Retirement fund body EPFO is likely to announce an interest rate of 8.5 per cent on provident fund deposits for 2013-14 to its over five crore subscribers, the same as provided for last fiscal. According to sources, the preliminary estimates indicate that the payment of 8.5 per cent rate of interest will leave no deficit for the Employees' Provident Fund Organisation (EPFO) and could rather leave some surplus for the body. "In all likelihood, the interest rate on PF deposits for this fiscal will be fixed at 8.5 per cent," a source said. The source further said if the interest rate is to be increased to 8.75 per cent for the current fiscal, it would result in some deficit, which might not be acceptable to the finance ministry. The body is likely to call a meeting of its apex decision making body, the Central Board of Trustees (CBT) headed by the Labour Minister, on September 23 to approve the interest rate. During the meeting, the trustee would reconstitute the EPFO's advisory body--Finance and Investment Committee (FIC), which recommends the rate of interest to the CBT. After the reconstitution of CBT by EPFO in June, the other sub-committees of EPFO like FIC, were dissolved and were required to be reconstituted. As per the practice, the EPFO would have to place the proposal before FIC after which it is considered by the CBT for taking a final call on the matter. Once approved, the proposal is put before the Finance Ministry for its concurrence. The source said the CBT will meet again after reconstituting FIC sometime before Diwali (which falls on November 3) to approve the rate of interest for this fiscal. EPFO paid 8.5 per cent interest rate to its subscribers in 2012-13, which was higher than 8.25 provided in the 2011-12 fiscal. (PTI)
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India's rupee has likely bottomed out after a 20 per cent plunge to record lows last week, but it is not expected to regain much ground over the coming year, a Reuters poll showed. The poll also showed analysts expect the Chinese yuan will continue to appreciate, albeit slowly, over the same time period as the economy improves. Despite the threat of the US Federal Reserve reducing its stimulus programme this month, the rupee is not seen weakening any further over the next year. Concerns over India's yawning current account deficit and rising bond yields in the United States have prompted foreign investors to dump emerging market assets since May, pummelling the rupee, stocks and bonds. Even Raghuram Rajan's appointment as the new head of the Reserve Bank of India in early August failed to stem the rot. The rupee has slid 7 per cent since then and is the worst performer among its emerging market peers. The rapidly falling rupee has also caused inflation to tick higher since rising crude oil and gold prices, two of India's most imported items, have swollen the country's already bloated import bill. However, the rupee has shown some signs of stabilisation since Wednesday, when Rajan, in his first day in office, stunned markets by announcing a slew of measures to regain market confidence and improve dollar inflows. The steps ranged from better communication with financial markets to improved trade financing and easier norms for Indians abroad to remit dollars. As a result, many large financial institutions raced to revise their calls for the rupee. Median expectations from 17 strategists in the poll conducted this week were for the dollar to fetch Rs 66 at the end of September, roughly around its rate on Friday. It is then seen firming slightly to Rs 65 a dollar by November and Rs 64.5 by August 2014. Those expectations are markedly worse than what analysts predicted in a similar poll last month and is likely a result of the weak sentiment in the rupee after the slide in August. Technical analysis may also suggest there may be a respite for the currency. Some analysts, however, say the worst is not yet over for the rupee, especially if the Fed goes ahead with its plan of reducing its $85 billion a month bond purchases when it meets September 17-18, and depending on how much it tapers. "The reaction in currency markets will probably depend more on how much the Fed decides to taper, and its forward guidance in its statement," said Janu Chan, analyst at St. George Bank in Sydney. "Tapering of around $15 billion or more would likely see the US dollar rise, particularly if there are hints of further tapering in its statement." A few analysts said the rupee could hit 70 or 72 to the dollar between this month and early next year. India's meagre currency reserves, just enough to cover seven months' imports, also means the RBI has limited options in trying to stem the slide by intervening in currency markets and selling dollars. India's is not alone in fighting a free-falling currency. From Turkey, to South Africa, to Brazil, to Indonesia, most emerging nations are reeling under market pressure on their respective currencies. Falls range from 14 per cent for the Brazilian real and 12 per cent for the Indonesian rupiah and South African rand since the beginning of May. Brazil, China, India, Russia and South Africa announced on Thursday, on the sidelines of the G20 summit in St. Petersburg, a plan to set up a currency reserve pool of $100 billion to fight persistent depreciation in their respective currencies. Analysts in the poll said the RBI could do more, from financial reforms to introduction of dollar-denominated bonds to even tightening monetary policy if the rupee falls further. But with Indian economic growth sliding to 4.4 per cent between April to June, an increase in interest rates would further sour business sentiment in the country. Yuan To Scale New HighsMeanwhile, the poll also showed the Chinese yuan will strengthen a little from current levels to trade at 6.11 in 6 months and 6.09 in twelve months. Those predictions are roughly unchanged from last month's survey. Data due next week is expected to confirm that Beijing has prevented a sharp slowdown in its economy after the government announced reforms and policies to encourage investment. "There are some emerging signs of modest economic recovery which makes us believe that the Chinese authorities will continue to move forward with reform of the dollar/yuan market, said Derek Halpenny, analyst at BTMU in London. "Our forecast profile assumes a band widening will be announced by the Chinese authorities in September." The People's Bank of China has recently set a series of higher midpoints for the yuan, slowly allowing the currency to appreciate to record highs last month.(Reuters)
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The Congress today stepped up attack on Narendra Modi saying "real criminals" are still not in jail and sought action on "new facts" emerging after the sting operation related to Tulsiram Prajapati's killing and former cop D. G. Vanzara's explosive letter slamming the state government.Latching on to a communciation by National Commission for Scheduled Castes to CBI today asking the agency to probe whether the ongoing investigation and judicial process in the Prajapati case had been manipulated, party spokesperson Bhakt Charan Das said had the Modi government been responsive, such killings would not have taken place.AICC Communication Department Chairman Ajay Maken said that since now the NCSC has stepped into the issue and asked the CBI to probe the matter, the Chief Minister should step down till the probe is over.Prajapati was killed in an alleged fake encounter by the Gujarat police in December 2006.A PIL was filed in the Supreme Court against BJP MPs Prakash Javdekar and Bhupendra Singh Yadav alleging that they tried to impede investigation in the case in which former Gujarat Home Minister Amit Shah is main accused.The petition filed by a journalist on the basis of a sting operation done by him alleged that attempts were made by the MPs to impede the trial and other judicial proceedings in this regard by "manipulating the complainant with the sole intent to protect Shah".Congress has used the CD to lambast Modi over the killing of a "backward caste person" at a time when there is talk about Modi's projection as a backward caste leader in Lok Sabha polls.Das, however, rejected any caste angle to the issue and downplayed questions as to why Congress is highlighting the backward caste identity of the slain Prajapti 7 years after the encounter and when the Lok Sabha elections are nearing."New facts are emerging in public domain now. Gradually truths are coming out. In that light we have to take step. The letter by Vanzara also shows that uptil now only cover-up has been done and real culprits are still not in jail," he said.Vanzara (59), a Deputy Inspector General of Police (DIG) rank officer considered close to Modi, had on Tuesday resigned from service accusing the Gujarat government of failing to protect loyal police officers who fought against "Pakistan-inspired terrorism".Das also downplayed questions as to why the Chairman of NCSC P L Puniya, used the AICC forum on Tuesday to announce that he will write to CBI to take action on the CD issue.He first said that Puniya addressed the press briefing at AICC as Congress MP. Pressed further and reminded that Puniya had repeatedly said that he swung into action into the matter, Das said this should be asked to the NCSC Chairman himself.Das said that Vanzara in his letter claimed that police officers took the action only as per the order of the state government and when 32 officers are now in jail in criminal cases it is being asked "why those, who gave the orders are still out? Why they, who commit criminal acts while being in power, are not in jail? His officers are asking this." "Modi should resign. Action should be initiated against him," the Congress spokesperson said after reading portions from the NCSC letter to CBI Director Ranjit Sinha and the notices issued by the Commission to the Chief Secretaries and DGPs of Gujarat and Rajasthan seeking details in the matter immediately, failing which it would summon them.Das said that the slain Prajapati belonged to an OBC caste in Rajasthan.The panel, which got into the issue on the ground that the deceased belonged to OBC category, said it has taken "serious cognizance" of the case in view of the sting operation.(PTI)
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Former Telecom Minister A Raja's plea was today allowed by a Delhi court which directed the CBI to produce before it the inquiry report of the Central Vigilance Commission (CVC) in connection with the 2G spectrum allocation scam.The order came on an application filed by Raja in which he had said that in 2009, an inquiry was conducted by the CVC into the allegations of allotment of 2G spectrum by Department of Telecommunications (DoT) and on 12 October, 2009, CVC had forwarded its direct inquiry report to the CBI.Special CBI Judge O P Saini, in his order, said the agency had argued that CVC's communication cannot be disclosed and had not filed any response on Raja's plea."CBI has admitted that the aforesaid communication and direct inquiry report (of the CVC) is in its custody. However, its case is that the communication was sent in official confidence and as such cannot be disclosed."However, the CBI has chosen not to even file a reply to the application despite the opportunity given to it, what to talk of claiming privilege," the court said.It also observed that CBI had not said disclosure of the CVC's communication would make public interests suffer."Accordingly, I find no merit in the submission of the CBI. The prayer is allowed. The aforesaid communication of the CVC along with its direct inquiry report be produced in court and the accused/applicant A. Raja would be at liberty to take a copy of it," the judge said.Raja had said in his plea that CVC had asked the CBI to take "necessary action in the matter" and CVC's 12 October 2009 communication and direct inquiry report are in "custody of CBI and have a material bearing on this case and are relevant for the cross-examination of the investigating officers in this matter".Raja, along with others, including DMK MP Kanimozhi is facing trial in the case.(PTI)
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Gold prices suffered the steepest fall in a week on 5 September' 2013, falling by Rs 1,250 to Rs 30,950 per ten grams here on heavy sell-off by stockists as equity markets and rupee recovered after RBI's fresh measures. Silver also plunged by Rs 1,800 to Rs 53,700 per kg on poor offtake by industrial units and weakening trend in overseas markets. Traders said the precious metals fell sharply following fast recovery in rupee against the dollar after the new RBI chief announced measures to boost economic growth. The rupee was trading higher by 84 paise at Rs 66.24 per dollar, while stock markets were up by over 2 per cent, denting the appeal of gold considered as safe haven for investors during economic turbulences. New RBI Governor Raghuram Rajan came out with a slew of measures to rescue the battered financial markets to boosting growth. Traders said a weakening trend in overseas markets on expectations for reduced stimulus in the US and limited military strikes against Syria, further influenced sentiment. Gold in Singapore, which normally sets price trend on the domestic front, fell 0.7 per cent to 1,381.35 dollar an ounce and silver by 0.9 per cent to 23.27 an ounce. On the domestic front, gold of 99.9 and 99.5 per cent purity suffered Rs 1250 loss each to quote at Rs 30,950 and Rs 30,750 per ten grams respectively. It had gained Rs 1,100 in last two sessions. Sovereign declined by Rs 200 to Rs 25,100 per piece of eight gram. Silver ready dropped by Rs 1,800 to Rs 53,700 per kg and weekly-based delivery by Rs 2400 to Rs 54,600 per kg. Silver coins also fell by Rs 1,000 to Rs 88,000 for buying and Rs 89,000 for selling of 100 pieces.(PTI)
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Retirement fund manager EPFO will launch an online facility tomorrow where over 5 crore subscribers can view their updated accounts. "We will launch the facility tomorrow where subscribers can track their accounts online on a real-time basis and check their updated accounts," EPFO's Central Provident Fund Commissioner K K Jalan said. At present, subscribers get account statements once a year. The Employees' Provident Fund Organisation (EPFO) has to dispatch annual PF account slips by September. The PF slips for 2012-13 are supposed to be provided by September 30, 2013. Sometimes, it takes longer to receive the statements because the EPFO hands them over to employers for distribution to workers. The new facility will enable subscribers to see their updated accounts and take printouts for their records. Jalan said EPFO members would be able to see their account balances, including credited interest, as of March 31. For the period starting in April, they would be able to see the amounts credited to their accounts every month without the interest component because the rate of return on PF deposits for this fiscal has not been announced, he added. Jalan also said the EPFO will issue annual PF account slips on demand. The facility will be launched by Labour Minister Sis Ram Ola tomorrow morning at the EPFO headquarters in the capital. All members, including those with inoperative accounts, will benefit from online access, Jalan said. The EPFO makes accounts inoperative when a contribution is not made for 36 months in a row.(PTI)
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The BRICS group of emerging economies will contribute $100 billion to a fighting fund to steady currency markets destabilised by an expected pullback of US monetary stimulus, China and Russia said on Thursday (5 September).China, holder of the world's largest foreign exchange reserves, will contribute the lion's share of the currency pool. But it will be much smaller than the $240 billion originally envisaged and officials said it would not be functional for some time yet.Cheap dollars that fueled a boom in Brazil, Russia, India, China and South Africa over the past decade have turned tail since Ben Bernanke, chairman of the Federal Reserve, warned in May of a 'taper' in the U.S. bond-buying scheme."The scale of the reserve arrangement will be $100 billion and China will take the lion's share of this," China's Vice Finance Minister Zhu Guangyao told a briefing at the Group of 20 summit in St. Petersburg, Russia.Both Zhu and Russian Deputy Finance Minister Sergei Storchak said details still needed to be worked out, suggesting that - beyond the announcement - much more work would need to be done on the reserve facility.A joint BRICS development bank, with capital of up to $50 billion, is also still months away from realisation amid disagreements over burden sharing and where it should be based.Russian President Vladimir Putin was expected to announce the currency pool's size at a meeting of BRICS leaders, before the full G20 gathers later on Thursday (5 September) to discuss the state of the world economy."We have asked not to create unnecessary expectations," Storchak told Reuters regarding the currency pool. "Politically, the countries are ready, but technically they are not."The total is known, but I don't even know how to come to that," Storchak said.Last year's original initiative foresaw creating a pool of central bank funds available to BRICS facing balance of payments difficulties. There was also a push to create an IMF-style credit line to insure against external shocks.The Fed is widely expected this month to take its first steps to reduce the extraordinary monetary stimulus, with potentially huge implications for a global financial system where the US dollar accounts for 62 per cent of reserve assets.Solidarity Only Goes So FarThe emerging nation facing the biggest financial shock, India, received scant sympathy from China and Russia as both called for policy action to tackle external deficits."We see the temporary difficulties of some BRICS countries, mainly as difficulties in terms of international balance of payments," said Zhu."The policy options in response to such ... difficulties include increasing interest rates or devaluing currencies."It increasingly appears that India's announcement last Friday that it was liaising with other emerging countries on a plan to coordinate intervention in offshore currency markets had few if any other backers.Asked about the Indian statement, South African Finance Minister Pravin Gordhan told Reuters on Tuesday: "We don't know what the proposal is ... This is India's initiative to resolve India's issues."Nonetheless, Indian officials said they were counting on the strong support of the G20 to provide reassurance over the winding down of the Fed's quantitative easing programme as the US economy picks up.Arvind Mayaram, economic affairs secretary at India's ministry of finance said: "I think there should be a very strong statement on the G20 having a consensus on the concern about the spillover effects."I think if a strong statement is made on these two points, it will have a major calming impact on the markets in the emerging economies," he told reporters ahead of the summit.Storchak said the communique's wording on spillover effects would be the same as agreed by G20 finance ministers in July, when they said future changes to monetary policy should be "carefully calibrated and clearly communicated".(Reuters)
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Monsoon was less than average for a second straight week but with summer crops such as rice, cane, soybean and cotton well established after swift planting in a heavy start to the season, an early end to the rains should not create problems. Rainfall was 30 per cent below average in the week ending September 4 compared with 29 per cent below the previous week, the weather office's latest data showed on 5 September. The monsoon rains usually start retreating from western India by mid-September, but this year they could lift earlier. Summer crops do not need heavy rains at this stage of growth but just sporadic showers to aid the maturing process. The monsoon, vital for 55 per cent of Indian farmland that does not have irrigation, was the heaviest in nearly two decades during the first half of the season with the fastest ever coverage of the country - almost a month ahead of schedule. The ample rains from the beginning of the monsoon season in June make bumper harvests likely and that will mean higher rural incomes in the world's second most populous country, which could improve retail sales and help rural growth. India, one of the world's biggest producers and consumers of farm commodities, is heavily reliant on the annual monsoon for its huge harvests of rice, sugar and cash crops like cotton.(Reuters)
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