Prime Minister Narendra Modi raised issues of terror and the trial in Mumbai attack case in his first bilateral meeting with Pakistani counterpart Nawaz Sharif in New Delhi on Tuesday (27 May). According to sources, Modi raised the issue of slow pace of trial in 26/11 terror case which was being held in Pakistan and as also India's core concern of terror with the visiting Pakistani leader. The two leaders also talked about ways to enhance cooperation in the field of trade during the meeting which was attended by External Affairs Minister Sushma Swaraj, Foreign Secretary Sujatha Singh among others, they said. The two leaders had a firm handshake and posed for photographers before heading towards the meeting room for talks at the ceremonial Hyderabad House. Ahead of his meeting, Sharif had yesterday said he was carrying a message of peace and intends to pick up the threads with India's new leader Narendra Modi from where he and then Prime Minister Atal Bihari Vajpayee left off in 1999. Both governments have a strong mandate and this could help in "turning a new page in our relations", the Pakistan Prime Minister had said. Sharif's visit is seen as significant by political observers here given that hardline elements in Pakistan have expressed their unhappiness over his responding to the invitation positively.Sharif will leave for Pakistan later in the day.(PTI)
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The 30-share BSE Sensex has closely mirrored political developments. Its movement on election results day has always been keenly watched. Read on to see the connect...Click here to view graphic Compiled by Shailesh Menon; Graphic by Prashant Chaudhary(This story was published in BW | Businessworld Issue Dated 16-06-2014)
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In a restructuring of his Cabinet, Prime Minister Narendra Modi on Tuesday (27 May) combined 17 related ministries into seven different groups, including some infrastructure departments, in an apparent bid to ensure synergy and better results.First the Ministry of Overseas Indian Affairs, created in UPA-II, has been brought together with External Affairs Ministry under Sushma Swaraj while Corporate Affairs has been brought back to Finance under Arun Jaitley.In infrastructure sector, the Prime Minister has combined Road Transport and Highways and Shipping in the ministry to be headed by Nitin Gadkari, who had made a name for himself by adopting an innovative approach in expanding road transport network and bridges in Maharashtra when he was a minister there in BJP-Shiv Sena Government.Another important infrastructure combination is bringing together Power, Coal and New and Renewable Energy under the independent charge of Minister of State Piyush Goyal. These used to be separate ministries with Cabinet ministers incharge in the UPA governments. Related ministries of Urban Development, Housing and Poverty Alleviation have been placed under the charge of M Venkaiah Naidu, while Rural Development, Panchayat Raj and Drinking Water and Sanitation have been grouped together under the charge of Gopinath Munde.In another minor combination of ministries, Goa's Shripad Naik has been charge of Culture and Tourism as Minister of State with independent charge.However, this is not the first time that ministries have been brought together for the purpose of efficiency and homogeneity.Late Prime Minister Rajiv Gandhi brought together infrastructure department of Railways, Shipping and Civil Aviation under one combined ministry of Transport headed by the late Bansi Lal. He had three Ministers of States to help him.Gandhi also clubbed education, culture and women and child development under the Ministry of Human Resources Development under late P V Narasimha Rao. The HRD ministry was created for the first time then.Former Prime Minister Atal Bihari Vajpayee during his tenure had brought Information Technology and Communication under one umbrella while his successor Manmohan Singh had brought together Surface Transport and Shipping.(Agencies)
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Manufacturing in Asia and Europe finished the first quarter on a weaker note but activity in the United States remained relatively steady, suggesting severe winter weather in North America had only a modest effect on US factories.Factories across Europe eased back on the throttle in March while China's vast manufacturing industry contracted for a third straight month, surveys showed, fueling expectations policymakers may be forced to act in coming months.The performance in the US contrasts with the lackluster data elsewhere and arguably gives US monetary authorities more room to reduce stimulus than their central banking counterparts abroad, who are trying to prop up growth.US markets judged the news as positive. Stocks added to gains to push the S&P 500 to a new intraday record, and the dollar edged higher."It is consistent with an economy making progress but one growing between 2 and 2.5 per cent," said Richard Franulovich, senior currency strategist at Westpac Banking Corp in New York."That's respectable but not as much as the Fed would like."The two US surveys, one from Markit and one from the Institute for Supply Management, contradicted each other in spots, but both overall figures were solidly above 50, indicating ongoing growth.The weak performance of China's massive manufacturing sector remains a primary concern for the global economy. The final Markit/HSBC PMI gauge of factory activity fell to an eight-month low of 48.0 in March, and has remained below the 50 level since January.The official survey, which is geared towards bigger, state-owned firms, showed a marginal increase to 50.3 from 50.2, but economists warned that given seasonal patterns it too could be taken as a sign of weakness rather than improvement in the world's second-biggest economy."Overall, both March PMI readings further underpin the weak start to the year experienced by the Chinese economy. They also increase the pressure on the Chinese authorities to stimulate the economy," said Nikolaus Keis, an economist at UniCredit.Investors are betting China will try to arrest the loss of momentum after what has shaped up to be its worst quarter in five years.Last week, Premier Li Keqiang said Beijing had the necessary policies in place and would push ahead with infrastructure investment, after recent weak economic data and mounting signs of financial risks clouded the nation's outlook."The PMIs have given a steer on the Chinese economy for a while and it is looking like the People's Bank of China will take some action," said Philip Shaw at Investec.Strong US GrowthMarkit's final reading on US factory growth in March fell to 55.5 from 57.1 in February, while ISM's survey rose to 53.7 in March from 53.2 in February.Markit noted a slight dip in new orders and output growth, while ISM said its new orders subindex rose marginally. More concerning was the drop in the ISM employment subindex to 51.1, the weakest since June 2013, from 52.3.Other markets across the Americas posted improved figures. The pace of growth in Canada picked up in March thanks to rising new orders, with the RBC Canadian Manufacturing PMI rising to 53.3 from 52.9 in February.Brazil's manufacturing activity expanded for the fourth straight month in March, with the HSBC PMI rising to 50.6 in March from 50.4 in February, even as new order growth slowed.Output again rose across the board in the euro zone, suggesting its recovery is becoming entrenched, but Markit's Purchasing Managers' Index (PMI) also revealed that factories were once more cutting prices.The bloc's final manufacturing PMI came in at 53.0, matching an earlier flash reading but below February's 53.2, while the output price sub-index dropped below the 50 mark that separates growth from contraction for the first time since August.Euro zone inflation fell to just 0.5 per cent last month, its lowest since November 2009 and well below the European Central Bank's target of just below 2 per cent.The ECB is expected to keep monetary policy unchanged on Thursday despite calls for it to act to support growth. Olli Rehn, the EU's top economic official, added to that pressure on Tuesday, saying prolonged low inflation would make it harder to correct imbalances in the euro zone.Growth in British manufacturing unexpectedly eased to its slowest pace in eight months and prices paid by factories tumbled, giving the Bank of England scant reason to adjust its loose policy stance.Sentiment Weak In JapanIn Japan, the closely watched central bank tankan survey showed business sentiment barely improved in the three months to March and was set to sour this quarter following an increase in sales tax that took effect on Tuesday. The tax hike was put in place to shore up government revenues and help lift Japan out of years of deflationary stagnation.Big manufacturers and non-manufacturers in Japan expect conditions to worsen in the three months ahead, keeping alive expectations the Bank of Japan will boost its massive monetary stimulus to sustain recovery in the world's No. 3 economy.Japan's Markit/JMMA Manufacturing PMI pulled back further from January's eight-year high as heavy snow in some areas curbed production.Factory PMI surveys for Asia's third and fifth-largest economies India and Indonesia also came in softer, with India's index still in growth territory, but Indonesia's hitting a seven-month low.However, South Korea, Asia's fourth-largest economy and one of its leading manufacturing and export powerhouses, managed to buck the trend as its HSBC/Markit manufacturing gauge rose.(Reuters)
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Asian Development Bank (ADB) has been a long-term infrastructure development partner of India’s. The Manila-based bank has lent a cumulative $31.5 billion to the country so far. In an interview with BW’s Joe C. Mathew, M. Teresa Kho, country director, ADB, shares what she believes should be the priorities of the new government in reviving the infrastructure sectorWhat should the next government do to address the myriad problems that slow down India’s infrastructure development?If we look at the infrastructure sector, about a third of the projected $1 trillion investment under the 12th Five-Year Plan is targeted at energy and another third at transport (roads, railways, ports, airports and mass rapid transit systems). Addressing infrastructure deficit in these sections is critical to a growth that is high, inclusive and sustainable. The new government should note that while investment in infrastructure has increased in recent years, sectoral progress has been uneven. While telecom and airports have been successful in attracting investment for infrastructure, others such as roads, railways and ports have lagged due to a variety of implementation problems. Improving availability of long-term finance, implementing policy and regulatory reforms, and improving infrastructure project design and project management capacities can only help speed up infrastructure development.How can we tackle the lack of funding for the sector?India needs to address infrastructure financing by dramatically expanding the sources and the volume of financing. Developing a deep corporate debt market is a solution. Innovative mechanisms such as ‘take-out’ financing, partial credit guarantees and infrastructure debt funds have been introduced, but they need to be mainstreamed. The 12th plan estimates that about 50 per cent of the proposed investments in infrastructure will come from the private sector. In the power sector, most of the new capacity that was added after 2009 is either stranded or running below capacity due to a lack of fuel. State distribution companies do not have the money to buy expensive power. What should the government do? Clearly, India needs a more diversified energy mix, so that generation is not dependent on a particular type of fuel. This would mean more focus on renewable energy initiatives in the long term. Also, it is equally important to restore financial viability of energy distribution companies. This includes addressing transmission and distribution (T&D) losses caused by inefficiencies in metering, billing, revenue collection and pilferage. The establishment of state regulatory commissions, unbundling of state electricity boards, strengthening T&D and increasing consumer metering are essential. How can we address the problem of connectivity?Development of corridors through multi-modal connectivity — intended to support manufacturing, urbanisation and deeper integration of India into global production networks — is the need of the hour. One should also look at improving sub-regional road connectivity and the efficiency of the international trade corridor by expanding roads in the north-eastern region, a key strategic thoroughfare integrating South and South-east Asia. In the transport sector, one needs to support development of ports, access roads in select economic corridors and mass transit systems in key urban centres. Should we prioritise some sectors for faster growth? What else can we do to propel growth?Transport and energy, along with the urban sector, are certainly key to reducing infrastructure deficit in India and propelling faster growth. Growing urbanisation in India presents a huge challenge going forward. The manner in which India manages its urbanisation process will have significant implications on growth and inclusion. The promotion of dynamic economic corridors between major urban cities holds much promise. However, timely implementation of infrastructure projects remains a big challenge. The government should strengthen the capabilities of the executing agencies, so they can efficiently plan and implement projects. Setting up well-staffed project management units within executing agencies, improving project management through best practices in contract management, monitoring of progress, introducing better accounting systems and audit requirements are important.What is the way forward for India in infrastructure development?India needs to multiply efforts to cut down infrastructure deficit and spur growth. Developing a robust infrastructure requires concerted and sustained efforts from both public and private sectors. Multilateral development agencies like ADB can pitch in by partnering with the government and the executing agencies to enhance capabilities in project planning and implementation. joe@businessworld.intwitter@joecmathew(This story was published in BW | Businessworld Issue Dated 16-06-2014)
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The rupee is trading at 59.70/71 versus Friday's close of 59.91/92 as bunched-up dollar inflows and record high domestic shares aid sentiment. The unit rose to as high as 59.60, its strongest since July 30.Traders say some support for the dollar is likely at around 59.70 levels on the back of importer demand.Trading in the rupee resumed after a two-day break due to a local holiday and annual closing of bank accounts.Traders say sentiment for the rupee is positive after the Reserve Bank of India kept rates on hold at its policy review while further tightening bank's access to cheap overnight funds.Gains in other Asian currencies also helping rupee sentiment.(Reuters)
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Till late on Monday (26 May) night there was no official word on the portfolios of the newly appointed Ministers of the Narendra Modi cabinet but the talk was that Rajnath Singh was being made the Home Minister while Arun Jaitley may be the Finance Minister with additional charge of Defence.Senior leader Sushma Swaraj is tipped to get External Affairs while Nitin Gadkari may be given charge of Surface Transport, Highways and Ports.Interestingly, Swaraj attended the dinner hosted by President Pranab Mukherjee to foreign leaders who had attended the swearing-in ceremony.Speculation was that another senior BJP leader M Venkaiah Naidu may be given Rural Development and Poverty Alleviation while Gopinath Munde may get Agriculture.Former Karnataka Chief Minister D V Sadananda Gowda is tipped to get Railways. Smriti Irani, who has been surprisingly inducted with a Cabinet rank, is talked about as the new HRD Minister.Ashok Gajapati Raju, who belongs to BJP's ally TDP, may get Civil Aviation portfolio. Akali Dal's Harsimrat Kaur Badal is being speculated to get Food Processing Industries Ministry while Shiv Sena's Anant Geete is tipped to get Heavy Industry Ministry.BJP's Ravi Shankar Prasad is likely to get Law and Telecom while his party colleague Prakash Javadekar could be the new Minister of State with Independent charge in Information and Broadcasting and Environment.(Agencies)
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Following is the list of 46-member Council of Ministers headed by Prime Minister Narendra Modi.Prime Minister: Narendra Modi Cabinet Ministers:1. Rajnath Singh2. Sushma Swaraj3. Arun Jaitley4. M Venkaiah Naidu5. Nitin Gadkari6. D V Sadananda Gowda7. Uma Bharti8. Najma A Heptulla9. Gopinathrao Munde10. Ramvilas Paswan11. Kalraj Mishra12. Maneka Gandhi13. Ananthkumar14. Ravi Shankar Prasad15. Ashok Gajapathi Raju Pusapati16. Anant Geete17. Harsimrat Kaur Badal18. Narendra Singh Tomar19. Jual Oram20. Radha Mohan Singh21. Thaawar Chand Gehlot22. Smriti Zubin Irani23. Harsh VardhanMinisters of State (Independent Charge) 1. General (retd) V K Singh2. Inderjit Singh Rao3. Santosh Kumar Gangwar4. Shripad Yesso Naik5. Dharmendra Pradhan6. Sarbananda Sonowal7. Prakash Javadekar8. Piyush Goyal9. Jitendra Singh10. Nirmala Sitharaman Ministers of State 1. G M Siddeshwara2. Manoj Sinha3. Nihalchand4. Upendra Kushwaha5. Radhakrishnan P6. Kiren Rijiju7. Krishan Pal8. Sanjeev Kumar Balyan9. Mansukhbhai Dhanjibhai Vasava10. Raosaheb Dadarao Danve11. Vishnu Deo Sai
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