The Indian government on Thursday said the tax payers whose annual income comprising salary and interest is up to Rs 5 lakh, are not required to file income-tax return from now onwards, a move which would benefit about 85 lakh assesses.The scheme would cover those salaried persons whose interest income per annum is up to Rs 10,000, Central Board of Direct Taxes (CBDT) said."The CBDT has notified the scheme exempting salaried taxpayers with total income up to Rs 5 lakh from filing income tax return for assessment year 2011-12, which will be due on July 31, 2011," Central Board of Direct Taxes Prakash Chandra told reporters in New Delhi.Chandra further said, "Individuals having total income up to Rs 5,00,000 for 2010-11, after allowable deductions, consisting of salary from a single employer and interest income from deposits in a saving bank account up to Rs 10,000 are not required to file their income tax return."This scheme would not be applicable to individuals who have got salary from two or more than two employers in a financial year. This happens in case a person changes the job.Giving more details about the scheme, Chandra said, "Such individuals must report their Permanent Account Number (PAN) and the entire income from bank interest to their employer, pay the entire tax by way of deduction of tax at source, and obtain a certificate of tax deduction in Form No 16."The scheme would not cover those tax payers who have income from sources other than salary and interest income from a savings bank account, or having refund claims.(PTI)
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G20 farm ministers settled a deal on Thursday to tackle high food prices, agreeing to a watered-down declaration that fell short of France's ambitious proposals to tighten regulation of commodity markets."The member states of the G20 concluded an agreement this morning on an action plan on volatility of food prices and global agriculture," French Farm Minister Bruno Le Maire told journalists after chairing the meeting.A communique was not immediately available, but a G20 source said it urged finance ministers of the Group of 20 major economies to improve rules and supervision of commodity markets.The deal appeared to lack, however, a commitment for a tough crackdown on speculators that French President Nicolas Sarkozy had campaigned for in the run-up to the summit, the first-ever G20 agriculture meeting."We recognise that appropriately regulated and transparent agricultural financial markets are indeed key for well-functioning physical markets," the communique said, according to the source."On this basis we strongly encourage G20 finance ministers and central bank governors to take the appropriate decisions for a better regulation and supervision of agricultural financial markets," it added.World food prices hit a record high earlier this year, reviving memories of soaring prices in 2007-2008 that sparked riots in developing countries, and giving fresh urgency to debate about how to improve a global food system that leaves some 925 million people hungry.France had wanted all G20 countries to commit themselves to imposing position limits -- a curb on how much of the market an investor can buy into -- but the G20 source said the communique only said reforms could include trading limits.Action PlanThe action plan includes increasing agricultural output, improving market transparency through a new database and removing export restrictions for food aid, Le Maire said.France, which heads the G20 this year, was keen to crown agreement on areas like data transparency and policy coordination with firm proposals for regulating commodity derivatives, but partners like Britain had so far remained opposed to stringent controls on financial markets.UK Agriculture Minister Caroline Spelman told Reuters on Wednesday that Britain backed efforts to improve regulation but said it was up to G20 finance ministers, not farm ministers, to come up with concrete measures.Paris has taken a hard stance on negotiations in recent days, saying it would not sign a half-hearted agreement as it pushed for an ambitious deal that would boost Sarkozy's profile 10 months before a new presidential election.Under the deal, G20 members agreed to exclude humanitarian aid from export restrictions, U.S. Agriculture Secretary Tom Vilsack said in a statement.G20 members had committed to getting the deal approved under World Trade Organisation rules, a source close to the talks said.The scope of commitments on regulation and other divisive issues like biofuels and emergency food stocks would be limited, however, other sources had said.Brazil, a major producer of sugar-based ethanol, has been staunchly opposed to suggestions biofuels contribute to rising food prices, while the United States has been sceptical on the idea of developing food stocks for humanitarian purposes."There will be some sentences about biofuels but these will be about the need for more studies, research, not really trying to introduce a drastic new approach," said a source, who was involved in last night's discussions.Sarkozy had urged G20 farm ministers on Wednesday to adopt France's proposed action plan, including a tough line on speculators whom he blames for driving up food prices and fuelling political upheaval in some countries."A market that is not regulated is not a market but a lottery where fortune favours the most cynical instead of rewarding work, investment and value creation," he said.European wheat prices tumbled 7 percent on Wednesday amid signs of intense competition on export markets, giving fresh evidence of market volatility which France sees as not justified by physical supply-and-demand factors.(Reuters)
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Private sector activity slowed in China and Europe this month just as the outlook for the United States has darkened, according to data on Thursday which suggests a global slowdown is becoming more entrenched.The euro zone private sector grew only modestly -- and without the support of Germany and France, it would have shrunk -- while China's factory sector barely expanded even as inflation eased, purchasing managers' indexes (PMIs) showed.The data come a day after the US Federal Reserve said the pace of recovery in the world's largest economy was proceeding more slowly than it had expected, but pledged no new help for the economy once its bond purchase programme expires this month.Adding to the gloomy mix, Europe is trying to hammer out a second bailout for Greece and there are concerns that the sovereign debt crisis could spill over again to other countries on the euro zone's periphery.Growth in the 17-nation bloc's dominant service sector was much slower than in recent months while manufacturers also eased off the accelerator as new orders declined for the first time in nearly two years, the Markit PMIs showed."Economic activity is losing momentum quite rapidly. The pace of growth deceleration in May-June matches similar evidence in other industrialized countries," said Marco Valli at UniCredit.Earlier data from China -- which has been the main driver of world growth -- showed its factory sector barely expanded in June as ongoing policy tightening by the central bank to control inflation muffles a booming economy.China's flash HSBC PMI, the earliest available indicator of the country's industrial activity, eased to 50.1 in June. Data compiler Markit said this was consistent with second quarter economic growth of around 9.1-9.3 percent year-on-year, down from 9.7 in the first quarter."At this level, the PMI is still consistent with GDP growth of 8-9 percent. The size of the latest decline does ring alarm bells but there are still good reasons to be confident that China will achieve a soft landing," said Mark Williams, senior China economist at Capital Economics in London.Tighter Policy Biting In AsiaSigns of slowing in some of the world's most important economies is happening at a time when stimulus is being withdrawn, not ramped up.The Fed on Wednesday cut its forecasts for U.S. economic growth, but offered no hint of further monetary support, saying the recovery should gradually pick up heading into 2012.The central bank confirmed it was ending its $600 billion bond-buying program at the end of June. By the time its latest stimulus wraps up next week, the Fed will have pumped some $2.3 trillion of new money into the economy.The European Central Bank was the first of the big four central banks to hike interest rates back in April and is expected to raise again next month in a battle to control inflation despite the stuttering recovery and Greek debt crisis.The Flash Markit Eurozone Services PMI fell to 54.2 in June from May's 56.0, its lowest level since December.But it was the 22nd month the index, which measures the activities of companies ranging from banks to hotels, has been above the 50 mark that divides growth from contraction.The flash manufacturing PMI fell to 52.0 from 54.6 in May, its lowest level since December 2009 while the composite PMI, a broader measure of the private sector which combines the services and manufacturing data, fell to 53.6 from 55.8.The composite index is often used as a guide to growth and Markit said it was consistent with euro zone quarterly growth of 0.6 percent for the second quarter.Economists polled by Reuters this month predicted growth of just 0.3 percent this quarter.Meanwhile Greece, Ireland and Portugal face years of economic purgatory after being forced to take bailouts from the European Union and International Monetary Fund to stave off defaulting on their debts."It is the July data that will be key to understanding whether this a stabilisation of the long run pace of recovery we have seen so far or whether we need to be concerned about a double-dip," said Silvio Peruzzo at RBS said.(Reuters)
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China's factory sector barely expanded in June even as price pressures eased, a purchasing managers' survey showed on Thursday, reflecting the impact of monetary policy tightening and slack global demand.The flash HSBC PMI, the earliest available indicator of China's industrial activity, eased to 50.1 in June, the lowest since July 2010. A sub-index for new orders also dropped to its lowest since July 2010, showing marginal growth.The flash PMI reading was just a whisker above the 50-point level that demarcates expansion from contraction and compares with the final reading of 51.6 in HSBC's PMI for May."It certainly was not a great number," said Robert Prior-Wandesforde, an economist at Credit Suisse in Singapore, who added the data was symptomatic of a further slowing of China's economic activity. "It fits with the broader picture of weakness not just in the developed world but also in the emerging world as well."Still, analysts said the slowdown in China was orderly and acceptable to authorities, leaving them on course to focus on policy tightening to combat stubbornly high inflation.Financial markets showed a muted reaction to the data. The Australian dollar eased modestly against the US dollar on concern Australia's major trading partner was losing steam.For markets more broadly, the latest sign of a slowdown in the world's second-biggest economy provided another reason for investors -- already worried by the risk of a Greek debt default and weakening growth in the United States -- to be cautious."Demand is cooling thanks to the effect of tightening measures and the slackness in external markets," said Qu Hongbin, chief China economist at HSBC.Qu said worries about a hard landing for the Chinese economy were "unwarranted" because industrial production is still growing at around 13 percent year on year."The good news is that inflationary pressures started to ease meaningfully in June amid slowing demand," he noted.Official data for May showed China's factory output is growing at a healthy annual pace of around 13 per cent, well above a 10 per cent threshold that suggests a hard landing is at hand, while the fairly reasonable pace of expansion in imports showed domestic demand had not slowed drastically.The flash PMI showed China's sub-index of factory input prices fell sharply to 52.1 in June from 60.1 in May. That shows prices pressures are increasing, but at a much weaker pace than in May.China's headline consumer inflation hit a 34-month-high of 5.5 per cent in May and many analysts forecast it could peak in June or July at about 6 per cent, which they say means the central bank will tighten monetary conditions further.Uneasy with stubbornly-high inflation, China's central bank signalled last week that taming price pressures remained its top policy priority, effectively brushing aside investor concerns of a sharp slowdown in the economy.It lifted the reserve requirement ratio for banks last week for the ninth time since October to a record high of 21.5 percent.The central bank has launched a series of tightening measures this year, including increasing interest rates. The expansion in money supply slowed to a 30-month low in May while bank lending fell, indicating that tightening was taking effect.A Reuters poll issued on June 16 showed economists expect China to raise bank reserve ratios twice more this year and lending rates just once more before pausing."I do see a reason behind the weak reading as the effects of China's monetary policy tightening," said Xu Biao, an economist at China Merchants Bank in Shenzhen.Xu said industrial output growth is slowing down as small firms and some big borrowers feel the pinch of tighter credit conditions and also power supply restrictions."But it is a modest slowdown," said Qiu Yunbo, an economist at China Post Securities in Beijing. "China's industrial production growth will not fall to a single-digit rate."The flash PMI is designed to provide a preview of the final data, which is due on July 1 along with the official PMI.The flash PMI, compiled by British research firm Markit, is based on up to 90 percent of total responses to a monthly survey and is designed to be a snapshot of the final data, usually released on the first working day of the month.This is the fifth month that HSBC has published a flash PMI for China. In May, the flash reading was 51.1, slightly weaker than the final reading of 51.6.Weaker global demand growth has weighed on China's huge exports sector this year. Annual exports growth in May of 19.4 percent was much slower than 29.9 percent in April, although healthy import figures suggested the domestic economy remained healthy.Possibly the biggest threat to global growth this year is posed by the mounting debt woes in Europe and concern Greece is heading for a debt default, a factor acknowledged by the U.S. Federal Reserve on Wednesday.The U.S. central bank cut its growth forecast for the United States but maintained its view that the country's recovery would gradually pick up later this year.However, Chairman Ben Bernanke conceded that the U.S. economic outlook would be partly hostage to events in Europe, reflecting the uncertainty that can affect demand for China's exports."If there were a failure to resolve that (Greek debt) situation, it would pose threats to the European financial system, the global financial system, and to European political unity," Bernanke said.(Reuters)
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Food inflation in the country touched a two-and-half-month high of 9.13 per cent in the week ended June 11 on the back of costlier fruits, milk, onions and protein-based items.Food inflation, as measured by the Wholesale Price Index (WPI), stood at 8.96 per cent during the previous week. It was almost 23 per cent during the second week of June, 2010.Food inflation has crossed the 9 per cent mark after a gap of one week.The latest food inflation numbers are the highest since the week ended March 26, 2011, when the rate of price rise of food items touched 9.18 per cent.As per data released by the government today, fruits became dearer by 28.66 per cent year-on-year, while milk grew 15.30 per cent more expensive.During the week under review, prices of onions went up by 11.89 per cent and eggs, meat and fish by 10.56 per cent on an annual basis.Cereals were also up 4.32 per cent and potatoes became dearer by 0.71 per cent.However, prices of pulses, wheat and vegetables went down during the week. While pulses became 10.34 per cent cheaper, wheat was down 1 per cent and vegetables 9.27 per cent.Overall, primary articles reported inflation of 12.62 per cent during the period under review, down from 12.86 per cent in the previous week. Primary articles have a share of 20 per cent in the WPI.The latest surge in food inflation comes close on the heels of the India Meteorological Department's (IMD) forecast that monsoon rains are expected to be below normal at 95 per cent of the Long Period Average (LPA), with margin for error of plus or minus 4 per cent.A below normal monsoon can have a serious fallout on agricultural output.Meanwhile, inflation of non-food primary articles stood at 18.43 per cent for the week ended June 11 as against 20.20 per cent during the previous week.Fibres grew more expensive by 43.77 per cent and minerals by 25.90 per cent. Fuel and power became dearer by 12.84 per cent and petrol was up 33.23 per cent year-on-year.Yesterday, Finance Minister Pranab Mukherjee tried to allay concerns over the forecast of 'below normal' monsoon rains during the current season and said the projections are only a shade below the annual average."Let us wait for some more time... They (IMD) are saying it would be around 95 per cent and normal average is 98 per cent," he had said.The latest surge in food inflation numbers belies the RBI's recent claim that headline inflation would be mostly driven by commodity prices in next few months and the rate of price rise in food items would moderate.Overall inflation was mostly driven by high food prices in 2010.Headline inflation in the country stood at 9.06 per cent in May. The RBI has already hiked key policy rates 10 times since March, 2010, to tame demand and curb inflation.Food inflation was in double digits for most of last year, before showing signs of moderation since March this year. However, it has again started going up since the second half of May.The government had to deal with a series of bad news during recent weeks on the economic front. While January-March economic growth stood at 7.8 per cent, the lowest in five quarters, industrial output also slowed down to 6.3 per cent in April.(PTI)
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Attributing the latest jump in food inflation mainly to rising prices of protein-based items, Finance Minister Pranab Mukherjee today said the high inflationary regime was not acceptable and efforts would be made to bring it down."... We are in region of high inflationary regime, which is not acceptable. It will have to be brought down," Mukherjee told reporters here while commenting on food inflation, which touched two-and-half-month high of 9.13 per cent for the week ended June 11.Food inflation, as measured by the Wholesale Price Index (WPI), stood at 8.96 per cent during the previous week. It was almost 23 per cent during the second week of June, 2010."Detailed analysis of food items indicate that it is substantially contributed by the milk products, poultry products, fish and certain other items," Mukherjee said.The minister, however, expressed satisfaction that inflation in overall primary articles came down during the week."On the whole, the figures are not satisfactory... but not disappointing in the sense that the WPI primary articles have come down from 12.86 per cent to 12.62 per cent," the Finance Minister said, adding that cereal prices have also moderated during the week.Primary articles have a share of over 20 per cent in the overall WPI basket.Referring to the non-food items, Mukherjee said they have "been steadily declining from 23.82 per cent just a month back... every subsequent week from May 7 to June 11 it has steadily declined. That is one important aspect." .As per the WPI data, inflation in non-food primary articles declined from 23.82 per cent for the week ended May 7 to 18.43 per cent during the reporting week.Fruits and milk became dearer by 28.66 per cent and 15.30 per cent, respectively, during the week ended June 11. The other items which became more expensive during the week were onions (11.89 per cent), eggs, meat and fish (10.56 per cent), cereals (4.32 per cent) and potatoes (0.71 per cent).However, prices of pulses, wheat and vegetables went down during the week. While pulses became 10.34 per cent cheaper, wheat was down 1 per cent and vegetables 9.27 per cent.Overall, primary articles reported inflation of 12.62 per cent during the period under review, down from 12.86 per cent in the previous week.Meanwhile, inflation of non-food primary articles stood at 18.43 per cent for the week ended June 11 as against 20.20 per cent during the previous week.Fibres grew more expensive by 43.77 per cent and minerals by 25.90 per cent. Fuel and power became dearer by 12.84 per cent and petrol was up 33.23 per cent year-on-year.(PTI)
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Food inflation, a key driver of its headline inflation, remains uncomfortably high and is being steered by fundamental factors, a deputy governor of the central bank said on Thursday.Higher food prices also indirectly push up inflation in the form of higher wage demand, Subir Gokarn added."Apart from the direct impact of the index, this is also likely to feed through into the wider inflationary process through higher wage demand, of which there is some evidence," Gokarn said in a speech in the southern city of Chennai.Food price index rose 9.13 per cent and the fuel price index climbed 12.84 per cent in the year to 11 June, government data showed on Thursday. In the previous week, annual food and fuel inflation stood at 8.96 per cent and 12.84 per cent, respectively.Food articles have a weight of little over 14 per cent in India's inflation basket."It is generally believed that food prices are highly sensitive to monsoon performance, but this belief has been tested over the past few years," Gokarn said."I think there is sufficient evidence to suggest that food prices are being driven not by transitory factors such as rainfall, but by more fundamental factors."The wholesale price index, India's main inflation gauge, rose an annual 9.06 per cent in May, above the April figure of 8.66 per cent and well above the Reserve Bank of India's (RBI's) projection of 6 per cent by March 2012.The RBI has clearly conveyed that its current focus is to rein in inflation, even at the cost of sacrificing some growth.At its mid-quarter policy statement last week, the RBI raised interest rates for the 10th time in just over a year and signalled more increases to come even as growth in Asia's third-largest economy is slowing down."Although the drivers of inflation in recent months have been energy prices and demand pressures as reflected in the non-food manufactured product index, food prices contributed significantly in the first half of 2010 and remains uncomfortably high," Gokarn said.(Reuters)
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Taking a step forward against black money, the Finance Ministry has asked the Income Tax Department to launch immediate prosecution action in tax evasion cases wherein tangible assets and investments are located in foreign shores.The department has been asked to do away with the norm of taking permission from higher authorities to initiate legal action and begin proceedings against tax evasion.The Finance Ministry's Foreign Taxation division can now ask the I-T range concerned to begin prompt prosecution action and issue summons to the depositor based on the evidence provided by the financial enforcement wing of the foreign nation concerned."The CBDT has issued orders in this regard as this will help in initiating quick action in cases where foreign accounts or assets have been traced by investigators," a senior I-T officer said.The step is also aimed at ensuring seamless flow of information between the investigating officer and the party under prosecution.Sources said the step has been taken in the backdrop of CBDT obtaining for the first time investment data of few Indians who had accounts in Germany's Leichestein bank, recently.According to sources, empowering investigators with such a step will also help India showcase its seriousness to the international financial enforcement community on addressing issues of black money and illicit funds.(PTI)
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The International Monetary Fund's acting head John Lipsky said on Tuesday the euro zone's partners were concerned about the potential for the crisis in the zone's peripheral economies to spread to core countries.Lipsky said in a speech in Berlin that "common sense tells you the direct impact of the peripheral economies is very small as they are small economies, but there is concern about the potential spillovers into the core economies."He said the IMF stood ready to help the troubled euro zone countries which carry out the necessary reforms. Greece is under a tight deadline to approve a new package of unpopular reforms to qualify for aid and avoid plunging into bankruptcy.Progress on these reforms will decide whether the European Union release a new tranche of their existing 110-billion-euro Greek bailout in July and a fresh package of 120 billion euros designed to keep Greece afloat through 2012 and beyond."As long as these countries are willing to make these efforts, we along with our European partners will make sure their financing needs are met," Lipsky said at the American Academy in Berlin.He singled out the countries in the European Union's single currency zone which have already received bailouts -- Greece, Ireland and Portugal -- as countries whose debt and deficit problems were fundamentally caused by lost competitiveness."If these countries can't restore competitiveness, they won't prosper," he said."No one is expecting miracles or that the solutions will be instantaneous," he said. "In each of these cases the programmes have provided adequate financing so the countries have not been required to access private markets for some time to come."Focusing on Greece, whose parliament is due to vote Tuesday night on Prime Minister George Papandreou's reform proposals which are a strict condition for fresh assistance from the IMF and the euro zone, he said the solutions required political will."The underlying Greek fiscal system is broken, but if it's broken, that implies it can be fixed. It's not that hard to figure out how to fix it. ... It's a matter of political will,"he said, adding that the reforms needed to be implemented fully in order to succeed.Asked what would happen if the Greek parliament did not give its backing to the reforms, Lipsky said this would mean that "the bedrock of the programme does not exist."He was, however, optimistic that there would be "real progress" in talks on how to involve Greece's private creditors in the fresh bailout programme, a requirement that Germany, the euro zone's economic powerhouse, has insisted upon."After this weekend's meeting I am very hopeful and expect to see real progress," he said, referring to a meeting of euro zone finance ministers in Luxembourg on Sunday.(Reuters)
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Tata Steel said on Wednesday it had received about $130 million as part of an arbitration settlement between its subsidiary and certain third parties relating to the Teesside Cast Products business.Earlier this year, the world's No.7 steelmaker said it signed a $469 million agreement to sell some assets of Teesside Cast Products (TCP) to Thailand's SSI.TCP, based in the northeast of England, was mothballed a year ago after a consortium of offtakers withdrew from a 10-year supply agreement.(Reuters)
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