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Financial details of Indians bringing in gold from abroad after duty payment will be shared by customs authorities with Income Tax department to check suspicious ferrying of the yellow metal into the country.According to norms, an Indian who has been living abroad for over six months can bring in a kg of gold legally after payment of duty. The duty, which is charged at the rate of 10 per cent, is payable in currency of the nation where the gold was bought.Besides, a man can also bring in gold jewellery worth Rs 50,000 and women Rs one lakh, without payment of any duty, provided they live abroad for more than a year.Officials in the Directorate of Revenue Intelligence (DRI), lead agency responsible for checking smuggling and customs duty evasion among others, said at least 3,000 kg of gold has been legally brought into the country after payment of customs duty during 2013-14."There has been a rise in people bringing in one kg of gold legally. There is a possibility of an organised gang of hawala operatives who could be exploiting these people after paying money. The PAN card details of these flyers are being shared with Income Tax department to ascertain source of their income and avoid possibility of any wrongdoing," a senior DRI official said.There is a suspicion that the gold is being sold to bullion traders, they said.The official cites that there is huge profit in legally bringing gold to India. An individual can make at least Rs two lakh if he sells a kilogram of gold (which costs about Rs 1.61 lakh) bought from foreign nations here. The DRI officials, who plead helplessness in checking this new modus operandi, are working in close coordination with their customs counterparts to maintain a data of such people. "There is nothing we can do. After all they are paying duty. It is a legal thing," the official said.While there was no all-India compiled figure available with the DRI on gold brought into the country legally, he said airports in southern part of the country (especially Kerala) are seeing spurt in this activity."Field officials have been alerted to keep a check on flyers and bullion traders. We will also seek help of Enforcement Directorate (ED) to check involvement of any hawala dealer in this," the official added.The high demand of gold has been a matter of concern for Finance Ministry which is grappling to rein in Current Account Deficit (CAD), difference between the outflow and inflow of foreign currency. The CAD touched a historic high of USD 88.2 billion or 4.8 per cent of GDP in 2012-13 and was mainly attributed to high imports of petroleum products and gold.India, the largest gold consumer in the world, has imported 830 tonnes of gold in 2012-13.(PTI)
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War against price rise will remain the "overriding policy priority" of Congress, AICC said on 17 January amid a growing feeling in the rank and file that inflation hit the party in the recent Assembly elections where it suffered one of the worst defeats in the recent times."Congress believes that price rise especially of essential commodities is the biggest burden on the common man....The war against price rise will continue to remain the overriding policy priority of the Congress party," said a resolution at the AICC meet here.The AICC resolution on price rise came a day after the Congress Working Committee meet, which saw party leaders "cornering" the government over its economic policies and targeting Petroleum Minister M. Veerappa Moily in particular over rise in petroleum prices and?cap on subsidised LPG cylinders.Immediately after the results of Assembly elections in Delhi, Rajasthan, Madhya Pradesh and Chattisgharh in which Congress suffered a humiliating defeat,? party President Sonia Gandhi had on December 8, last year accepted price rise as one of the factors for the Congress drubbing.In the resolution, the party said that while some of the price rise is due to high prices of commodities in the international markets and other external factors, Congress remains committed to doing everything in its command to fight price rise."It is with this intent that all Congress-ruled states have delisted fruits and vegetables from their respective Agriculture Produce Marketing Committees (APMC) Acts so that the farmers have a choice where to sell their produce by eliminating the middleman and the consumers get the benefit of lower prices," it said.The resolution said that all Congress-ruled states are also invoking the Essential Commodities Act, 1955 to sternly deal with hoarding, black marketing and profiteering."Chronic offenders will also be detained under the Prevention of Black Marketing and Maintenance of Supplies of Essential Commodities Act, 1980," it said. These measures were part of the five-point formula advocated by Congress Vice President Rahul Gandhi during a meeting of 11 Congress Chief Ministers out of the 12 party-ruled states to contain inflation.The party resolution reaffirmed its commitment to high economic growth,?which is essential to create jobs and increase incomes of the common man.However, Congress President Sonia Gandhi had a word of caution as she said that while "growth is essential?and must be sustained but rapid growth alone cannot address the problems arising out of continuing disparities"."Tackling these is not just a matter of social justice but more importantly an existential necessity and a moral imperative."If the basic needs of large sections of our society are not met in tangible measure, if the growing aspirations of our people are not met in substantial measure, the fabric of our society will be stretched and torn. That is the ground where despair leads to unrest and breeds extremism as the only hope for change," she said."This unrest also gives various vested interests the opportunity to pursue their selfish interests," she said, explaining the logic of UPA bringing out schemes like MNREGA,? Forest Rights Act and Food Security Act.The resolution hailed that the rate achieved in the past nine-year period is the highest for any nine-year period in India's history."Congress will continue to promote policies that create high economic growth which creates employment as well as government revenues for social welfare programmes."The Congress pledges to maintain a business environment conducive to investment, both domestic and foreign, and entrepreneurship, especially in micro, small and medium enterprises," the party said.Maintaining that the proposed industrial corridors connecting all parts of the country are the most innovative infrastructure projects, it said, "Congress will continue to pursue the creation of world-class infrastructure in a time-bound manner, proactively attract investment, enhance bilateral trade and capital flows and promote the labour- intensive manufacturing sector in particular." PTI AMR SPG SGI(PTI)
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Industrial groups like Tata and Anil Ambani's Reliance ADAG were allocated coal blocks despite not being recommended by the Power Ministry during UPA 1 when Prime Minister Manmohan Singh was heading the coal ministry, shows a list submitted by the Centre to Supreme Court today.A day after the Supreme Court raised questions on how the companies, whose names were not recommended by Central Electricity Authority and Ministry of Power, were allocated coal blocks, the Centre placed a list of 11 such firms which were given blocks for end-use power plants.The list also includes Tata Power, Reliance Energy Ltd, Balco SKS Ispat and Power, Prakash Industries, Green Infrastructure, Visa Power, Vandana Vidyut, GVK, Gagan Sponge Iron and Lanco Group Ltd.Attorney General also provided a list of eight companies recommended by Ministry of Power but not selected by Screening Committee. They are Rashmi Cement, TRN Energy, Maithon Power, Mahabir Global Co., Rosa Power Co., Bhushan Energy, Lanco Amarkantak and Vedanta.The apex court had yesterday questioned the Centre over the functioning of the screening committee for allocation of coal blocks in which 11 private companies were allegedly preferred despite not figuring in the recommendations by competent authorities."What appears to be for sure is that the screening committee is not accepting the broad guidelines," it observed while hearing the issue of allocation of coal blocks by screening committee in 2007-08 when Prime Minister Manmohan Singh was holding charge of the coal ministry.Referring to one screening committee decision, the bench said it needs explanation as out of 28 recommendations, it accepted 20 and rejected another 8 while adding on the application of 11 private companies for allocation of coal blocks on its own."Of the 28 recommendations made by the CEA and endorsed by the Ministry of Power, 20 were accepted by the screening committee and eight were not. Why was this?"What was the criteria adopted by the screening committee to exclude eight. Why 11 were added by the screening committee which were not recommended by the CEA and Ministry of Power.What makes screening committee to add or include the 11 companies/applicants. Please look into it and tell us," the bench asked the Attorney General.(PTI)
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The rupee edges up at 61.52/53 versus its previous close of 61.54/55, as debt-related dollar inflows and comments from Moody's aid the unit.Foreign funds have bought nearly $2 billion worth of Indian debt so far in January.Traders said comments from a Moody's analyst saying India was unlikely to be downgraded also helped the rupee.Traders expect the pair to hold in a 61.42 to 61.65 range during the rest of the session.BSE Sensex trading down 0.4 per cent and will be watched for cues on foreign fund flows.(Reuters)
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India will consider providing incentives for production of raw sugar up to 4 million tonnes for exports in the next cabinet meeting, Food Minister K. V. Thomas said, as part of efforts by the world's second-biggest producer to stop adding to massive mounds of the refined grade which are piling up because of low prices.The export incentives would be World Trade Organisation (WTO)-compatible and applicable for the crop produced in this and the next season, Thomas said on Thursday (16 January).A group ministers under the chairmanship of Farm Minister Sharad Pawar on Thursday revived the proposal to be placed before the cabinet, but haven't decided about the quantum of incentives yet, Thomas said.Indian mills traditionally produce white sugar but a global glut has made exports difficult. A rise in sugar refining capacity in Asia and Africa has now given an opportunity to export raws.Exports of raws from India, the world's biggest consumer of sugar, will eat into the share of top suppliers Brazil and Thailand. Extra supplies could also put further pressure on benchmark prices in New York, which are hovering around a 3-1/2-year low in an over-supplied world market.(Reuters)
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British Prime Minister David Cameron said on Wednesday, 15 January he had not so far seen any evidence that the government of Margaret Thatcher had helped India plan a deadly attack against Sikh separatists in the Golden Temple at Amritsar in 1984.Cameron ordered a review into the matter after newly released official papers suggested that Thatcher, then prime minister, had sent an officer in Britain's elite SAS special air service to advise the Indians on the raid."I would note that so far there has not been any evidence to contradict the insistence by senior Indian army commanders responsible at the time that the responsibility for this was planned and carried out solely by the Indian Army," Cameron told parliament.Sikh groups have said they were shocked by the idea that Britain may have been involved in the attack, a bloody episode which angered Sikhs around the world and triggered the revenge assassination of Prime Minister Indira Gandhi.Cameron said on Wednesday he wanted the review to establish whether Britain had been involved in any way.The death toll remains disputed, with Indian authorities putting it in the hundreds and Sikh groups in the thousands. (Reuters)
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China called on the IMF on Wednesday to stick to a commitment to give emerging markets more power at the world body after US lawmakers set back historic reforms that would give developing countries a greater say.The remarks by Chinese Foreign Ministry spokesman Hong Lei were an indirect criticism of the United States, the biggest and most powerful IMF member, where lawmakers failed on Monday to agree on key funding measures, though Hong did not mention the United States by name.The proposed $1 trillion spending bill for the U.S. federal government did not include funding for the International Monetary Fund.Congress must sign off on the IMF funding to complete 2010 reforms that would make China the IMF's third-largest member and revamp the IMF board to reduce the dominance of Western Europe.The changes would also give greater say to nations such as Brazil and India to reflect their growing economic heft.But the changes have been held up by the lack of approval from the United States."The IMF quotas reform is an important decision made by the organisation," Hong said at a daily news briefing."The relevant organisation's members should earnestly implement the decision, and honour and enhance the voice and representation of developing countries within the IMF."The reform of the voting shares, known as quotas, cannot proceed without the United States, which holds the only controlling share of IMF votes.After putting off the request in 2012 because of the U.S. presidential election, the U.S. Treasury has sought to tuck the provision into several bills since March.The administration's requests, however, have been met with scepticism from some Republicans, who see them as tantamount to approving fresh funding in a tight budget environment.Some lawmakers have also raised concerns about how well the IMF is helping struggling economies in Europe and the risks attached to IMF loans, suggesting Congress is in no hurry to approve any changesIndia's Finance Ministry did not immediately respond to requests for comment. But an official at the ministry, who has been dealing with multilateral institutions including the IMF, said India was "disappointed" at the Congress lack of action.The official declined to be identified because he was not authorised to talk to the media.A South Korean Finance Ministry official, who declined to be identified, said: "While we appreciate the U.S. government's efforts, we regret the fact that the proposed funding measure fell through in Congress at the last minute."IMF quota reform is an important matter to address and we hope that the matter will be discussed at the G-20 level with the end-January deadline approaching."Developing nations have longed viewed the IMF with suspicion for promoting disastrous privatisations that complicated the transition from communism for some emerging nations in the early 1990s, and for pushing budget cuts that exacerbated debt crises in Asia and Latin America a few years later.That suspicion has been compounded by a power structure that dates to IMF's founding in 1944. The structure was shaped by the victors of World War Two - the United States and Europe.(Reuters)
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India's headline inflation eased to a five-month low of 6.16 percent in December from a 14-month high, helped by a softening in vegetable prices, government data showed on Wednesday.The wholesale price index's annual rise compared with a 7.0 percent jump forecast by economists in a Reuters poll. In November, wholesale prices, India's main inflation measure, rose 7.52 percent, their fastest pace in 14 months.The reading for October headline inflation was revised to 7.24 per cent from 7.0 per cent.CommentaryAnubhuti Sahay, Economist, Standard Chartered In Mumbai:"If you remember (central bank) governor Rajan's three preconditions, he talked about a reduction in core CPI and WPI numbers, apart from the headline numbers. That has not materialised. If one holds him literally to that, it can still go either way. However, we are calling a hold based on the substantial easing in headline numbers."Nizam Idris, Head Of Fixed Income And Currency At Macquarie Group In Singapore:"Given India's large current account deficit, the rupee requires large equity inflows just to stand still against the US dollar. Lower inflation would allow the RBI to delay rate hikes, lending support for the domestic equity market and the rupee."While we continue to dislike the INR over the medium term, we think the USDINR will consolidate around 61.0-62.0 in the near term on favourable data mix. We, however, think inflation numbers are likely to head higher from March."Suresh Kumar Ramanathan, Regional Rates And Currency Strategist, CIMB, Kuala Lumpur:"Lower WPI suggests the RBI staying pat in the medium term is a likely scenario. I don't see the RBI showing any urgency to announce any new policy measures at this point of time, particularly when we have elections around the corner."Food prices are lower, fuel is also low, and manufacturing inflation is within expectations, so naturally what the RBI did last month by staying pat was a prudent decision. Going forward, we are evaluating whether this decline in inflation is sustainable. If it does, then RBI was right in raising rates in September 2013."Upasna Bhardwaj, Economist, Ing Vysya Bank, Mumbai:"The moderating headline retail and wholesale inflation have definitely increased the likelihood of RBI maintaining a status quo in its January meeting. However, with core inflation inching up, we believe the RBI will continue to sound hawkish and hence do not rule out another 25 basis points of rate hike in the next few months".Shakti Satapathy, Fixed Income Strategist, AK Capital, Mumbai:"As expected the softening was a result of falling primary article index led by easing food prices and a decline in fuel index. With easing food prices, stable currency, and favourable global crude movement, we expect the central bank to pause rates in the January policy meet."However, the chances of one more rate hike in the coming months can't be ruled out given the persistent rise in the non-food manufacturing index and stickiness seen in the retail core inflation. Further, the upward revision in the October number along with coming months' final revisions would be closely looked at."A. Prasanna, Economist, ICICI Securities Primary Dealership Ltd, Mumbai:"The WPI data has surprised on the downside and seen in conjunction with the CPI data should strengthen the case for a rate pause in the January review. However, with core CPI inflation quite sticky, I think that RBI is not done with rate hikes. I expect another 25 basis points rate hike by March."Anjali Verma, Economist At Phillipcapital In Mumbai:"The maximum impact of the vegetable price decline is reflecting in the current numbers. If vegetable prices remain stable, January-February numbers should also be lower. These numbers obviously mean that a rate hike is ruled in January, and rates may even remain stable for an extended time."Rupa Rege Nitsure, Chief Economist, Bank Of Baroda, Mumbai:"WPI data has been showing a significant fall due to the easing in food prices on expected lines. But based on one observation we cannot make a assumption of a trend."If we look at the services PMI, IIP, CPI and WPI combined, then these four data points suggest the RBI will maintain a status quo in the next policy."But I don't expect any rate cuts to begin in the near future because inflation continues to remain way above the RBI's comfort zone. There is also potential upside risks to inflation coming from global commodity prices especially oil prices."Shubhada Rao, Chief Economist, Yes Bank, Mumbai:"Primary articles has driven the inflation data this time. The RBI governor will watch for month-over-month momentum in core inflation. However, this data, in conjunction with what we saw in CPI, does indicate the RBI would continue with the previous meeting -- which is watching and waiting for more data. We believe a rate hike may not come in this meeting."Market ReactionIndia's benchmark 10-year bond yield fell 5 basis points (bps) to 8.63 per cent from levels before the data.The benchmark 5-year swap rate and the 1-year rate each fell 4 bps, according to dealers.The benchmark index, which had been up 0.9 percent before the data, extended gains to be up 1.1 per cent.Interest rate-sensitive stocks also gained. The NSE bank sub-index was up 1.8 percent, helping push the broader Nifty to a 1.1 percent gain.BackgroundA cooling in food prices slowed down retail inflation to a three-month low of 9.87 percent in December, data showed this week.Industrial production output shrunk for the second straight month in November, by 2.1 percent, data showed last week, dragged down by a contraction in consumer goods output.India's trade deficit widened to $10.14 billion in December, data showed last week, on slowing export growth which could pose pressure on the country's fragile current account balance.(Reuters)
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China has granted licences to import gold to two foreign banks for the first time, sources said, as moves to open the world's biggest physical bullion market gather pace.Allowing more banks to import gold could increase the supply of the metal into the country, easing local prices that are higher than in most Asian nations.China's gold imports more than doubled last year to over 1,000 tonnes - ousting India as the biggest buyer - as demand soared to unprecedented levels due to the first drop in international prices in 12 years.ANZ and HSBC were awarded import licences late last year, two sources with direct knowledge of the matter told Reuters.Other trading sources said China Everbright Bank has also received approval to join the nine local banks already allowed to ship gold into China. Beijing strictly controls how much the banks import through a quota system.ANZ and HSBC declined to comment. Everbright could not immediately be reached for comment."China is actually increasing its transparency. I think there will possibly be further access to other banks as well," said Cameron Alexander, manager of Asian precious metals demand at metals consultancy GFMS, which is owned by Thomson Reuters.China faced a supply crunch early in 2013 when a sharp plunge in gold prices released pent up demand that eroded inventories at banks and jewellery sellers.Premiums in China tend to be higher as supply is tighter than other parts of Asia due to the quota system and the limited number of import licences.Premiums are currently about $15 an ounce over London prices, compared to less than $2 in Singapore and Hong Kong. They rose to a record high of $30 in April-May last year.China imported 1,060 tonnes of gold from Hong Kong in the first 11 months of 2013. Beijing does not release gold trade data, so numbers from Hong Kong - the main conduit for gold - provide the best estimate on imports.But traders warned the award of the new licences did not necessarily mean imports would jump sharply from 2013's record volumes, as the level of demand would be the main factor driving shipments. But they added that the move indicated appetite for gold would likely be strong.ANZ and HSBC were in 2011 also the first two foreign banks to get the green light to trade gold futures on the Shanghai Futures Exchange.ANZ is the only foreign bank on the list of 10 most-active members by volume on the Shanghai Gold Exchange, the physical trading platform in China.String Of ChangesThe granting of new licences is the latest in a string of steps by China to ease restrictions on bullion trading and boost market accessibility.China approved its first gold-backed exchange-traded funds last year and extended trading hours on the futures exchange.The central bank issued a draft policy document in September that proposed letting more banks import and export gold.The move also comes as the SGE plans to launch gold futures in the city's pilot free trade zone this year that would be open to foreign investors."China will need to allow more foreign players into the physical gold market if it's planning to have foreign investors participate on its gold futures," said one of the sources."This is the first step that the regulators are taking to ensure that its gold futures contract in the free-trade zone can take off."(Reuters)
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The rupee is at 61.59/60 versus its close of 61.55/56 on Monday (13 Janaury) as the the dollar gains versus most other Asian peers.The rupee is seen in a range of 61.50 to 62.00 till the WPI data due to be released around noon (0630 GMT).India's retail inflation in December eased to a three-month low as vegetable prices fell, giving some relief to policymakers struggling to contain price pressures as growth hovers at a decade low.The BSE Sensex is up 0.6 per cent and will be watched for cues on foreign fund flows.(Reuters)
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