Street expects RBI to hold rate until end of fiscal year
The current financial year might end up being the first in seven years to see the Reserve Bank of India (RBI) keeping the benchmark repo rate unchanged, indicates a Business Standard poll among 15 financial experts, days before the central bank’s review of its monetary policy.
As many as nine respondents — all leading names in the public sector, private and foreign banks, as well as other financial intermediaries — said RBI would hold the repo rate at eight per cent at least until the end of March 2015.
There are, of course, a few bravehearts who are betting on a repo rate cut of 25 basis bps (four of the 15) to 75 bps (one) and even 100 bps (one).
The repo rate — the rate at which banks borrow from the central bank — was last kept unchanged through a financial year in 2007-08, at 7.75 per cent.
After Rajasthan, MP liberalizes labour laws. The only way to push through nationwide reforms on this subject is to impose peer pressure. When a critical mass of states have liberal laws and attract business, other holdouts will be forced to do the same to get business. Good way for BJP states to corner business and money.
MP agrees to amend 20 labour laws
The Madhya Pradesh cabinet on Monday approved amendments to as many as 20 labour laws. Of these, 17 are central government laws and three state laws. “All the central labour laws will be forwarded to the President of India for his assent,” said K C Gupta, labour commissioner.
Madhya Pradesh has become the second state, after Rajasthan, to propose amendments to labour laws, including the Industrial Disputes Act, 1947, and the Factories Act,1948.
In an important amendment to the Industrial Disputes Act, 1947, the cabinet gave its assent to the retrenchment of workers, lay-offs and the easy closure of units. “Lay-offs, retrenchments and even closures will not require any permission,” Gupta said.
When asked if this was akin to a ‘hire-and-fire’ policy, Gupta said, “Yes. But it has certain conditions. The amendment will be applicable only if the industrial establishment has up to 300 workers. Earlier, it was applicable to industrial units having atleast 100 workers, employed on an average per working day for the preceding 12 months.” The cabinet approved this amendment to offer an option to employers to retrench unproductive and inefficient workers.
Such workers would lose job security but would get better compensation packages. “The principal of ‘Last Come First Go’ will remain intact. The employer can retrench employees by giving them a three-month notice and wages of three months in lieu of the job,” Gupta said.
Vis a vis state labour laws, the cabinet cleared an amendment to the Madhya Pradesh Industrial Employment (Standing Orders) Act, 1961. It would give an easy option to employers of small and medium enterprises (SMEs) to terminate any employee without giving any reason or conducting any enquiry. This would apply to SMEs having worker strength of less than 50.
Similarly, an amendment to the Trade Union Act, 1926 has also been given clearance.
Among other amendments, the state government has cleared the proposal to stretch “overtime” from 75 hours to 125 hours but “with the consent of the worker”, through an amendment to the Factories Act, 1960 and also extend working time from the maximum 60 hours to 72 hours.
To protect their interest, the state has cleared certain exemptions to micro industries from certain labour laws mainly the Contract Labour (regulation and abolition) Act, 1970, the Factories Act, 1948, MP Industrial Employment Act, 1961 and the Trade Unions Act, 1926.
Also, the state has now empowered the labour commissioner in lieu of labour inspector to prosecute employers in case of any violation of labour laws. To make them free from inspections, state industries will not have to maintain as many as 68 registrations and furnish 16 returns under 19 different laws. “Now, they will be required to maintain only one register,” Gupta said.
GoI continues to stick to its guns and refuse to make a deal on TFA if it doesn't get its way on agricultural subsidies:
TFA panel meet: India to stick to its stance at WTO meet
India is going to again push for its demand to have a parallel agreement on public stockholding for food security purposes, as the preparatory committee on a trade facilitation agreement (TFA) is set to meet on September 29 at the World Trade Organization's (WTO), headquarters in Geneva.
After missing the deadline of July 31, when the protocol of amendment to the TFA was expected to be signed, member-countries were expected to reach a possible consensus on the demand made by India. It seems after a month-long break, countries have rather hardened their positions. While the majority of developed and developing countries have agreed to convert the TFA into a legal framework, India and some countries have demanded a parallel agreement on public stockholding for food security.
A senior commerce department official told Business Standard: "WTO has a long history of missing deadlines, mainly pertaining to those that benefit developing countries. So, missing the July 31 deadline did not bring the world to an end. Deadlines are important but not sacrosanct. India is not backing off from the TFA. All that we have asked for is a parallel agreement on public stockholding. If the Bali Package has to be implemented, then the whole package has to be implemented."