L A T E S T      N E W S

Chidambram presents interim budget in Lok Sabha; 
leaves taxes unchanged

NEW DELHI: Finance Minister P. Chidambaram presented the interim budget in the Lok Sabha on Monday. It is a vote-on-account authorizing the government to carry out expenditure on different heads till a regular budget is presented.

Ahead of the beginning of the parliament session early this month, Chidambaram had said that the government would tinker only in areas that are essential to revive the economic growth which might likely include some changes in excise and service taxes in the interim budget.

On Sunday, Chidambaram gave final touches to the interim budget or Vote On Account for fiscal 2014-15.

In an election year, India presents an interim budget to parliament for approval for planned expenditure for three to four months, but leaves it to the next government to announce major policy steps in a full-year budget after the polls. 

Leaves taxes unchanged

Leaving direct taxes untouched except for continuing the income tax surcharge on ‘super-rich’ individuals and corporates, the Interim Budget on Monday slashed excise duty on cars and two-wheelers, and capital goods and consumer durables to boost manufacturing and growth.

Presenting the Interim Budget for 2014-15 along with a vote-on-account for spending up to July, Finance Minister P. Chidambaram also provided service tax exemption for storage and warehousing of rice like it was done in the case of paddy last year. Also, blood banks have been exempted from its purview.

The 10 per cent surcharge on ‘super-rich’ having income above Rs. 1 crore in a year and the up to 5 per cent surcharge on corporates imposed last year will continue.

“In keeping with the conventions I do not propose to make any announcements regarding changes to the tax laws,” he said.

The Budget document does not give figures of the indirect tax concessions, which are valid up to June 30, 2014 and could be reviewed later. They will be notified later.

In a major relief to ex—servicemen, the Minister announced that the government has accepted in—principle their demand for one-rank-one-pension.

The allocation for defence for the coming year has been enhanced by 10 per cent from Rs. 2,03,672 crore in Budget estimate of 2013-14 to Rs. 2,24,000 crore in 2014-15.

Non-plan expenditure estimated at Rs. 12,07,892 crore. Of this expenditure on food, fertiliser and fuel subsidy will be Rs. 2,46,397 crore, which will be slightly more than the revised estimate of Rs. 2,45,452 crore in 2013-14.

Giving Budget estimates, the Minister said the current financial year will end on a satisfactory note with the fiscal deficit at 4.6 per cent, below the redline of 4.8 per cent, and the revenue deficit at 3.3 per cent.

The fiscal deficit for 2014-15 has been pegged at 4.1 per cent, which will be below the target of 4.2 per cent set by the new fiscal consolidation path. Revenue deficit is estimated at 3 per cent.

Justifying the excise duty reliefs, Chidambaram said, “The current economic situation demands some interventions that cannot wait for the regular Budget. In particular, the manufacturing sector needs an immediate boost.”

To encourage domestic production of mobile handsets, he restructured the excise duty for all categories fixing it at 6 per cent with CENVAT credit or 1 per cent without CENVAT credit.

Customs duty structure on non-edible grade industrial oils and its fractions, fatty acids and fatty alcohols has been pegged at 7.5 per cent to encourage to domestic production of soaps and oleo chemicals.

Similarly, a concessional customs duty of 5 per cent on capital goods imported by Bank Note Paper Mill India Pvt. Ltd. has been provided to encourage to indigenous production of security paper for printing currency notes.

Chidambaram said excise duty has been reduced from 12 to 10 per cent on capital goods and consumer non-durables falling under Chapter 84 and 85 of the Schedule to the Central Excise Tariff Act.

Small cars, motorcycles, scooters and commercial vehicles will attract a lower excise duty of 8 per cent from the current 12 per cent, while SUVs will see a 6 per cent reduction in duty from 30 to 24 per cent.

Large and middle segment cars will enjoy an excise duty of 24/20 per cent, down from 27/24 per cent.

Plan expenditure for the coming fiscal has been fixed at Rs. 555,322 crore, unchanged from current year, and non-Plan expenditure at Rs. 12,07,892 crore, marginally higher than 2013-14.

Outlining a 10-point vision for the future, the Finance Minister said India must achieve the target of fiscal deficit of 3 per cent of GDP by 2016-17 and remain below that level always.

On Current Account Deficit, he said there is no room for any aversion for it since the country will run a CAD every year for some more years and it can be financed only by foreign investments - FDI, FII or ECBs or any other foreign inflow.

As part of the vision, he said a developing economy must accept that when the aim is high growth, there will be moderate level of inflation.

“RBI must strike a balance between price stability and growth while formulating monetary policy,” he said in his vision formula that included financial sector reforms, infrastructure, manufacturing, subsidies, urbanisation, skill development and sharing responsibilities between states and Centre.

Expressing disappointment over not being able to introduce Goods and Services Tax (GST), he said, “I leave it to you to answer the question who blocked the GST when an agreement on the game-changing tax reform was around the corner?”

He said the DTC, which will serve for the next 20 years, is ready and intents to place in on the website for public discussion.

“I appeal to all political parties to resolve to pass the GST laws and DTC in 2014-15,” he said.

Referring to the GDP growth rate, Chidambaram said the slowdown began in 2011-12 and in nine quarters it had declined from 7.5 per cent in Q1 of 2011-12 to 4.4 per cent in Q1 of 2013-14.

He said thanks to numerous measures taken, he was confident the decline will be arrested and the growth cycle will turn in the second quarter.

“I think I have been vindicated. Growth in Q2 of 2013-14 has been placed at 4.8 per cent and growth for the whole year has been estimated at 4.9 per cent. This means that growth in Q3 and Q4 of 2013-14 will be at least 5.2 per cent,” he said.

The Finance Minister said the economy is more stable today than what it was two years ago. “The fiscal deficit is declining, the current account deficit has been contained, inflation has been moderated, the quarterly growth rate is on the rise, the exchange rate is stable, exports have increased and hundreds of projects have been unlocked,” he said.

He said the current year will end with a merchandise exports of $326 billion, indicating a growth of 6.3 per cent.

The current account deficit that threatened to exceed last year’s CAD of USD 88 billion, will be contained at $45 billion, which will be $15 billion more than the foreign exchange reserves by the end of financial year.

Last year, WPI headline inflation stood at 7.3 per cent and core inflation at 4.2 per cent. At the end of January 2014, WPI was 5.05 per cent and core inflation at 3 per cent.

“While our efforts have not been in vain, there is still some distance to go. Food inflation is still the main worry, although it has declined sharply from a high of 13.6 per cent to 6.2 per cent,” he said.

Rejecting the argument of policy paralysis, Chidambaram enumerated the path-breaking decisions of the government in 2013-14 which included decontrol of sugar, gradual correction of diesel prices, rationalisation of railway fare, starting the process of issue of new bank licenses and restructuring of power distribution companies.

The Cabinet Committee on Investment (CCI) and the Project Monitoring Group were set up. Thanks to the swift decisions taken by them, by the end of January 2014, the way was cleared for completing 296 projects with an estimated project cost of Rs. 6,60,000 crore.

On performance, Chidambaram gave examples of fast growth in various sectors in various sectors. India produced 263 million tons of foodgrains now as compared to 213 million tons 10 years ago.

Agriculture sector has shown stellar performance in 2013-14. Foodgrain production is estimated at 263 million tons. Production of sugarcane, cotton, pulses, oilseeds and quality seeds has reached new records.

Agriculture exports are likely to cross $45 billion.

Agriculture credit is likely to touch Rs. 7,35,000 crore, exceeding the target of Rs. 7,00,000 crore. In the current year, agriculture growth is estimated at 4.6 per cent. For 2014-15, the target for agriculture credit has been fixed at Rs. 8 lakh crore.

Chidambaram also announced that the interest subvention scheme shall continue in 2014-15. Under this scheme, a subvention of 2 per cent and an incentive of 3 per cent for prompt payment is provided, reducing the effective rate of interest for farm loan to 4 per cent.

A moratorium period for education loans taken up to March 31, 2009 has been proposed. It will benefit nearly 9 lakh student borrowers by way of reduced interest burden. Rs. 2,600 crore has been allocated for it.

The government will contribute Rs. 1000 crore to the Nirbhaya Fund on top of a similar grant provided last year.

The fund has also been made non-lapsable. - Agencies

Fiscal deficit will be contained at 4.6% of GDP: Chidambaram

NEW DELHI: The government on Monday said the fiscal deficit for the current financial year will be contained at 4.6 per cent of GDP.

“Let me begin with the good news. Fiscal deficit for 2013-14 will be contained at 4.6 per cent of GDP, well below the red line that I had drawn last year,” Finance Minister P. Chidambaram said in the interim budget presented in Parliament.

The fiscal deficit, which is the gap between expenditure and revenue, was 4.9 per cent of GDP in the previous financial year.

After talking over as Finance Minister in August 2012, Chidambaram had drawn up a financial consolidation road map to lower the fiscal deficit to 4.8 per cent of GDP in 2013-14, 4.2 per cent in 2014-15 and 3.6 per cent in 2015-16.

He said the government’s objectives included fiscal consolidation, reviving the growth cycle and enhancing manufacturing.

The Minister had on several occasions said he had drawn a red line for the fiscal deficit and it would not be breached.

As per current indications, the fiscal deficit has come down mainly on account of expenditure compression and higher realisation from the 2G spectrum auction.

The Finance Minister also said GDP growth has improved and will be 4.9 per cent for the current financial year.

Economic growth had slowed to a decade’s low of 4.5 per cent in 2012-13. - PTI

President’s rule imposed in Delhi

NEW DELHI: Central rule was on Monday imposed in Delhi and the Legislative Assembly kept in suspended animation after President Pranab Mukherjee accepted the resignation of Chief Minister Arvind Kejriwal.

Making a suo moto statement in both Houses of Parliament, Home Minister Sushilkumar Shinde said following a factual report sent by Lieutenant Governor Najeeb Jung, the Union Cabinet had recommended imposition of President’s Rule in Delhi.

“The Hon’ble President has accepted the resignation of Arvind Kejriwal, Chief Minister of the GNCT of Delhi and his Council of Ministers and also approved the imposition of President’s Rule while keeping the Legislative Assembly in suspended animation,” he said in identical statement made in both Lok Sabha and Rajya Sabha.

Shinde said the Council of Ministers of the Government of the National Capital Territory of Delhi tendered its resignation on February 14.

The resignation of the AAP government came after it failed to introduce the Jan Lokpal Bill for the consideration of the Legislative Assembly.

“The bill was a finance bill and necessitated prior reference to the Central Government by the Lieutenant Governor which procedure had not been followed by the Government of NCT of Delhi,” Shinde said.

According to a statement issued by the LG office, the President will now act through the Lt. Governor for administering the National Capital Territory.

“In exercise of the functions and powers assumed by the President... it shall be lawful for President to act to such extent as he thinks fit through the Lt Governor for administering National Capital Territory in accordance with the provision of Article 239 and Article 239AA,” the statement said.

Najeeb Jung had sent a report to the President on the political situation in Delhi in the wake of resignation of the Aam Aadmi Party government. He had also forwarded the resignation of AAP government to the President along with the report.

The AAP government had recommended to the Lt. Governor to dissolve the Assembly and hold fresh elections. - PTI

CRPF seizes 3,400 kg of ammonium nitrate in Bihar

NEW DELHI: Security forces have seized 3,400-kgs of ammonium nitrate — used for making IEDs and explosives — and detonators during an anti-Naxal operation in Bihar’s Rohtas district.

The operation was conducted by paramilitary CRPF along with State police forces in the Rudrapur forests of the district.

“Numerous bags weighing 3,400-kgs of ammonium nitrate were seized during an operation in the district. Also, 700 electronic detonators were seized,” a senior official here said.

Thirteen large bundles of iron wire mesh were also seized during the same operation, the official added.

Ammonium nitrate is extensively used in Maoist violence-affected areas to prepare Improvised Explosive Devices (IEDs) to target security forces and hence such a large seizure of this chemical from one spot is worrisome, the official said.

The seized items will be handed over to local police. - PTI

Jagan brings thousands of anti-Telangana protestors to Delhi

NEW DELHI: Thousands of protestors from Andhra Pradesh on Monday gathered here to participate in an anti-Telangana agitation over the proposed bifurcation of the state. In order to stall the Telangana bill and urge the government to withdraw its decision, the YSR Congress of Jagan Mohan Reddy and Seemandhra government employees will protest in different parts of the city.

Due to security concerns, three metro stations have been shut till evening in the heart of the city.

The government recently approved the creation of Telangana, a move that has revived deep political divisions in Andhra Pradesh and raised fears of violence in the area between pro and anti Telangana groups.

"You will have to take back your decision immediately. If not, we are coming to Delhi, we are showing our strength then only you have to withdraw your decision," said Rami Reddy, a protestor from Guntur.

Earlier this week, the parliament erupted in mayhem when a lawmaker fired pepper spray in the house in protest against the Telangana Bill, which left lawmakers coughing, sneezing and holding scarves to their faces. The agitated protesters also broke a glass table and broke an official's microphone.

The furor erupted after Home Minister Sushilkumar Shinde rose to table the bill.

Andhra Pradesh MP Lagadapati Rajagopal, who was later expelled from the Congress, then unleashed a pepper spray.

The decision to divide Andhra Pradesh comes ahead of the general elections next year. - ANI

Two Delhi Metro stations closed in view of Telangana protests

NEW DELHI: Two Metro stations near Parliament House will remain shut on Monday in view of possible protests over the Telangana issue.

Central Secretariat and Udyog Bhawan stations will remain closed from 9 a.m. to 5 p.m., while Race Course and Patel chowk stations will be kept open, a DMRC spokesperson said.

As advised by Delhi Police, the Metro stations will remain closed due to security reasons, Metro officials said.

However, interchange and controlled exit will also be allowed at Central Secretariat. - PTI

New Zealand 571/6 on day four

WELLINGTON: India’s listless bowlers allowed New Zealand off the hook as the home team rode on skipper Brendon McCullum’s monumental double century to continue their remarkable fightback and take a commanding lead on the fourth and penultimate day of the second cricket Test in Wellington on Monday.

McCullum remained unbeaten on 281 runs and shared a world record partnership of 352 runs for the sixth wicket with BJ Watling (124), helping their side reach a formidable 571/6 at stumps and take the game away from India at the Basin Reserve.

India, who had New Zealand in a spot of bother at 94 for five in their second innings yesterday, are now facing the prospect of even losing the match with the hosts swelling their lead to 325 runs. The duo defied the visitors for 123 overs and turned around a 246-run deficit into a massive lead with one day left in the match.

McCullum was still batting after nearly six sessions at the crease, facing 525 balls and hitting 28 fours and 4 sixes.

At the other end, James Neesham brought up his maiden Test fifty and was unbeaten on 67 off 93 balls, with 9 fours.

For India, Zaheer Khan (3-129), Mohammad Shami (2-136) and Ishant Sharma (0-124) toiled hard on an unresponsive pitch, particularly with the third new ball. Ravindra Jadeja (1-108) was rendered ineffective as well. Part-timers Rohit Sharma (0-40) and Virat Kohli (0-13) were given a go to try something different, while skipper MS Dhoni (0-5) also bowled after the tea-break.

Starting at 440/5 after tea, the set batsmen had another string of batting records coming their way, with the pitch playing perfect foil to them. As Dhoni bowled his gentle medium-pace first up, McCullum and Watling crossed the 350-mark for their partnership in the 159th over.

An over later, they brought up the highest ever sixth-wicket partnership in Test cricket breaking the 351-mark by Mahela and Prasanna Jayawardene, also set against India at Ahmedabad in 2009. Their lead also swelled to 200 in the meantime.

The third new ball was taken immediately and the Indian pacers put in a lot of effort to change the direction of the match. Mohammad Shami got the breakthrough finally, in the 161st over, trapping Watling lbw. He faced 367 balls in his innings, hitting 13 fours.

Meanwhile, McCullum carried on and crossed the 250-run mark, starting to climb the ladder for highest individual score for a New Zealand batsman. At the other end, Neesham too joined in the fun and struck some lusty blows, matching his partner for strokes.

They continued to punish the hapless bowling on a flat track and in the final session put on 125 runs for the seventh wicket, as the hosts crossed the 550-run mark.

McCullum heaped misery on India, finishing as the second-highest run-scorer for New Zealand, behind Martin Crowe’s 299 scored against Sri Lanka at the same ground in 1991. On the final day, he will attempt to become the first Kiwi batsman to get a Test triple hundred.

Earlier in the post-lunch session, McCullum and Watling continued their brilliant domination of this Indian attack on a pitch that completely changed character to become a batting beauty. They brought up the 350-mark for New Zealand in the 128th over, first one after the break, and then carried on to reach personal milestones.

First up they broke the highest partnership record for New Zealand for any wicket against India, passing the 271 runs scored by Ross Taylor and Jesse Ryder in Napier in 2009. Then in the 138th over, Watling brought up his 3rd Test century in 420 minutes, facing 297 balls and hitting 12 fours. Unlike his captain who was dropped twice, the keeper-batsman never even gave a sniff to the Indian bowlers.

Their 300-run partnership came in the 142nd over, and then two overs later, McCullum became the first New Zealand batsman to hit back-to-back double hundreds.

It was his third double hundred, all three having come against India, and he is only the second New Zealand batsman after Stephen Fleming to score three double-hundreds.

Before going to tea, they crossed the 339-run sixth wicket stand between McCullum and Martin Guptill against Bangladesh in 2010 and became the third-highest-ever partnership for New Zealand in Test cricket.

In the morning session, starting at their overnight score of 252/5, McCullum and Watling needed a double approach on this fourth day’s play.

If it was all about survival on day three, now they also needed to score runs and put pressure on India. And they did not get bogged down, as shots started flowing once they both got a feel of the conditions early on. For the record, the golden-brown pitch now looked completely different from the lush-green wicket that it was on day one.

Their progress was very heartening for the hosts’ camp, with the scoring rate reaching 4.7 over in the first ten, and in the first hour of play, 56 runs came in the 13 overs bowled.

The 200-run partnership between the two batsmen came up in the 110th over of the innings. As if sensing the high scoring rate, Jadeja was introduced in the 115th over and was given an attacking field with three close-in fielders.

But it didn’t have any effect on the two settled batsmen who marched along without fuss. In the next over, McCullum crossed the 150-run mark for the second time in this series, notching up his best series aggregate and going past his previous best of 370 runs, also scored against India in 2010.

He faced 303 balls and batted for a humongous 432 minutes for this, hitting 18 fours and 1 six.

After being put down twice yesterday, if at all he gave a chance, it was in the 122nd over bowled by Zaheer, when he edged one past the slip cordon wherein Shikhar Dhawan was standing at third slip. Watling though was solid as ever at the other end, and the 250-run partnership came up in the 126th over, just before the break.

On day one, Ishant Sharma’s best Test figures of 6-51 bowled New Zealand out for a paltry 192 runs. Then, on day two, Ajinkya Rahane (118) strucks his maiden Test hundred to take India to 438 in their first innings, a lead of 246 runs.

On day three, needing 247 runs to make India bat again, New Zealand were reeling at 94/5 before a 158-run partnership between McCullum and Watling rescued them.

Brief Scores:

New Zealand 1st innings 192 India 1st innings 438 New Zealand 2nd innings (overnight 252-5) Peter Fulton lbw b Khan 1 Hamish Rutherford c Dhoni b Khan 35 Kane Williamson c Dhoni b Khan 7 Tom Latham c Dhoni b Shami 29 Brendon McCullum batting 281 Corey Anderson c & b Jadeja 2 B J Watling lbw b Shami 124 Jimmy Neesham batting 67

Extras (B-5, LB-11, W-2, NB-7) 25

Total (six wickets; 189 overs) 571

Fall of wickets: 1-1, 2-27, 3-52, 4-87, 5-94, 6-446.

Bowling: Ishant Sharma 39-4-124-0, Zaheer Khan 43-12-129-3, Mohammed Shami 40-5-136-2, Ravindra Jadeja 49-10-108-1, Rohit Sharma 11-0-40-0, Virat Kohli 6-1-13-0, Mahendra Singh Dhoni 1-0-5-0. - PTI

McCullum, Watling break world record for 6th-wicket stand 

WELLINGTON: New Zealand skipper Brendon McCullum and B J Watling on Monday broke the world record for the highest sixth-wicket partnership with a 352-run stand against India in the ongoing second cricket Test in Wellington on Monday.

McCullum and Watling scored 229 (not out) and 124 runs respectively to break the previous record of 351 which was put together by Mahela Jayawardene and Prasanna Jayawardene in 2009 against India.

McCullum and Watling’s marathon stand came to an end when latter was trapped LBW by Mohammed Shami in the first over after the new ball was taken.

In the course of the partnership, McCullum became only the sixth player in history and the first from New Zealand to score two double centuries in back-to-back Test matches.

This was also McCullum’s third double hundred — all these big knocks have come against India.

Watling joined McCullum on Sunday when New Zealand were tottering at 94 for the loss of five wickets. - PTI