The rupee weakened to its lowest level in more than a month on Monday as surging crude oil prices threatened to push up domestic inflation pressures and aggravate the country's current account deficit.Alongside, data showed wholesale price inflation in India accelerated to a five-month high of 6.01 percent in May, which further hurt the rupee and pulled it down intraday to 60.23 per dollar, a level last seen on May 6.Brent crude rose towards $113 a barrel on Monday after a strong rally last week, as Sunni insurgents advanced in Iraq, intensifying concerns over a potential disruption to oil exports from the second-largest OPEC producer.India imports nearly two-thirds of its oil needs, leaving its currency especially vulnerable to price swings.Traders were also seen buying the greenback as they looked to square off their short dollar positions."As long as the Iraq crisis continues, this should be the trend for the time being. And, if RBI doesn't intervene, and the Iraq crisis continues, it will definitely remain below 60 to the dollar," said Ashtosh Raina, head of forex trading at HDFC Bank.The central bank is expected to buy or sell dollars to prevent any excessive volatility in the currency.In recent months, the central bank has been aggressively buying dollars to prevent sharp gains in the rupee from hurting export growth while also building up its foreign exchange reserves.The partially convertible rupee ended at 60.1550/1650 per dollar versus its previous close of 59.76/77 on Friday.Equities also fell on Monday, to their lowest close in 1-1/2 weeks on risk aversion among investors due to tensions in Iraq and Ukraine.Traders will now focus on whether the dollar can gain more should the U.S. Federal Reserve provide new hints on the timing of interest rate hikes when it concludes its two-day policy meeting on Wednesday.For the near-term, traders expect the rupee to trade in a 59.90/60.20 range.In the offshore non-deliverable forwards, the one-month contract was at 60.52, while the three-month was at 61.11.(Reuters)
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Congress vice president Rahul Gandhi filed his nomination papers from the Amethi Lok Sabha constituency on Saturday (12 April). Gandhi, the incumbent member from Amethi, is locked in a three-cornered contest in Amethi, with the Bharatiya Janata Party fielding TV's 'favourite bahu' Smriti Irani and the Aam Aadmi Party Kumar Vishwas. While Vishwas has been camping in Amethi for the last two months, Irani has also been in town for the last few days. Both leaders have accused Rahul Gandhi of neglecting development in his constituency.Amethi is going to polls on May 7 and Rahul is contesting for the third consecutive time to retain the seat.Rahul also rejected criticism that he made a personal attack against Narendra Modi by referring to his marital status, saying he just stated that he had previously not mentioned about his wife in poll affidavits.No Personal Comment Agaiinst Modi"I did not get personal. I just stated that on his affidavits he had previously not mentioned something. So it's not a personal thing," Rahul told reporters here soon after filing his nomination papers for the Lok Sabha polls.He was responding to a question on his raking up the marital status of Modi while addressing a rally in Jammu and Kashmir on 11 April.Flanked by his mother Sonia Gandhi and sister Priyanka, the Congress Vice-President also rubbished the projection of opinion polls that his party will lose elections.He said Congress had been written off by the opinion polls in 2004 as well as 2009 but those did not prove to be correct."They (opinion polls) kept saying Congress will lose but you know what happened," he said, referring to his party's unexpected victories in last two Lok Sabha elections.Asked about polarising statements made by leaders of various political parties, he said attempts to polarise elections take place every time and Congress will take everybody alongPriyanka also said that Rahul had not made any personal attack on Modi."I don't think he made a personal attack. He made a point that something was missing from the affidavit before. Besides, I don't think they (BJP) are in a position to talk about personal attacks," she said.Rahul expressed confidence about victory from Amethi in Uttar Pradesh, the Nehru-Gandhi family pocketborough where BJP has fielded Smriti Irani and AAP has Kumar Vishwas.He said he has family relations with Amethi and "We will have a good victory."Rahul said he had focussed on three things for development of Amethi -- working with women bodies, connecting the area with national highways and railways and developing food park.He will focus on these issues in the future also to generate more employment for youths, he said.Rahul along with Sonia Gandhi, Priyanka and her husband Robert Vadra, reached Amethi after conducting a roadshow through adjoining Sultanpur where his cousin Varun Gandhi is contesting on a BJP ticket.The roadshow was conducted on a 42-km stretch between Amhart in Sultanpur and Gauriganj in Amethi.The event evoked curosity as this is for the first time Rahul is organising such a political campaign from Sultanpur constituency where another Gandhi family member if fighting against a Congress candidate.How Will Cong Fare At The Centre?Apparently resigned to a poor performance in this election, some Congress insiders have started trying to put a positive spin on a likely spell in opposition."Being in opposition in democratic politics gives a great opportunity to the party," Mani Shankar Aiyar, a senior Congress official and former government minister, told Reuters. "We need to democratise the party."Another senior party member said: "This is a tough election. At the moment, the BJP appears to have an advantage."Officially, Congress says the opinion polls have got it wrong and it will emerge as the single largest party."We're extremely confident," said party spokesman Sanjay Jha. "After Rahul Gandhi said we'll win, we've been especially upbeat. Poll findings will have no bearing."Nevertheless, some Congress members have said the inability of 43-year-old Gandhi, the scion of the Nehru-Gandhi political dynasty, to effectively counter Modi has led to its woes. And although Gandhi has vowed to revitalise the party, they doubt he has the acumen to eventually lead it back to power.Some senior members of Congress had favoured sister Priyanka and a newspaper report had quoted senior general secretary Janardan Dwivedi as saying that Priyanka Gandhi had been interested in "political developments and the language of politics" since an early age.In a party where Rahul Gandhi is at least publicly seen as the unquestioned heir, the report had created a storm.Priyanka has restricted her political activities to supporting her brother and campaigning in her mother Sonia Gandhi's constituency. But many Congress faithful see her easy campaign style and marked resemblance to her grandmother, former prime minister Indira Gandhi, as a sign that she could revive the party's fortunes.Doesn't Have ConfidenceOn the stump, Rahul Gandhi, the son, grandson and great-grandson of former prime ministers, draws crowds but even those in the audience do not fancy his chances.Kept waiting for hours, thousands of listless young supporters in Aurangabad, a down-at-heel district in Bihar state, come alive as Gandhi's helicopter descends, throwing up a plume of dust.With a designer stubble and wearing white cotton 'kurta' tunic over blue jeans, Gandhi strides onto a rickety stage. Pushing up his sleeves, he appeals in his speech to core Congress voters."We want the poor to feel that they are a part of this nation. This is our dream for India," Gandhi tells a crowd that appears enthused more by his celebrity appeal than his rhetoric.Despite criticism that his brand of Hindu nationalist politics is divisive, Modi has dominated the campaign. He has focused on effective government and creating jobs, which has resonated better with the country's 815 million voters.Congress, which has been in power for the last decade, has struggled to overcome a series of corruption scandals, slowing economic growth and an inability to push policy.At the election meeting, insurance agent Dharmendra Singh came early to get a ringside view of Gandhi. But he will cast his vote for Modi, impressed by a stint working in the western state of Gujarat which the Bharatiya Janata Party candidate has led for the past decade."There's no graft. There's 24-hour electricity," says the 25-year-old. "I want to see Narendra Modi as prime minister."Away from the rally, teacher Kamala Devi had come to Aurangabad to visit the district school office. A lifelong Congress voter, when asked about Rahul Gandhi, Devvi said: "He doesn't take a stand. He doesn't have confidence." says Devi, 56. "What they want to do is good. Their thinking is good, but they don't get things done."The turning point of the election campaign, many analysts say, was Gandhi's first major television interview in January, which he fluffed.Asked if he was afraid of losing the election to Modi, he replied in the third person: "Rahul Gandhi and millions of youngsters in this country want to change the way the system in this country works."Gandhi appeared nervous and ill-prepared and the interview was widely criticised as a public relations disaster. He has not given any others since."How can he reform the system that made him what he is?" said Mohan Guruswamy, a political analyst. "It would have been a smart strategy if he was an outsider. But now it looks contrived."Although any talk of a role Priyanaka Gandhi may have in Congress is nascent, it has begun. One strategist, however, described her as an ace in the sleeve, and not to be used now."There's the feeling that this is not the best election in terms of our prospects, so why waste our ace?" said the strategist, who, like others, spoke on condition of anonymity due the sensitivity of the matter. (Agencies)
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MAIT, the apex body representing India’s IT hardware, training and R&D services sectors, has come out with a recommendation document for the IT hardware industry for the upcoming Union Budget 2014. The budget is of paramount importance not only from a clear-mandate perspective where the Government can take decisive actions, but also the most anticipated policy thrust of the Narendra Modi Government setting expectations at the peak.Amar Babu, President of MAIT, said “This budget marks the first litmus test propelling the development agenda; the past years have witnessed an economic downturn and a downturn of domestic growth. The Budget should address the issues curtailing investment sentiment and bring renewed optimism for sustained economic growth, conversely the government should quickly amend the policy paralysis with regards to the ease of doing business.”Anwar Shirpurwala, Executive Director, MAIT opines, “The Hon’ble Finance Minister, Arun Jaitley should drive reforms around the ten point agenda that Mr. Modi has eloquently articulated. Recognising the multifaceted contribution of manufacturing and electronics on a war-footing basis, the government should prioritize reforms that can navigate the challenges the manufacturing and ICT industry face every day. It should give boost to local manufacturing,early implementation of goods and service tax and credible policies to attract investments.”Suggestions to overhaul manufacturing, electronics and ICT are as followsInverted Duty Structure for manufacturers of Information Technology HardwarePlugging the lacuna with respect to Inverted Duty Structures would encourage manufacturing in India. The government should exempt SAD on all components used by a manufacturer of IT hardware by necessitating amendments in Notification No 21/2012-Customs (T) dated March 17, 2012 and imposing necessary safeguards through specification of a condition of end use (in manufacturing/by a manufacturer) to create a level playing fieldConcessional rate of duty for Computers and TabletsReducing the rate of duty applicable on indigenous manufacture of laptops and tablets is a much-needed move to boost computer manufacturing in a country where manufacturing is disproportionate to demand. The rate could also be aligned to avoid unwarranted disputes o n the classification and treatment of goods in terms of features as well as composition at the stage of import. This also distincts the line of commonality in a tablet and smart-phone.MAIT also recommends that indigenously manufactured personal computers and tablets be extended concessional excise duty similar to mobile handset manufacturing in India by amending Notification no 12/2012 dated March 17, 2012 to provide for a concessional duty scheme in respect of goods classifiable under chapter 8471. An excise duty rate of 5 per cent with CENVAT and 1 per cent without CENVAT could be extended to personal computers and tablet computers by way of an amendment.Dual taxation on sale of packaged or canned: We recommend a clarification to be issued with regard to software licensors involved in sale of pre-packaged software which seeks to clarify that irrespective of whether software supplied to media is electronically is accompanied by a license of otherwise, this license entails transfer of right to use goods and is outside the purview of service tax.MAIT seems to clarify that distributors are carrying out sale of pre-packaged software without having any rights to issue licenses and therefore, transactions shall not be treated as service liable to service taxITA Products be included in the list of declared goods. Inconsistency in VAT rates for same goods in different states provides undue hardships for the manufacturer while calculating different rates for states. This difference in rates causes a diversion of trade discriminating free flow of trade within the country. The CST Act should be amended to specify ‘All ITA bound goods” to be ‘declared goods’ under the section 14 of the CST Act so that these goods attract uniform rate of VAT of 5 per cent across states. This ensures that same goods are not subject to a different rate of CAT and safe-guard against diversion of trade.ITA Products: MAIT advocates that the expression ‘computer and computer peripherals’ may be replaced with the expression ‘information technology and telecommunication hardware’ in Rule 3(5A)(a)(i) of the CENVAT Rules as well as in Notification 22/2003 – CE and Notification 52/2003 – Customs. MAIT expresses hope that a comprehensive list of all ITA products and telecommunication hardware (aligned to the list of 217 ITA bound goods specified under Notification Nos 24 and 25/ 2005 – Customs both dated March 1, 2005) be notified for the benefit of accelerated depreciation in the aforesaid Provisions/notifications. MAIT also presses that the rate of accelerated depreciation may be revised to 10 percent per quarter or part thereof in the aforesaid provisions/notificationsGST: MAIT sought clarity on the date of Implementation of GST with uniformity in procedures and documentation across the country. Also, uniformity in GST rate as well as threshold for levy across goods and services and across the centr and state laws may be published at the earliest.
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Amber Dubey, Partner and India Head of Aerospace and Defense at global consultancy KPMG, has come out with the top ten pre-budget expectations for the airline industry Notify ATF as a ‘declared good’ at the earliest. It is much more prudent to generate tax from final goods and services than a raw material (ATF). ATF in India is 55-60 per cent costlier than the Gulf and Asean region. The cascading effect of ATF taxes have brought ruin to the airline sector. ATF should have a uniform levy of 4 per cent across India.Announce a task force to look into practical options for privatization of Air India. Else Air India will continue to bleed under increasing competition, falling market share and increasing costs. The taxpayers funds can be used for development of the aviation sector as a whole, and to provide some compensation to states for forgoing VAT on ATF.Provide a 10 year tax holiday (covering Customs, Excise and Service Tax) to aerospace manufacturing and MRO sector. Encourage states to extend the tax holiday to local VAT. This should not be mistaken as a ‘tax loss’ since there’s negligible manufacturing or MRO activity in India and hence there’s hardly any tax collection. The creation of jobs, saving of foreign exchange and the tax on consumption by employees would be several multiples of the notional loss.Allow private airport operators to issue tax free infrastructure bonds to the public. Investments in these bonds should be allowed for deduction under section 80CCF of the Income Tax Act.Upgradation of existing airports should be eligible for Section 80IA benefits. Essential airport infrastructure like ground handling, fuel farm etc should also be covered under the same.Allocate Rs 1000 cr as a seed funding for the Essential Air Services Fund (EASF). EASF to provide VGF funding for no-frills-airports (NFA) and air connectivity in Tier 3-4 locations based on a thorough feasibility analysis.Provide see funding of Rs 200 cr to establish 20-25 heliports at important tourist, port and mining locations. Balance to come from state governments and private operators.Allocate Rs 500 cr for modernization of Air Navigation Services (ANS). The ANS training centre at Allahabad should be expanded to produce trained ATC officers for not just India but also for the global aviation market.Identify funding requirements of DGCA to ensure its financial autonomy. Government of India may provide 50 per cent of the same as seed funding. Balance to come from service charges levied on issuing of licenses to airports, airlines and other stakeholders.Allocate Rs 1000 crore to establish set up four National Aviation Universities (NAU) in the country and to support upgradation of AME training centers across the country.
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Suspected Maoist rebels set off two bombs in Chhattisgarh on Saturday (12 April), killing 13 people, most of them paramilitary soldiers and officials charged with holding elections in the region.The attacks, half an hour apart, were the most serious since voting to elect a new federal government began last week in a six-week process to allow security forces to move across the country.The first explosion took place in a bus in Bijapur carrying election officials who were on their way back after completing the vote. Seven people were killed.A second bomb hit an ambulance in the thickly forested Bastar region killing five members of the Central Reserve Police Force and their driver, said R.K.Vij, the head of anti-Maoist operations.It was not clear why the soldiers were travelling in the ambulance, but in the past government officials are known to be have used such vehicles to avoid attacks by the Maoists.The rebels have operated for decades across a wide swathe of central and eastern India, and grew in strength during recent times in areas where poor, tribal villagers came into conflict with mining companies seeking resources for industrialisation.The Maoists seek the violent overthrow of the Indian state, accusing it initially of taking over land from poor peasants and now plundering the mineral wealth of states likes Chhattisgarh.(Reuters)
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After feeble signs of a recovery, industrial production once again slipped into negative territory and contracted 1.9 per cent in February due to poor performance in manufacturing, especially capital goods. Factory output as measured by the index of industrial production (IIP) showed a decline of 0.1 per cent during the 11-month period from April to February, compared with growth of 0.9 per cent in the corresponding period a year earlier. Industrial output for January was revised upward to growth of 0.8 per cent from a provisional estimate of 0.1 per cent, according to data released by the Central Statistics Office (CSO). In February 2013, the IIP recorded modest growth of 0.6 per cent. Factory output started to decline in October, when the IIP contracted 1.2 per cent, and continued till December, as per CSO data released today. Manufacturing, which constitutes over 75 per cent of the index, declined 3.7 per cent in February as against growth of 2.1 per cent in the same month a year ago. During April-February, the sector's output contracted 0.7 per cent compared with 1 per cent growth previously. Production of capital goods, a barometer of demand, shrank 17.4 per cent, in sharp contrast to an expansion of 9.1 per cent in the same month in 2012. The segment declined 2.5 per cent in April-February over a contraction of 7.7 per cent in the comparable period. Overall, 13 of the 22 industry groups in manufacturing showed negative growth in February as compared to the corresponding month of 2012. (PTI)
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In yet another populist measure, Arvind Kejriwal Government on Wednesday (12 February) announced that consumers who did not pay their electricity bills as part of AAP's power agitation will have to shell out only half of their total dues, a decision which will cost Rs 6 crore to exchequer.A decision to this effect was taken by a meeting of Delhi Cabinet presided by Chief Minister Kejriwal. The penalty on the outstanding has also been waived."Delhi government today decided to give a 50 per cent subsidy to those who did not pay their bills from October, 2012, to April, 2013, (the duration of the agitation) and continued not paying till December," senior Minister Manish Sisodia told reporters.Officials said the decision will benefit around 24,000 consumers.Just after its formation, AAP had launched a 'Bijli Satyagraha' against "inflated" power bills in the national capital. As part of the campaign, Kejriwal had urged people to refuse to pay their power bills.Although around 10 lakh people had signed AAP's petition against power distribution companies during the agitation, only 24,000-odd consumers actually stopped paying their bills.Keeping a pre-poll promise, Kejriwal had announced a 50 per cent subsidy on electricity consumption of up to 400 units in Delhi after coming to power.Later, the AAP government also ordered the Comptroller and Auditor General to audit the finances of the three private power distribution companies serving Delhi.A total of 2,508 electricity meters were disconnected by the concerned authorities for non-payment of inflated and wrong bills. The government has decided to provide relief to these people also.The government has also decided to consider the closure of theft cases registered against some consumers during the previous government's regime.(PTI)
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The rupee weakened to 60 to a dollar on Monday, its lowest in more than a month, as strong demand for the greenback from oil marketing companies weighed after global crude prices surged to nine-month highs on Friday.At 9:34 a.m., the rupee was at 59.9850/9900 after hitting 60.00, a level last seen on May 12. The pair had closed at 59.76/77 on Friday.Traders expect the rupee to weaken further during the session as concerns persisted that an insurgency in Iraq could disrupt oil exports from the second-largest OPEC producer.(Reuters)
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