Government is looking at raising Rs 15,000 crore in the current fiscal through the gold bond scheme, for which a cabinet note is likely to be moved for consideration later in the month. The interest rate for the scheme, which was announced by Finance Minister Arun Jaitley in his budget speech, would be close to the rates on government securities, a senior official said. “We are in talks with the RBI on it. The floor rate would be somewhere around the rates fetched by other government securities,” the official said. The Finance ministry last month came out with a discussion paper on the sovereign gold bond scheme. It had suggested that the scheme be linked to the government borrowing programme. “We are targeting to raise Rs 15,000 crore and the issuance would be for retail investors in tranches,” the official added. The proposed scheme, which aims to shift part of the estimated 300 tonnes of physical gold bar purchased every year to demat gold bond, will be marketed through post offices and brokers on commission basis. “The final contours and timing will be decided by the Public Debt Management Agency (PDMA), which is the RBI. The Finance Ministry will get a cabinet nod for it,” the official said. He further said that if the scheme turns out to be a success it would be linked to government’s borrowing programme from the beginning of next fiscal. The government plans to borrow Rs 6 lakh crore in current fiscal of which Rs 3.6 lakh crore would be done in first half. The government would be preparing the borrowing calender for the second half by September. As regards taxation, the discussion paper said, capital gains tax treatment for the scheme would be the same as for physical gold. The bonds will be issued in 2, 5, 10 grams of gold or other denominations, it said, adding that the tenor of the bond could be for a minimum of 5 to 7 years so that it would protect investors from medium-term volatility in gold prices. In his Budget speech, Jaitley had said: “Though stocks of gold in India are estimated to be over 20,000 tonnes, most of this gold is neither traded, nor monetised. I propose to… Develop an alternative financial asset, a Sovereign Gold Bond, as an alternative to purchasing metal gold.”(PTI)
Read More
If the JAM trinity (Jan Dhan Yojana, Aadhar cards, and Mobile numbers) take off, it will be a catalyst in fostering further growth, writes Manish Kumar PathakThe terms ‘agriculture’ and ‘rural’ are no longer synonymous. The changing rural landscape has resulted in a scenario where even if there is deficient monsoon in the rural landscape, there will not be a massive effect on the rural spending according to the prediction made by the India Ratings and Research (Ind-Ra). Also the rural economy seems to be better protected than before in dealing with deficient rainfall, as the income generated from non-agricultural activities amounts to nearly two-thirds of the net revenue.However, a poor monsoon will still have a bearing on the agricultural sector; the evolving landscape of the countryside has meant that rural economy will not take a severe hit. The industrial and services sector, has helped in carving out substantial share of non-agricultural activities in the rural income. The dearth of space in industrial hubs in cities and towns are forcing new industrial establishments to turn their focus to the villages, the rural areas which were previously uncharted territories. Hence the effect that trickles out from this is that the rural economy is benefitting a greater deal than the urban economy. Also, this makes the economy less susceptible to deficient monsoons. The vocational industries like handicrafts, and non-farm activities like processing, constructional repairs etc are gaining a stronger foothold in the villages.The effect of urbanisation is more profound when it comes to consumption of goods and services, and the aptitude of the rural population is increasingly becoming more urbanised, and hence the spending towards availing these facilities has also seen a growth. Ind-Ra believes, that if the JAM trinity (Jan Dhan Yojana, Aadhar cards, and Mobile numbers) take off, it will be a catalyst in fostering further growth.If this JAM trinity can be linked, and as proposed if the subsidies are rolled out, there will be real progress and then the rural economy will further see progressive trends.
Read More
A great feat has been achieved without much fanfare. In continuation of the growing trend that has seen a greater percentage of girls doing better than boys in high school exams, four girls have managed to bag the top four out of five posts in the much vaunted civil services exams. And of them, Ira Singhal, has also become the first physically challenged candidate to top the UPSC exams, that too in the general category.A total of 1,236 candidates cleared the civil services exam and were recommended for appointment to the Indian Administrative Service, Indian Foreign Service, Indian Police Service (IPS) and various central services. The exams are conducted in three stages — preliminary, mains and interviews — and started on August 24 last year with 4.51 lakh candidates.“I am shocked and surprised. I want to say to everyone, let your daughters study and work. Let them go out in the world and make something of their lives,” said Singhal, 29, an IRS officer who has scoliosis or curvature of the spine.Singhal’s success follows intense struggle. She had cleared the exam in 2011 but had the government had cancelled her candidature on account of her disability.One of the reasons cited was that Singhal’s 62 per cent disability that affected both her arms would not allow her to pull, push and lift heavy packets — a quality the government felt was necessary for her to be in the Indian Revenue Service (Customs and Central Excise).Singhal took her fight to the central administrative tribunal and, after 18 months, got a favourable ruling with the bench wondering if an IRS officer really needed to lift heavy packets herself during a raid. A medical examination showed she could lift a packet weighing up to 10 kg anyway.Renu Raj, who came in second place on her first attempt, is a doctor in Kerala. Third-place Nidhi Gupta, an IRS (Customs & Central Excise) officer like Singhal, and fourth-place Vandana Rao are both from Delhi. Suharsha Bhagat, also with the IRS, was the sole male in the top five.“Though I performed well in the exam and interview, I never expected such a rank. I will use this great opportunity to serve the people well,” an elated Raj was quoted by Hindustantimes.com.“It is really a proud moment. I put in a lot of hard work and it finally paid,” said Gupta.Rao, who cleared the test on her third attempt and topped in the OBC category, said, “I called up people twice to check if I had indeed made it. It is really a result of hard work. I want to be an IAS officer and do something worthwhile for the country.”Women have been consistenly evolving for the better and from 2012 have started doing better than the men in IQ tests - for the first time in 100 years, In India, as mentioned earlier, girls have been doing better than the boys in school leaving exams - be it CBSE, ICSE ans ISC. Scientifically, women have been shown to have stronger immunity system then men and are less likely to get common illnesses. In India, despite bright exceptions, society has tended to suppress women and even now instances of female foeticide abound. Now, with governmeent efforts like #selfiewithdaughter, hopefully awareness will increase and women, especially in India, will trully come into their own.Meanwhile, one hopes Ira and her sisters will spark off a quiet revolution. Go girls!
Read More
The Narendra Modi-led National Democratic Alliance government on Friday (03 July) released the results of a census that gives the first large-scale picture of India’s caste and socio-economic makeup since 1932. Around 73 per cent of households in India are rural, according to the Socio Economic and Caste Census (SECC) data released jointly by Finance Minister Arun Jaitley and Rural Development, Panchayati Raj and Drinking Water Supply and Sanitation Minister Chaudhary Birendra Singh. BW | Businessworld deciphers the Socio Economic and Caste Census numbers. Here are the highlights According to the data, 74.5 per cent of rural households have an income of the highest earning member below Rs 5000 per month. Only 8.3 per cent of rural households have an income of the highest earning member above Rs. 10,000 per month. The census provided for automatic exclusion on the basis of 14 parameters, and inclusion on the basis of five parameters. Of the rural households, 7.05 crore or 39.39 per cent were excluded, while 16.50 lakh or 0.92 per cent were included. The deprivation data reveal that 5.37 crore (29.97 per cent) households in rural areas are "landless deriving a major part of their income from manual labour". As many as 2.37 crore (13.25 per cent) families in villages live in houses of one room with 'kaccha' walls and roof. Almost 21.53 per cent, or 3.86 crore, families living in villages belong to SC/ST categories. The census said just 4.6 per cent of all rural households in the country pay income tax. As for sources of income, 9.16 crore households (51.14 per cent) depend on manual casual labour followed by cultivation 30.10 per cent. It further said 2.5 crore (14.01 per cent) rural families are dependent on income from other sources which include government service, private sector and PSUs. According to the Census, the average mobile penetration in the country stood at 68.35 per cent (179 million rural households). As far as possession of white goods are concerned, only 11.04 per cent rural households owns refrigerator. Goa with 69.37 per cent is on the top among the list followed by Punjab with 66.43 per cent households owning it. Bihar has lowest number of refrigerators. Only 2.61 per cent households own a fridge. Chhattisgarh follows Bihar in ascending order with 3.30 per cent of the households own this. 50 million households don’t own a landline or a mobile phone. 1,052,210 divorced people living in rural areas. That’s just 0.12% of the population. Divorce is very rare in India. The country has 44.84 lakh domestic helps, 4.08 lakh rag pickers and 6.68 lakh beggars Of the total rural population, landless ownership is 56 per cent with 70 per cent of Scheduled Castes and 50 per cent of Scheduled Tribes being landless owners. 20.69 per cent rural households had either an automobile or a fishing boat. 8. 94 per cent of the rural households owned a house with 54% cent having 1-2 room dwellings.
Read More
Deprivation affects more than 48.5% of rural households, according to the Socio-Economic & Caste Census, reports Simar SinghThe recently released 2011 Socio-Economic and Caste Census indicates that in Rural India a mere 39.39 per cent of households are not considered deprived. These figures, though not unexpected, mean that the government has a huge section of people to target for their poverty alleviation schemes and other policy measures.Upon releasing the data, Finance Minister Arun Jaitley said that it would help in better targeting of government policies, calling it a reflection of the Indian reality and a important input for all policymakers.The exercise has ranked households based on seven requisite indicators of deprivation which include households with one room, kucha walls and kucha roof, those deriving a major chunk of their income from casual manual labour, and SC or ST households.16.50 lakh (0.92 per cent) households were automatically included. These cover households without shelter, those who had to scavenge to survive and legally released bonded labour.10.69 households were considered for deprivation out of which 2 crore reported no deprivation while the rest 8.69 crore fulfilled at least one of the seven parameters. This means that around 48.50 per cent of rural households suffer from one or multiple types of deprivation.The data further breaks this figure up to show that SC households make up 13.28 per cent of the total deprived households and ST households make 10.97 per cent. These two are the major identifiable sections of the deprived households in the rural landscape and together make up around 29.43 per cent of its population.Also, only 4.58 per cent of the rural population pays income tax, with a mere 3.49 per cent of SC households and the comparatively slightly better 3.34 per cent of ST households, paying income tax.The Socio Economic and Caste Census (SECC) 2011 also painted a grim picture of rural India, indicating that one out of three families living in villages is landless and depends on manual labour for livelihood.The SECC 2011, also the first paperless census conducted on hand-held electronic devices by the government, said 23.52 per cent rural families have no literate adult above 25 years, suggesting a poor state of education among rural masses.The census, carried out in 640 districts under the aegis of the Rural Development Ministry, was released jointly by Finance Minister Arun Jaitley and Rural Development Minister Chaudhary Birendra Singh here.According to the census, there are a total number of 24.39 crore households in the country, of which 17.91 crore live in villages. Of these, 10.69 crore households are considered as deprived.The deprivation data reveal that 5.37 crore (29.97 per cent) households in rural areas are "landless deriving a major part of their income from manual labour". As many as 2.37 crore (13.25 per cent) families in villages live in houses of one room with 'kaccha' walls and roof.It further said 21.53 per cent, or 3.86 crore, families living in villages belong to SC/ST categories.Releasing the census, Jaitley said, "It's after seven-eight decades that we have this document after 1932 of the caste census... It's going to be very important document for all policy makers both at central and state governments...this document will help us target groups for support in terms of policy planning."The data, Singh said, "addresses the multi-dimensionality of poverty and provides a unique opportunity for a convergent, evidence based planning with a Gram Panchayat as unit".Singh added a caveat, saying though the name of the census suggests caste, it does not include castes."The name of the report indicates (caste), but caste is not reflected in our data ... still the name is Socio Economic and Caste Census," he said. .
Read More
Waiting at queues at toll plazas is a nightmare. The lawmakers are exempted from queues at toll plazas on highways. Now, it is time for the common man. Private vehicle owners may soon be able to zip through toll plazas on all national highways across the country by paying an annual toll charge of around Rs 2,500-Rs 3,000 without getting caught in noisy snarls snaking out from toll plazas. The road transport ministry is set to move a cabinet proposal seeking approval of this proposal that could entail the government taking the burden of paying a substantial portion of the toll to the private developers, according to a report in The Times of India. At present, the share of toll paid by private vehicles annually is about Rs 1,900 crore. Unlike other parts of the world where alternative toll-free roads are available in a given route, in India there are hardly any. Those who find the user charges steep and want to take an alternative route, even if it is longer and winding, have no option. As cities expand rapidly, toll roads on the periphery, originally conceived as inter-city roads, become part of the city. The toll plan does not accommodate such changes in travel patterns. This causes hardships to users and increases resentment.With only a few exceptions, the toll booths poorly managed, whichever way one looks at them. First, while international service standards require passage through the tollgate in about five seconds per vehicle, the real time taken in India is usually a large multiple of that. Second, while in general there is a separation of octroi booths from normal tollgates, this is often not done at state borders, which results in delays. Third, while the toll amount should be rounded off at a convenient number, this, too, is not always done. There have been violent protests against the toll system in some parts of the country in the past. As many as 62 toll plazas on national highways and expressways have been closed by the government after recovery of capital cost and considering public interest, the Lok Sabha was informed in April this year. Minister of state for road transport and highways Pon Radhakrishnan said the total revenue collected from toll plazas was Rs 9283.23 crore in 2012-13, Rs 11,436.59 crore in 2013-14 and Rs 14,214.48 crore in 2014-15. In October 2012, former Gujarat Congress MP Vitthalbhai Radadiya allegedly brandished his gun at toll plaza staff. According to media reports, security cameras showed Radadiya getting out of his car, brandishing his weapon at the toll booth attendant. When the attendant refused to accept a photocopy of Radidya's parliamentary ID and asked for the original, the lawmaker pulled out his gun. In June 2013, an RTI query revealed that the toll collected by some booths in Gujarat were way over what the roads had cost to build. One booth on the Ahmedabad-Mehsana road had collected Rs 391 crore against a construction cost of Rs 342 crore. Chief Minister Devendra Fadnavis announced the closure of 12 toll plazas in Maharashtra while exempting private light motor vehicles and buses of the state transport corporation at 53 toll plazas. According to a report in Mint, the state will have to pay compensation of Rs.7,000 crore to toll operators over the next 25 years. At present, toll rates are typically brought down to 40 per cent of the ongoing rate after the end of a concession period. Concession period is the duration for which a developer is given the contract for tolling a road project for recovering the cost of constructing and maintaining it, and is typically 20-30 years. The Delhi High Court has recently ordered the dismantling of a toll plaza on the Delhi-Gurgaon Expressway, which had caused huge traffic jams. However, the Mamata Banerjee-led West Bengal government has decided to draft a policy to levy toll on state highways, signalling a departure from Mamata Banerjee's well-documented aversion to the imposition of user charges. Experts say the shift was aimed at persuading reluctant private investors to develop roads in the state but added that they remained sceptical of the impact in the absence of industrialisation. The DND Flyway, which connects Delhi to Noida, is an eight-laned 9.2 km road. It was built and is maintained by The Noida Toll Bridge Company Ltd. Commuters on the DND often caught in a massive traffic jam during pick hours.The long-term solution, however, lies in treating roads as a public good and spending more government funds on developing them.
Read More
Railway Minister Suresh Prabhu introduces a lot of viable schemes to revive the ailing organisation, writes Arshad Khan In 2014, the biggest challenge before the Narendra Modi-led National Democratic Alliance was to put the Indian Railways back on track. The government, however, took some time to choose the right man for the job. Finally Shiv Sena's Suresh Prabhu, who joined the BJP overnight was given the charge to rescue the railways. After assuming office, Prabhu introduced a lot of schemes and measures to revive the ailing organisation. Even his critics termed his railway budget as futuristic. The railway ministry's took ceratin bold initiatives including allowing 100 per cent foreign direct investment, accelerating work for high speed trains, connecting north-eastern part with rest of the country, roping the National Institute of Design for internal design and increasing private participants.Apart from big initiatives, the ministry also launched several moderate ones as well to provide more convenience to passengers. Of late, the railways has changed timings for Tatkal booking. The new schedule opens the window for Tatkal booking between 10 am to 11 am for AC class and for non- AC the Tatkal booking will commence at 11am and close at noon. 50 per cent refund on cancelling Tatkal ticket will bring relief tom passengers. This move is certainly going to be welcomed by passengers who were mostly left at the mercy of agents for confirmed tickets. The ministry has introduced Tatkal special trains to cater the rush between busiest stations at affordable price. Indian will soon run bullet trains. The first bullet train corridor will be between Mumbai- Ahemdabad. To attract passengers, fares are kept pocket friendly. Running at a speed of 320 kmph, the train is expected to take less than two hours to cover the distance. Earlier this year, the railways carried out a successful trial of its semi high speed train between Delhi and Agra. The service will commence soon once it get mandatory clearance from the Commissioner of Railway Safety (CRS). Improving the condition of existing railways stations is also one of the major steps which the ministry has undertaken. Planning to set up toilets at all the platforms of New Delhi railway station, associating railways with Swatch Bharat Mission to make stations hygienic and installing Integrated Security System (ISS) in metropolis stations for passengers safety will polish the condition of stations. The railways has also increased the use of mobile in catering services. It has provided passengers the option to book their meals via SMS (often referred as WhatsApp meal). Alerting passengers about train cancellation by sending SMS will also help passengers to save their time and money. The development of Indian Railways is linked the country's growth. Since Independence, the railways has been the major source of public transport, but its development has always compromised with favour given to other sectors. Hopefully, Prabhu will deliver.
Read More
Flagging subdued rural economy as a 'credit negative' for India's sovereign rating, global giant Moody's on Tuesday (30 June) said there are growing concerns about risk of policy stagnation and "some disappointment" has emerged over the pace of reforms under the Modi government. In its latest 'Inside India' report, Moody's Investors Service said the consensus view on India's economic growth prospects is relatively optimistic and in line with Moody's baseline forecast of 7.5 per cent expansion in current fiscal. "Forecast represents the highest projection amongst G20 economies, and provides a key pillar of support for the Baa3 sovereign rating and positive outlook," it said. This is the lowest investment grade rating, but a 'positive' outlook indicates room for further upgrade. However, the results of the latest polls conducted by it has showed "some disappointment...with regard to the pace of reform under the administration of Prime Minister Narendra Modi, and increasing concerns about the risk of policy stagnation. "Specifically, almost half of the poll respondents identified sluggish reform momentum as the greatest risk to India's macroeconomic story." Moody's said "the multi-party, federal democracy in India underpins a gradual pace of policy implementation" and many of the policies are positive for India's institutional strength. However, the direct impact of growth-enhancing reforms is only likely to take full effect over a multi-year horizon, it said. Moody's further said it expects India's weakened rural economy to remain subdued through the fiscal year ending March 2016, particularly if the risk of below-average monsoon rainfall materialises. "A sustained soft patch for India's rural economy would weigh on private consumption and non-performing assets in the agricultural sector, (which is) a credit negative for the sovereign and banks," Moody's Vice President and Senior Research Analyst Rahul Ghosh said. Citing results of polls conducted during the first annual Moody's and ICRA India Credit Conference in Mumbai last month, Moody's said almost half of the respondents believed "that sluggish reform momentum represents the greatest risk to India's macroeconomic story going forward". Moody's said however that the recent policy changes are slowly taking effect and the positive impact of growth -enhancing reforms is only likely to take full effect over a multiyear horizon. "Policies including the 'Make in India' campaign, increased foreign direct investment limits in rail infrastructure, defence and insurance, and bills related to mining will all improve India's growth outlook," it said. It added: "The government's recent policy agenda ? including diesel price deregulation, lifting of the iron ore mining ban, the Coal Mines Special Provisions Bill and the Mines and Minerals Development and Regulation Bill ? will benefit refining, metals, steel and power companies. "Other sectors have yet to see a specific boost from government policies under the Modi administration, but are likely to benefit from the government's pro-growth agenda." In the survey, sluggish reform momentum was cited as the greatest risk (47 per cent) to India's macroeconomic story over the next 12-18 months, followed by infrastructure constraints at the second place (38 per cent) and external shocks at the third (10 per cent). The resurgent inflation and fiscal performance came as the fourth and fifth biggest concerns. Asked what would be the key driver of credit conditions for Indian corporates over the next 12-18 months, respondents named government policy implementation on the top (56 per cent), followed by monetary easing at the second place (23 per cent), while commodity price weakness and external factors came in at the third and fourth places. The project approval delays emerged as the biggest challenge for the infrastructure sector, followed by lack of available funding, weak financial health of the sector and loss of reform momentum as other main concerns.(PTI)
Read More
Finance Minister Arun Jaitley said on Thursday that economic reforms in the legislative pipeline can push India's growth rate above the 7 to 7.5 percent range. India's economy, Asia's third largest, is expected to grow 7.5 percent this year, according to the latest World Bank forecast, which would make it the world's fastest growing economy. The government forecasts growth of 8.1-8.5 percent while the central bank has a 7.6 percent gross domestic product growth target. "Neither the government, nor the people, nor the industry whose representatives, some of whom are here, nobody is very excited about a 7-7.5 percent growth rate in India," Jaitley said during a discussion with Timothy Geithner, president of investment firm Warburg Pincus and a former U.S. Treasury Secretary. "Because a series of reform fixes which are in the pipeline and are to be implemented, we have now identified all the problem areas, and I think one by one as we go resolving most of them, hopefully we should reach what our destination targets are," he said. Prime Minister Narendra Modi, one year in power, has sparked optimism that he can implement economic reforms and alleviate bureaucratic overload in India that is seen as a hindrance to attracting foreign investment and ultimately stronger economic growth. Jaitley took questions about the ability of India's government to push through and more importantly implement economic reforms to speed up infrastructure spending and streamline tax policies. He acknowledged the bottlenecks in both areas but said the government was making progress. Modi has pledged to overhaul the nation's tax regime. However the pro-business government was caught flat-footed in a row with foreign portfolio investors over demands they pay the minimum alternate tax, for which they had not previously been liable. Jaitley has said previously he hoped that the upper house of parliament would "soon" pass an enabling amendment that would make it possible to implement on time a new goods and services tax (GST) that would unify India into a common market. The bill on the GST has been referred to a committee for discussion and Jaitley said there is a current majority among the committee in favour of the legislation. Jaitley said he was focussed on implementing the tax measure by April 1, 2016, the start of the new fiscal year. "This reference to the committee has actually shortened the window of time available to me. I now have to run faster to in order to catch up. If nothing unusual happens, hopefully I make it. So I am conscious of the time constraint," he said. (Reuters)
Read More
India’s manufacturing sector witnessed a modest growth in May, but going ahead “weak demand conditions” may persist that could have a negative impact on the industrial output numbers, says an SBI research report. The SBI Monthly Composite Index, a leading indicator for manufacturing activity in Indian economy, inched up from 46.8 in April 2015 to 53.8 in May 2015. However, the outlook is bearish. “We believe that due to continued tepid credit growth and subdued commercial vehicle sales in recent period, a negative impact may precipitate in June/July 2015 IIP,” SBI said, adding that “this will subsequently reflect in our Composite Index values, going forward.” Meanwhile, the yearly SBI Composite Index for May 2015 decelerated to 56.4 in May from 58.2 in April 2015, due to entrenched disinflationary impetus and weak demand. An index value of less than 42 means large decline, while value of 42 to 46 means (moderate decline), 46 to 50 (low decline), 50 to 52 (low growth), 52 to 55 (moderate growth) and above 55 high growth, SBI said. Weak demand “We are overtly concerned regarding the weak demand conditions that are refusing to pick up. Inflation numbers will continue to surprise on the downside, with retail inflation likely to be at sub 4 per cent within the next 2—3 months, and this will not be a result of only base effect, as widely believed,” the report said. SBI further added that “overall, with economic growth currently patchy and plagued with weak demand and low capex, corporate earnings are likely to remain subdued for most sectors barring few exceptions.” According to SBI, infra activities will start possibly from the second half of this year as the Government would be in a position to push the projects. Time to cut rates, again “With the Government doing its bit, it is imperative to improve sentiments further through another round of monetary easing,” the report said. The central bank has lowered its policy rate twice so far in 2015, but maintained a status quo in its last monetary policy review on April 7 on fears of unseasonal rains impacting food prices. The next review meeting is scheduled on June 2, although the previous two cuts have taken place outside the scheduled policy reviews. The SBI Composite Index rivals the existing data point from British lender HSBC. It has been developed on the basis of the bank’s internal loan portfolio, which mirrors the credit demand in the country, and other data sets available in public domain. (PTI)
Read More
