Bharat Rakshak

Plastic notes in the denomination of ₹10 will be introduced on a pilot basis, Minister of State for Finance Namo Narayan Meena told to the Lok Sabha on Friday.

In a written reply to a question, Meena said about 1billion ₹10 plastic notes will be introduced on a trial basis in five cities — Kochi, Mysore, Jaipur, Shimla and Bhubaneswar. The field trial is expected to be launched in the second half of 2014.

the net sown areas in the country have increased from 41.8% to 46.1%. the forest areas have increased from 14.2% to 22.8%, and the areas under non - agriculture uses, which include industrial complexes, transport network, mining, heritage sites, water bodies and urban and rural settlements has increased from 3.3% to 8.5% ....... fallow lands have drastically decreased by nearly half from 40.7% to
22.6% .... mining areas are about 0.17% of total land of India, the urban areas are about 2.35% and the industrial areas are much less than 1%."

Rahul Mehta wrote:India has population almost 20-25 times UK. And India has urban land only thrice of UK !! No wonder housing is so poor in India

kmkraoind wrote:When a PSU bank top job goes for Rs 40 cr, and liquor barons get away with murder

After reading this I got a sad feeling. I think NaMo is stepping up on a landmine, hope his armor is think to withstand it.

Austin wrote:All PSU top position for babus from mid to top level in GOI and even position in Police are up of sale only. Even posting at lucrative place but in similar position are for sale and generally such thing happens with Government change both in State and Center. Thats how the cycle of corruption closes , If a posting demands you pay 1 Cr to your bosses then its with the conviction that you will earn 3-5 x the money during the tenure...... this is the unsaid rule of the game. Recruitment in PSU like Banks , Companies , Police Services are also a very fertile ground for bribe to make the cut. Infact same is the case with some position in Armed Forces

The United States on Monday said it would take India to the World Trade Organization to gain a bigger foothold for U.S. manufacturers in its fast-growing solar products market, adding another irritant to an already strained relationship.

The Obama administration said it was filing its second case at the WTO over the domestic content requirements in India's massive solar program, which aims to ease chronic energy shortages in Asia's third-largest economy.

US Trade Representative Michael Froman said making Indian solar developers use locally made equipment discriminated against U.S. producers and could hinder the spread of solar power.

"Domestic content requirements detract from successful cooperation on clean energy and actually impede India's deployment of solar energy by raising its cost," Froman said.

It is the second time in a year that Washington has sought a consultation at the WTO - the first stage in a dispute process that can lead to sanctions - over the Jawaharlal Nehru National Solar Mission.

The USTR issued its first challenge to India's solar program last February when it formally requested consultations over its first stage. The program aims to double India's renewable energy capacity by 2017.

US officials had hoped a second phase of the program would address Washington's concerns, but now fear the harm to American producers would likely be even greater because the rules were expanded in October to cover so-called thin film technology that comprises the majority of US solar product exports to India.

India hit back at the initial US accusations in April, asking Washington to justify its own incentives offered to U.S. companies that use local labour and products in renewable energy and water projects. The Indian embassy in Washington was not immediately available for comment on the latest trade action.

India has argued its solar policies are legal under WTO government procurement rules that permit countries to exempt projects from non-discrimination obligations.

Years in the making

Froman said the action did not undermine the value that the United States placed on its relationship with India, saying: "Today's action addresses a specific issue of concern and in no way detracts from the importance we attach to this relationship." Attorneys for the USTR said later such cases took months to prepare.

US solar trade groups cheered the move and said the United States had been patient in its discussions with India.

"The US government spent two years talking with India trying to encourage them to move away from the local content requirement before initiating the first action roughly a year ago," said John Smirnow, vice president of trade and competitiveness for the Solar Energy Industries Association.

"We are almost three years in the making of the US trying to get India to move back from this local content requirement."

US environmental groups have urged the Obama administration to back off any WTO action, arguing that building up India's solar power industry will help it cut high greenhouse gas emissions.

But the administration has come under growing pressure from lawmakers and business groups to take a tougher stance on perceived Indian protectionist measures and intellectual property rights abuses by Indian drug companies.

India is widely perceived in Washington as a serial trade offender, with US companies unhappy about imports of everything from shrimp to steel pipes they say threaten jobs.

The US International Trade Commission is scheduled to hold a hearing into complaints of trade barriers erected by India on Wednesday and Thursday.

There are 14 past or current World Trade Organization cases between India and the United States, whose bilateral trade in goods measured $63.7 billion last year, not including the latest case.

kmkraoind wrote:When a PSU bank top job goes for Rs 40 cr, and liquor barons get away with murder

After reading this I got a sad feeling. I think NaMo is stepping up on a landmine, hope his armor is think to withstand it.

Ford Motor Co.'s gutsy decision to build its next-generation F-Series pickups, starting this summer, from aluminum instead of steel prompted whistles of amazement across the industry.

Ford's lead aluminum supplier is Novelis, an Atlanta-based subsidiary of an Indian conglomerate.

Novelis belongs to Hindalco Industries Ltd., a subsidiary of Aditya Birla Group, a multinational conglomerate based in Mumbai.

Exports rose 3.79% to $26.75 billion in January from a year ago, moderately ahead of the 3.5% rise recorded in December, data released on Tuesday showed.

Imports dropped at the fastest pace in four months in January, declining 18.07% to $36.6 billion because of a 77% plunge in bullion imports, helping narrow the trade deficit to $9.92 billion in January from $10.14 billion in December. "We now firmly believe that FY14 CAD (current account deficit) should go below $40 billion and would closer to 2% of India's GDP," said Soumya Kanti Ghosh, chief economic adviser, State Bank of India

The wholesale price index (WPI)-based inflation eased to an eight-month low of 5.05 per cent in January from 6.16 per cent in the previous month, pulled down mainly by food prices. The data came on a day when the government said the country was going to produce record food grain of 263.2 million tonnes in 2013-14.

Inflation in food items was down to a single digit for the first time since May at 8.80 per cent in January from 13.68 per cent in the previous month. The rate of price rise in onions — one of the prime causes of high inflation in the previous months — plunged to 6.59 per cent from 39.65 per cent in December. Overall vegetable inflation plummeted to 16.60 per cent from 57.33 per cent.

Cereal prices rose 9.27 per cent in January year-on-year, lower than 10.19 per cent in the previous month. The agriculture department said on Friday that rice production was expected to be at an all-time high at 106.19 million tonnes and wheat production at a record 95.60 million tonnes in 2013-14.

With inflation coming closer to the RBI’s comfort zone of 5 per cent, expectations are that the central bank might ease policy rates to spur economic growth.

However, some economists caution that the RBI might not tinker with rates as core inflation (related to non-oil and non-food items) has shown an uptick. The RBI will have one more data set next month before deciding on policy.

Core inflation inched up to 3 per cent in January from 2.8 per cent a month back. Inflation in manufactured items went up to 2.76 per cent in January from 2.64 per cent in the previous month. “WPI-based inflation has eased in line with improved agricultural supplies. Manufactured inflation remains sticky, implying that some pricing power is left with companies,” said Rupa Rege Nitsure, chief economist at Bank of Baroda.

India’s diamond jewellery export is likely to see a rise in the coming months due to indications of revival in the economies of America and China, which together constitute two-thirds of global jewellery consumption.

Gems and jewellery export fell 8.7 per cent during the first nine months of the current financial year to $25,076 million (Rs 150,257 crore) from $27,465 mn (Rs 149,955 crore) in the corresponding period last year.

“We expect a slight strengthening in growth in diamond jewellery demand in 2014, driven by continued gradual improvements in the global economic outlook. The US and China are expected to continue to be the main engines of growth for polished diamonds. Most other markets are expected to show positive growth in local currency, with final dollar-denominated results being partly dependent on currency fluctuations,” said Mark Cutifani, chief executive of Anglo American, the parent company of De Beers, while presenting financial results of the company on Friday.

India’s trade deficit – the difference between merchandise exports and imports -- continues to improve with each passing month, easing pressure on the rupee and cushioning the blow from the monetary tightening by US Federal Reserve. The trade deficit fell to $9.9 billion in January this year from $10.1 billion in the previous month and $20 billion in January 2013. On an annualised basis, trade deficit is now down to $145 billion or around 7.5% of the GDP during the 12 months ending January 2014 from an all time high of 11.3% in FY13, according to figures by RBI.

CAD is likely to fall to a manageable level of 2.2% of GDP by March this year from over 5% in FY13,” says Devendra Pant, chief economist at India Ratings.

A reduction in current account deficit is likely to reduce the downward pressure on rupee that has depreciated by nearly 27% in last two years. Some experts are now expecting the rupee to appreciate marginally. India Ratings for example expects the rupee to rise to Rs 60 to a dollar by the end of March and Rs 57 to a dollar by March 2015.

More importantly, it will reduce India’s dependence on volatile foreign capital inflows such as portfolio investments to fund current account deficit. At its peak, India required nearly $7 billion worth of capital inflows every month to fund CAD. Now this requirement will be down to around $3-4 billion a month. This could be easily funded through foreign direct investment that is highly stable and less prone to policy moves by central banks. In the last five years, inbound FDI in India has been well above $50 billion and is likely to grow further as more MNCs look to capitalize from the growth opportunity in India.

The only risk to this otherwise benign outlook on India’s external sector is a likely spike in imports once industrial activity revives in line with economic recovery later this year. Fall in imports, both crude oil and non-oil, have played a big role in deficit reduction. Crude oil imports were down 10.1% in January while non-oil imports were down 22%.

On the brighter side, exports continue to grow, up 3.8% in January due to gains from rupee depreciation and economic recovery in Europe and the US. Experts expect this trend to continue and thus dampen the negative impact of a likely import surge next fiscal. The crisis has been averted for now.

Suraj wrote:Those come in under total balance of payments. We have a net positive on that count because remittance invisibles exceed the CAD, which is why forex reserves are slowly rising again.

Aditya_V wrote:The US does nothing about its Huge Trade deficit with China but wants to hit poor india.

From a Humanatarian prespective, creating jobs in a poor country like India is the best way to left millions from poverty, rather than buying from affluent countries like China. All the US officialss involved in such actions are anti-Human.

chola wrote:Remittances have always been stable. What does fluctuates violently is the amount of FII coming in or cashing out. FII has steadily reversed course the past months mainly through the steady hand of Rajan.

chola wrote:

Aditya_V wrote:The US does nothing about its Huge Trade deficit with China but wants to hit poor india.

From a Humanitarian perspective, creating jobs in a poor country like India is the best way to left millions from poverty, rather than buying from affluent countries like China. All the US officialss involved in such actions are anti-Human.

Now you want India and its generic drug makers to be in the same boat as the PRC? We can build respectful brands because we do have rule of law.

Suraj wrote:Some have asked about the Rupee-Dollar situation. Here's something about that:Expect a sharp fall in current account deficit in FY14

India’s trade deficit – the difference between merchandise exports and imports -- continues to improve with each passing month, easing pressure on the rupee and cushioning the blow from the monetary tightening by US Federal Reserve. The trade deficit fell to $9.9 billion in January this year from $10.1 billion in the previous month and $20 billion in January 2013. On an annualised basis, trade deficit is now down to $145 billion or around 7.5% of the GDP during the 12 months ending January 2014 from an all time high of 11.3% in FY13, according to figures by RBI.

CAD is likely to fall to a manageable level of 2.2% of GDP by March this year from over 5% in FY13,” says Devendra Pant, chief economist at India Ratings.

A reduction in current account deficit is likely to reduce the downward pressure on rupee that has depreciated by nearly 27% in last two years. Some experts are now expecting the rupee to appreciate marginally. India Ratings for example expects the rupee to rise to Rs 60 to a dollar by the end of March and Rs 57 to a dollar by March 2015.

More importantly, it will reduce India’s dependence on volatile foreign capital inflows such as portfolio investments to fund current account deficit. At its peak, India required nearly $7 billion worth of capital inflows every month to fund CAD. Now this requirement will be down to around $3-4 billion a month. This could be easily funded through foreign direct investment that is highly stable and less prone to policy moves by central banks. In the last five years, inbound FDI in India has been well above $50 billion and is likely to grow further as more MNCs look to capitalize from the growth opportunity in India.

The only risk to this otherwise benign outlook on India’s external sector is a likely spike in imports once industrial activity revives in line with economic recovery later this year. Fall in imports, both crude oil and non-oil, have played a big role in deficit reduction. Crude oil imports were down 10.1% in January while non-oil imports were down 22%.

On the brighter side, exports continue to grow, up 3.8% in January due to gains from rupee depreciation and economic recovery in Europe and the US. Experts expect this trend to continue and thus dampen the negative impact of a likely import surge next fiscal. The crisis has been averted for now.

This mirage of fiscal consolidation is the result of a well-known trick. Mr Chidambaram himself has demonstrated the sleight of hand more than once before. The assumptions for revenue growth that went into the forecast are so wildly optimistic that investors will discard them as unbelievable anyway. India's next government will come up with its own - hopefully more realistic - projections for tax and privatisation proceeds by July.

Besides, even if Mr Chidambaram's deficit reduction scenario proved accurate, it could actually mean self-defeating austerity. Hitting the target would require a severe compression in public spending which, if attempted, could stall the sputtering economy. Even then, the deficit target might remain elusive because tax collections would also decline. At the same time, the next government will have to shoulder the burden of an extra one per cent of GDP in subsidies deferred from this year.

But the truly disappointing part of Mr Chidambaram's performance was its utter pointlessness: the finance minister didn't really have to act as an illusionist. Investors who not long ago cheered his reform plans would have much preferred a gritty, honest appraisal of the tough trade-offs that face an economy mired in stagflation and a confident, bold strategy to break out of a largely self-inflicted middle-income trap. What's more, Mr Chidambaram could have found it in him to be imaginative. After all, it's very unlikely that his government will return to power after this year's general election. That means he wouldn't have to follow through on any tough promises.

Rather than propose anything new, the finance minister used his bully pulpit in Parliament to preach to the central bank, asking it to "strike a balance between price stability and growth". This was a thinly veiled attack on Reserve Bank Governor Raghuram Rajan's plan to turn the Indian monetary authority into an inflation-targeting central bank.

The attack makes little sense. After all, Mr Rajan's painful reversal of his predecessor's premature interest rate cuts has managed to bring retail inflation down to below 10 per cent. Consumer expectations of future price gains are still not well anchored, which is why Mr Rajan wants to install a credible monetary policy regime. And he's right. As the US Federal Reserve removes the worldwide glut of cheap dollars, high-inflation emerging economies are sitting ducks for episodes of capital outflows such as the one that saw the rupee plunge last summer.

But the growth-inflation trade-off wasn't the only one Mr Chidambaram missed. He pointed out that in recent years India's investment rate hadn't fallen as fast as the savings rate. That's no reason, though, for the government to pat itself on its back. The difference between the two rates, after all, is the country's current account balance. It's only because domestic financial savings collapsed, with households getting spooked by high inflation and moving their money into gold, that the current account deficit widened precipitously, creating a large vulnerability to fickle global capital flows. The authorities were woefully late in waking up to the gap, and only did so when the currency and bond markets gave them the unpleasant message that financing the shortfall was going to be a severe challenge given the rising global cost of capital.

It was surprising, therefore, that Mr Chidambaram made light of the current account deficit in his speech. He said that when it comes to financing the deficit, "there is no room for any aversion to foreign investment" regardless of whether it is equity or debt. But debt-creating hot money inflows induce financial crises with unfailing regularity in emerging markets. Foreign direct investment, which is largely in the form of equity, doesn't have the same destabilising effect. To say the nature of capital inflows doesn't matter for India is pure hubris. Believing it will simply keep the financial system forever at the mercy of hot money. Lowering that vulnerability means competing for multinational corporations' investment dollars. But India's investment climate is not improving. The tax regime has become unpredictable. On such "doing business" issues, the Budget had precious little to say.

In the budget he presented last February, Chidambaram had pencilled in a revenue deficit of Rs 3,79,838 crore – or 3.3 percent of GDP. The difference between this number and the fiscal deficit number (Rs 5,42,499 crore) matters less, since the extra spending over the revenue deficit would presumably be going into investment – which is like like sowing the seeds of future revenues.

The reason why Chidambaram is making a song-and-dance about the fiscal deficit and his red line is simple: it is intended to take our attention away from the revenue deficit, which is the real number to monitor. If this number is lower than the 3.3 percent that he talked about last year, it is at least an improvement; if it is more, it is bad. A higher revenue deficit indicates real bad kinds of spending – as in subsidies and administrative costs.

It is worth recalling that in the grow-grow years of UPA-1, this was the number Chidambaram was unable to manage. In his last budget for UPA-1, Chidambaram, in fact, said that he was relaxing the targets set for revenue deficit in the Fiscal Responsibility and Budget Management Act (FRBM Act).

After liberally throwing freebies at the electorate – including the Rs 72,000 crore farm loan waiver and high outlays on make-work schemes – Chidambaram had this to say in his 2008-09 budget: “In the case of revenue deficit, I will meet the target of annual reduction of 0.5 percent. However, because of the conscious shift in expenditure in favour of health, education and the social sector, we may need one more year to eliminate the revenue deficit. In my view, this is an entirely acceptable deferment."

In 2008, Chidambaram was talking about eliminating the revenue deficit in "one more year". The UPA was re-elected, but neither Chidambaram nor his successor, Pranab Mukherjee, made good on this specific promise about eliminating the revenue deficit next year.

At 3.3 percent, the revenue deficit is still too high four years later - nowhere near zero. The deficit, which was to end in 2009-10, is simply beyond the reach of the spendthrift UPA which has used taxpayers’ money repeatedly to buy votes.

Suraj wrote:I don't quite understand how gold smuggling and terrorism are related directly. No additional funds are being generated here, beyond marginal price difference of gold abroad and in India less smuggling costs, which decreases when supply increases. This is a laundering operation. The money is already there, before and after smuggling for any would-be terrorist. Let's look at the sequence:

* Smuggler buys gold in Dubai or elsewhere using black money, probably a few percent cheaper than Mumbai spot price.
* Ships gold securely to Mumbai coast. This costs money - hiring boat, reliable henchmen, ability to avoid CG...
* Gold sold into domestic consumption market in exchange for rupees.

Besides shipping costs, the smuggler incurs time spread risk, i.e. difference in price between when he bought it and sold it. In a choppy/falling market this business is unviable. It works best when the market is rising. Gold is down ~20% from its Sept 2013 peak when the duty was applied, in the Indian spot market. I'm sure there's been plenty of smuggling to meet demand and just launder cash, but I question whether it's been really viable, because the market situation indicates it would have been hard to break even.

http://www.thehindubusinessline.com/eco ... 661227.ece


The Government lost $1 billion (₹6,200 crore) in revenue from duties and taxes last year due to the sharp increase in smuggling of gold.

Speaking to Business Line, Aram Shishmanian, Chief Executive Officer, World Gold Council, said curbs imposed by the Government has led to 150-200 tonnes of gold being smuggled into India and a potential revenue of $1 billion was lost in terms of taxes.

“The irony is the money would not be recovered in the years to come. Once into the grey market, the gold would remain there and never come into the legitimate trade,” he said.

That 200 tonnes of gold came in through the black market route means that regardless of the Government measures, gold demand continues in India and is growing gradually, he added.

Last year, over 15 regulatory changes to curb gold demandwere made by the Government. The changes caused a scare in the jewellery industry.

Any industry that has to respond to the changes is going to get grid locked, particularly with the 80:20 rule, said Shishmanian. In a bid to curb gold imports, the Government increased import duty to eight per cent, and the Reserve Bank of India made it mandatory for jewellers to export 20 per cent of their gold consignment before placing orders for fresh gold imports.

High import duty and other restrictions fuelled smuggling and black marketing industry. The scourge of smuggling, which was largely eradicated in 1991 when gold imports were liberalised, has come back with a vengeance. Therefore, policy makers need to consider the consequence carefully, he said.