16 FDI proposels given green signal by Government

Government of India cleared total of 16 Foreign Direct Investment Proposals(FDI) totalling to INR 825 crores including on hydro power project in state of sikkim.

The Government, however, revoked all foreign collaboration approvals for ByCell Telecom on concerns over the Switzerland registered company's funding sources.

Among cleared proposals, Teesta Urja will bring in Rs 547.20 crore for developing 1,200-MW hydro power project in Sikkim.

The Government also allowed IL&FS Trust Company to hold two per cent stake in Multi Commodity Exchange of India, that will bring in Rs 108 crore of FDI.

Govt would require to borrow 120 billion rupees per week

The Government official said today that the borrowing in the closing weeks of September could be 110 billion rupees or less.

Earlier, a central bank deputy governor said the government would borrow an additional 1.1 trillion rupees ($22.6 billion), taking the total to 2.99 trillion between April and September, a central bank deputy said on Thursday.

The additional borrowing excludes 120 billion rupees of bond sale scheduled for Friday.

Wholesale price index Weekly Inflation at (-1.21 %) - July 4/09

Weekly whole price index rose from -1.55% to -1.21 % for week ended july 4 as government increased the price of fuel in corresponding week which led to increase in whole sale price index or inflation.

Following the government decision to raise fuel prices effective July 1, prices of naphtha rose 15 per cent, furnace oil 11 per cent, petrol 10 per cent, high-speed diesel 7 per cent and light diesel oil by 4 per cent.

However consumer price index is still alarming high

Finance Minister assures about Economic Reforms pace

Finance Minister Pranab Mukherjee replied to opposition questions "...there is no question of diluting the process of economic reforms. Reform is a continuing process, whichever government comes they continue to do so," Finance Minister Pranab Mukherjee told Rajya Sabha in reply to debate on the Budget 2009-10.

He said disinvestment is not the only indicator of economic reforms. It is part of the government programmes.

If he has not given the list of public sector companies to be disinvested, some believe heavens have fallen. "I do not subscribe to this view", the minister said.

Top 10 economies of world in trade - friendliness

Indian economy is growing by over 6 percent from last 3-4 years so has our economy become more trade friendly, well if I compare it with era before 1990`s then the answer to this question is `yes`, After the liberalisation of Indian economy in the 90`s thanks to the present Prime Minister for bringing the reforms. Still I think a lot of work needs to be done as our Indian economy is still not the most trade friendly economy of the world, as i saw the list of top 10 economies in their trade friendliness and Indian Economy doesn`t feature in the list.

Following is the list of top 10 economies (country) of the world :

Rank 1 - SINGAPORE

Rank 2 - HONG KONG

Rank 3 - SWITZERLAND

Rank 4 - DENMARK

Rank 5 - SWEDEN

Rank 6 - CANADA

Rank 7 - NORWAY

Rank 8 - FINLAND

Rank 9 - AUSTRIA

Rank 10 - NETHERLANDS

3837 crores lies unclaimed in EPFO and is unusable

Government of India's Employees Provident Fund Organization (EPFO) which has
accumulated to the tune of Rs 3,837 crore, even as EPFO is making efforts to trace those who have not taken their dues.

"As the money, lying in the inoperative accounts belongs to the members or their heirs, and is payable at any time when claims are received. It cannot be utilised for any other purpose," Minister of State for Employment Harish Rawat said in the Lok Sabha. He said that as of March 31, 2008, money to the tune of Rs 3,837 was lying unclaimed in the inoperative accounts of Employees Provident Fund.

In a written reply in the House he said instructions have been issued to all field officers of EPFO to scrutinise the claims of the inoperative account holders and release the amounts only to the rightful claimants.

EPFO on its part is also making efforts to trace out the beneficiaries through advertisements in newspapers and inviting those who have not preferred their claims for more than three years after leaving their job.

Indian Government not to monetise debt

The Government on Tuesday categorically said that it has "no intention" to monetise its debt, which implies that it will not directly borrow from the Reserve Bank of India.

"Government has no intentions of monetising its debt," Finance Minister Pranab Mukherjee told Lok Sabha in his reply to the debate on Union Budget (read budget highlights).

He said during the first half of 2009-10, the Government plans to borrow Rs 2.41 lakh crore from the market and RBI is supporting it through its Open Market Operations (OMO), through which the central bank releases or sucks money from the market against government securities.

"OMO should not be confused with monetisation of debt," Mukherjee said. Monetisation of the Government debt would be when RBI directly subscribes to the Government paper.
(read budget highlights).
As fiscal deficit is projected to be at 6.8 per cent of GDP this fiscal and the Government has pegged its market borrowings at around Rs 4 lakh crore for 2009-10.

Mukherjee also dispelled fears that higher government borrowings would leave little resources for the private sector and would increase cost of borrowings, as also apprehensions that the private sector will be elbowed out due to this.

Govt rules out possibility of banning of meat export

The government on Monday ruled out banning the export of meat and said doing so would not be in the interest of the livestock sector.(read budget highlights).

"Considering the overall development of livestock sector, the government is not in favour of ban on the export of meat," Minister of State for Commerce and Industry Jyotiraditya Scindia said in a written reply to Lok Sabha.

Scindia said representations were received from Maharaja Kumarapal Jeevadaya Trust, Munoth House and Dhahraj Baid Jain College for imposing ban on the export of meat.

"However, export of cow and veal meat from India is banned," he said.

According to official data, in April-January 2009, India exported about Rs 2.86 crore meat and meat products, against Rs 2.65 crore in the corresponding period last year.

The country, on June 5, banned import of live stock and its products for a period of six months in the wake of Swine flu.(read budget highlights).

courtesy - economictimes.com

INR slips to 8 week low

The rupee weakened in afternoon trade towards eight-week lows on Friday tracking the domestic share market which dropped more than 2 percent and on sharp overseas gains in the dollar versus majors.(read budget highlights).

The dollar index, a gauge of the U.S. unit's performance against majors, was up 0.7 percent.

FII'S have bought about $1 billion of stocks so far this month, taking net inflows in 2009 to nearly $6 billion, a key factor in its rise from a record low of 52.2 in March.

In the currency futures market, the most traded near-month contract on the National Stock Exchange and MCX-SX were quoting at 48.9350 and 48.93 respectively, with the total traded volume on the two exchanges at about $1.26 billion.

Agriculture contribution in GDP declines at 16.6 perc

India's agriculture sector has accounted for only 16.6 per cent of its gross domestic product so far this plan period (2007-12) despite record production of farm commodities in the 2007-08 season, according to the latest government estimate.

The share of the farm sector in the GDP is down to 16.6 per cent from a whopping 46.3 per cent during the First Plan period (1951-56), according to the data presented by Minister of State for Agriculture K V Thomas in a written reply in the Rajya Sabha today.

The sector contributed 17.8 per cent to the overall GDP in the last Plan period (2002-07), The declining share of the sector in the GDP can be a major cause of concern for policy makers this year as the forecast of a "below-normal monsoon" during the on-going Kharif has cast a gloom on production.

Moreover, the dependence on farming has not dipped that dramatically. About 65 per cent of the world's second-most populous nation still depends upon farming for livelihood.

Even though the country has witnessed record foodgrain production of 230.78 million tonnes in the 2007-08 season followed by another year of bumper output of the grains at 229.85 million tonnes, the share of the sector in the GDP has not shown any improvement.

courtesy - economictimes

Indian rupee at 2 week low thanks to FII for taking out USD from indian markets

Indian National Rupee or poupularly known as INR touched two week low today at 48.88 / US $ since foreign investor's took out much investment which they made in indian markets over past couple of months due to which SENSEX ans Nifty also closed down today(read full report).

The details about the weak rupee is as follows (ovser past 2 days) :

The partially convertible rupee ended at 48.88/89 per dollar, 0.9 per cent below Tuesday's close of 48.45/46 per dollar. It is down 2 per cent so far this week. It hit a low of 48.9450 in intraday deals.

One-month offshore non-deliverable forwards were quoting at 48.97/49.07 per dollar in late Indian trade.

The dollar was steady while the yen climbed on Wednesday as uncertainty about the global economic outlook reined in investor risk-taking.

According to barclay's indian rupee will trade between 48.5 to 49.5 against a single US dollar.

Govt of India awaits more then half of fiscal deficit from disputes

Believe it or not the government is yet to receive over Rs one trillion in taxes from corporate and other entities and add to it other arrears worth about Rs 47,000 crore, the total outstanding equals more than half of the total revenue deficit this year.

Also read
Budget 2009-10 highlights

At about Rs 150,000 crore, the unrealised tax and non-tax revenue is 53 per cent of the total revenue deficit of over Rs 282,000 crore projected by Finance Minister Pranab Mukherjee in his Budget for 2009-10.

The arrears outstanding at the end of reporting year 2007 -08 pertain to a period of up to ten years or more and also include interests from state governments and PSUs.

In totality, the arrears that the government is still awaiting are held up in litigation, or are due for some other reasons. If realised, they could have substantially reduced the Centre's borrowings, pegged at over Rs 4,00,000 crore for the current fiscal.

Bulk of the tax arrears is caught under disputes and amounts to over Rs 64,000 crore, while the amounts not under dispute total at about Rs 40,000 crore also include cases pending for adjudication.

Economic Estimates assumed for Budget 2009-10

For Reading full Finance Budget highlights (click here)

BUDGET ESTIMATES FOR 2009/10:

* Total receipts seen at 10.21 trillion rupees

* Revenue receipts seen at 6.14 trillion rupees

* Capital receipts seen at 4.06 trillion rupees

* Borrowings and other liabilities seen at 4.01 trillion rupees

* Total expenditure seen at 10.21 trillion rupees

* Plan expenditure seen at 3.25 trillion rupees

* Non-plan expenditure seen at 6.96 trillion rupees

* Fiscal deficit seen at 4.01 trillion rupees, or 6.8 percent of GDP

* Revenue deficit seen at 2.83 trillion rupees, or 4.8 percent of GDP

Fiscal deficit reaches alarming high at 6.8 percent of GDP

Indian economy's fiscal deficit is projected to widen to an 18-year high of 6.8 per cent of GDP in the current fiscal as the government continues to provide stimulus to the economy, necessitating higher market borrowings at around Rs 4 lakh crore.

Also read -
Union Budget 2009-10 highlights

With states also allowed to borrow from markets even if their fiscal deficit increases to 4 per cent of their GDP against the current limit of 3.5 per cent, the combined fiscal deficit of India will easily touch the double-digit mark.

However, Finance Minister Pranab Mukherjee committed to return to fiscal consolidation part at the earliest, even as the 13th Finance Commission is seized of the issue of setting up new targets for fiscal deficit.

"I intend to... return to the FRBM target for fiscal deficit at the earliest and as soon as the negative effects of the global crisis on the Indian economy have been overcome," he said.

Analysts noted that fiscal deficit at 6.8 per cent is within the expectation and they will wait for the Finance Commission report likely in October to comment further.

Also read -
Union Budget 2009-10 highlights

Fiscal deficit is projected to widen against 5.5 per cent expected in the Interim Budget for 2009-10 and 6.2 per cent witnessed in 2008-09 as the Centre's expenditure expanded to an all-time high of over Rs 10 lakh crore and tax income taking a hit due to stimulus packages.

FBT and Commodity transaction tax abolished

Finally Bowing to the long standing demand of India Inc, finance minister Pranab Mukherjee has abolished the fringe benefit tax and commodity transaction tax. in union budget 2009 - 10 which he presented today in parliament (see budget highlights)

However, Minimum Allocation Tax (MAT) on book profits has been increased from 10 percent to 15 percent, but with a provision of carrying forward the tax credit on MAT to 10 years from the current seven years.