The rupee is trading at 62.20/21 versus its close of 62.30/31 on 7 January, tracking gains in Asian stocks and currencies.Asian markets got a hand up on 8 January after strong trade data boosted expectations for US growth while a lessening of sovereign strains in Europe lifted stocks there to the highest since 2008.Almost all Asian currencies trading stronger versus the dollar.(Reuters)
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A list of the country’s most competitive cities with key parameters rankedClick here to view graphic(This story was published in BW | Businessworld Issue Dated 27-01-2014)
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Mumbai had many things going for it in the year gone by. Several infrastructure projects were launched — or are close to opening. The 14-km Eastern Freeway that runs from South Mumbai to the eastern suburb of Chembur has opened, providing a quick exit and entry point to those commuting by car from the satellite towns of Navi Mumbai, and the more distant Pune. Then, the much-needed flyover connecting the suburbs of Santa Cruz and Khar to the Western Expressway and the airport was finally inaugurated. The first leg of both the monorail network and the Metro is complete and they are ready to go. In the first phase — Chembur to Wadala — the monorail will have a run of 9 km. The Metro’s first phase, Versova on the coast to Ghatkopar, will create the first east-west corridor for the city. Having missed six deadlines, the Santa Cruz-Chembur Link Road, a double-decker flyover — a 6.5-km link between Mumbai’s eastern and western suburbs — is now ready. These projects, worth some Rs 6,500 crore, have helped keep Mumbai at No. 2 in the City Competitiveness Index of 50 cities across India. Delhi beat Mumbai by a whisker. While Delhi scored 69.89, Mumbai was just a fraction of a point behind at 69.88. Expectedly, Mumbai topped in financial infrastructure and in terms of access to high quality business inputs, including natural and human resources and capital availability. However, it fell behind in ‘administrative’ performance — a poor show at No. 26; and was also marked down in ‘physical’ outlook, where it stood at No. 7. The old ‘inner city’, bounded by the sea, has a sprawl of just 603 sq. km and houses more than 12 million people. The key to the city’s survival and growth lies in connecting to the hinterland by a network of roads and rail corridors; to the new towns in the extended metropolitan region. A crucial project to serve this end is the Sewree-Uran Sea Link, a 22-km sea bridge connecting the district of Raigad to the city. It will also provide access to a new airport at Navi Mumbai. Within the city, where long commutes are a way of life, the Rs 24,340-crore Metro phase-II will connect Nariman Point in the south to Bandra-Kurla Complex — two key commercial hubs — and then go north to the international airport and Marol industrial centre. Expected to carry around 22 lakh commuters daily, it will ease the pressure on Mumbai’s overcrowded trains. But, nobody has a clue to when the project will start — and its completion date. Mumbai’s nearly 150-year-old industrial past has given it a work culture and access to human resources that can scarcely be rivalled. However, for want of investment and administrative bungling, the city has seen little modernisation. The roads are a mess and every monsoon the city shuts down. Mumbai’s famous storm water drains are of British vintage. Good residential property is exorbitantly expensive. “A lot of talent is leaving this city because the quality of life is poor and too expensive,” admitted Maharashtra chief minister Prithviraj Chavan in an earlier interview with BW|Businessworld. Key to building a modern city is providing good transport infrastructure, including mass rapid public transport and a network of roads and bridges that allow people to commute easily and quickly. And, expanding the urban sprawl to take the pressure off the city’s inner core. Can the government come up with a workable plan for affordable housing in satellite towns? There is a plan for a multi-modal corridor, 126-km long, that will run in a semi-circle, skirting the city, from Virar in the north to Alibaug, south of Mumbai. It will connect the towns of Bhiwandi, Kalyan, Dombivili and Panvel. The Rs 10,000-crore corridor will have eight lanes; with dedicated lanes for buses, two-wheelers and non-motorised transport. The corridor will become a magnet for alternative and modern city development, the government is hoping. Again, nobody knows if the plan will materialise and, if so, how long it will take for fruition. gurbir1@gmail.com twitter@stayalive (This story was published in BW | Businessworld Issue Dated 27-01-2014)
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West Bengal Governor M K Narayanan has accepted the resignation of Justice Ashok Ganguly as chairman of West Bengal Human Rights Commission, highly-placed sources said on Tuesday (7 January)."The Governor has accepted the resignation and has informed the state government about it," the sources told PTI.Ganguly had met the Governor at Raj Bhavan on Monday (6 January) after which the judge refused to comment on the matter. The development came close on the heels of the Union Cabinet on Thursday last approving a proposal for sending a Presidential reference to the Supreme Court on the issue, which was seen as a step towards his removal as WBHRC chairman.West Bengal Chief Minister Mamata Banerjee had written twice to President Pranab Mukherjee seeking urgent action against the retired judge.A three-judge Supreme Court panel had indicted Ganguly by holding that the statement of the intern, both written and oral, had prima facie disclosed "an act of unwelcome behaviour (unwelcome verbal/non-verbal conduct of sexual nature)" by the judge with her in the Le Meridien hotel room on December 24 last year.Justice Ganguly has denied the allegations of the law intern and blamed "powerful interests" of trying to tarnish his image due to certain judgements delivered by him.(PTI)
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In the courtyard of the bali International Convention Centre, just outside the hall where World Trade Organization (WTO) delegates were negotiating a modest, if controversial, agreement, someone had erected a small impromptu shrine, replete with flower petals and other offerings. The memorial was for Lee Kyung Hae, the Korean farmer who, ten years earlier, had scaled the barricades keeping the masses from WTO negotiators in Cancún, Mexico. He pronounced the simple indictment that “WTO kills farmers,” then took his own life. With a reported quarter-million farmer suicides since 1990, Indian negotiators may well have had Lee Kyung Hae on their minds as they arrived in Bali, Indonesia for the WTO’s ninth ministerial. The country’s National Food Security Act was under threat from the WTO’s arcane rules, and Indian negotiators came to fight. So did India’s Right to Food Campaign, which sent two representatives to object to the intrusion of the global trade body in India’s domestic policy-making. The act was the result of a decade of organising and lobbying. How could a distant trade body undermine its simple principles of paying hungry farmers a decent price for their grains and distributing it to India’s millions of hungry? In a last-hour settlement in the early morning hours of 7 Dec., negotiators reached a compromise, granting India and other developing countries with such programmes a four-year “Peace Clause” which ensured they could not be sued under WTO subsidy rules for their existing programmes. The Right to Food Campaign objected, but the agreement allowed the WTO to salvage a modest agreement in the stalled Doha Round of negotiations on food security, trade facilitation, and specific measures for Least Developed Countries.(Bloomberg) It is likely the agreement will change very little on the ground, but it puts India’s food security programme front and center as WTO negotiations heat up in the next four years. Also on the table is the larger Agreement on Agriculture, which produced the controversies over rich country subsidies and poor country flexibilities that have repeatedly stalled Doha negotiations since 2003. Indian negotiators had every right to come to Bali with a chip on their shoulders. Their painfully reasonable proposals had been largely ignored since 2008, and now the United States and a few other countries were objecting to a joint proposal from the Group of 33, led by India but including other agricultural countries such as the Philippines and Indonesia. The proposal called for programmes such as India’s, which subsidise farmers through administered prices slightly higher than prevailing market prices, to be exempt from WTO disciplines because they feed the hungry and do not distort trade. Thus, they should be included in the so-called Green Box of permissible farm subsidies. It was not lost on delegates that the country objecting to this proposal now has a remarkable $120 billion of its annual $130 billion farm and food subsidy bill protected in the Green Box. The vast majority is for food programmes for the poor in the United States, but some is for farm subsidies to corn, wheat, soybean, and rice farmers. How could U.S. delegates call India’s programme, which distributes food within India, trade-distorting when their own Green Box subsidies go to crops that are heavily exported? Nor was it lost on the Indian delegation that the foundations of U.S. farm policy coming out of the Great Depression in the 1930s used precisely the measures India is now pursuing: supported farm prices, public stock holding, managed domestic markets, and public support for food purchases. As I noted in a talk I gave in Bali, we in the United States used such measures because they work. In fact, the U.S. was trying to catch India in a WTO technicality. Under archaic WTO rules, written by the U.S. and the E.U. to protect their farm subsidies, supported prices are considered a subsidy if they pay above market prices. India did not object to this. What they objected to was the bizarre rule that instead of comparing purchase prices to current market prices they would be compared to an antiquated “international reference price” set by the Agreement on Agriculture to be the average international price from 1986-88. Such a calculation makes any administered price today seem like a massive subsidy. Because of that artificially low price, a barely above-market price of Rs 1,250 per tonne for rice would look like a Rs 986 subsidy when compared to the outdated Rs 264/tonne reference price. The actual subsidy was barely above market prices. India’s initial proposal had been, quite simply, to update the reference price for inflation. The U.S. and other developed countries refused. And the battle of Bali was on. Indian negotiators, under pressure from home to defend a popular programme, with elections looming, were strong despite the intense pressure to accept a four-year Peace Clause with no promise of resolving the issue. Lead negotiator Anand Sharma, Minister of Commerce and Industry, was defiant in a 5 Dec. press conference. “The right to food security is non-negotiable.” India and its allies succeeded in preventing the U.S. and other rich countries from declaring India’s food security programme in violation of WTO rules, agreeing to a Peace Clause for existing programmes with a firm commitment to resolve the issue within four years. This was certainly a setback for the rich countries. That said, the draft decision in no way gives the green light for such programmes. Those countries that don’t have programmes now would not be protected by the “Peace Clause.” And onerous reporting requirements create a “guilty until proven innocent” situation by putting the onus on the developing country to prove that its stock-holding programme is not “trade distorting.” Indian activists worry that the government will use the agreement as an excuse not to expand the food security programme to pulses and other crops not currently supported. Meanwhile, the US and EU are in no way obligated to make good on the commitment they made in Hong Kong eight years ago to eliminate export credits and subsidies, the most trade-distorting government intervention of them all. The text calls on them to make their best endeavor at reductions, with no targets or commitments. The right to food won an important defensive battle in the larger war for a global trading system worthy of the lofty development ideals of the Doha Round. The next battles will come in the short four years that WTO members have committed to resolve this issue for good. The hope is that all this attention to farm subsidies will put the issue front and center in negotiations to come. “Public stock-holding is just the tip of the subsidies iceberg,” said Martin Khor of the Geneva-based South Centre. “Hopefully we can reveal the rest of the iceberg now and try to fix it.” Anuradha Talwar of India’s Right to Food Campaign seemed exhausted by the WTO meddling in India’s policy-making. “The agreement on the table today is going to make it even more difficult to achieve food security for our people,” she sighed. “And it was hard enough already.” The author is policy research director at the Global Development and Environment Institute at Tufts University (This story was published in BW | Businessworld Issue Dated 27-01-2014)
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This is one record that Delhi’s former chief minister Sheila Dikshit can be proud of despite her Congress party suffering its worst rout under her stewardship. The city remains India’s most competitive for the fourth year running.Delhi’s superior infrastructure, better communication services and the large talent pool helped it continue its winning streak in the City Competitiveness Index 2013, brought out by the Institute for Competitiveness, India.The biggest attraction in the city, apart from its sprawling network of flyovers, is the Metro. Over the last decade, the Delhi Metro has proven to be one of the best initiatives in sustainable urban transportation in the country, notes the institute in its report. “The Metro and the road networks are a tremendous strength when it comes to the competitiveness of Delhi,” says Ajay S. Shriram, president-designate, Confederation of Indian Industry (CII). The Metro today has an operational network covering 190 km in Delhi and neighbouring Gurgaon, Ghaziabad and Noida, with 142 stations. Approx-imately 1.5 million passengers commute by the Metro on a daily basis. In the last five years, Delhi saw the completion of 16 flyovers, with work in progress on 44 more flyovers-cum-grade separators.Infrastructure apart, Delhi’s ability to draw skilled manpower from the National Capital Region (NCR) and other states provides the essential human resource requirement of businesses. “Delhi is like a magnet for people from surrounding areas,” notes Shriram. “People in Delhi tend to be very competitive. They are go-getters,” says Alok B. Shriram, senior vice-president, PHD Chamber of Commerce and Industry.A quick look at Delhi’s outlay explains why the state remains competitive in terms of infrastructure. In 2012-13, Delhi had earmarked Rs 2,650 crore, or 20 per cent of its total budgetary expenditure, on the transport sector. The outlay increased by 46 per cent during 2013-14, with the government deciding to spend Rs 3,876 crore to improve transport infrastructure. The outlay is 24 per cent of the overall plan expenditure. Urban development and housing, water supply and sanitation, and energy were the other sectors that received priority treatment in the last budget. The results were impressive. “The whole of Delhi gets almost uninterrupted supply of power. This is a positive,” says the CII president-designate. Fortunately for the Aam Aadmi Party and its leader — new chief minister Arvind Kejriwal — Delhi has the wherewithal to spend. Kejriwal has inherited a state that has shown 10.3 per cent growth in gross domestic product (GDP) as against a national average of 7.9 per cent in the past five years. Delhi’s per capita income, at Rs 2 lakh, is among the highest when compared to other states. Its outstanding debt as a percentage of state GDP was 8 per cent, among the lowest in 2012-13. The state spends less than 10 per cent of its tax revenues on servicing its debt. Most importantly, 93 per cent of the state’s financial outlay of Rs 16,000 crore for 2013-14 comes from internal resources, and not central or multilateral funds. Given its level of urban concentration, Delhi has been emphasising the promotion of high-tech, low-energy-intensive and non-polluting industries. The government has also taken measures to retain its household industrial manufacturing base by regularising over two dozen small-scale industrial clusters, where industrial activity spans over 70 per cent of the total area. As the report shows, Delhi retains its top rank not only because of its physical infrastructure and communication network, but also due to the presence of a diversified range of business entities that support the overall industry ecosystem. Delhi ranks high in terms of institutional support, incentives to businesses, demand conditions, innovations and a host of other parameters. It, however, lags (in 45th position) in terms of ‘administrative’ competitiveness. This could perhaps be the reason why the newly formed AAP won the hearts of Delhi’s electorate. joecmathew@gmail.com twitter@joecmathew (This story was published in BW | Businessworld Issue Dated 27-01-2014)
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Gold extended its new year rally to a sixth session on Tuesday, pushing the safe-haven metal to near three-week highs with support from weaker equities and robust Chinese physical demand.U.S. gold futures also steadied after unusually sharp movements in the previous session, when prices fell 3 percent for a brief period before recovering.Spot gold has gained nearly 4 percent in the past six sessions, after a 28 per cent drop last year, mainly due to weakness in stock markets and as funds reallocate positions at the start of the year."We have been rather surprised by gold's resilience over the course of the last week, but suspect that it's upside staying power will be limited," INTL FCStone analyst Edward Meir said.Meir said prices will be hurt by the US stimulus tapering, the possibility of a stronger dollar, low inflation and outflows from exchange traded funds - factors that caused bullion to tumble in 2013 after a 12-year rally.Spot gold had gained 0.3 percent to $1,241.45 an ounce by 0721 GMT, not far from its three-week peak of $1,248.30.Asian shares fell to a near four-month low on Tuesday, though the dollar rebounded after overnight weakness on disappointing US services sector data that raised concerns about growth in the world's largest economy.Gold is seen as an alternative to risky investments such as equities."We believe the gold price looks likely to move sideways in choppy action," HSBC analysts said in a note. "Investment demand is still sluggish but underlying physical consumption is positive."Physical DemandInvestors were heartened by buying interest in the physical markets, where the outlook for demand from top buyers - China and India - looked optimistic.Indian officials are in talks to cut a record high import duty on gold and relax rules on exports, government sources said, after the measures helped narrow the country's trade deficit but now threaten to encourage smuggling.The stringent rules cut off demand from India last year, adding pressure to gold prices.In China, premiums for 99.99 per cent purity gold on the Shanghai Gold Exchange were steady at about $20 an ounce over London prices.Volumes traded on the exchange hit their highest on Monday since May.(Reuters)
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Restrictions on gold imports are likely to continue until at least March-end, notwithstanding an improvement in the current account deficit situation."Our point is that we need to keep the CAD (current account deficit) low. We cannot afford to let it go and therefore, at least for this fiscal, we should not tamper with the what the regime is."...and whatever is to be considered should be considered in the next year after fully understanding how the CAD will look for the next year," Economic Affairs Secretary Arvind Mayaram told PTI in an interview.He said his Ministry gets various kinds of advice and one view is to open up gold imports as demand has been compressed significantly.Recently, Finance Minister P Chidambaram too said that some curbs on gold imports should remain in force. However, Reserve Bank Governor Raghuram Rajan favours doing away with the restrictions, which encourage smuggling.Gold imports fell to 19.3 tonnes in November from a high of 162 tonnes in May in the wake of a series of curbs by both the government and the RBI.The government had increased customs duty on gold to 10 per cent while the RBI linked imports of the metal to exports amid a widening CAD and depreciation of the rupee.Asked if the restrictions had led to smuggling, Mayaram said there was no "conclusive evidence" to support the argument."What is the total compression in gold we are looking at? About 100-150 tonnes. What are the total seizures you get? It is minuscule."So, if you look at the trade off, we need to increase vigilance and surveillance to be able to check any rise in smuggling. But at the same time, we cannot afford to allow CAD numbers to become weak because it has a bearing on how the rupee behaves," the Secretary added.As per the RBI, the CAD in this financial year is likely to be in the range of $56 billion as against the lifetime high of $88.2 billion in the previous year.(PTI)
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A lawyer for Indian diplomat Devyani Khobragade is seeking to postpone proceedings in a visa fraud case that has created tensions between the United States and India, citing the need to continue "meaningful discussions" with the prosecution.In a letter to a federal magistrate judge in New York, Khobragade's lawyer requested an extension of the time by which the US government must file an indictment or commence a preliminary hearing.The lawyer, Daniel Arshack, confirmed he filed the letter in court but would not comment about a possible resolution of the case.Khobragade, who was deputy consul-general in New York, was arrested on 12 Decembner and charged with one count of visa fraud and one count of making false statements about how much she paid her housekeeper.The case was adjourned until 13 January by which the government must commence a preliminary hearing or file an indictment.Arshack asked US Magistrate Judge Sarah Netburn to extend the deadline by 30 days to 12 February."Significant communications have been had between the prosecution and the defense and amongst other government officials and it is our strong view that the pressure of the impending deadline is counterproductive to continued communications," Arshack wrote.A spokesman for Preet Bharara, the US attorney in Manhattan, whose office is handling the case, did not immediately respond to a request for comment.Khobragade's arrest enraged India, which is demanding that all charges be dropped against her. On the day of her arrest, she was strip searched. The arresting authority, the US Marshals Service, said the strip search was a routine procedure imposed on any new arrestee at the federal courthouse.Khobragade was released on $250,000 bail.In the aftermath of her arrest, India requested to transfer Khobragade to the United Nations.US State Department spokeswoman Marie Harf said on Monday that India's application to transfer Khobragade's accreditation to the Indian mission at the United Nations, which was made before Christmas, was still under review."We've received the request for change in accreditation, but the process is ongoing and no official decision has been made yet to do that. So there's no change in her status as of this point," she told a regular news briefing.Indian media has said the request to transfer Khobragade to the United Nations was aimed at ending the stand-off with the United States in the hopes that her new diplomatic status could allow New Delhi to bring her home without the prosecution proceeding.According to UN guidelines on diplomatic privileges and immunities, documents certifying diplomatic immunity, if approved, are usually issued by the US Mission to the United Nations within two weeks of the initial request.A State Department official said there was no set time period for the process, and noted that the request had been filed just ahead of a period of government holidays.Harf said the United States hoped to see the case resolved as soon as possible in the interest of the bilateral relationship between India and the United States, which has been strained by the case."We don't want this to define our relationship going forward and don't think that it will," Harf said. "If you look throughout the region, if you look at Afghanistan, if you look at energy issues, economic issues, we have a whole host of things we work together on, and those are very important and shouldn't be derailed by this incident. ... (T)he relationship with India is incredibly important, it's vital, and that's what we're focused on." (Reuters)
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The rupee was trading marginally lower at 62.37/38 versus its closeed of 62.31/32 on 6 January, tracking largely steady regional stock markets with traders looking ahead at the inflation data next week for a clearer direction.The Sensex was up 0.3 per cent. India shares will be watched for cues on foreign fund flows.Asian currencies trading mixed compared to the dollar. See for a snapshot. The index of the dollar against six major currencies up 0.06 per cent.(Reuters)
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