Indian Oil Corp Ltd (IOC), the country's biggest refiner, said it would raise petrol prices by 1.2 per cent and diesel by 1.1 per cent from Thursday after global prices of the fuels have risen.India's three state-run fuel retailers - IOC, Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp Ltd - tend to move their prices together. India deregulated fuel prices in June 2010.In January, India allowed fuel retailers to raise the price of subsidised diesel by around 50 paise a litre every month and asked bulk buyers to pay market rates.(Reuters)
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The UPA Government's proposed Food Security Bill carries a slew of "economic consequences", including pressures on fiscal deficit, growth and inflation, Reserve Bank Governor D Subbarao said on 30 July."There are going to be lots of economic consequences of the Food Security Bill (FSB), which at the RBI, we will study further," Subbarao said at the customary post-policy interaction with journalists in Mumbai. "There will be pressure on procurement, there will be pressure of subsidy, there will be pressure of fiscal deficit that will have implications for growth and for inflation, implications for surplus income that beneficiaries of food security might have and how they might spend that and what implications they will have for inflation," he said.However, he added that the central bank is still studying the Bill's proposals and is yet to quantify the implications of the ambitious programme."At the moment, the fiscal consequences and the macroeconomic backdrop that will change on account of the FSB is a bit premature to discuss because the numbers are still being worked out," RBI Deputy Governor Urijit Patel said.Early this month, the Union Cabinet decided to take the Ordinance route to implement the FSB, which aims to give nation's two-thirds population the right to 5 kg of foodgrain every month at highly subsidised rates of Rs 1-3 per kg.India will join a select league of countries in the world that guarantee food security to majority of its population. At Rs 1,25,000 crore of Government support, the food programme will be the largest in the world.Analysts have said the programme will put a strain on Government finances and pointed to the excess investments required in the warehousing space.(PTI)
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The government will sell a 7.64 per cent stake in state-run National Fertilizers on Wednesday through a share auction, disinvestment secretary Ravi Mathur told reporters. The sale is part of the government's efforts to raise Rs 400,00 through stake sales in the current fiscal year. So far this year it has only raised about $140 million. The government currently owns 97.64 per cent in the fertilizer company. At the current market price, the stake sale would raise about $17 million. Ahead of the offer, shares in National Fertilizer were trading 8.4 per cent lower at Rs 27. (Reuters)
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The rupee fell to a two-week low on Tuesday, erasing all gains made since the Reserve Bank of India first announced early this month it would defend the currency by tightening cash, reflecting doubts about how long the central bank can sustain the measures. Falls accelerated in the afternoon session after the RBI left interest rates unchanged and said it will roll back those liquidity tightening measures when stability returns to the currency market. The RBI announced measures to drain cash in the evening of 15 July, and followed up with additional steps on 23 July. The partially convertible rupee was trading at 59.88/90 per dollar at 1:27 pm, after falling to as low as a two-week low of 59.92 to the dollar, below its close of 59.89 on 15 July. The rupee had closed at 59.4150/4250 on Monday, 30 July. (Reuters)
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Hours after the Reserve Bank said that stabilising the battered rupee is its priority, Chief Economic Adviser to Finance Ministry Raghuram Rajan said RBI's action in this regard must not hurt the growth too much."RBI has come up with measures to put stability in the exchange rate. With these measures I hope there should not be serious consequences to growth. We must try to ensure that growth is not diminished," Rajan told a summit organised by the NSE, through a video link, this evening.The rupee strengthened to 58.69 to the dollar after the RBI first unveiled its measures on July 15, but has not closed below 59 since then and remains close to 60 levels after it had hit a record low of 61.21 on July 8.Earlier in the evening, the RBI said it will follow a cautious monetary stance, with focus on stabilising the domestic currency and containing the current account deficit.Hinting at a status-quo in tomorrow's policy review, the RBI's first quarter macroeconomic and monetary development report said: "The priority for monetary policy now is to restore stability in the currency market so that macro- financial conditions remain supportive of growth," even though it admitted that growth recovery is likely to be slower.Meanwhile, earlier in the day, Finance Minister P Chidambaram had said that the RBI should also look at boosting sagging growth and generating employment while focusing on price stability."All over the world thinking in changing. The mandate of a central bank must not only be price stability. The mandate of central bank must be seen as part of larger mandate which includes price stability, growth and maximising employment," he said while addressing a function of daily Divya Bhaskar.(PTI)
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Hinting at status quo on policy rates, the RBI said on Monday, 29 July its immediate focus is to stabilise rupee and made a case for calibrated action to contain the current account deficit, which is a major reason for the steep fall in currency.The central bank's policy focus has shifted from reviving economic growth to defending a rupee that hit a record low of 61.21 to the dollar on July 8, when it was down more than 9 per cent since the start of the year. "The priority for monetary policy now is to restore stability in the currency market so that macro-financial conditions remain supportive of growth. (However) this strategy will succeed only if reinforced by structural reforms to reduce the CAD and step up savings and investment," RBI said in its macroeconomic and monetary developments review released on the eve of the policy announcement."Amplifying macro-financial risks warrant cautious monetary policy stance," it added.Finance Minister P Chidambaram on the other hand said the mandate of a central bank is not only to ensure price stability but also to promote growth and generate employment.Stating he did not expect any hike in interest rates by the commercial banks, the Minister said they had enough funds to meet credit demands and that the onus of coming up with large investment projects rests with the industry."All over the world thinking in changing. The mandate of a central bank must not only be price stability. The mandate of central bank must be seen as part of larger mandate which includes price stability, growth and maximising employment," he said.RBI Governor D Subbarao had last week met Prime Minister Manmohan Singh and Chidambaram and is believed to have discussed the current macro-economic situation.Read Also: RBI Needs To Look At Growth: FMRead Also: RBI To Manage Liquidity As Rupee Stability Trumps GrowthA survey of external professional forecasters done by Reserve Bank increased its median expectation on rupee value to the 59.5 level to the dollar by March 2014 - nearly the same level at which the domestic currency is now trading. This is compared to the earlier expectation of 54.A majority of RBI watchers expect the policy to be a "no show" event, but are looking forward to the guidance which Governor D Subbarao gives in the quarterly policy announcement, which would be the last before he demits office early September.The depreciation in the rupee, which has shed over 10 per cent this fiscal, will weigh heavy on RBI, they said, adding that this is a shift from the central bank's focus on bringing down inflation and propping up economic growth."While monetary policy is largely guided by the growth-inflation dynamics, it is also tempered by considerations of risks of external imbalances," the report said.Depreciation in the rupee to a record low of 61.21 against a dollar has forced the RBI to take some unconventional measures to curtail liquidity and curb speculation in the past fortnight.The steps taken include limiting banks to draw only 50 per cent of their total deposits in overnight borrowings and maintaining 99 per cent average CRR everyday, apart from increasing of 2 per cent interest rate on the marginal standing facility.It said the measures give anything but "some breathing time" and would succeed only if reinforced by structural reforms to reduce the CAD.Flagging consumer price inflation, which has been constantly hovering in the double digits for the past 15 months even though wholesale price index has eased, RBI said the high retail inflation number puts pressure on public finances and erodes domestic savings, which in turn widen CAD.The CAD will improve only on structural reforms, it said, adding that CAD is expected to come lower in FY14 than the 4.8 per cent last fiscal. However, the 3.8 per cent achieved in the last quarter of FY13 is likely to be breached in the June quarter, it said.However, RBI said that even though the number may come in lower, the slowdown in the investor interest, which has resulted in outflows of USD 12 billion since last week of May alone, will mean financing the CAD will be a difficult task.On the growth front, RBI raised concern saying that the recovery is likely to be slower.(Agencies)
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Seeking to distance himself from latest poverty estimates, Plan panel deputy chief Montek Singh Ahluwalia on Monday, 29 July said they are based on methodology recommended by an expert group and there is a need to improve it."The Tendulkar (committee methodology) numbers show about 22 per cent as poor (in the country). I am perfectly willing to agree that, that (poverty) line is a bit low," Ahluwalia said in an interview to NDTV-24X7.About doubts raised within the Congress party against the controversial poverty line, he said, "Kapil (Sibal) has said that the present system is abstract and even we should improve it. Even we agree to that."According to the latest estimates of the Planning Commission, the poverty ratio, or population of poor in the country, declined to 21.9 per cent in 2011-12 from 37.2 per cent in 2004-05 due to an increase in per capita consumption.Read Also: Poverty Declines To 21.9%, Greater Fall In Ratio Of Rural PoorThe Commission used the Suresh Tendulkar Committee's methodology, which factors in spending on health and education besides calorie intake to arrive at a poverty line for cities and villages. Accordingly, those whose daily consumption of goods and services exceed Rs 33.33 in cities and Rs 27.20 in villages are not poor.Ahluwalia said, "This is not the Planning Commission's (poverty) line. Poverty line is not drawn by the Planning Commission. It is actually drawn by an expert group. The line you are talking about is a line recommended by the Suresh Tendulkar expert committee."An earlier use of the Tendulkar methodology by the Commission to determine the poverty line had also raked up a controversy.After that, a committee was appointed under Prime Minister's Economic Advisory Council Chairman C Rangarajan to revisit the methodology for tabulating poverty. The Committee is expected to submit its report by mid 2014. Elaborating on the need to use the Tendulkar Committee methodology again, Ahluwalia said, "It would have been absurd for us, not showing what Tendulkar line was in 2011-12.""It shows that prior to 2004, the decline in poverty was 0.74 percentage point every year. After 2004, it was 2.2 percentage points every year."According to Ahluwalia, since the poverty reduction rate during the United Progressive Alliance's time was three times higher than before, the numbers came under attack from various political parties."This conclusion that during the UPA period we did a much better job on poverty than in the previous period -- this is the main point that is coming out. That is why, politically, it is being attacked," he said, adding that it is not being attacked because of debate from the level of poverty."People don't want to recognise that UPA have done three times better than the pre-UPA period in the matter of reducing poverty. Whatever measure you use, the last line here will show a much better rate of improvement than the previous eight years. That is the key issue. That's why people are agitated," he pointed out.Elaborating further, he said the UPA came in 2004 and at that time, the poverty line was very low. It was the UPA that set up the Tendulkar Committee in order to review the position and it opted for a higher poverty line. It had raised the poverty line.According to Ahluwalia, there is a lot of noise about the poverty line because people thought this would be linked to benefits being provided by the government under various programmes.(PTI)
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Indian corporates love to lament that they are victims of a corrupt system. They say the licence raj ensures that a bribe is the only way for getting business done in the country and if they are caught, they are prosecuted while the officials who connived with them get protected by the power of the State.A new survey by Ernst & Young’s Fraud Investigation & Dispute Services team finds shows that nearly half of the 250-odd respondents said that they had lost business because of their competitors’ unethical conduct. The top three reasons cited were weak law enforcement, numerous government ‘touch points’, and a complicated tax and licensing system, and while 75 per cent of the respondents say that they favour self-reporting of corruption, many hesitate because of a fear of backlash or victimisation. In short, their hands are tied.But a look through some of the finer points in the report reveals a need for India Inc to introspect. When the surveyors asked respondents for instances where their organisations engaged in unethical conduct purely to boost its reported profits (through advancing the reporting of revenues, under-reporting of costs, or even forcing clients to buy stock earlier than they normally would to meet short term sales targets), 60 per cent of them say they had seen at least one of the above. Contrast that with a global survey by EY that pegged similar practices at 26 per cent in rapid growth economies to get an idea of the depth of the infection. With 77 per cent of the respondents arguing that the Managing Director had to take responsibility to ensure compliance, such practices simply portray the tone at the top.Corruption at times could become a differentiating advantage to grab business, says Arpinder Singh, partner at EY who authored the report. “If the demand is from the government, the supply side is met by the private sector,” he explainsArpinder says there are several cases where investors have bargained hard for a lower price due to irregular practices in certain parts of the business they are looking to acquire The message rings loud. Come clean, or the consequences could be severe.abraham(dot)mathews(at)abp(dot)inmatabrahamc(at)gmail(dot)com (at)ebbruz
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Madras High Court on 26 July' 2013 directed CBI to conduct a probe into appointments made in the prestigious Indian Institute of Technology-Madras between 1995 and 2000 for its correctness and legality. The court further directed the agency to prosecute the persons responsible, if it was found that any case of illegality had been committed. Justice S Nagamuth gave the direction on a batch of petitions from W B Vasantha and others, seeking to quash the selection for certain teaching positions by an advertisement issued in 1995 and to further direct the Chairman and Board of Directors and the IIT(M) Director to select her as Associate Professor in a duly constituted selection committee following the reservation for OBC. The judge said the petitioner should be treated as having been appointed as Associate Professor from July 27, 1995 and as a Professor from December 18, 1996. He said the pay and allowances for Vasantha from July 27, 1995 as Associate Professor till December 17, 1996 should be calculated notionally for fixing her future salary. But for this period she would not be entitled for back wages. For the period commencing from December 18, 1996, pay and allowance of the petitioner should be notionally calculated for the post of professor as of date for purpose of fixing her future salary, he said. However, on such fixation of salary for the post of Professor from December 18, 1996 till today, she should not be entitled for back wages. For the period between Dec 18, 1996 to till date, she should be given pay and allowances equivalent to the post of Associate Professor and she would be paid the differential amount, the judge said. Vasantha, who is from the OBC community contended the selection in 1995 was 'arbitrary, illegal and discriminatory,' since reservation for OBC was not followed despite the Apex Court's rulings. She said her candidature was ignored despite possessing required qualifications and experience, while her juniors were granted promotions at each and every stage.(PTI)
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With an aim of fastracking infrastructure development, the Prime Minister's Office has set deadlines for steps to implement key projects covering sectors like railways, highways and power.The deadlines were earmarked at the first meeting of the steering group appointed by Prime Minister Manmohan Singh to accelerate infrastructure investment."The progress on the intermediate steps will be monitored on a regular basis. The deadlines will ensure that ministries /departments are clear about not just the overall deadline but also all the intermediate steps that need to be completed so that there are no slippages," a PMO statement said.The Principal Secretary to Prime Minister has directed all ministries/departments to nominate a nodal officer each, of the rank of a Joint Secretary or above, who will report on a weekly basis on the progress of their department's projects.Contracts for the construction of 17 identified projects will be awarded between September 2013 and March 2014.Projects which are to be awarded in 2014 include Mumbai Rail Corridor, Navi Mumbai Airport, Loco Project, Delhi-Meerut Expressway, Mumbai-Vadodra Expressway and UMPPs Cheyyar (TN), Bedabahal (Odisha).Those to be awarded in 2013 include Eastern Peripheral Expressway, Eastern Region transmission strengthening VI and VII, Southern system strengthening for import of power from Eastern region.As per the statement, Transmission system from Kudgi TPS (3x800 MW), Transmission system for connectivity of NCC power project and Baira Siul HEP Sarna D/C line too would be awarded in the remaining months of 2013.With regard to the Mumbai Elevated Rail Corridor Project, it was decided in the meeting that the issue of whether the RFQ will be reissued is to be resolved by Railways within a week.Railways will also provide exact timelines on completion of the Khurja-Kanpur, Kanpur-Mughalsarai and Mughalsarai- Sonnagar stretches.Regarding the Ludhiana-Dadri stretch for which funding has yet to be fully tied up, the PMO said the Steering Group will review the matter in four weeks, after the committee on financing projects in Railways completes its work.In the meeting it was also decided that Power Ministry will try to award 13 identified transmission projects as per the agreed timelines.The PMO statement further said that in addition to Navi Mumbai, the Ministry of Civil Aviation will make efforts to move ahead on Goa (Mopa) airport as well.(PTI)
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