note.
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UP IN THE AIR
BY ANIL PADMANABHAN
Finance minister Pranab Mukherjee's second effort in less than nine months is an honest attempt at consolidation and correcting the fiscal abuse of the past, but it may yet fall under the burden of scepticism emerging from the underly- ing macroeconomic risks and what's been left un- said in Budget 2010.
In the trade-off between inflation and growth the minister, risking personal political damage, has opted for the latter and at the same time, to ensure the desired fiscal discipline, targeted subsidies in a manner that could, in the short term, imply an ad- justment cost for consumers.
Together with an across-the-board increase in in- direct taxes, which signalled the rollback of the fiscal stimulus, and bringing new services in the tax net, the Budget creates the basis for inflationary pressures.
Given the politics, especially with the opposition parties staging a walkout, the first in the history of Parliament during the presentation of a budget, it is understandable that the minister stayed away from stating the bare facts about the adjustment (con- sumers will end up having to pay more for a variety of offerings, though Mukherjee has tried to lessen the impact of the blow). The downside is that be- cause he hasn't done this, interpretations are open to exaggeration. This could mean trouble when the message sinks in. This is evident in the reaction of the markets--buoyant at first, muted later.
Politically this can make the Congress-led Unit- ed Progressive Alliance (UPA) unpopular and give the Opposition a rallying point, besides stirring disquiet among allies. It could also make individu- als and companies hold off investments and defer consumption--threatening growth and the core of the government's strategy.
A reforms legacy Still, the UPA has to be complimented for seizing the political space provided by the 13th Finance Commission (TFC) to press ahead with some honest and much-needed (and politically difficult) fiscal re- form even as it continues the stock-market friendly disinvestment programme. If it does not lose its nerve and effect a retreat, the UPA may well find itself in a position to add to its already enviable legacy as the political coalition that helped put in place the building blocks for a modern economy. Mukherjee has, with this Budget, already joined the pantheon of politicians such as P.V. Narasimha Rao, Manmohan Singh, P. Chidambaram and Yashwant Sinha, who pushed difficult but very critical economic reforms.
Budget 2010 also marks a departure from finance bills of the UPA's first tenure (2004-09) when the government failed to take advantage of a booming economy to undertake structural measures to cut back expenditure. This is important because the ac- tion taken report (ATR) on the recommendations of TFC submitted to Parliament on Thursday seemed to suggest that the government had deferred any response to the proposals on expenditure reform.
It emerges that relying on the recommenda- tions of TFC, a constitutional body, the govern- ment has actually moved ahead with a reorder- ing of expenditure and committed itself to a f transparent and binding medium-term fiscal reforms programme. Not only is the UPA going to reduce its borrowing by about Rs1 trillion from 2009-10, it has decided to embark on a new strategy: the government will cap its stock of internal debt at 68% of the gross do- mestic product and derive the fiscal deficit, gross borrow- ings, as a residual, instead of deriving the fiscal deficit from spending excesses as it used to do previously; since the gov- ernment also plans to elimi- nate the revenue deficit, the gap between the government's income through taxes and oth- er revenues and its spending, this means that it will progres- sively reduce its borrowings.
Not only will this guarantee a non-inflationary financing of development programmes, it will also ensure that such fi- nancing does not crowd out private investment and create an upward pressure on inter- est rates.
It is apparent that a lot of thought has gone into this Budget.
It is not, despite the Rs26,000 crore giveaways in direct tax concessions and the sustained spending on social sector programmes, by any measure a populist budget. A tax concession of about Rs60,000 for anyone earning above Rs9 lakh, a key demo- graphic category among the middle class, would in normal circumstances be construed a sop. Instead, it is, as are the other direct tax changes, de- signed to ready the tax infra- structure for the introduction of the game-changing direct tax code (DTC) in April next year.
Similarly, the minister has gone in for several meas- ures--such as preferring to re- tain the service tax rate at 10%--in the area of indirect tax to prepare ground for the introduction of a single goods and services tax (GST).
Mukherjee has also taken an initiative to usher in the much-needed institutional re- form. Key among these is the move to create the information technology infrastructure that can make a success of efforts such as the implementation of GST and DTC. Another is the implementation of TFC's rec- ommendation to create a na- tional mission for delivery of judicial and legal reforms.
Equally significant is the UPA's decision to press ahead on green initiatives. Accord- ingly, it has effected a 61% in- crease in the outlay to the ministry of new and renewable energy, funded new pro- grammes for river-cleaning and give a big push to use of non-fossil fuels such as solar energy.
Threat of inflation Since previous governments shied away from action on the vexing issue of expenditure re- form, Mukherjee inherited a dubious legacy; matters were worsened because some of his predecessors resorted to cre- ative accounting to mask the fiscal impact of subsidizing consumption, especially when there was a runaway rise in in- ternational fuel prices. Any ef- fort to undo this would inevi- tably imply adjusting prices.
Unfortunately, since this has coincided with the rollback of the fiscal stimuli that the UPA had injected over the last two years, it is likely to lend a price shock to the system--indeed, if not contained, it could spiral out of control.
Inflation, as measured by the Wholesale Price Index, was already high at 8.5% in Janu- ary; more worrying is the fact that food inflation continues to remain in the high double digits.
Some of the inflationary ef- fects of the Budget have al- ready resulted in price rises in some offerings; rises in several others could follow. The list of such offerings includes fuel, cars, air tickets, cement, coal, cigarettes, consumer products, and air conditioners.
The challenge The Opposition has, by seiz- ing on the weak link in the Budget, signalled its intent to throw down the gauntlet on inflation. The UPA has no choice but to take up the chal- lenge; it will find the going difficult since some of its al- lies have very publicly dif- fered with it on politically sensitive reforms. So far, the Congress has demonstrated leadership qualities by refus- ing to bow to such pressures, even as it has, occasionally, passed on the responsibility to politically weakened allies such as the Nationalist Con- gress Party led by Sharad Pa- war. It has been helped, no doubt, by its firm commit- ment to inclusive growth, something that Mukherjee re- ferred to as "an article of faith".
The Congress' spin doctors will have to back Mukherjee and wear down the political criticism to the Budget. To its advantage, the Congress still enjoys credibility with people; but in politics, like in cricket, situations can alter dramatic- ally and often without warn- ing. What would also help is the fact that Mukherjee, as a CVoter survey reported in Mint on 25 February, showed enjoys personal credibility.
Troubleshooters of the gov- ernment have already indicat- ed that they are prepared to take on the political opposi- tion. The Congress has 208 seats in the Lok Sabha, needs 273 for a simple majority in the House, and it still has the backing of 276 members of Parliament--even after the withdrawal of outside support from the Samajwadi Party and the Bahujan Samaj Party.
The real test for Budget 2010, however, will be the ability of the UPA to ensure strong policy response to pre- vent inflationary pressures from spiralling out of control.
So far, it has been found want- ing on that front. But now the stakes, both political and eco- nomic, are very high. Any mis- step in policy would not only set back the Congress as well as the UPA, it could plunge the country into an economic crisis--that could mean miss- ing out on a once-in-a-life- time opportunity to break the economic shackles and deliv- er inclusive growth.
The finance minister has delivered the single-most significant expectation from the budget: fiscal consolidation. With this, India joins a select
band of countries that have begun to exit the extraordinary stimulus governments unleashed to combat the global crisis.
While partially reversing the tax giveaways, the government has unified the rates of tax on goods and on services, and expanded the scope of service tax a bit, achieving tax reform in the process and facilitating the proposed move to a goods and services tax (GST) next fiscal.
The FM proposes to bring the fiscal deficit down to 5.5% of GDP in 2010-11 and further down to 4.8% and 4.1% of GDP over the two subsequent years, and commits to follow the Finance Commission prescription to bring public debt down to 68% by 2014-15. He also proposes sharp cuts in non-Plan expenditure and rise in Plan spending.
Such earnest display of commitment to quantitative and qualitative fiscal responsibility is bound to impress foreign investors.
Rise in excise duties and petrol and diesel prices will upset consumers across the board, but the FM has bought peace with the vocal middle class by giving them unexpected income-tax concessions.
Moving to macro-economic balance and moving to tax and petro-price reforms are welcome; omission of other big reforms is a worry.
===============================================================
Not quite as good as it looks, Pranabda
Mythili Bhusnurmath, ET Bureau
On the face of it, Pranab Mukherjee’s first full Budget in the UPA government is an improvement over his July 2009 Budget. The main macro number,
fiscal deficit (FD)/GDP ratio, is a tad below the Budget estimate (BE) of 6.8%. Even better, it is slated to come down to 5.5% by March 2010.
Add to that the FM’s apparent willingness to move away from the smoke-and-mirrors practice of the past, and present more transparent accounts, widen personal income-tax slabs, set a more ambitious target for disinvestment, hold out the prospect of additional banking licences to private players and make a beginning in the direction of legal reform, and it would appear that the stock market is not the only one with reason to cheer.
On the flip side, there is the small (2%) roll back of the reduction in central excise duties allowed last year as part of the stimulus package, expansion of the service tax net to cover more services, increase in central excise duty on petrol and diesel and on non-smoking tobacco, and some unwanted tinkering with tax rates on a host of items.
But none of this takes away from the general sense of Budget 2010 being a workman-like, no-nonsense Budget; one that will set the economy back on the track of growth along with fiscal consolidation. Or so it seems.
Until you look a little closer at the assumptions underlying the Budget, particularly fiscal consolidation. To begin with, the improvement in fiscal health reflected in the lower FD/GDP ratio conceals the worsening in the quality of the FD, not only in the revised estimates (RE) for 2009-10 but also in the BE for 2010-11 compared to 2008-09.
Thus, the revenue deficit/fiscal deficit ratio (RD/FD), which shows how much of the borrowing is going to finance current consumption (rather than investment), has increased from just 41% in 2007-08 to 79% in 2009-10 (RE), and is to go down only marginally to 73% in 2010-11. What this means is that every Rs 100 the government borrows will have to be serviced from whatever it earns by investing Rs 27. The balance Rs 73 would be spent on consumption and will not earn anything. This is a nigh impossible task that means the government will have to borrow more and more just to keep its head above water.
Second, the improvement in the FD/GDP ratio is premised on a sharper-than-warranted increase in net revenue and a lower-than-warranted increase in expenditure, especially non-Plan expenditure. Net tax revenue to the Centre grew only 5% in the current year, according to revised estimates for 2009-10. Yet, Budget 2010 projects a far more robust growth of 15%. On the expenditure side, though non-Plan expenditure grew 16% over actuals in 2008-09, it is expected to grow by a far more modest (unrealistic?) 4% in the next fiscal year.
Last but not least, unless inflation comes to the government’s rescue, the GDP number for 2010-11 is likely to be an over-estimate. The reason is third-quarter GDP numbers released by the CSO on Friday show third-quarter growth at just 6%, which means the economy must register growth of about 8.8% in the fourth quarter if we are to live up to the CSO’s advance estimate of 7.2% for the year.
This looks a trifle far fetched at the moment, so the final GDP number for 2011 may be somewhat lower; in which case we may end up with an FD/GDP ratio of more than 5.5%, and the much-celebrated improvement in fiscal health will turn out to be no more than wishful thinking. In course of time, markets will wake up to that realisation. But till then, it is party time.
=================================================================
Fiscal health gets a booster shot
Swaminathan S Anklesaria Aiyar , ET Bureau
It’s a middle-of-the-road budget,neither harsh nor soft, neither left nor right. Finance minister Pranab Mukherjee is neither a populist nor radical
reformer. Curbs on non-Plan spending rather than stiff taxation (net additional taxes are barely Rs 20,000 crore) will reduce fiscal deficit to 5.5% of GDP next year, with further reductions to 4.8% and 4.1% in the next two years.
This conforms to the targets of fiscal consolidation in last year’s budget. Banks are relieved that they will be able to fund the reduced borrowing requirement of the government. Disinvestment of public sector shares will fetch Rs 40,000 crore, and the 3G spectrum auction another Rs 35,000 crore or so.
This exceeded the markets’ low expectations, and the Sensex zoomed 175 points. Reliance Capital was a top gainer, after the finance minister’s statement that more private sector banking licences would be given out.
Conditions today were good for a reformist budget. Only one state election (in Bihar) occurs this year, and the current coalition partners lack the muscle to topple the government unlike the Left Front in the 2004-09 coalition.
But Mr Mukherjee avoided any significant reforms. FDI could have been allowed into retail and the FDI limit hiked in insurance; foreign investors could have been given voting power in line with their bank shareholding.
The budget assumes 8-8.5% real growth and 4% inflation, giving 12.5% nominal GDP growth. This very optimistic scenario assumes that the global economy will not slow down. If it does, all bets on deficit reduction are off.
The surcharge on corporate tax has been cut from 10% to 7.5% while the minimum alternative tax (MAT) has been raised from 15% to 18%. This will raise the overall effective tax rate. The tax break for software parks has not been extended, so the likes of TCS will now be taxable, but for the refuge they get in SEZs.
The aam aadmi will get more rhetoric than cash: NREGA gets just a marginal boost to Rs 40,100 crore from Rs 39,100 crore last year. The fiscal stimulus was rolled back very partially. Cenvat went from 8% to 10%, well short of the pre-stimulus 14%. Cenvat and service tax now stand unified at 10%, preparing for the transition to a single-rate goods and services tax next year.
Import and excise duty on crude and petroleum products were cut in 2008 when crude hit $112/barrel, and these cuts have been reversed in the budget. Petrol and diesel will go up in price by Rs 2.67/litre and Rs 2.58/litre, respectively. But petrol and diesel prices remain to be decontrolled.
The Economic Advisory Council recently said the fiscal stimulus comprised accelerated spending much more than tax cuts, suggesting that the rollback should focus on spending. Mr Mukherjee has followed this advice—non-Plan spending is up only 6%, and non-Plan outlays are actually down for several sectors, including defence, subsidies, police, economic services, social services and other general services. Plan spending is up 15%, a desirable trend change.
The middle class will be angry with the rise in petrol and diesel prices, and Mr Mukherjee has sought to mollify it with a widening of income-tax slabs, which will provide some relief. But inflation remains a major concern, and the budget hope that inflation will fall to 4% over the next year is a triumph of hope over experience.
----------------------------------------------------------------
'Markets cheer Budget 2010', screamed one headline. 'Sensex salutes Union Budget', said the other. Clearly, bouquets far outweighed the brickbats in response to the Union Budget 2010 that was tabled in the parliament today. Count us amongst the one offering the bouquets! Of course, it would be too premature to pass any judgment right now. But the budget clearly showed that the Government is in no mood anymore to drive down the wrong path. Most of all, in the field of fiscal prudence. And it also showed that the previous two years were an aberration. An aberration that had arisen as a result of political compulsions and a severe global economic turmoil.
Absent any of these factors, the Government seemed quite intent to take the right steps. Steps that will put the economy on a structurally higher growth path and at the same time strive for financial inclusion.
And clearly, markets seem to have liked this positive gesture by the government. Most of us would remember that during the last budget, it was the ballooning of the fiscal deficit that had perhaps caused the maximum heart burn for the investors, resulting into the markets going into a tailspin on the budget day and the Sensex shedding a massive 870 points. But things were starkly different today. The FM promised that the Government would strive to shave off fiscal deficit by nearly 3% as a percent of GDP by FY13, thus helping lift investor spirits.
Fiscal deficit is not entirely bad in itself. But increasingly in India, more of it has been finding its way into wasteful expenditures that do nothing to improve the long term productivity and economic health of the country. Thus, with the same expected to come down, markets heaved a sigh of relief that money would now be spent towards more productive purposes, thus boosting economic growth.
In a nutshell, while the Finance Minister did nothing that could take away from the near term India growth story, it took further measures like showing a firm resolve to rein in the fiscal deficit that could do wonders to the long term India growth story and put us on a higher growth path. Was it a responsible budget? Tell us what you think.
Talking about fiscal deficit, the budget showed the government's commitment to revert back to the path of fiscal prudence in the coming years. The chart of the day shows the government's fiscal targets in the medium term. Fiscal deficit has reduced from 7.8% of GDP (including oil and fertiliser bonds) in FY09 to a target level of 5.5% in FY11E. This is due to disinvestment in public sector companies and reforms in government expenditure chiefly subsidies. In fact, the targets for FY12E and FY13E are improvements over the suggested roadmap by the 13th Finance Commission.
The budget was certainly not only about the fiscal deficit. The Finance Minister also chose to take away a lot less money from salaried professionals by way of taxes thus boosting their disposable income and further strengthening the Indian consumption story. Also, availability of credit, so very essential for big ticket purchases like auto and homes, is all set to improve what with the Government deciding to give away more banking and NBFC licenses and also strengthening the capital base of public sector banks.
It should be borne in mind that all these measures were over and above the ones that the Government has now started taking on a regular basis and the ones so very essential for the sustenance of the Indian growth story like focus on infrastructure, employment guarantee schemes, greater emphasis on education and health and the like.
What does all this mean for the investor? If one is looking to invest in the markets from a 3-5 year perspective, there is a strong chance that the returns in the region of 12%-15% annually that the investors have come to expect from Indian stock markets from a long term perspective, could well be surpassed. Of course, one will have to stick to companies favorably positioned to ride the India growth story run by a competent management team and available at reasonable valuations. The FM seems to have done his bit. Now, it is your turn to take advantage of it.
The power sector received a lot of attention in the budget. Plan allocation for power sector (excluding RGGVY) has been doubled to Rs 51 bn in FY11. That will aid new generation capacities that had been stalled for want of funds. Competitive bidding for allocating coal blocks will help bring about a level playing field in the sector as more and more generation companies are looking to have their own supplies of coal. Higher outlay for renewable energy will help power companies given the mandatory requirements to source a part of their power distribution requirements from clean fuel sources. However, the hike in the standard rate of excise duty to 10% to make equipments a bit more expensive that will impact the overall project costs for power companies.
Banking was another such sector that received its due importance in the Budget. The RBI will give additional branch licenses to private sector banks and NBFCs that meet the central bank's eligibility criteria. An additional sum of Rs 165 bn will be offered to the under-capitalized public sector banks to ensure that all PSU banks are able to attain a minimum 8% Tier-I capital by FY11. Banks' target for agricultural credit for the year FY11 has been enhanced to Rs 3,750 bn. By ensuring that the banks are adequately capitalized and have enough scope to grow their franchise and loan book, the budget ensured that banks play a major role in the economy's growth in the coming fiscals.
FY10 turned out to be the year when the Indian auto sector made a grand comeback. The Union Budget for the year 2010-11 did little to disrupt the growth story in the auto sector. Except for the 2% excise duty hike in passenger vehicles, it chose to keep most of the other duties intact and hence, did not roll back any of the stimulus measures. Also, higher allocation towards defence and infrastructure augurs well for the long-term growth story. On the direct tax front, while increase in weighted deduction on R&D expense to 200% was a positive, increase in MAT rates is likely to take some sheen away from it. All in all, a favorable budget for the auto sector.
The Union Budget 2010 brought some cheers to the Indian markets, which had been reeling under fear for the past few days with respect to the government's stimulus withdrawal. The BSE Sensex and NSE Nifty closed with gains of around 175 points (1.1%) and 65 points (1.4%) respectively. Among other key Asian markets, while China closed marginally in the red, Hong Kong (up 1%) and Japan (up 0.2%) were among the gainers. European markets have opened today on a positive note.
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UP IN THE AIR
BY ANIL PADMANABHAN
Finance minister Pranab Mukherjee's second effort in less than nine months is an honest attempt at consolidation and correcting the fiscal abuse of the past, but it may yet fall under the burden of scepticism emerging from the underly- ing macroeconomic risks and what's been left un- said in Budget 2010.
In the trade-off between inflation and growth the minister, risking personal political damage, has opted for the latter and at the same time, to ensure the desired fiscal discipline, targeted subsidies in a manner that could, in the short term, imply an ad- justment cost for consumers.
Together with an across-the-board increase in in- direct taxes, which signalled the rollback of the fiscal stimulus, and bringing new services in the tax net, the Budget creates the basis for inflationary pressures.
Given the politics, especially with the opposition parties staging a walkout, the first in the history of Parliament during the presentation of a budget, it is understandable that the minister stayed away from stating the bare facts about the adjustment (con- sumers will end up having to pay more for a variety of offerings, though Mukherjee has tried to lessen the impact of the blow). The downside is that be- cause he hasn't done this, interpretations are open to exaggeration. This could mean trouble when the message sinks in. This is evident in the reaction of the markets--buoyant at first, muted later.
Politically this can make the Congress-led Unit- ed Progressive Alliance (UPA) unpopular and give the Opposition a rallying point, besides stirring disquiet among allies. It could also make individu- als and companies hold off investments and defer consumption--threatening growth and the core of the government's strategy.
A reforms legacy Still, the UPA has to be complimented for seizing the political space provided by the 13th Finance Commission (TFC) to press ahead with some honest and much-needed (and politically difficult) fiscal re- form even as it continues the stock-market friendly disinvestment programme. If it does not lose its nerve and effect a retreat, the UPA may well find itself in a position to add to its already enviable legacy as the political coalition that helped put in place the building blocks for a modern economy. Mukherjee has, with this Budget, already joined the pantheon of politicians such as P.V. Narasimha Rao, Manmohan Singh, P. Chidambaram and Yashwant Sinha, who pushed difficult but very critical economic reforms.
Budget 2010 also marks a departure from finance bills of the UPA's first tenure (2004-09) when the government failed to take advantage of a booming economy to undertake structural measures to cut back expenditure. This is important because the ac- tion taken report (ATR) on the recommendations of TFC submitted to Parliament on Thursday seemed to suggest that the government had deferred any response to the proposals on expenditure reform.
It emerges that relying on the recommenda- tions of TFC, a constitutional body, the govern- ment has actually moved ahead with a reorder- ing of expenditure and committed itself to a f transparent and binding medium-term fiscal reforms programme. Not only is the UPA going to reduce its borrowing by about Rs1 trillion from 2009-10, it has decided to embark on a new strategy: the government will cap its stock of internal debt at 68% of the gross do- mestic product and derive the fiscal deficit, gross borrow- ings, as a residual, instead of deriving the fiscal deficit from spending excesses as it used to do previously; since the gov- ernment also plans to elimi- nate the revenue deficit, the gap between the government's income through taxes and oth- er revenues and its spending, this means that it will progres- sively reduce its borrowings.
Not only will this guarantee a non-inflationary financing of development programmes, it will also ensure that such fi- nancing does not crowd out private investment and create an upward pressure on inter- est rates.
It is apparent that a lot of thought has gone into this Budget.
It is not, despite the Rs26,000 crore giveaways in direct tax concessions and the sustained spending on social sector programmes, by any measure a populist budget. A tax concession of about Rs60,000 for anyone earning above Rs9 lakh, a key demo- graphic category among the middle class, would in normal circumstances be construed a sop. Instead, it is, as are the other direct tax changes, de- signed to ready the tax infra- structure for the introduction of the game-changing direct tax code (DTC) in April next year.
Similarly, the minister has gone in for several meas- ures--such as preferring to re- tain the service tax rate at 10%--in the area of indirect tax to prepare ground for the introduction of a single goods and services tax (GST).
Mukherjee has also taken an initiative to usher in the much-needed institutional re- form. Key among these is the move to create the information technology infrastructure that can make a success of efforts such as the implementation of GST and DTC. Another is the implementation of TFC's rec- ommendation to create a na- tional mission for delivery of judicial and legal reforms.
Equally significant is the UPA's decision to press ahead on green initiatives. Accord- ingly, it has effected a 61% in- crease in the outlay to the ministry of new and renewable energy, funded new pro- grammes for river-cleaning and give a big push to use of non-fossil fuels such as solar energy.
Threat of inflation Since previous governments shied away from action on the vexing issue of expenditure re- form, Mukherjee inherited a dubious legacy; matters were worsened because some of his predecessors resorted to cre- ative accounting to mask the fiscal impact of subsidizing consumption, especially when there was a runaway rise in in- ternational fuel prices. Any ef- fort to undo this would inevi- tably imply adjusting prices.
Unfortunately, since this has coincided with the rollback of the fiscal stimuli that the UPA had injected over the last two years, it is likely to lend a price shock to the system--indeed, if not contained, it could spiral out of control.
Inflation, as measured by the Wholesale Price Index, was already high at 8.5% in Janu- ary; more worrying is the fact that food inflation continues to remain in the high double digits.
Some of the inflationary ef- fects of the Budget have al- ready resulted in price rises in some offerings; rises in several others could follow. The list of such offerings includes fuel, cars, air tickets, cement, coal, cigarettes, consumer products, and air conditioners.
The challenge The Opposition has, by seiz- ing on the weak link in the Budget, signalled its intent to throw down the gauntlet on inflation. The UPA has no choice but to take up the chal- lenge; it will find the going difficult since some of its al- lies have very publicly dif- fered with it on politically sensitive reforms. So far, the Congress has demonstrated leadership qualities by refus- ing to bow to such pressures, even as it has, occasionally, passed on the responsibility to politically weakened allies such as the Nationalist Con- gress Party led by Sharad Pa- war. It has been helped, no doubt, by its firm commit- ment to inclusive growth, something that Mukherjee re- ferred to as "an article of faith".
The Congress' spin doctors will have to back Mukherjee and wear down the political criticism to the Budget. To its advantage, the Congress still enjoys credibility with people; but in politics, like in cricket, situations can alter dramatic- ally and often without warn- ing. What would also help is the fact that Mukherjee, as a CVoter survey reported in Mint on 25 February, showed enjoys personal credibility.
Troubleshooters of the gov- ernment have already indicat- ed that they are prepared to take on the political opposi- tion. The Congress has 208 seats in the Lok Sabha, needs 273 for a simple majority in the House, and it still has the backing of 276 members of Parliament--even after the withdrawal of outside support from the Samajwadi Party and the Bahujan Samaj Party.
The real test for Budget 2010, however, will be the ability of the UPA to ensure strong policy response to pre- vent inflationary pressures from spiralling out of control.
So far, it has been found want- ing on that front. But now the stakes, both political and eco- nomic, are very high. Any mis- step in policy would not only set back the Congress as well as the UPA, it could plunge the country into an economic crisis--that could mean miss- ing out on a once-in-a-life- time opportunity to break the economic shackles and deliv- er inclusive growth.
Friday, February 26, 2010
SISCO BANK DIVIDEND CHEQUE TO HCM
SIKKIM:Smooth Municipality Election stressed by Chief Minister
Gangtok: A high level meeting was held Monday afternoon under the chairmanship of Chief Minister Dr. Pawan Chamling at the conference hall of the Tashiling Secretriat, Gangtok, which was attended by Council of Ministers, MLAs and senior State Government officials.
At the outset Chief Minister informed that in its last meeting held on 19th Feb the Cabinet had decided to hold the Elections to the Municipalities on 27th April 2010. He directed the concerned departments to take necessary actions like reservations etc in a systematic manner within the ambit of law for holding the elections smoothly.
In the meeting it was also decided to hold Self Employment Mela, first of its kind in the State, in which all the industrial units, power developers, educational instiutions, among others, will be advised to have their stalls and provide information on the emploment opportunities to the local unemployed youth including walk in interviews. Multinational companies will be also invited to participate in the Mela. Loans will be also disbursed by various financial institutions like SIDICO, SABCO and SKVIB to educated unemployed youths for self employment ventures.
Chief Minister told all concerned that the livelihood schools set up should be made effective and all opportunities should be given to local people. He also directed the Cooperative Deprtment to prepare the modalities for award of various works upto Rs.50 lakhs at Panchayat level itself to Cooperative Societies promoted by the unemployed youths at schdule of rates. The existing policy of providing works upto Rs.20 lakhs to Labour Cooperative Societies should be made more effective and all departments should follow this policy strictly, he said.
A cheque for Rs. 25,54,656 was also handed over to Chief Minister towards the payment of dividend by the Sikkim State Cooperative Bank for the year 2008-09.
The Bank has so far paid Rs.196.23 laks as dividend to the State Government since its formation. Chief Minister thanked the management of the bank and assured them full cooperation.
source: Sikkim Reporter
Gangtok: A high level meeting was held Monday afternoon under the chairmanship of Chief Minister Dr. Pawan Chamling at the conference hall of the Tashiling Secretriat, Gangtok, which was attended by Council of Ministers, MLAs and senior State Government officials.
At the outset Chief Minister informed that in its last meeting held on 19th Feb the Cabinet had decided to hold the Elections to the Municipalities on 27th April 2010. He directed the concerned departments to take necessary actions like reservations etc in a systematic manner within the ambit of law for holding the elections smoothly.
In the meeting it was also decided to hold Self Employment Mela, first of its kind in the State, in which all the industrial units, power developers, educational instiutions, among others, will be advised to have their stalls and provide information on the emploment opportunities to the local unemployed youth including walk in interviews. Multinational companies will be also invited to participate in the Mela. Loans will be also disbursed by various financial institutions like SIDICO, SABCO and SKVIB to educated unemployed youths for self employment ventures.
Chief Minister told all concerned that the livelihood schools set up should be made effective and all opportunities should be given to local people. He also directed the Cooperative Deprtment to prepare the modalities for award of various works upto Rs.50 lakhs at Panchayat level itself to Cooperative Societies promoted by the unemployed youths at schdule of rates. The existing policy of providing works upto Rs.20 lakhs to Labour Cooperative Societies should be made more effective and all departments should follow this policy strictly, he said.
A cheque for Rs. 25,54,656 was also handed over to Chief Minister towards the payment of dividend by the Sikkim State Cooperative Bank for the year 2008-09.
The Bank has so far paid Rs.196.23 laks as dividend to the State Government since its formation. Chief Minister thanked the management of the bank and assured them full cooperation.
source: Sikkim Reporter
INDIA BUDGET 2010-2011 HIGHLIGHTS
Highlights of General Budget 2010-11
GENERAL BUDGET 2010-11
· THE FINANCE MINISTER SHRI PRANAB MUKHERJEE LAYS EMPHASIS ON CONSOLIDATED GROWTH, IMPROVING INVESTMENT ENVIRONMENT, INCLUSIVE DEVELOPMENT AND STRENGTHENING TRANSPARENCY AND PUBLIC ACCOUNTABILITY IN BUDGET 2010-11.
· THE TOTAL EXPENDITURE PROPOSED IN THE BUDGET ESTIMATES IS RS.11,08,749 CRORE , AN INCREASE OF 8.6 PER CENT OVER LAST YEAR.
· THE PLAN AND NON-PLAN EXPENDITURE ESTIMATED AT RS.3,73,092 CRORE AND RS.7,35,657 CRORE RESPECTIVELY, AN INCREASE OF 15 PERCENT IN PLAN EXPENDITURE AND 6 PER CENT IN NON-PLAN EXPENDITURE OVER THE BE OF PREVIOUS YEAR.
· FISCAL DEFICIT AT 5.5 PER CENT OF GDP WORKS OUT TO BE RS. 3,81,408 CRORE.
· ROLLING TARGETS FOR FISCAL DEFICIT PEGGED AT 4.8 PER CENT AND 4.1 PER CENT FOR 2011-12 AND 2012-13.
· NET MARKET BORROWING WOULD BE OF THE ORDER OF RS. 3,45,010 CRORE LEAVING ENOUGH SPACE TO MEET CREDIT NEEDS OF PRIVATE SECTOR.
· AGAINST A FISCAL DEFICIT OF 7.8 PER CENT IN 2008-09 , INCLUSIVE OF OIL AND FERTILIZER BONDS, THE COMPARABLE FISCAL DEFICIT IS 6.9 PER CENT AS PER RE 2009-10.
· GROSS TAX RECEIPTS ESTIMATED AT RS.7,46,651 CRORE AND NON-TAX RECEIPT ESTIMATED AT RS. 1,48,118 CRORE.
· STATUS PAPER GIVING ROAD MAP FOR CURTAILING THE OVERALL PUBLIC DEBT TO BE BROUGHT OUT WITHIN 6 MONTHS.
· ABOUT RS. 25,000 CRORES TO BE RAISED THROUGH DISINVESTMET PROGRAMME
· TO SIMPLIFY THE FDI REGIME, FOR THE FIRST TIME BOTH OWNERSHIP & CONTROL RECOGNISED AS CENTRAL TO THE FDI POLICY.
· RS. 16,500 CRORE TO BE PROVIDED TO PUBLIC SECTOR BANKS TO ACHIEVE A MINIMUM 8 PER CENT TIER-I
· GROWTH OF 127 PER CENT RECORDED IN EXPORTS FROM SEZs TILL DECEMBER, 2009.
· A FOUR-PRONGED STRATEGY TO SPUR THE GROWTH IN AGRICULTURE SECTOR ENVISAGED. WHICH INCLUDES AGRICULTURAL PRODUCTION, REDUCTION IN WASTAGE OF PRODUCE , CREDIT SUPPORT TO FARMERS AND THRUST TO THE FOOD PROCESSING SECTOR.
· AGRICULTURE CREDIT FLOW TARGET RAISED TO RS. 3,75,000 CRORE FROM RS.3,25,000 CRORE
· SUBVENTION FOR TIMELY REPAYMENT OF CROP LOAN INCREASED FROM 1 PER CENT TO 2 PER CENT.
· INFRASTRUCTURE DEVELOPMENT GETS AN ALLOCATION OF Rs. 1,73,552 CRORE, 46 PER CENT OF TOTAL PLAN ALLOCATION , AN INCREASE OF 13 PER CENT IN ROAD TRANSPORT SECTOR.
· INDIA INFRASTRUCTURE FINANCE COMPANY LIMITED’S DISBURSEMENTS TO REACH RS. 20,000 CRORE BY MARCH 2011.
· ALLOCATION FOR POWER SECTOR INCREASED BY MORE THAN DOUBLED TO RS. 5,130 CRORE.
· NEW TAX INCENTIVES ANNOUNCED FOR INFRASTRUCTURE SECTOR.
· NATIONAL CLEAR ENERGY FUND FOR FUNDING RESEARCH AND INNOVATIVE PROJECTS IN CLEAN ENERGY TECHNOLOGIES TO BE SET UP.
· SPENDING ON SOCIAL SECTOR TO ACCOUNT FOR 37 PER CENT OF TOTAL PLAN OUTLAY AT RS.1,37,674 CRORE
· ALLOCATION FOR RURAL DEVELOPMENT ENHANCED TO RS.66,100 CRORES. ALLOCATION FOR NREGA STEPPED UP TO 40,100 CRORE.
· RS. 48,000 CRORE ALLOCATED FOR BHARAT NIRMAN PROGRAMME
· BACKWARD REGION GRANT FUND ALLOCATION ENHANCED TO RS. 7,300 CRORE.
· RAJIV AWAS YOJNA FOR SLUM DWELLERS AND URBAN POOR TO GET RS. 1,270 CRORE , AN INCREASE OF OVER 700 PER CENT
· NATIONAL SOCIAL SECURITY FUND FOR UNORGANISED SECTOR WORKERS TO BE SET UP WITH AN INITIAL AMOUNT OF RS. 1,000 CRORE.
· MAHILA KISAN SASHAKTIKARAN PARIYOJNA WITH A PROVISION OF RS.100 CRORE LAUNCHED
· 80 PER CENT INCREASE IN THE ALLOCATION FOR MINISTRY OF SOCIAL JUSTICE & EMPOWERMENT AT RS 4,500 CRORE.
· MINORITY AFFAIRS TO GET RS.2,600 CRORE, AN INCREASE OF 50 PER CENT.
· TO REWRITE AND CLEAN UP THE FINANCIAL SECTOR LAWS, FINANCIAL SECTOR LEGISLATIVE REFORMS COMMISSION TO BE SET UP.
· UNIQUE IDENTIFICATION AUTHORITY OF INDIA TO GET AN ALLOCATION OF RS. 1,900 CRORE. A TECHNOLOGY ADVISORY GROUP FOR UNIQUE PROECT TO BE SET UP.
· ALLOCATION FOR DEFENCE INCREASED TO RS.1,47,344 CRORE
· NATIONAL MISSION FOR DELIVERY OF JUSTICE AND LEGAL REGORMS TO BE SET UP TO PROVIDE TIMELY JUSTICE TO ALL.
· INCOME TAX SLABS BROADENED - 10 PER CENT ON INCOME ABOVE RS 1.6 LAKH TO 5.00 LAKH, 20 PER CENT ON INCOME ABOVE 5.OO LAKH TO 8.00 LAKH , 30 PER CENT ON ABOVE RS. 8.00 LAKH
· ADDITIONAL DEDUCTION OF RS. 20,000 FOR INVESTMENT IN INFRASTRUCTURE BONDS
· SURCHARGE OF 10 PER CENT ON DOMESTIC COMPANIES REDUCED TO 7.5 PER CENT
· MAT INCREASED FROM 15 PER CENT TO 18 PER CENT
· WIGHTED DEDUCTION NON EXPENDITURE INCURRED ON IN-HOUSE R&D FROM 150 PER CENT TO 200 PER CENT
· LIMIT OF TURNOVER FOR PRESUMPTIVE TAXATION OF SMALL BUSINESS ENHANCED TO RS. 60 LAKH.
· LIMITS OF TURNOVER NEEDING AUDIT ENHANCED TO 60 LAKH FOR BUSINESSES AND RS. 15 LAKH FOR PROFESSIONS.
· PROPOSAL OF DIRECT TAX TO RESULT IN REVENUE LOSS OF RS. 26,000 CRORE WHERE AS INDIRECT TAXES TO RESULT IN A REVENUE GAIN OF RS. 46,500 CRORE.
· SERVICE TAX PROPOSALS TO RESULT IN NET REVENUE GAIN OF RS.3,000 CRORE.
· ACCREDITED NEWS AGENCIES WHICH PROVIDES NEWS FEED ONLINE EXEMPTED FROM SERVICE TAX
· SARAL –II FOR INDIVIDUALSALARY TAXPAYERS READY FOR NOTIFICATION
· SERVICE TAX RETAINED AT 10 PER CENT.
· CERTAIN NEW SERVICES TO BE BROUGHT WITHIN SERVICE TAX PURVIEW..
· MICRO-WAVE OVENS, PRE-PACKAGED IMPORTED GOODS, MOBILE PHONES, WATCHES, READYMADE GARMENTS, TOY BALOONS, LONG PEPPER, REPLACEABLE HOUSEHOLD WATER FILTER TO BE CHEAPER.
· INFOTAINMET SECTOR TO BENEFIT FROM CONCESSIONAL CUSTOM DUTY
· INDIAN RUPEE TO GET A SYMBOL, JOIN THE SELECT CLUB OF CURRENCIES
· SPECIAL DUTY CONCESSIONS TO PROMOTE CLEAN ENVIRONMENT CLEAN ENERGY CESS @ RS. 50 PER TONNE ON COAL
· RATE REDUCTION IN CENTRAL EXCISE DUTIES PARTIALLY ROLLED BACK AD VALOREM ON NON PETRO PRODUCTS & CARS INCREASED BY 2 PER CENT
· UNIFORM BASIC DUTY OF 5 PER CENT AND CVD OF 4 PER CENT ON IMPORT OF MEDICAL EQUIPMNET.
· SCIENTIFIED INPUTS FOR ORTHOPAEDIC IMPLANTS EXEMPTED FROM IMPORT DUTY
· CENTRAL EXCISE ON PETROL & DIESEL RAISED BY RS. ONE PER LITRE.
· MAJOR TAX RELIEF TO AGRICULTURE & RELATED SECTORS
· PROJECT IMPORT STATUS FOR THE SETTING UP OF COLD STORAGES
· FULL EXEMPTION FROM EXCISE DUTY TO TRAILERS & SEMI –TRAILERS.
GENERAL BUDGET 2010-11
· THE FINANCE MINISTER SHRI PRANAB MUKHERJEE LAYS EMPHASIS ON CONSOLIDATED GROWTH, IMPROVING INVESTMENT ENVIRONMENT, INCLUSIVE DEVELOPMENT AND STRENGTHENING TRANSPARENCY AND PUBLIC ACCOUNTABILITY IN BUDGET 2010-11.
· THE TOTAL EXPENDITURE PROPOSED IN THE BUDGET ESTIMATES IS RS.11,08,749 CRORE , AN INCREASE OF 8.6 PER CENT OVER LAST YEAR.
· THE PLAN AND NON-PLAN EXPENDITURE ESTIMATED AT RS.3,73,092 CRORE AND RS.7,35,657 CRORE RESPECTIVELY, AN INCREASE OF 15 PERCENT IN PLAN EXPENDITURE AND 6 PER CENT IN NON-PLAN EXPENDITURE OVER THE BE OF PREVIOUS YEAR.
· FISCAL DEFICIT AT 5.5 PER CENT OF GDP WORKS OUT TO BE RS. 3,81,408 CRORE.
· ROLLING TARGETS FOR FISCAL DEFICIT PEGGED AT 4.8 PER CENT AND 4.1 PER CENT FOR 2011-12 AND 2012-13.
· NET MARKET BORROWING WOULD BE OF THE ORDER OF RS. 3,45,010 CRORE LEAVING ENOUGH SPACE TO MEET CREDIT NEEDS OF PRIVATE SECTOR.
· AGAINST A FISCAL DEFICIT OF 7.8 PER CENT IN 2008-09 , INCLUSIVE OF OIL AND FERTILIZER BONDS, THE COMPARABLE FISCAL DEFICIT IS 6.9 PER CENT AS PER RE 2009-10.
· GROSS TAX RECEIPTS ESTIMATED AT RS.7,46,651 CRORE AND NON-TAX RECEIPT ESTIMATED AT RS. 1,48,118 CRORE.
· STATUS PAPER GIVING ROAD MAP FOR CURTAILING THE OVERALL PUBLIC DEBT TO BE BROUGHT OUT WITHIN 6 MONTHS.
· ABOUT RS. 25,000 CRORES TO BE RAISED THROUGH DISINVESTMET PROGRAMME
· TO SIMPLIFY THE FDI REGIME, FOR THE FIRST TIME BOTH OWNERSHIP & CONTROL RECOGNISED AS CENTRAL TO THE FDI POLICY.
· RS. 16,500 CRORE TO BE PROVIDED TO PUBLIC SECTOR BANKS TO ACHIEVE A MINIMUM 8 PER CENT TIER-I
· GROWTH OF 127 PER CENT RECORDED IN EXPORTS FROM SEZs TILL DECEMBER, 2009.
· A FOUR-PRONGED STRATEGY TO SPUR THE GROWTH IN AGRICULTURE SECTOR ENVISAGED. WHICH INCLUDES AGRICULTURAL PRODUCTION, REDUCTION IN WASTAGE OF PRODUCE , CREDIT SUPPORT TO FARMERS AND THRUST TO THE FOOD PROCESSING SECTOR.
· AGRICULTURE CREDIT FLOW TARGET RAISED TO RS. 3,75,000 CRORE FROM RS.3,25,000 CRORE
· SUBVENTION FOR TIMELY REPAYMENT OF CROP LOAN INCREASED FROM 1 PER CENT TO 2 PER CENT.
· INFRASTRUCTURE DEVELOPMENT GETS AN ALLOCATION OF Rs. 1,73,552 CRORE, 46 PER CENT OF TOTAL PLAN ALLOCATION , AN INCREASE OF 13 PER CENT IN ROAD TRANSPORT SECTOR.
· INDIA INFRASTRUCTURE FINANCE COMPANY LIMITED’S DISBURSEMENTS TO REACH RS. 20,000 CRORE BY MARCH 2011.
· ALLOCATION FOR POWER SECTOR INCREASED BY MORE THAN DOUBLED TO RS. 5,130 CRORE.
· NEW TAX INCENTIVES ANNOUNCED FOR INFRASTRUCTURE SECTOR.
· NATIONAL CLEAR ENERGY FUND FOR FUNDING RESEARCH AND INNOVATIVE PROJECTS IN CLEAN ENERGY TECHNOLOGIES TO BE SET UP.
· SPENDING ON SOCIAL SECTOR TO ACCOUNT FOR 37 PER CENT OF TOTAL PLAN OUTLAY AT RS.1,37,674 CRORE
· ALLOCATION FOR RURAL DEVELOPMENT ENHANCED TO RS.66,100 CRORES. ALLOCATION FOR NREGA STEPPED UP TO 40,100 CRORE.
· RS. 48,000 CRORE ALLOCATED FOR BHARAT NIRMAN PROGRAMME
· BACKWARD REGION GRANT FUND ALLOCATION ENHANCED TO RS. 7,300 CRORE.
· RAJIV AWAS YOJNA FOR SLUM DWELLERS AND URBAN POOR TO GET RS. 1,270 CRORE , AN INCREASE OF OVER 700 PER CENT
· NATIONAL SOCIAL SECURITY FUND FOR UNORGANISED SECTOR WORKERS TO BE SET UP WITH AN INITIAL AMOUNT OF RS. 1,000 CRORE.
· MAHILA KISAN SASHAKTIKARAN PARIYOJNA WITH A PROVISION OF RS.100 CRORE LAUNCHED
· 80 PER CENT INCREASE IN THE ALLOCATION FOR MINISTRY OF SOCIAL JUSTICE & EMPOWERMENT AT RS 4,500 CRORE.
· MINORITY AFFAIRS TO GET RS.2,600 CRORE, AN INCREASE OF 50 PER CENT.
· TO REWRITE AND CLEAN UP THE FINANCIAL SECTOR LAWS, FINANCIAL SECTOR LEGISLATIVE REFORMS COMMISSION TO BE SET UP.
· UNIQUE IDENTIFICATION AUTHORITY OF INDIA TO GET AN ALLOCATION OF RS. 1,900 CRORE. A TECHNOLOGY ADVISORY GROUP FOR UNIQUE PROECT TO BE SET UP.
· ALLOCATION FOR DEFENCE INCREASED TO RS.1,47,344 CRORE
· NATIONAL MISSION FOR DELIVERY OF JUSTICE AND LEGAL REGORMS TO BE SET UP TO PROVIDE TIMELY JUSTICE TO ALL.
· INCOME TAX SLABS BROADENED - 10 PER CENT ON INCOME ABOVE RS 1.6 LAKH TO 5.00 LAKH, 20 PER CENT ON INCOME ABOVE 5.OO LAKH TO 8.00 LAKH , 30 PER CENT ON ABOVE RS. 8.00 LAKH
· ADDITIONAL DEDUCTION OF RS. 20,000 FOR INVESTMENT IN INFRASTRUCTURE BONDS
· SURCHARGE OF 10 PER CENT ON DOMESTIC COMPANIES REDUCED TO 7.5 PER CENT
· MAT INCREASED FROM 15 PER CENT TO 18 PER CENT
· WIGHTED DEDUCTION NON EXPENDITURE INCURRED ON IN-HOUSE R&D FROM 150 PER CENT TO 200 PER CENT
· LIMIT OF TURNOVER FOR PRESUMPTIVE TAXATION OF SMALL BUSINESS ENHANCED TO RS. 60 LAKH.
· LIMITS OF TURNOVER NEEDING AUDIT ENHANCED TO 60 LAKH FOR BUSINESSES AND RS. 15 LAKH FOR PROFESSIONS.
· PROPOSAL OF DIRECT TAX TO RESULT IN REVENUE LOSS OF RS. 26,000 CRORE WHERE AS INDIRECT TAXES TO RESULT IN A REVENUE GAIN OF RS. 46,500 CRORE.
· SERVICE TAX PROPOSALS TO RESULT IN NET REVENUE GAIN OF RS.3,000 CRORE.
· ACCREDITED NEWS AGENCIES WHICH PROVIDES NEWS FEED ONLINE EXEMPTED FROM SERVICE TAX
· SARAL –II FOR INDIVIDUALSALARY TAXPAYERS READY FOR NOTIFICATION
· SERVICE TAX RETAINED AT 10 PER CENT.
· CERTAIN NEW SERVICES TO BE BROUGHT WITHIN SERVICE TAX PURVIEW..
· MICRO-WAVE OVENS, PRE-PACKAGED IMPORTED GOODS, MOBILE PHONES, WATCHES, READYMADE GARMENTS, TOY BALOONS, LONG PEPPER, REPLACEABLE HOUSEHOLD WATER FILTER TO BE CHEAPER.
· INFOTAINMET SECTOR TO BENEFIT FROM CONCESSIONAL CUSTOM DUTY
· INDIAN RUPEE TO GET A SYMBOL, JOIN THE SELECT CLUB OF CURRENCIES
· SPECIAL DUTY CONCESSIONS TO PROMOTE CLEAN ENVIRONMENT CLEAN ENERGY CESS @ RS. 50 PER TONNE ON COAL
· RATE REDUCTION IN CENTRAL EXCISE DUTIES PARTIALLY ROLLED BACK AD VALOREM ON NON PETRO PRODUCTS & CARS INCREASED BY 2 PER CENT
· UNIFORM BASIC DUTY OF 5 PER CENT AND CVD OF 4 PER CENT ON IMPORT OF MEDICAL EQUIPMNET.
· SCIENTIFIED INPUTS FOR ORTHOPAEDIC IMPLANTS EXEMPTED FROM IMPORT DUTY
· CENTRAL EXCISE ON PETROL & DIESEL RAISED BY RS. ONE PER LITRE.
· MAJOR TAX RELIEF TO AGRICULTURE & RELATED SECTORS
· PROJECT IMPORT STATUS FOR THE SETTING UP OF COLD STORAGES
· FULL EXEMPTION FROM EXCISE DUTY TO TRAILERS & SEMI –TRAILERS.
INDIA BUDGET 2010-11 SUMMARY
INDIA BUDGET: Summary of Union Budget 2010-11
GENERAL BUDGET 2010-11
The Union Budget this year has aimed to focus on inclusive growth and insuring food security. These concerns for aam aadami have gone hand in hand with credible measures for improving investment climate, strengthening infrastructure and fiscal consolidation. As the country looks to ‘quickly revert to high GDP growth path’ in the wake of ‘uncertain times’, concerns for inclusive growth targeting the disadvantaged sections form the defining features of the Budget.
Many new initiatives have been introduced for sustained and inclusive growth. These include setting up of Mahila Kisan Sashaktikaran Pariyojana, Financial Stability and Development Council, Gold Regulatory Authority, Technical Advisory Group for Unique Projects, National Mission for Delivery of Justice and Legal Reforms, Independent Evaluation Office and National Clean Energy Fund,
Presenting the Union Budget 2010-11 in the Lok Sabha today, the Finance Minister Shri Pranab Mukherjee, said that three challenges would continue to engage the Indian policy planners for next few years. The first challenge is to quickly revert to the high GDP growth path of 9 per cent and then find the means to cross the double digit growth barrier. The second challenge is to consolidate recent gains in making development more inclusive. The third challenge is to remove weaknesses at different levels of governance and to improve public delivery mechanism. The Budget, therefore, focuses on fiscal consolidation, making growth more broad-based and ensuring that supply-demand imbalances are better managed.
The Minister expressed the hope that the economy will reach 10 per cent growth in not too distant a future. The Minister explained that after a fall in GDP growth in 2008-09 to 6.7 per cent, the growth has built up and 7.2 per cent growth is expected in 2009-10. The Minister said that the recovery is very encouraging as it has come about despite negative growth in agriculture sector. The growth rate in manufacturing in December 2009 was 18.5 per cent, the highest in past two decades. Similarly, there are also signs of a turnaround in the merchandise exports with a positive growth in November and December 2009 after a decline in about twelve successive months.
Expressing concern at the emergence of double digit food inflation, the Minister said that the Government has set in motion steps in consultation with the State Chief Ministers to bring down the inflation in the next few months and ensure better management of food security.
FISCAL CONSOLIDATION
The Minister said that now that the recovery has taken roots, there is a need to review public spending, mobilize resources and gear them towards building the productivity of the economy.
The government will follow the recommendations of the Thirteenth Finance Commission by capping the government debt. The Commission has recommended a capping of the combined debt of the Centre and the States at 68 per cent of the GDP to be achieved by 2014-15.
For the first time, the Government would target an explicit reduction in its domestic public debt-GDP ratio. A status paper would be brought out within six months, giving a detailed analysis of the situation and a road map for curtailing the overall public debt. This would be followed by an annual report on the subject.
The Finance Minister expressed the hope that a broad consensus would be achieved on the Direct Tax Code and the Goods and Service Tax (GST) and these would be introduced from April 2011.
IMPROVING INVESTMENT ENVIRONMENT
The Finance Minister said that a number of steps have been taken to simplify the Foreign Direct Investment (FDI) regime. The government also intends to make the FDI policy user-friendly by consolidating all prior regulations and guidelines into one comprehensive document. This would enhance clarity and predictability of our FDI policy to foreign investors, he said.
With a view to strengthen and institutionalize the mechanism for maintaining financial stability, Government has decided to set up an apex-level Financial Stability and Development Council. It would monitor macro prudential supervision of the economy, including the functioning of large financial conglomerates.
Towards strengthening the banking system, the Budget provides Rs.16500 crore as Tier-I capital. It would ensure that the Public Sector Banks are able to attain a minimum 8 per cent Tier-I Capital by March 2011. Further capital would also be infused into the Regional Rural Banks (RRBs). The Minister also informed that the RBI is considering giving some additional banking licenses to private sector players. Non Banking Financial Companies could also be considered, if they meet the RBI’s eligibility criteria.
AGRICULTURE GROWTH
A four-pronged strategy would be followed to spur growth in agriculture sector. The elements of the strategy are (a) agricultural production; (b) reduction in wastage of produce; (c) credit support to farmers; and (d) a thrust to the food processing sector.
The Budget provides Rs.400 crore for extending the green revolution to the eastern region of the country comprising Bihar, Chattisgarh, Jharkhand, Eastern UP, West Bengal and Orissa, with the active involvement of Gram Sabhas and the farming families.
60,000 ‘pulses and oil seed villages’ will be organized in rainfed areas with an outlay of Rs.300 crore during 2010-11. This will provide water harvesting, watershed management and soil health facilities to enhance to productivity of dryland farming areas. Another Rs.200 crore have been provided in the Budget for conservation farming.
To improve the storage capacity of food grains, Food Corporation of India is being allowed to hire godowns from private parties for a guaranteed period of seven years. This period so far was five years.
The target for farm credit is being raised to Rs.3,75,000 crore in 2010-11 from Rs.3,25,000 crore in the current year.
The period for repayment of loans under the Debt Waiver and Debt Relief Scheme is being extended by six months to June 30,2010.
The interest subvention for timely repayment of crop loans is being raised from 1 per cent to 2 per cent. Thus, the effective rate of interest for crop loans for farmers who repay their crop loan as per schedule will now be 5 per cent per year.
Five more Mega Food Parks will be set up in addition to the 10 already being established. External Commercial Borrowings will henceforth be available for cold storage, farm level pre-cooling and preservation and storage of agricultural and allied produce marine products and meat.
INFRASTRUCTURE
The Budget provides Rs.1,73,552 crore for infrastructure, accounting for over 46 per cent of the total Plan allocation.
The allocation for road transport is being increased by over 13 per cent from Rs 17,520 crore to Rs.19,894 crore.
Disbursement for infrastructure by India Infrastructure Finance Company Ltd(IIFCL) is expected to reach Rs.20,000 crore in 2010-11 as against Rs.9,000 crore this year. Refinancing of bank landing to infrastructure projects by IIFCL is expected to be more than double in 2010-11.
ENERGY
The Plan allocation for power sector is being more than doubled from Rs.2,230 crore in 2009-10 to Rs.5,130 crore in 2010-11.
A Coal Regulatory Authority is proposed to be set up for creating level playing field in the coal sector and resolving various issues.
The Plan outlay for New and Renewal Energy Ministry is being increased by 61 per cent from Rs. 620 crore to Rs.1,000 crore, especially to support the ambitious solar energy programme.
INCLUSIVE DEVELOPMENT
Stating that inclusive development is an act of faith for the UPA government, the Finance Minister said that after the Right to Information, Right to Work and Right to Education, the government is now ready with the draft Food Security Bill. A sums of Rs.1,37,674 crore, representing 37 per cent of the total outlay, will be spent on social sector programmes.
Plan Allocation for school education is being increased from Rs.26,800 crore to Rs.31,036 crore to support the children’s rights to free and compulsory education. In addition, States will have an access to Rs. 3,675 crore for elementary education under the Finance Commission grant for 2010-11.
It has been decided to provide appropriate banking facilities to habitations having population in excess of 2000 by March 2012. It is also proposed to extend insurance and other services to the targeted beneficiaries. These provisions are expected to cover 60,000 habitations.
Rs.66,100 crore have been provided for Rural Development. Mahatma Gandhi National Rural Employment Guarantee Scheme gets Rs.40,100 crore and Bharat Nirman Programme, Rs.48,000 crore.
Indira Awas Yojana gets Rs.10,000 crore. The unit cost under this scheme is being raised to Rs.45,000 in plain areas and Rs.48500 in hilly areas to cover the increase in cost of construction of houses.
The allocation to Backward Region Grant Fund is being enhanced by 26 per cent from Rs.5,800 crore to Rs.7,300 crore. An additional Central assistance of Rs.1,200 crore is being provided for drought mitigation in the Bundelkhand region.
Swarna Jayanti Shahari Rozgar Yojana gets 75 per cent increase in allocation from Rs.3,060 crore to Rs.5,400 crore. In addition, the allocation for Housing and Urban Poverty Alleviation is also being raised from Rs.850 crore to Rs.1,000 crore in 2010-11.
The 1 per cent interest subvention on housing loans upto Rs.10 lakh (where the cost of the house does not exceed Rs.20 lakh) provided in the Budget for 2009-10 has been extended by another year.
Rajiv Awas Yojana, a scheme for housing to slum dwellers and urban poor, gets a huge jump in allocation from Rs.150 crore last year to Rs.1,270 crore in 2010-11.
It has been decided to set up a National Social Security Fund for unorganized sector workers with an initial allocation of Rs.1,000 crore. This fund will support schemes for weavers, toddy tappers, rickshaw pullers, bidi workers etc.
The Rashtriya Swasthya Bima Joyana is being extended to all Mahatma Gandhi NREGA beneficiaries who have worked for more than 15 days during the preceding financial year.
The Swavalamban initiative started last year, under which the government contributes Rs.1,000 per year to each New Pension Scheme (NPS) account, will now be available for another three years.
Plan outlay for Women and Child Development is being stepped up by 50 per cent. A Mahila Kisan Sashaktikaran Pariyojana is being launched to meet the specific needs of women farmers.
The Plan outlay of Ministry of Social Justice and Empowerment gets a boost of 80 per cent to Rs.4,500 crore. Besides supporting the programmes for the target beneficiaries, the Ministry will be able to raise the rates for scholarship schemes for SC and OBC students. Similarly, the Ministry of Minority Affairs allocation has been raised by 50 per cent to Rs.2,600 crore.
STRENGTHENING TRANSPARENCY AND PUBLIC ACCOUNTABILITY
The government proposes to set up a Financial Sector Legislative Reforms Commission to rewrite and clean up the financial sector laws to bring them in line with the requirements of the sector.
Rs.1,900 crore has been allocated for the Unique Identification Authority of India.
A Technology Advisory Group for Unique Projects (TAGUP) is proposed to be set up under the Chairmanship of Shri Nandan Nilekani for creation of reliable and secure IT projects.
Defence gets an allocation of Rs.1,47,344 crore. As a one time confidence building measure in Jammu and Kashmir about 2000 youths will be recruited as constable in five Central Para-Military forces in 2010. Adequate funds will be made available to support the action plan to be prepared by the Planning Commission for development of 33 left wing extremist affected districts.
An Independent Evaluation Office is to be set up to undertake impartial and objective assessment of various public programmes and improve the effectiveness of public interventions in Planning Commission.
A National Mission for Delivery of Justice and Legal Reforms is also to be set up.
TAX PROPOSALS
The Finance Minister emphasized the need for continued Tax Reforms. The Tax Returns form are being simplified and the Income Tax Department is now ready to notify Saral-2 forms for individual salary tax payers. The Sevottam project started in four cities to provide a single window system for registration and grievance redressal will be extended to four more cities. Two more centres will be opened for bulk processing of Tax Returns. The Indirect Tax Administrations are being revamped to achieve the roll out of Goods and Services Tax (GST). Rs.1133 crore have been budgeted for a mission mode project to achieve this.
Major relief has been provided to individual tax payers by enhancing exemption limit and reducing tax in different slabs of personal income.. Deduction of an additional amount of Rs.20000 for investment in long term infrastructure bonds will be available in addition to the existing limit of Rs.1 lakh available for specified savings.
The surcharge on domestic companies is being reduced from 10 per cent to 7.5 per cent. However, the minimum alternate tax (MAT) is being increased from 15 per cent to 18 per cent.
Exemptions and deductions have been provided to increase spending on research.
The investment linked deduction to new hotels of two star category and above is being extended to give boost to investment in Tourism sector.
A one time interim relief is being provided to the housing and real estate sector by allowing pending projects to be completed within a period of five years instead of four years for claiming a deduction on their profits.
The Finance Minister has proposed to partially roll back the rate deduction in Central Excise duties and enhance the standard rate on all non-petroleum products from 8 per cent to 10 per cent ad valorem. The specific rates of duty applicable to Portland cement and cement clinker are also being adjusted upwards proportionately. Similarly, the ad valorem component of excise duty on large cars, multi-utility vehicles and sports utility vehicles which was reduced as part of the first stimulus package, is being increased by 2 percentage points to 22 per cent.
The basic duty of 5 per cent on crude petroleum; 7.5 per cent on diesel and petrol and 10 per cent on other refined products is being enhanced. The Central Excise Duty on petrol and diesel is being enhanced by Rs.1 per litre.
Excise duty on non-smoking tobacco is being enhanced. In addition a compounded levy scheme is being introduced by chewing tobacco and branded unmanufactured tobacco based on the capacity of pouch making machines.
A number of duty concessions are being proposed to support agriculture and allied sector. Mechanised handling systems in warehouses will get project import status with a concessional import duty of 5 per cent. Installation and commissioning of such equipment will be fully exempt from service tax. Concessional duty will also be applicable for cold storages, food processing units, specified equipment for food preservation etc. The concessional import duty to specified machinery for use in the plantation sector is being further extended upto March 2011. Testing and certification of agricultural seed is being exempt from service tax.
Tax exemptions have been announced for equipment used in solar systems and wind energy system, LED lights, electric cars, cycle rickshaw, mobile phone components and certain medical equipment.
The rate of tax on services has been retained at 10 per cent.
BUDGET ESTIMATES
The Budget Estimates 2010-11 provides for a total expenditure of Rs. 11,08,749 crore. Out of this, Rs 3,73,092 crore is plan expenditure and Rs.7,35,657 crore is non-plan expenditure. The plan expenditure has increased by 15 per cent while there is only 6 per cent in increase in non-plan expenditure.
The total receipt are estimate Rs.7,46,651 crore.
The Fiscal deficit is pegged at 5.5 per cent. In the Medium Term Fiscal Policy Statement being presented along with other Budget documents in the House today, the rolling targets for fiscal deficit are pegged at 4.8 per cent and 4.1 per cent for 2011-12 and 2012-13, respectively. These projections improve upon the recommendations of the Thirteenth Finance Commission.
GENERAL BUDGET 2010-11
The Union Budget this year has aimed to focus on inclusive growth and insuring food security. These concerns for aam aadami have gone hand in hand with credible measures for improving investment climate, strengthening infrastructure and fiscal consolidation. As the country looks to ‘quickly revert to high GDP growth path’ in the wake of ‘uncertain times’, concerns for inclusive growth targeting the disadvantaged sections form the defining features of the Budget.
Many new initiatives have been introduced for sustained and inclusive growth. These include setting up of Mahila Kisan Sashaktikaran Pariyojana, Financial Stability and Development Council, Gold Regulatory Authority, Technical Advisory Group for Unique Projects, National Mission for Delivery of Justice and Legal Reforms, Independent Evaluation Office and National Clean Energy Fund,
Presenting the Union Budget 2010-11 in the Lok Sabha today, the Finance Minister Shri Pranab Mukherjee, said that three challenges would continue to engage the Indian policy planners for next few years. The first challenge is to quickly revert to the high GDP growth path of 9 per cent and then find the means to cross the double digit growth barrier. The second challenge is to consolidate recent gains in making development more inclusive. The third challenge is to remove weaknesses at different levels of governance and to improve public delivery mechanism. The Budget, therefore, focuses on fiscal consolidation, making growth more broad-based and ensuring that supply-demand imbalances are better managed.
The Minister expressed the hope that the economy will reach 10 per cent growth in not too distant a future. The Minister explained that after a fall in GDP growth in 2008-09 to 6.7 per cent, the growth has built up and 7.2 per cent growth is expected in 2009-10. The Minister said that the recovery is very encouraging as it has come about despite negative growth in agriculture sector. The growth rate in manufacturing in December 2009 was 18.5 per cent, the highest in past two decades. Similarly, there are also signs of a turnaround in the merchandise exports with a positive growth in November and December 2009 after a decline in about twelve successive months.
Expressing concern at the emergence of double digit food inflation, the Minister said that the Government has set in motion steps in consultation with the State Chief Ministers to bring down the inflation in the next few months and ensure better management of food security.
FISCAL CONSOLIDATION
The Minister said that now that the recovery has taken roots, there is a need to review public spending, mobilize resources and gear them towards building the productivity of the economy.
The government will follow the recommendations of the Thirteenth Finance Commission by capping the government debt. The Commission has recommended a capping of the combined debt of the Centre and the States at 68 per cent of the GDP to be achieved by 2014-15.
For the first time, the Government would target an explicit reduction in its domestic public debt-GDP ratio. A status paper would be brought out within six months, giving a detailed analysis of the situation and a road map for curtailing the overall public debt. This would be followed by an annual report on the subject.
The Finance Minister expressed the hope that a broad consensus would be achieved on the Direct Tax Code and the Goods and Service Tax (GST) and these would be introduced from April 2011.
IMPROVING INVESTMENT ENVIRONMENT
The Finance Minister said that a number of steps have been taken to simplify the Foreign Direct Investment (FDI) regime. The government also intends to make the FDI policy user-friendly by consolidating all prior regulations and guidelines into one comprehensive document. This would enhance clarity and predictability of our FDI policy to foreign investors, he said.
With a view to strengthen and institutionalize the mechanism for maintaining financial stability, Government has decided to set up an apex-level Financial Stability and Development Council. It would monitor macro prudential supervision of the economy, including the functioning of large financial conglomerates.
Towards strengthening the banking system, the Budget provides Rs.16500 crore as Tier-I capital. It would ensure that the Public Sector Banks are able to attain a minimum 8 per cent Tier-I Capital by March 2011. Further capital would also be infused into the Regional Rural Banks (RRBs). The Minister also informed that the RBI is considering giving some additional banking licenses to private sector players. Non Banking Financial Companies could also be considered, if they meet the RBI’s eligibility criteria.
AGRICULTURE GROWTH
A four-pronged strategy would be followed to spur growth in agriculture sector. The elements of the strategy are (a) agricultural production; (b) reduction in wastage of produce; (c) credit support to farmers; and (d) a thrust to the food processing sector.
The Budget provides Rs.400 crore for extending the green revolution to the eastern region of the country comprising Bihar, Chattisgarh, Jharkhand, Eastern UP, West Bengal and Orissa, with the active involvement of Gram Sabhas and the farming families.
60,000 ‘pulses and oil seed villages’ will be organized in rainfed areas with an outlay of Rs.300 crore during 2010-11. This will provide water harvesting, watershed management and soil health facilities to enhance to productivity of dryland farming areas. Another Rs.200 crore have been provided in the Budget for conservation farming.
To improve the storage capacity of food grains, Food Corporation of India is being allowed to hire godowns from private parties for a guaranteed period of seven years. This period so far was five years.
The target for farm credit is being raised to Rs.3,75,000 crore in 2010-11 from Rs.3,25,000 crore in the current year.
The period for repayment of loans under the Debt Waiver and Debt Relief Scheme is being extended by six months to June 30,2010.
The interest subvention for timely repayment of crop loans is being raised from 1 per cent to 2 per cent. Thus, the effective rate of interest for crop loans for farmers who repay their crop loan as per schedule will now be 5 per cent per year.
Five more Mega Food Parks will be set up in addition to the 10 already being established. External Commercial Borrowings will henceforth be available for cold storage, farm level pre-cooling and preservation and storage of agricultural and allied produce marine products and meat.
INFRASTRUCTURE
The Budget provides Rs.1,73,552 crore for infrastructure, accounting for over 46 per cent of the total Plan allocation.
The allocation for road transport is being increased by over 13 per cent from Rs 17,520 crore to Rs.19,894 crore.
Disbursement for infrastructure by India Infrastructure Finance Company Ltd(IIFCL) is expected to reach Rs.20,000 crore in 2010-11 as against Rs.9,000 crore this year. Refinancing of bank landing to infrastructure projects by IIFCL is expected to be more than double in 2010-11.
ENERGY
The Plan allocation for power sector is being more than doubled from Rs.2,230 crore in 2009-10 to Rs.5,130 crore in 2010-11.
A Coal Regulatory Authority is proposed to be set up for creating level playing field in the coal sector and resolving various issues.
The Plan outlay for New and Renewal Energy Ministry is being increased by 61 per cent from Rs. 620 crore to Rs.1,000 crore, especially to support the ambitious solar energy programme.
INCLUSIVE DEVELOPMENT
Stating that inclusive development is an act of faith for the UPA government, the Finance Minister said that after the Right to Information, Right to Work and Right to Education, the government is now ready with the draft Food Security Bill. A sums of Rs.1,37,674 crore, representing 37 per cent of the total outlay, will be spent on social sector programmes.
Plan Allocation for school education is being increased from Rs.26,800 crore to Rs.31,036 crore to support the children’s rights to free and compulsory education. In addition, States will have an access to Rs. 3,675 crore for elementary education under the Finance Commission grant for 2010-11.
It has been decided to provide appropriate banking facilities to habitations having population in excess of 2000 by March 2012. It is also proposed to extend insurance and other services to the targeted beneficiaries. These provisions are expected to cover 60,000 habitations.
Rs.66,100 crore have been provided for Rural Development. Mahatma Gandhi National Rural Employment Guarantee Scheme gets Rs.40,100 crore and Bharat Nirman Programme, Rs.48,000 crore.
Indira Awas Yojana gets Rs.10,000 crore. The unit cost under this scheme is being raised to Rs.45,000 in plain areas and Rs.48500 in hilly areas to cover the increase in cost of construction of houses.
The allocation to Backward Region Grant Fund is being enhanced by 26 per cent from Rs.5,800 crore to Rs.7,300 crore. An additional Central assistance of Rs.1,200 crore is being provided for drought mitigation in the Bundelkhand region.
Swarna Jayanti Shahari Rozgar Yojana gets 75 per cent increase in allocation from Rs.3,060 crore to Rs.5,400 crore. In addition, the allocation for Housing and Urban Poverty Alleviation is also being raised from Rs.850 crore to Rs.1,000 crore in 2010-11.
The 1 per cent interest subvention on housing loans upto Rs.10 lakh (where the cost of the house does not exceed Rs.20 lakh) provided in the Budget for 2009-10 has been extended by another year.
Rajiv Awas Yojana, a scheme for housing to slum dwellers and urban poor, gets a huge jump in allocation from Rs.150 crore last year to Rs.1,270 crore in 2010-11.
It has been decided to set up a National Social Security Fund for unorganized sector workers with an initial allocation of Rs.1,000 crore. This fund will support schemes for weavers, toddy tappers, rickshaw pullers, bidi workers etc.
The Rashtriya Swasthya Bima Joyana is being extended to all Mahatma Gandhi NREGA beneficiaries who have worked for more than 15 days during the preceding financial year.
The Swavalamban initiative started last year, under which the government contributes Rs.1,000 per year to each New Pension Scheme (NPS) account, will now be available for another three years.
Plan outlay for Women and Child Development is being stepped up by 50 per cent. A Mahila Kisan Sashaktikaran Pariyojana is being launched to meet the specific needs of women farmers.
The Plan outlay of Ministry of Social Justice and Empowerment gets a boost of 80 per cent to Rs.4,500 crore. Besides supporting the programmes for the target beneficiaries, the Ministry will be able to raise the rates for scholarship schemes for SC and OBC students. Similarly, the Ministry of Minority Affairs allocation has been raised by 50 per cent to Rs.2,600 crore.
STRENGTHENING TRANSPARENCY AND PUBLIC ACCOUNTABILITY
The government proposes to set up a Financial Sector Legislative Reforms Commission to rewrite and clean up the financial sector laws to bring them in line with the requirements of the sector.
Rs.1,900 crore has been allocated for the Unique Identification Authority of India.
A Technology Advisory Group for Unique Projects (TAGUP) is proposed to be set up under the Chairmanship of Shri Nandan Nilekani for creation of reliable and secure IT projects.
Defence gets an allocation of Rs.1,47,344 crore. As a one time confidence building measure in Jammu and Kashmir about 2000 youths will be recruited as constable in five Central Para-Military forces in 2010. Adequate funds will be made available to support the action plan to be prepared by the Planning Commission for development of 33 left wing extremist affected districts.
An Independent Evaluation Office is to be set up to undertake impartial and objective assessment of various public programmes and improve the effectiveness of public interventions in Planning Commission.
A National Mission for Delivery of Justice and Legal Reforms is also to be set up.
TAX PROPOSALS
The Finance Minister emphasized the need for continued Tax Reforms. The Tax Returns form are being simplified and the Income Tax Department is now ready to notify Saral-2 forms for individual salary tax payers. The Sevottam project started in four cities to provide a single window system for registration and grievance redressal will be extended to four more cities. Two more centres will be opened for bulk processing of Tax Returns. The Indirect Tax Administrations are being revamped to achieve the roll out of Goods and Services Tax (GST). Rs.1133 crore have been budgeted for a mission mode project to achieve this.
Major relief has been provided to individual tax payers by enhancing exemption limit and reducing tax in different slabs of personal income.. Deduction of an additional amount of Rs.20000 for investment in long term infrastructure bonds will be available in addition to the existing limit of Rs.1 lakh available for specified savings.
The surcharge on domestic companies is being reduced from 10 per cent to 7.5 per cent. However, the minimum alternate tax (MAT) is being increased from 15 per cent to 18 per cent.
Exemptions and deductions have been provided to increase spending on research.
The investment linked deduction to new hotels of two star category and above is being extended to give boost to investment in Tourism sector.
A one time interim relief is being provided to the housing and real estate sector by allowing pending projects to be completed within a period of five years instead of four years for claiming a deduction on their profits.
The Finance Minister has proposed to partially roll back the rate deduction in Central Excise duties and enhance the standard rate on all non-petroleum products from 8 per cent to 10 per cent ad valorem. The specific rates of duty applicable to Portland cement and cement clinker are also being adjusted upwards proportionately. Similarly, the ad valorem component of excise duty on large cars, multi-utility vehicles and sports utility vehicles which was reduced as part of the first stimulus package, is being increased by 2 percentage points to 22 per cent.
The basic duty of 5 per cent on crude petroleum; 7.5 per cent on diesel and petrol and 10 per cent on other refined products is being enhanced. The Central Excise Duty on petrol and diesel is being enhanced by Rs.1 per litre.
Excise duty on non-smoking tobacco is being enhanced. In addition a compounded levy scheme is being introduced by chewing tobacco and branded unmanufactured tobacco based on the capacity of pouch making machines.
A number of duty concessions are being proposed to support agriculture and allied sector. Mechanised handling systems in warehouses will get project import status with a concessional import duty of 5 per cent. Installation and commissioning of such equipment will be fully exempt from service tax. Concessional duty will also be applicable for cold storages, food processing units, specified equipment for food preservation etc. The concessional import duty to specified machinery for use in the plantation sector is being further extended upto March 2011. Testing and certification of agricultural seed is being exempt from service tax.
Tax exemptions have been announced for equipment used in solar systems and wind energy system, LED lights, electric cars, cycle rickshaw, mobile phone components and certain medical equipment.
The rate of tax on services has been retained at 10 per cent.
BUDGET ESTIMATES
The Budget Estimates 2010-11 provides for a total expenditure of Rs. 11,08,749 crore. Out of this, Rs 3,73,092 crore is plan expenditure and Rs.7,35,657 crore is non-plan expenditure. The plan expenditure has increased by 15 per cent while there is only 6 per cent in increase in non-plan expenditure.
The total receipt are estimate Rs.7,46,651 crore.
The Fiscal deficit is pegged at 5.5 per cent. In the Medium Term Fiscal Policy Statement being presented along with other Budget documents in the House today, the rolling targets for fiscal deficit are pegged at 4.8 per cent and 4.1 per cent for 2011-12 and 2012-13, respectively. These projections improve upon the recommendations of the Thirteenth Finance Commission.
Union Budget 2010: FM allocates more for health, focus on rural populace
26 Feb 2010, 1428 hrs IST, IANS
NEW DELHI: India's health allocation has gone up by Rs 2,700 crore to Rs 22,300 crore (Rs 223 billion/$4.82 billion) with Finance Minister Pranab Mukherjee particularly focussing on rural heath in his budget speech Friday.
"I propose to increase the plan allocation for the Ministry of Health and Family Welfare from Rs 19,534 crore to Rs 22,300 crore for 2010-11," the finance minister said in his budget presented in parliament.
He also announced that an annual health survey would be carried out to prepare the district health profile of the rural populace.
"The findings of the survey should be of immense benefit to major public health initiatives, particularly the National Rural Health Mission (NRHM), which has successfully addressed the gaps in the delivery of critical health services in rural areas," he said.
The flagship programme of the United Progressive Alliance (UPA) government, the NRHM, was launched in 2005. The aim was to improve availability and access to quality healthcare for people living in remote areas.
The main focus is on 18 states that have weak public health infrastructure - Arunachal Pradesh, Assam, Bihar, Chhattisgarh, Himachal Pradesh, Jharkhand, Jammu and Kashmir, Manipur, Mizoram, Meghalaya, Madhya Pradesh, Nagaland, Orissa, Rajasthan, Sikkim, Tripura, Uttarakhand and Uttar Pradesh.
26 Feb 2010, 1428 hrs IST, IANS
NEW DELHI: India's health allocation has gone up by Rs 2,700 crore to Rs 22,300 crore (Rs 223 billion/$4.82 billion) with Finance Minister Pranab Mukherjee particularly focussing on rural heath in his budget speech Friday.
"I propose to increase the plan allocation for the Ministry of Health and Family Welfare from Rs 19,534 crore to Rs 22,300 crore for 2010-11," the finance minister said in his budget presented in parliament.
He also announced that an annual health survey would be carried out to prepare the district health profile of the rural populace.
"The findings of the survey should be of immense benefit to major public health initiatives, particularly the National Rural Health Mission (NRHM), which has successfully addressed the gaps in the delivery of critical health services in rural areas," he said.
The flagship programme of the United Progressive Alliance (UPA) government, the NRHM, was launched in 2005. The aim was to improve availability and access to quality healthcare for people living in remote areas.
The main focus is on 18 states that have weak public health infrastructure - Arunachal Pradesh, Assam, Bihar, Chhattisgarh, Himachal Pradesh, Jharkhand, Jammu and Kashmir, Manipur, Mizoram, Meghalaya, Madhya Pradesh, Nagaland, Orissa, Rajasthan, Sikkim, Tripura, Uttarakhand and Uttar Pradesh.
Thursday, February 25, 2010
The proposed Direct Tax Code could be the most significant tax reform India has ever seen, but it seems that there are too many vested interests lined up against it.
Is the new Direct Tax Code Dead?
Different people have different ways of dealing with their tax-related problems. A week ago, a small plane crashed deliberately into a building in the city of Austin in Texas, USA. After the expected panic about terrorism had settled down, it turned out the building housed the offices of the Internal Revenue Service (IRS), the USA equivalent of our Income Tax Department and the pilot’s suicide note said that he was taking revenge for 30 years of harassment by the IRS. I doubt whether we’ll ever see anything like this in India, but the tax law that is the root of many of our frustrations seems increasingly immune to change.
The long-awaited simplification and rationalisation of India’s direct tax system is not as imminent as we’ve been led to believe, and that’s not good news. The Direct Tax Code (DTC) is in trouble. In the corridors of power in Delhi, ‘everyone’ knows this. The latest indication came a few days ago when a delegation from the Bharatiya Janata Party (BJP) met the finance minister to protest against some measures in the DTC. The FM’s response was, among other things, to assure them that the DTC is just a draft and there would be no implementation, at least not till 2011-12.
This isn’t anything different from what was supposed to be the case, but the whole tone in which the DTC is being talked about has changed. Earlier, the general view was that there may be minor problems with it, but it was a huge step in the right direction. Now, that has changed to the view that it may be a step forward in the right direction, but there are huge problems with it. If we know how things work in the government, the inevitable result will be a delay.
It is true that from a narrow savings and investments perspective, there are certain problems with the DTC draft. Taxation of long-term capital gains tax, the elimination of ELSS exemptions will be hard to swallow. Moreover, the switch to EET taxation will hit retirement savings hard. The idea of paying tax on withdrawing Provident Fund (PF) money is not easy to accept.
The real benefit of the new code comes in the simplification of the law. The tax code document is readable and understandable, and more importantly, one can instantly appreciate the logic of everything that it contains. One may or may not agree with everything in it, but at least there is a clear thread of systematic thought running through the draft DTC. While the fiscal gap, stimulus withdrawal and inflation is taking up all the pre-Budget mindshare, the tax code could end up being put in cold storage.
-- Dhirendra Kumar
Is the new Direct Tax Code Dead?
Different people have different ways of dealing with their tax-related problems. A week ago, a small plane crashed deliberately into a building in the city of Austin in Texas, USA. After the expected panic about terrorism had settled down, it turned out the building housed the offices of the Internal Revenue Service (IRS), the USA equivalent of our Income Tax Department and the pilot’s suicide note said that he was taking revenge for 30 years of harassment by the IRS. I doubt whether we’ll ever see anything like this in India, but the tax law that is the root of many of our frustrations seems increasingly immune to change.
The long-awaited simplification and rationalisation of India’s direct tax system is not as imminent as we’ve been led to believe, and that’s not good news. The Direct Tax Code (DTC) is in trouble. In the corridors of power in Delhi, ‘everyone’ knows this. The latest indication came a few days ago when a delegation from the Bharatiya Janata Party (BJP) met the finance minister to protest against some measures in the DTC. The FM’s response was, among other things, to assure them that the DTC is just a draft and there would be no implementation, at least not till 2011-12.
This isn’t anything different from what was supposed to be the case, but the whole tone in which the DTC is being talked about has changed. Earlier, the general view was that there may be minor problems with it, but it was a huge step in the right direction. Now, that has changed to the view that it may be a step forward in the right direction, but there are huge problems with it. If we know how things work in the government, the inevitable result will be a delay.
It is true that from a narrow savings and investments perspective, there are certain problems with the DTC draft. Taxation of long-term capital gains tax, the elimination of ELSS exemptions will be hard to swallow. Moreover, the switch to EET taxation will hit retirement savings hard. The idea of paying tax on withdrawing Provident Fund (PF) money is not easy to accept.
The real benefit of the new code comes in the simplification of the law. The tax code document is readable and understandable, and more importantly, one can instantly appreciate the logic of everything that it contains. One may or may not agree with everything in it, but at least there is a clear thread of systematic thought running through the draft DTC. While the fiscal gap, stimulus withdrawal and inflation is taking up all the pre-Budget mindshare, the tax code could end up being put in cold storage.
-- Dhirendra Kumar
India: Economic Survey 2009-2010
The Finance Minister tabled the Economic Survey 2009-10 in the Parliament today. In summary, the survey has sent out positive vibes for India's economic future over the next 3 to 5 years. This is notwithstanding the immediate concerns of inflation and stimulus withdrawal. With respect to the former i.e., inflation, the survey has warned that food prices would continue to rise further over the next few months. In the same breath, it has also recommended a gradual rollback of stimulus measures after assessing the impact on each sector.
Amidst all this, the survey seems extremely positive on India touching a double-digit growth rate over the next 4-5 years. As for the current and next financial years (FY10 and FY11), the survey has projected GDP growth of 7.2% and 8.75% respectively.
With the full effects of the economic reforms of the 1990s working through the system, the Indian economy has moved to a higher growth path. Overall, the key issues confronting India today are the sustainability of high growth with moderate inflation, and the inclusive nature of such high growth. The inclusive nature of the growth itself will be conditioned by the progress that is made in the areas of education, health and physical infrastructure. For this, the government needs to rise to the challenge of maintaining and managing high growth, bolster growth through fiscal prudence and high investment. Also, it needs to improve the effectiveness of its intervention in critical areas such as education, health and support for the needy.
The Finance Minister tabled the Economic Survey 2009-10 in the Parliament today. In summary, the survey has sent out positive vibes for India's economic future over the next 3 to 5 years. This is notwithstanding the immediate concerns of inflation and stimulus withdrawal. With respect to the former i.e., inflation, the survey has warned that food prices would continue to rise further over the next few months. In the same breath, it has also recommended a gradual rollback of stimulus measures after assessing the impact on each sector.
Amidst all this, the survey seems extremely positive on India touching a double-digit growth rate over the next 4-5 years. As for the current and next financial years (FY10 and FY11), the survey has projected GDP growth of 7.2% and 8.75% respectively.
With the full effects of the economic reforms of the 1990s working through the system, the Indian economy has moved to a higher growth path. Overall, the key issues confronting India today are the sustainability of high growth with moderate inflation, and the inclusive nature of such high growth. The inclusive nature of the growth itself will be conditioned by the progress that is made in the areas of education, health and physical infrastructure. For this, the government needs to rise to the challenge of maintaining and managing high growth, bolster growth through fiscal prudence and high investment. Also, it needs to improve the effectiveness of its intervention in critical areas such as education, health and support for the needy.
India Inc. is entering a new growth phase
Looks like India Inc. has left the ghosts of the financial crisis far behind it. Most companies which were wary of spending at the height of the crisis are now in the mood to loosen their purse strings. Many expansion plans appear to have been lined up across industries. This means that India Inc. could be entering a new growth phase.
The need to expand and grow business would lead to creation of more jobs and demand for machinery and infrastructure. All this would then culminate in a strong growth of India's GDP. So which companies are planning to go on an expansion spree? As reported in a leading business daily, companies across industries such as cement, paper, tyre, paints, automobiles and consumer durables have in the past three months announced capex plans. These are totaling to around Rs 500 bn over the next 2-5 years. What is more, many more companies are still in the process of firming up plans. Yes, agriculture was a letdown this year. But industrial production has certainly picked up. Therefore, if agricultural activity picks up next year and earnings of Indian corporates grow nicely, it would certainly go a long way in bolstering India's economic performance.
What companies need to be careful about though is that in their exuberance of expanding, they do not stretch their balance sheets. The ill effects of such a practice were there for everyone to see when the crisis unfolded. Why companies, even countries are being weighed down by excess debt. And in India especially, since inflation is soaring, the possibility of higher interest rates looks increasingly likely. Therefore, as long as the Indian companies stay well within their means there is no reason why they should not grow at a strong pace going forward.
Looks like India Inc. has left the ghosts of the financial crisis far behind it. Most companies which were wary of spending at the height of the crisis are now in the mood to loosen their purse strings. Many expansion plans appear to have been lined up across industries. This means that India Inc. could be entering a new growth phase.
The need to expand and grow business would lead to creation of more jobs and demand for machinery and infrastructure. All this would then culminate in a strong growth of India's GDP. So which companies are planning to go on an expansion spree? As reported in a leading business daily, companies across industries such as cement, paper, tyre, paints, automobiles and consumer durables have in the past three months announced capex plans. These are totaling to around Rs 500 bn over the next 2-5 years. What is more, many more companies are still in the process of firming up plans. Yes, agriculture was a letdown this year. But industrial production has certainly picked up. Therefore, if agricultural activity picks up next year and earnings of Indian corporates grow nicely, it would certainly go a long way in bolstering India's economic performance.
What companies need to be careful about though is that in their exuberance of expanding, they do not stretch their balance sheets. The ill effects of such a practice were there for everyone to see when the crisis unfolded. Why companies, even countries are being weighed down by excess debt. And in India especially, since inflation is soaring, the possibility of higher interest rates looks increasingly likely. Therefore, as long as the Indian companies stay well within their means there is no reason why they should not grow at a strong pace going forward.
20000 CRORESPUBLIC ISSUE BY STATE BANK
India's largest lender State Bank of India (SBI) plans to raise up to Rs20,000 crore through a rights equity issue in 2010-11, about half the amount it needs to sustain growth over the next five years, chairman O.P. Bhatt said on Wednesday.
The bank would need to raise Rs40,000-50,000 crore to feed demand for loans over five years in the fast growing economy, Bhatt said.
"If we can raise half of it any- time during the next 12-18 months, it will be great," he told reporters on the sidelines of a banking technology sum- mit.
The rights offering will need the support of the government, which owns around 60% of the bank.
"Our rights issue can be suc- cessful only if government subscribes to it," Bhatt said, adding the bank will start working with the government after the Budget on Friday that is expected to provide clarity on capitalization plan for state-run banks.
Shares of the bank, which has a market value at $26.3 bil- lion (Rs1.22 trillion), have dropped 15.5% so far this year, more than a 6.8% fall in the benchmark Sensex index.
Bhatt also said telecom firm Bharti Airtel Ltd is in talks with SBI to fund its $10.7 billion bid to acquire most of the African assets of Kuwait's Zain Tele- com. "Bharti is in touch with us," Bhatt said, but declined to give details on the quantum of loan sought by Bharti.
Bharti and Zain are in exclu- sive talks till 25 March for the proposed deal. As per the transaction, Bharti would buy Zain's African assets except those in Morocco and Sudan.
Bharti had approached SBI last year, too, when the Indian telecom company was pursu- ing a deal with South Africa's MTN Group Ltd, which did not go through.
SBI is also eyeing a signifi- cant stake in Tata Motors Fi- nance, the vehicle financing arm of Ratan Tata-led enter- prise Tata Motors Ltd.
"Our investment committee would like SBI to partner in the deal and invest some amount.
Before that, however, we need RBI (Reserve Bank of India) clearance," Bhatt said.
The public sector lender would pick up a significant stake but not a majority in the Tata group company, he said.
India's largest lender State Bank of India (SBI) plans to raise up to Rs20,000 crore through a rights equity issue in 2010-11, about half the amount it needs to sustain growth over the next five years, chairman O.P. Bhatt said on Wednesday.
The bank would need to raise Rs40,000-50,000 crore to feed demand for loans over five years in the fast growing economy, Bhatt said.
"If we can raise half of it any- time during the next 12-18 months, it will be great," he told reporters on the sidelines of a banking technology sum- mit.
The rights offering will need the support of the government, which owns around 60% of the bank.
"Our rights issue can be suc- cessful only if government subscribes to it," Bhatt said, adding the bank will start working with the government after the Budget on Friday that is expected to provide clarity on capitalization plan for state-run banks.
Shares of the bank, which has a market value at $26.3 bil- lion (Rs1.22 trillion), have dropped 15.5% so far this year, more than a 6.8% fall in the benchmark Sensex index.
Bhatt also said telecom firm Bharti Airtel Ltd is in talks with SBI to fund its $10.7 billion bid to acquire most of the African assets of Kuwait's Zain Tele- com. "Bharti is in touch with us," Bhatt said, but declined to give details on the quantum of loan sought by Bharti.
Bharti and Zain are in exclu- sive talks till 25 March for the proposed deal. As per the transaction, Bharti would buy Zain's African assets except those in Morocco and Sudan.
Bharti had approached SBI last year, too, when the Indian telecom company was pursu- ing a deal with South Africa's MTN Group Ltd, which did not go through.
SBI is also eyeing a signifi- cant stake in Tata Motors Fi- nance, the vehicle financing arm of Ratan Tata-led enter- prise Tata Motors Ltd.
"Our investment committee would like SBI to partner in the deal and invest some amount.
Before that, however, we need RBI (Reserve Bank of India) clearance," Bhatt said.
The public sector lender would pick up a significant stake but not a majority in the Tata group company, he said.
Eating fatty food, even if ou're slim, could be deadlier than you think.
Fat hinders the effect of medicine and can cause the body's invisible army of war- rior cells to mutiny and worsen heart disease, diabetes and even cancer, reveal the results of a five-year study by a group of 10 researchers headed by a US endocrinologist who began her career at an Agra medical college.
The key culprit is a gene called PAI-1, roused like a ter- rorist sleeper cell, in this case by fatty tissue or free-roaming fat molecules, which come from fatty, fried foods or from being obese, report Preeti Kishore (39) and her col- leagues in the latest edition of Science Translational Medi- cine.
"The important finding of this study is that even in lean adults, high dietary fat may in- crease the secretion of PAI-1 and alter the risk for heart dis- ease," Carey Lumeng, a Uni- versity of Michigan pediatrics professor who reviewed the re- search, told the Hindustan Times.
"Understanding these mech- anisms and identifying the fat- derived factors that activate macrophages (mutinous de- fensive cells) could lead to new targeted therapies for these conditions, which have in- creased to epidemic propor- tions globally but particularly in India," said Dr Kishore, an endocrinologist at New York's Albert Einstein College of Medicine, whose Indian part- ner is the Christian Medical College, Vellore.
With nearly 35 million dia- betics, India--spurred by a ge- netic predisposition, poor di- ets and inactivity--leads a global epidemic of the disease.
Cardiovascular disease is now the leading killer in the world and India, with diabetes being its leading cause.
The study clears what re- searchers called "the fog sur- rounding the murky relation- ship" between free fatty acids circulating in the blood and in- flammation, the body's selfdefence mechanism.
Dr Kishore and her col- leagues injected healthy, non- diabetic adults with fats typi- cally seen in obese people and those with diabetes. The ef- fects of this were: the healthy bodies stopped responding ef- fectively to insulin, the main compound against diabetes, and there was a rise in the lev- els of the PAI-1 gene, linked to heart disease and an increased risk of diabetes.
"We have found that elevat- ed levels of fat molecules cir- culating in blood, as seen in obesity and type 2 diabetes, can directly increase PAI-1 gene expression in fat," said Dr Kishore, who pursued an MBBS degree from Sarojini Naidu Medical College in her home town, Agra, before leav- ing for the US 14 years ago.
It's normal for macrophag- es--the warrior cells--to fight infection and inflame tissue, but this battle can spin out of control in obesity and its relat- ed diseases.
The cells that get inflamed congregate in fat tissue when "people became obese", she explained.
According to the World Health Organization, at least 2.6 million people die each year as a result of being over- weight or obese, which makes obesity a bigger killer than malnutrition.
Science Translational Medi- cine is published by the Ameri- can Association for the Ad- vancement of Science, the world's largest general scien- tific society.
Fat hinders the effect of medicine and can cause the body's invisible army of war- rior cells to mutiny and worsen heart disease, diabetes and even cancer, reveal the results of a five-year study by a group of 10 researchers headed by a US endocrinologist who began her career at an Agra medical college.
The key culprit is a gene called PAI-1, roused like a ter- rorist sleeper cell, in this case by fatty tissue or free-roaming fat molecules, which come from fatty, fried foods or from being obese, report Preeti Kishore (39) and her col- leagues in the latest edition of Science Translational Medi- cine.
"The important finding of this study is that even in lean adults, high dietary fat may in- crease the secretion of PAI-1 and alter the risk for heart dis- ease," Carey Lumeng, a Uni- versity of Michigan pediatrics professor who reviewed the re- search, told the Hindustan Times.
"Understanding these mech- anisms and identifying the fat- derived factors that activate macrophages (mutinous de- fensive cells) could lead to new targeted therapies for these conditions, which have in- creased to epidemic propor- tions globally but particularly in India," said Dr Kishore, an endocrinologist at New York's Albert Einstein College of Medicine, whose Indian part- ner is the Christian Medical College, Vellore.
With nearly 35 million dia- betics, India--spurred by a ge- netic predisposition, poor di- ets and inactivity--leads a global epidemic of the disease.
Cardiovascular disease is now the leading killer in the world and India, with diabetes being its leading cause.
The study clears what re- searchers called "the fog sur- rounding the murky relation- ship" between free fatty acids circulating in the blood and in- flammation, the body's selfdefence mechanism.
Dr Kishore and her col- leagues injected healthy, non- diabetic adults with fats typi- cally seen in obese people and those with diabetes. The ef- fects of this were: the healthy bodies stopped responding ef- fectively to insulin, the main compound against diabetes, and there was a rise in the lev- els of the PAI-1 gene, linked to heart disease and an increased risk of diabetes.
"We have found that elevat- ed levels of fat molecules cir- culating in blood, as seen in obesity and type 2 diabetes, can directly increase PAI-1 gene expression in fat," said Dr Kishore, who pursued an MBBS degree from Sarojini Naidu Medical College in her home town, Agra, before leav- ing for the US 14 years ago.
It's normal for macrophag- es--the warrior cells--to fight infection and inflame tissue, but this battle can spin out of control in obesity and its relat- ed diseases.
The cells that get inflamed congregate in fat tissue when "people became obese", she explained.
According to the World Health Organization, at least 2.6 million people die each year as a result of being over- weight or obese, which makes obesity a bigger killer than malnutrition.
Science Translational Medi- cine is published by the Ameri- can Association for the Ad- vancement of Science, the world's largest general scien- tific society.
Road Deaths in India and Sikkim
NEW DELHI: India's record in road deaths has touched a new low, as toll rose to at least 14 deaths per hour in 2008 against 13 the previous year. The total annual deaths due to road accidents has crossed 1.18 lakh, according to the latest report of National Crime Records Bureau (NCRB).
While trucks/lorries and two-wheelers were responsible for over 40% deaths, the rush during afternoon and evening hours were the most fatal phases. Traffic experts are alarmed over the shooting trend of fatalities on roads between 2003 and 2008, and progressive states having a significant share of road fatalities. While the toll was only 84,430 in 2003, it crossed 1.18 lakh in 2008, an increase of nearly 40%. Andhra Pradesh, Maharashtra and Tamil Nadu reported 12%, 11% and 10.8% of total road accident deaths in the country.
"The toll is on the rise and no one knows who is to be held responsible. Should central assistance for curbing accidents and fatalities be cut in case of states which are failing to reduce accidents and deaths? We must give a thought to the increasing tally of injured in road accidents," said Rohit Baluja, a member of the Commission for Global Road Safety.
In fact, 4.69 lakh people were injured in road accidents in 2008, nearly four times the total death toll. As per the annual NCRB report, road accidents had the maximum (37.1%) share of unnatural causes of accidental deaths in the country.
The report also defined the period between 3-6pm as the most accident prone phase during the day. Traffic experts said accident rates were high during this period as drivers felt stressed out and were often half-asleep while driving. "Early morning hours are also similarly critical," they added.
According to the report, small states had a dubious record as far as the rate of accident-deaths per thousand vehicles was concerned. It was highest in Arunachal Pradesh at 5.7, followed by 3.6 in the case of Sikkim. Similarly, the rate of deaths per 100 cases of road accidents was highest in Nagaland at 92.1 followed by Mizoram at 89.7, against the national level of 28.4.
While trucks/lorries and two-wheelers were responsible for over 40% deaths, the rush during afternoon and evening hours were the most fatal phases. Traffic experts are alarmed over the shooting trend of fatalities on roads between 2003 and 2008, and progressive states having a significant share of road fatalities. While the toll was only 84,430 in 2003, it crossed 1.18 lakh in 2008, an increase of nearly 40%. Andhra Pradesh, Maharashtra and Tamil Nadu reported 12%, 11% and 10.8% of total road accident deaths in the country.
"The toll is on the rise and no one knows who is to be held responsible. Should central assistance for curbing accidents and fatalities be cut in case of states which are failing to reduce accidents and deaths? We must give a thought to the increasing tally of injured in road accidents," said Rohit Baluja, a member of the Commission for Global Road Safety.
In fact, 4.69 lakh people were injured in road accidents in 2008, nearly four times the total death toll. As per the annual NCRB report, road accidents had the maximum (37.1%) share of unnatural causes of accidental deaths in the country.
The report also defined the period between 3-6pm as the most accident prone phase during the day. Traffic experts said accident rates were high during this period as drivers felt stressed out and were often half-asleep while driving. "Early morning hours are also similarly critical," they added.
According to the report, small states had a dubious record as far as the rate of accident-deaths per thousand vehicles was concerned. It was highest in Arunachal Pradesh at 5.7, followed by 3.6 in the case of Sikkim. Similarly, the rate of deaths per 100 cases of road accidents was highest in Nagaland at 92.1 followed by Mizoram at 89.7, against the national level of 28.4.
SIKKIM:Construction begins for Sikkim rail link
Kolkata, Feb 24 (PTI) The construction work for a railway link between Sikkim and the rest of the country began at Sevoke in north Bengal on February 20, nearly four months after Vice-President Hamid Ansari laid the foundation stone on October 30.
The work began with the ground-breaking ceremony attended among others by the Northeast Frontier Railway general manager Shiv Kumar, senior NFR officials and representatives of IRCON International Limited which is executing the project.
According to IRCON sources, the project aims at connecting Sevoke in north Bengal to Rangpo in Sikkim by laying a 44.4-km line.
Passing along the foothills of the Kanchenjunga range, nearly 70 per cent of the proposed railway line will be through tunnels.
Kolkata, Feb 24 (PTI) The construction work for a railway link between Sikkim and the rest of the country began at Sevoke in north Bengal on February 20, nearly four months after Vice-President Hamid Ansari laid the foundation stone on October 30.
The work began with the ground-breaking ceremony attended among others by the Northeast Frontier Railway general manager Shiv Kumar, senior NFR officials and representatives of IRCON International Limited which is executing the project.
According to IRCON sources, the project aims at connecting Sevoke in north Bengal to Rangpo in Sikkim by laying a 44.4-km line.
Passing along the foothills of the Kanchenjunga range, nearly 70 per cent of the proposed railway line will be through tunnels.
Wednesday, February 24, 2010
SIKKIM: CRPF patrols Sikkim lifeline
Feb. 23: Less than 24 hours after two companies of the CRPF arrived in Siliguri, they were deployed along NH31A to keep the lifeline to Sikkim free of blockades. The third company of the central force also arrived in Siliguri today.
In Sukna, on the outskirts of Siliguri, where one company is billeted at Pintail Village, the CRPF personnel patrolled the area which was deserted for the second day running after a mob set on fire the police outpost there on Sunday night. This led to police raids and 18 people were arrested.
Shops and establishments in Sukna were shut but traffic remained normal, much like yesterday.
The inspector-general of police, north Bengal. K.L. Tamta, said all three companies had been deployed at strategic points along NH31A. “Two of the companies have moved out to the Kalimpong subdivision and will be patrolling NH31A from the Coronation Bridge to Rangpo, the gateway to Sikkim. Their sole task would be to ensure that the highway remains open to traffic round-the-clock and will intervene if there are any blockades,” Tamta said.
He said the CRPF personnel marched through Sukna and the neighbouring area in the morning to ensure peace in the area.
According to senior police officers in Kalimpong, one of the companies had moved into a fisheries office complex at Reang village, 40km from Siliguri, around 4am today.
Another company went up to Kalimpong, as there was no suitable accommodation at Rangpo. The officer said the company posted at Reang will patrol NH31A from Coronation Bridge to 29 Mile, while the one in Kalimpong will look after the stretch between Teesta and Rangpo, a distance of 35km, the officer said.
The company in Kalimpong has put up at the state library hall near Thanadara and at the empty Birla House in Upper Cart Road.
The CRPF has been deployed on the basis of an order of the Supreme Court to the central and state governments to ensure that NH31A is not blocked to traffic during strikes called in the region. The court was acting on a petition filed by O.P. Bhandari, a Sikkim resident, who had complained that frequent blockades on the highway by pro and anti-Gorkhaland forces cut off the Himalayan state that had neither a rail or air link, save a helicopter service.
source:telegraph
Feb. 23: Less than 24 hours after two companies of the CRPF arrived in Siliguri, they were deployed along NH31A to keep the lifeline to Sikkim free of blockades. The third company of the central force also arrived in Siliguri today.
In Sukna, on the outskirts of Siliguri, where one company is billeted at Pintail Village, the CRPF personnel patrolled the area which was deserted for the second day running after a mob set on fire the police outpost there on Sunday night. This led to police raids and 18 people were arrested.
Shops and establishments in Sukna were shut but traffic remained normal, much like yesterday.
The inspector-general of police, north Bengal. K.L. Tamta, said all three companies had been deployed at strategic points along NH31A. “Two of the companies have moved out to the Kalimpong subdivision and will be patrolling NH31A from the Coronation Bridge to Rangpo, the gateway to Sikkim. Their sole task would be to ensure that the highway remains open to traffic round-the-clock and will intervene if there are any blockades,” Tamta said.
He said the CRPF personnel marched through Sukna and the neighbouring area in the morning to ensure peace in the area.
According to senior police officers in Kalimpong, one of the companies had moved into a fisheries office complex at Reang village, 40km from Siliguri, around 4am today.
Another company went up to Kalimpong, as there was no suitable accommodation at Rangpo. The officer said the company posted at Reang will patrol NH31A from Coronation Bridge to 29 Mile, while the one in Kalimpong will look after the stretch between Teesta and Rangpo, a distance of 35km, the officer said.
The company in Kalimpong has put up at the state library hall near Thanadara and at the empty Birla House in Upper Cart Road.
The CRPF has been deployed on the basis of an order of the Supreme Court to the central and state governments to ensure that NH31A is not blocked to traffic during strikes called in the region. The court was acting on a petition filed by O.P. Bhandari, a Sikkim resident, who had complained that frequent blockades on the highway by pro and anti-Gorkhaland forces cut off the Himalayan state that had neither a rail or air link, save a helicopter service.
source:telegraph
SIKKIM: State prison now open for domestic tourists
Adding a new concept in the tourism sector, the Home Department, Government of Sikkim vide Notification No.141/Home/2009 dated 19/11/2009 had opened up the State Central Prison, Rongyek, to domestic tourists. In this regard, the Speaker of Sikkim Legislative Assembly, Mr. K.T. Gyaltsen convened a meeting with heads of various line departments and tourism stakeholders on the launching of Prison Tourism at a local hotel at Chongay on February 22. The meeting was organized by the Sikkim State Prison, Rongyek, and the Department of Tourism.
Speaker, Mr. Gyaltsen in his address said that tourist spots have been developed in the State and by placing tourism in the industry, unlimited opportunities have been created. The State Government is encouraging adventure, eco, health, wellness tourism and that prison tourism is totally a new concept.
“Tourism needs to be developed with a human touch”, said the Speaker and added that prison tourism is to take tourism to jail and exposing inmates to the outsiders. Besides, he further said, prison tourism is a part of a major tourism plan in Syari constituency and through this concept, the constituency will be developed for greater cause. He opined that sensitization of hotel owners, tour operators and taxi drivers is a must for inclusion of State Prison as one of the tourist spots for domestic tourists. Mr. Yap Tshering Bhutia, Sr. S.P. State Jail said that prison tourism is a new concept to be implemented in the State of Sikkim. The timing for the visits shall be from 11.a.m. to 2 p.m. and booking will be done in Tourist Information Centre, he informed. He mentioned that authorized signature of the concerned officer is needed. He also highlighted the various creative work being done by the inmates. (With IPR input)
[SOURCE: SIKKIM REPORTER / EDITED BY ASHOK CHATTERJEE]
Adding a new concept in the tourism sector, the Home Department, Government of Sikkim vide Notification No.141/Home/2009 dated 19/11/2009 had opened up the State Central Prison, Rongyek, to domestic tourists. In this regard, the Speaker of Sikkim Legislative Assembly, Mr. K.T. Gyaltsen convened a meeting with heads of various line departments and tourism stakeholders on the launching of Prison Tourism at a local hotel at Chongay on February 22. The meeting was organized by the Sikkim State Prison, Rongyek, and the Department of Tourism.
Speaker, Mr. Gyaltsen in his address said that tourist spots have been developed in the State and by placing tourism in the industry, unlimited opportunities have been created. The State Government is encouraging adventure, eco, health, wellness tourism and that prison tourism is totally a new concept.
“Tourism needs to be developed with a human touch”, said the Speaker and added that prison tourism is to take tourism to jail and exposing inmates to the outsiders. Besides, he further said, prison tourism is a part of a major tourism plan in Syari constituency and through this concept, the constituency will be developed for greater cause. He opined that sensitization of hotel owners, tour operators and taxi drivers is a must for inclusion of State Prison as one of the tourist spots for domestic tourists. Mr. Yap Tshering Bhutia, Sr. S.P. State Jail said that prison tourism is a new concept to be implemented in the State of Sikkim. The timing for the visits shall be from 11.a.m. to 2 p.m. and booking will be done in Tourist Information Centre, he informed. He mentioned that authorized signature of the concerned officer is needed. He also highlighted the various creative work being done by the inmates. (With IPR input)
[SOURCE: SIKKIM REPORTER / EDITED BY ASHOK CHATTERJEE]
SIKKIM: NSA crowned winner of “Nachyo Babari”
North Sikkim Academy (NSA) Mangan was declared winner of Nachyo Babari in the grand finale held on February 21 at Palzor Stadium. NSA got a cash award of Rs.1.5 lakhs. Fire and Ice, Soreng, Kyongsa Sewa Samaj, Geyzing, Bhaley Dhunga, 32 No., Hamro Pariwar, Dechiling, secured second, third, fourth and fifth positions respectively.
Chief Minister Dr. Pawan Chamling was chief guest and Salsa expert of India Mr. KT Namgyal guest of honour for the programme. Thousands of spectators witnessed the final which was organized by Swar Sikkim. Nayuma Television had made arrangements for live telecast of the event.
Reliance Insurance Company will give insurance of Rs.60 lakhs to the winners. Chief Minister handed over a cash prize of Rs.1lakh to the winners, Rs.50, 000 for 1st runner-up, Rs.30, 000 to 2nd runner up and Rs.25,000 to each of fourth and fifth position holders. Mr. Kamal Rai, Santa Nepali, Uttam Pradhan made the panel of judges accompanied by Mr. K.T Namgyal.
Chief Minister assured to provide scholarship if winners want to enroll themselves in any dance institute of the country. He further assured to give a financial support of Rs.20 lakhs, if someone from the state wants to make film on Sikkim. Mr. KT Namgyal and the three judges were felicitated by the chief guest.
North Sikkim Academy (NSA) Mangan was declared winner of Nachyo Babari in the grand finale held on February 21 at Palzor Stadium. NSA got a cash award of Rs.1.5 lakhs. Fire and Ice, Soreng, Kyongsa Sewa Samaj, Geyzing, Bhaley Dhunga, 32 No., Hamro Pariwar, Dechiling, secured second, third, fourth and fifth positions respectively.
Chief Minister Dr. Pawan Chamling was chief guest and Salsa expert of India Mr. KT Namgyal guest of honour for the programme. Thousands of spectators witnessed the final which was organized by Swar Sikkim. Nayuma Television had made arrangements for live telecast of the event.
Reliance Insurance Company will give insurance of Rs.60 lakhs to the winners. Chief Minister handed over a cash prize of Rs.1lakh to the winners, Rs.50, 000 for 1st runner-up, Rs.30, 000 to 2nd runner up and Rs.25,000 to each of fourth and fifth position holders. Mr. Kamal Rai, Santa Nepali, Uttam Pradhan made the panel of judges accompanied by Mr. K.T Namgyal.
Chief Minister assured to provide scholarship if winners want to enroll themselves in any dance institute of the country. He further assured to give a financial support of Rs.20 lakhs, if someone from the state wants to make film on Sikkim. Mr. KT Namgyal and the three judges were felicitated by the chief guest.
Food Processing Hub thrust on North East
Shri Subodh Kant Sahai, Minister of Food Processing Industries said that the government was eyeing to promote North-East as a brand for the Food Processing Industry not only in the country but also in foreign markets geographically close to the North East Region. Shri Sahai was speaking in a press conference on his visit to North East Region recently.
The Minister said that the government is concentrating more on promoting the region as a hub of food processing industry. He informed that even during recession, the industry recorded a growth of 14.3 per cent whereas the other manufacturing industries saw only 7-8 per cent growth. The government is taking steps to provide an end-to-end solution to problems like financing, market linkages, brand promotion as well as technological support, the Minister said.
Shri Sahai also addressed a gathering of entrepreneurs of the food processing sector and others to invest in the sector as the potential in this sector is huge. The Minister also attended an “Investors’ Meet” at Agartala, Tripura. The region has plenty of agri-horti produce, most of which get wasted in the supply chain due to low level of processing and lack of adequate processing as well as logistic facilities. Shri Sahai hoped that this investor’s meet will attract sufficient investment in the Food Processing Sector in North-East Region.
Shri Subodh Kant Sahai, Minister of Food Processing Industries said that the government was eyeing to promote North-East as a brand for the Food Processing Industry not only in the country but also in foreign markets geographically close to the North East Region. Shri Sahai was speaking in a press conference on his visit to North East Region recently.
The Minister said that the government is concentrating more on promoting the region as a hub of food processing industry. He informed that even during recession, the industry recorded a growth of 14.3 per cent whereas the other manufacturing industries saw only 7-8 per cent growth. The government is taking steps to provide an end-to-end solution to problems like financing, market linkages, brand promotion as well as technological support, the Minister said.
Shri Sahai also addressed a gathering of entrepreneurs of the food processing sector and others to invest in the sector as the potential in this sector is huge. The Minister also attended an “Investors’ Meet” at Agartala, Tripura. The region has plenty of agri-horti produce, most of which get wasted in the supply chain due to low level of processing and lack of adequate processing as well as logistic facilities. Shri Sahai hoped that this investor’s meet will attract sufficient investment in the Food Processing Sector in North-East Region.
52 New Long Distance Trains Introduced
RAILWAY BUDGET 2010-11
The Minister of Railways, Kumari Mamata Banerjee has announced introduction of 52 new long distance trains in the Railway Budget 2010-11 presented in Parliament today. Following is the list of the newly introduced trains:
1. Sultanpur-Mumbai Express (via Nihalgarh) (Weekly)
2. Sultanpur-Ajmer Express (via Nihalgarh) (Weekly)
3. Asansol-Digha Express (Weekly)
4. Howrah-Katpadi (Vellore) – Puducherry Express via Bhubaneswar (Weekly)
5. Kishanganj-Ajmer Express (Weekly)
6. Kolkata-Ajmer Express via Singrauli-Katni-Bhopal-Nagda-Ratlam (Weekly)
7. Kolkata-Anandpur Sahib-Nangaldam Express (Weekly)
8. Una-Haridwar Link Express (Tri-Weekly)
9. Siuri-Prantik-Howrah Express (Daily)
10. Haldia-Chennai Express (Weekly)
11. Hyderabad-Ajmer Express (Bi-weekly)
12. Rajgir-Howrah via Tilaiya-Koderma (Tri-weekly)
13. Mumbai-Shirdi Intercity Express (Tri-weekly)
14. Haridwar-Mumbai CST AC Express (Bi-weekly)
15. Valsad-Haridwar Express (Weekly)
16. Ajmer-Indore Link Express (Daily)
17. Nagercoil-Bangalore Express (Weekly) via Madurai-Hosur
18. Kanpur-Chitrakoot Express (Daily)
19. New Jalpaiguri-Chennai Express (Weekly)
20. Delhi Sarai Rohilla- Sri Ganganagar Express (Tri-weekly) via Bhatinda
21. Mangalore-Tiruchirapalli Express (Weekly)
22. Bhubaneswar-Pune Express (Weekly)
23. Habibganj-Jabalpur Intercity Express (Daily)
24. Calicut-Thiruvananthapuram Janshatabdi Express (5 days a week)
25. Pune-Ernakulum Superfast (Bi-weekly) via Panvel
26. Coimbatore-Tirupati Intercity Express via Salem (Tri-weekly)
27. Shimoga-Mysore Intercity Express (Daily)
28. Bangalore-Tirupati Intercity Express via Bangarapet (Tri-weekly)
29. Chhatrapati Sahu Maharaj Terminus (Kolhapur) – Solapur Express (Daily)
30. Jaipur-Pune Express (Weekly)
31. Ranchi-Jaynagar Express (Tri-weekly)
32. Madurai-Tirupati Express (Bi-weekly)
33. Tirupati-Secunderabad Express (Bi-weekly) via Pakalle-Madanpalle Road
34. Sambalpur-Howrah Express (Weekly)
35. Ahmedabad-Agra Express (Tri-weekly)
36. Gonda-Manduadih (Varanasi) Intercity (Daily)
37. Running of independent trains between Bangalore-Hubli and Bangalore-Nanded by delinking of 6591/6592 Bangalore-Hubli Hampi Express from 6593/6594 Bangalore-Nanded Express
38. Running of independent trains between Hyderabad-Tirupati (Daily), Hyderabad-Chhatrapati Sahu Maharaj Terminus (Bi-weekly) and Tirupati-Chhatrapati Sahu Maharaj Terminus (Daily) by delinking 7416/7429/7430 Haripriya and Rayalseema Express
39. Secunderabd-Manuguru Express (Tri-weekly)
40. Alipurduar-Lumding Intercity Express (Daily)
41. Guwahati-Mariani Intercity Express (Daily)
42. Gandhidham-Jodhpur Express via Bhildi (Tri-weekly)
43. Rajkot-Porbander Express (via Jetalsar) (Tri-weekly)
44. Kolkata-Darbhanga Express (Bi-weekly)
45. Howrah-Berhampur Express (Tri-weekly)
46. Baripada-Shalimar Intercity Express (Tri-weekly)
47. Kharagpur-Purulia Intercity Express (Tri-weekly)
48. Gwalior-Chhindwara Express (Bi-weekly)
49. Rampurhat-Sealdah Intercity Express (Tri-weekly)
50. Howrah-Shirdi Express (Weekly)
51. Puri-Valsad Express (Weekly) via Katni-Bhopal-Vadodara
52. Puri-Digha Express (Weekly)
*****
MKP/AD/LV
RAILWAY BUDGET 2010-11
The Minister of Railways, Kumari Mamata Banerjee has announced introduction of 52 new long distance trains in the Railway Budget 2010-11 presented in Parliament today. Following is the list of the newly introduced trains:
1. Sultanpur-Mumbai Express (via Nihalgarh) (Weekly)
2. Sultanpur-Ajmer Express (via Nihalgarh) (Weekly)
3. Asansol-Digha Express (Weekly)
4. Howrah-Katpadi (Vellore) – Puducherry Express via Bhubaneswar (Weekly)
5. Kishanganj-Ajmer Express (Weekly)
6. Kolkata-Ajmer Express via Singrauli-Katni-Bhopal-Nagda-Ratlam (Weekly)
7. Kolkata-Anandpur Sahib-Nangaldam Express (Weekly)
8. Una-Haridwar Link Express (Tri-Weekly)
9. Siuri-Prantik-Howrah Express (Daily)
10. Haldia-Chennai Express (Weekly)
11. Hyderabad-Ajmer Express (Bi-weekly)
12. Rajgir-Howrah via Tilaiya-Koderma (Tri-weekly)
13. Mumbai-Shirdi Intercity Express (Tri-weekly)
14. Haridwar-Mumbai CST AC Express (Bi-weekly)
15. Valsad-Haridwar Express (Weekly)
16. Ajmer-Indore Link Express (Daily)
17. Nagercoil-Bangalore Express (Weekly) via Madurai-Hosur
18. Kanpur-Chitrakoot Express (Daily)
19. New Jalpaiguri-Chennai Express (Weekly)
20. Delhi Sarai Rohilla- Sri Ganganagar Express (Tri-weekly) via Bhatinda
21. Mangalore-Tiruchirapalli Express (Weekly)
22. Bhubaneswar-Pune Express (Weekly)
23. Habibganj-Jabalpur Intercity Express (Daily)
24. Calicut-Thiruvananthapuram Janshatabdi Express (5 days a week)
25. Pune-Ernakulum Superfast (Bi-weekly) via Panvel
26. Coimbatore-Tirupati Intercity Express via Salem (Tri-weekly)
27. Shimoga-Mysore Intercity Express (Daily)
28. Bangalore-Tirupati Intercity Express via Bangarapet (Tri-weekly)
29. Chhatrapati Sahu Maharaj Terminus (Kolhapur) – Solapur Express (Daily)
30. Jaipur-Pune Express (Weekly)
31. Ranchi-Jaynagar Express (Tri-weekly)
32. Madurai-Tirupati Express (Bi-weekly)
33. Tirupati-Secunderabad Express (Bi-weekly) via Pakalle-Madanpalle Road
34. Sambalpur-Howrah Express (Weekly)
35. Ahmedabad-Agra Express (Tri-weekly)
36. Gonda-Manduadih (Varanasi) Intercity (Daily)
37. Running of independent trains between Bangalore-Hubli and Bangalore-Nanded by delinking of 6591/6592 Bangalore-Hubli Hampi Express from 6593/6594 Bangalore-Nanded Express
38. Running of independent trains between Hyderabad-Tirupati (Daily), Hyderabad-Chhatrapati Sahu Maharaj Terminus (Bi-weekly) and Tirupati-Chhatrapati Sahu Maharaj Terminus (Daily) by delinking 7416/7429/7430 Haripriya and Rayalseema Express
39. Secunderabd-Manuguru Express (Tri-weekly)
40. Alipurduar-Lumding Intercity Express (Daily)
41. Guwahati-Mariani Intercity Express (Daily)
42. Gandhidham-Jodhpur Express via Bhildi (Tri-weekly)
43. Rajkot-Porbander Express (via Jetalsar) (Tri-weekly)
44. Kolkata-Darbhanga Express (Bi-weekly)
45. Howrah-Berhampur Express (Tri-weekly)
46. Baripada-Shalimar Intercity Express (Tri-weekly)
47. Kharagpur-Purulia Intercity Express (Tri-weekly)
48. Gwalior-Chhindwara Express (Bi-weekly)
49. Rampurhat-Sealdah Intercity Express (Tri-weekly)
50. Howrah-Shirdi Express (Weekly)
51. Puri-Valsad Express (Weekly) via Katni-Bhopal-Vadodara
52. Puri-Digha Express (Weekly)
*****
MKP/AD/LV
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