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Saturday,
March 2, 2002, Chandigarh, India  
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Sinha links interest rates to inflation
AN EXPERT’S COMMENTS
Restore commission, say travel agents
French experts to help set up food parks |
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Special models of Maruti 800 launched
Ambuja Cement holds workshop
Proceedings against Tokyo Bank stayed
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Sinha links interest rates to inflation New Delhi, March 1 “Today inflation rate is only one per cent but the real interest rate was highest in this decade. So, it is important to link interest rate and inflation rate,” Mr Sinha told reporters after emerging out of a meeting the industrialist here at the Federation of Indian Chambers of Commerce and Industry (FICCI). “People here should not mind the slight (0.5 per cent) cut in interest rate on small savings. If interest rate on deposits have come down, people would also benefit from lower lending rates when they take loans for various needs including housing loans,” the Finance Minister said adding that linking of interest rates to inflation rate was a worldwide phenomenon. In US for instance, the interest rates were slashed 9-10 times in the last few months to spur demand in that country. Earlier addressing the industrialists, Mr Sinha said that an honest attempt has been made to strike a balance between spurring demand and reigning in fiscal deficit. “I personally feel guilty that I could not peg fiscal deficit at a lower level. But a honest attempt has been made to strike a balance between spurring demand and fiscal consolidation,” he said. On the demands of the industry for introduction of investment allowance and reduction of corporate taxes, the Finance Minister said that if these measures were introduced, the central exchequer would have lost a revenue of Rs 18,000 crore which would have pushed up the fiscal deficit to an unsustainable level of 7-7.5 per cent of GDP. He did not agree with the view that 5 per cent surcharge slapped on personal income tax was too high considering he was trying to mop up only Rs 2,750 crore in the whole budget of over Rs 4,10,000 crore. On the measures
announced for agriculture, the Finance Minister said that the farm sector has been identified as the engine for growth which will eventually spur economic growth. “Better value added in the agriculture sector in the coming year will translate into better industrial growth”, Mr Sinha said. |
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Mrs Sinha also feels the pinch
New Delhi, March 1 When mediapersons urged him to find a way out regarding this commonman’s problem, he said,“... My wife also did not like it. But the rationale behind it should be understood. Had the prices of kerosene and cooking gas remained static, there would have been an additional burden of Rs 8,000 crore on the Budget....’’ Everything had not become dearer, Mr Sinha observed, adding that petrol and diesel were now cheaper by Re 1 and 50 paise, respectively. “If you save Rs 2 every day on petrol, the increase in LPG price would be neutralised,’’ he argued.
UNI
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Concessions
for NRIs New Delhi, March 1 Non-resident Indians will be free to repatriate in foreign currency their current earnings in India such as rent, dividend, pension, interest and the like based on appropriate certification.
The schemes which do not offer full convertibility to NRIs will be discontinued from April 1, 2002 and the existing balances non-resident (non-repatriable) rupee accounts will be allowed to be credited on maturity to the convertible Non-Resident External rupee (NRE) account. There will be full convertibility of deposit schemes for NRIs. The existing Foreign Currency Non-resident scheme and the NRE scheme will continue to be
repatriable.
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AN EXPERT’S COMMENTS With the government remaining a prisoner of market dogma, there is little surprise that the Finance Minister is finding his options increasingly narrowed down. The Budget, 2002 -2003 is classic example of re-cycling of the same old cliches, logic, approach and proposals, with the only inevitable change being a different set of numbers and a negligible relative re-ordering of the magnitudes of the major budgetary items on both the expenditure and revenue sides. Given the wide and random divergence of the budgeted from the actual as a kind of natural law, the sanctity of the numbers and of the Parliamentary approval stands compromised. What clinches such a reading of the fifth exercise by the present FM is the astonishing phenomenon of the absence of any expectations of any major overhaul — least of all any qualitative break, entertained by the Budget savvy sections of the organised, middle, upper and super upper income group elites. While specific micro expectations galore, they are based on the perception that the Budget has the will and capacity to adhere the immediate concerns of the organised sectors. Despite massive deregulation, disinvestment-privatisation and cuts in social spending based rolling back of the state, high hopes continue to be pinned on the magic wand of the Budget, not only by all and sundry, but even by the big market players in whose favour the state is vacating the space it apparently so highmindedly occupied. In fact, the objective force of state’s persistent releveance fails to oblige the advocates of a minimalist state: total public sector
contribution to GDP remains almost undiminished at about 25 per cent. The gungho over Budget, irrespective of its hardy annual use by the state-market coalition to further cement its symbiotic ties, appears some what ironic in a policy environment wedded to further the unrestrained ‘free’ play of market forces. True, the second generation reforms’ agenda is waiting for action, but most of it has very little direct fiscal content. The long first part of the Budget, usurped the domain of other ministries, but still fails to enthuse the recession-hit growth enthusiasts and the Sensex. In this context the Union Budget for 2002-2003, presented in a political environment marked by a resounding slap by the electorate has to be viewed both in the context of the overall performance of the Indian economy, and of course, the proposals of a few previous budgets and their actual fate. As for the economy, all the bases like overall, sectoral and regional output growths; efficiency, in terms of comparative cost profile; conformity with the needs and demand, especially as reflected in the price income frontier facing the majority; capacity utilisation; savings and investment levels and their rate of change; current and capital account transactions and their financing; the availability and growth of employment, i e income earning opportunities; etc, have been shown to be
unsatisfactory, distorted, non-sustainable, involving heavy direct and indirect social costs and disturbing their mutual inter-relationships so basic to the orderly functioning of any social economy. With the shrinking real sectors, be it agriculture, industry, or construction, with their employment counterpart not only failing to keep pace, but sadly declining even in absolute terms for agriculture it is shocking
indeed that the policy priority is given to the services, especially financial services and external finance. Read the Budget speech twice over and scratch your head about the numbers given, and you could be a genius indeed if you can figure out how the demand for goods of farmers and industrial origin is going to be revised and infact, take a quantum jump needed for reviving the economy away from a “jobless future” to broad-based, sustainable, socially meaningful growth. To take just one example, the newly assumed obligation of compulsory, universal elementary education is sought to be accomplished by increasing the allocation for this purpose from Rs 4000 crore to Rs 4900 crore. It is true that the corporate sector, the tax-evading small section of the well-to-dos and the urbanites would continue cribbing about 5 per cent tax surcharge or this or that direct indirect tax rate, exemption, methods of administering the provisions etc. The real producing and income distributing informal sector continues to suffer prolonged neglect and unbargained for consequences of the sins of commission and omission by the Budget. The policy paradigm in India is so heavily focussed that there are hardly any analysis of the Budget policies and allocations from the point of view of the vast majority of our citizens. Certainly, we have a democracy and a really active one at that. A whole paraphernalia of schemes, projects agencies, etc have been created for addressing almost every conceivable problem. The Budget 2002-2003 too can boast of incrementally making same additions improvements, etc, in these discussions. Let us ask a few unconventional but unavoidable questions concerning the Budget. What are the key elements of a people-friendly democracy-rich Budget? On expenditure side does it allocate enough resources for providing to the poor, unemployed, small and marginal
farmers, landless rural workers, poor artisans, the slum dwellers, the minimum essential wherewithals of public and quasi-public goods worthy of the largest democracy in the world and supplement the fiscal measures by economic and social policies for ensuring livelihood security. Given the fact that we remain miles away from such a situation after over half a century, to be satisfied if sincere and reasonably time-bound steps are taken towards such a dream Budget, disregarding the fact that the fat cats of the corporate world treat such madness’ a virtual nightmare. One hardly comes across
any linking of such concerns in the official review of Public spending in the Economic Survey or even in the Budget speech. The present obsession seems to be to curtail public spending, provide public services on commercial like on user charges, with total absence of
anything like cross-subsidies, so essential in a highly skewed society. Neither on the spending nor on the revenue side, there is any trace of equity, livelihood security, sustainability of development or concern for the future generation. One may well argue that no analyst has any right to criticise the fiscal decisions on any criteria other than those adopted by the elected government. One would readily agree with this plea if the elected leaders repudiate the criteria we have mentioned or even deny that they have ever stood for any such values and vision of society. It is on these counts that one avers that is the course of its obsession with fiscal deficit, the Finance Ministers are multiplying the “democratic deficit” plaguing the polity, not succeeding to any appreciable extent, even in its housekeeping, as shown by the leapfrogging of the fiscal deficit to Rs 135524 crore in the Budget estimates for 2002-2003. So long as equity, employment generation, environmental sustainability, empovernment of the socially discenfranchised, poor and deprived continue to be sacrificed at the altar of the status-quoist growth, subservient to the interests of the tiny section of the super-rich, Budgets will only increase the democratic deficit crippling the social gains of our democracy. |
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Budget belies hopes of most tax payers
New Delhi, March 1 “Investors have been very badly hit as the middle level income-tax payers between Rs 1.5 lakh and Rs 5 lakh income will be eligible only to 10 per cent income tax rebate on the designated investments whereas the highest tax payers having income above Rs 5 lakh will no longer be eligible to any tax rebate,” R.N. Lakhotia said. The Finance Minister has left income tax proposals untouched in his recent Budget, which are at 10, 20 and 30 per cent and the tax rebate on investments has been halved. An individual having income above Rs 5 lakh will get an additional tax burden of Rs 16,000 a year as no tax rebate will be given. While a person having income less than Rs 5 lakh but more than Rs 1.5 lakh would bear an additional burden of Rs 8,000. The tax payers have been further burdened by imposition of 5 per cent surcharge across-the-board on all categories of tax payers. The existing surcharge of 2 per cent imposed last year in the wake of Gujarat quake relief has been abolished. The
imposition of 5 per cent surcharge is a retrograde step and is against the policy of simplification of tax structure, Lakhotia said.
PTI
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Restore commission, say travel agents Chandigarh, March 1 Mr Jehangir N. Katgara and Mr Balbir Singh Mayal, President and Vice-President of the Travel Agents Association of India (TAAI), who were here in connection with the managing committee meeting of the association, told The Tribune that while the travel agents were working for all international airlines on reduced commission from 9 to 7 per cent under protest, they may stop working for Indian Airlines in case it did not defer its decision. The domestic carriers announced to reduce the commission for their agents from March 1. The management of Jet Air, they said, agreed to the suggestion of the TAAI and deferred the reduction of commission “till the issue is amicably settled” while Indian Airlines management insisted on implementing its order from today. “In case the management of the IA does not listen to us, we will have no choice but to stop working for the carrier,” said Mr Katgara. “Reduced capacity, no uniformity in air fares and recession are the other major issues which the TAAI is currently debating,” Mr Katgara said, maintaining that the September 11 terrorist attacks in the USA acted as a catalyst in “dooming the aviation industry worldwide.” Mr Balbir Singh Mayal said the travel agents were also upset at the latest trend when airlines, in their endeavour to eliminate agents, start approaching the clients directly. “We have taken it up with the management of some of the international carriers.” Mr D.P. Sondhi, President of the Punjab chapter of the TAAI, criticised the Union Government for its policies maintaining that instead of allowing bigger aircraft, the Government wanted that there should be neither any offloading nor was it allowing increased capacity. |
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French experts to help set up food parks New Delhi, March 1 The government has already acquired land for setting up four food parks in Rai, Narwana, Dabwali and Saha and has sought the help of French experts in setting up food processing zones. During its 20-day visit in Haryana, French experts will provide guidance about various aspects related to the food processing industry, Haryana Chief Secretary L M Goyal, who was here in connection with the state’s participation in Krishi Expo-2002, told newspersons today. Besides this, the government also proposes to set up agri export zones at strategic locations so that export of food processing products could be promoted without any hassle. Already a proposal to set a agri export zone in Karnal has been forwarded to the Centre for approval. “A mechanism is being developed so that the food processing industry can buy the farmers raw material, i.e. foodgrain, vegetable, fruit, etc directly from the farmers without going to the market,” Mr Goyal said. The government is also exploring the possibility of setting up of preservation centre through radiation with the help of the Centre and laying emphasis on scientific cultivation of mushroom, aeronautic plants and cotton processing, he said.
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Special models of Maruti 800 launched
New Delhi, March 1 Called Maruti 800 special, the car has attractive body-graphics, body coloured bumper, body-coloured grill, new instrument cluster and will come in two variants — Standard and Deluxe — a company spokesman told PTI here. The Maruti 800 Special Standard has been priced at Rs 2.31 lakh (Ex-showroom Delhi), about Rs 6,800 more than the existing Maruti 800 Standard. The Deluxe version will cost Rs 2.79 lakh, about Rs 5,130 more than the current Maruti 800 Deluxe model, the spokesman said. The special edition which will be sold in limited numbers would have two new colours. “This is Maruti’s first colour coordinated car, with its interiors, including seat upholstery, door trim, leather steering wheel cover and carpets carrying the same colour as the car’s exterior,” the spokesman said.
PTI
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Ambuja Cement holds workshop Chandigarh, March 1 Fly ash is used worldwide in cement manufacturing. It is surprising that fly ash, a waste from thermal power plants, is a very important raw material in the cement manufacturing process. Fly ash not only contributes to the strength of concrete but also goes a long way in increasing its durability with its inherent qualities which is a fact that is proved and practiced internationally. Mr J.P. Desai, Senior Vice-President (Technical services) Gujarat Ambuja Cements delivered the introductory lecture on the use of fly ash in concrete/cement and the present scenario. Other speakers for the workshop included Dr V.M. Malhotra, of Canada, Dr P.K. Mehta, of University of California at Berkeley, Dr W.S. Langley, of Dalhousie University, Canada and Dr Tarun R. Naik, of University of Wisconsin, Milwankee.
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Proceedings against Tokyo Bank stayed Chandigarh, March 1 |
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NABARD Clearline gets ISO Factories strike HSIDC Corpn Bank |
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New Delhi, March 1
