3 schemes for unorganised sector announced
New Delhi, February 29
The government has introduced three schemes viz Aam Admi Bima Yojana, Rashtriya Swasthya Bima Yojana and Indira Gandhi National Old Age Pension Scheme to provide social security to workers in the unorganised sector in a phased manner.

Inflation jumps to 4.89 pc
New Delhi, February 29
Costly petroleum products and some food items pushed inflation rate to nine-month high of 4.89 per cent for the week ended February 16, vindicating the cautious approach adopted by RBI in its quarterly monetary review.

Scrap duty cut insufficient, say steel producers
Ludhiana, February 29
Secondary steel producers here are unlikely to pass on the benefit of the proposed reduction of customs duty on scrap in the union budget to steel consuming units.

Oil PSUs to pump in Rs 46,500 cr for exploration
New Delhi, February 29
Public sector oil companies will step up investment in exploration, refining and petrochemicals by 30 per cent to over Rs 46,500 crore in 2008-09 fiscal.

SMEs feel cheated
Chandigarh, February 29
The small and medium enterprises (SMEs) in the region have been left high and dry by the Finance Minister, as he presented his budget proposals today. With no relief in corporate tax or reduction in excise duty, the industry feels that they have been ignored at the cost of the farm sector.

Relief in dividend distribution tax
New Delhi, February 29
The budget has provided relief in the dividend distribution tax (DDT). A parent company is now allowed to set off the dividend received from its subsidiary company against dividend distributed by the parent company, provided that the dividend received has suffered DDT and the parent company is not a subsidiary of another company.

Oil boils at $103
London, February 29
The price of New York crude oil hit an all-time high point of $ 103.05 per barrel today owing to record weakness of the dollar but then fell back, traders said.

New Delhi, February 29
The Indian industry today gave a thumbs up to the union Budget, saying finance minister P Chidambaram has done a “fantastic” job.

“The finance minister has presented a comprehensive, balanced and growth-oriented budget”, said Sunil Mittal, president, CII. He, however, said they were disappointed that the corporate tax has not been changed.

The finance minister has managed to address the triple challenge of growth inclusiveness and sustainability very astutely, he said, adding that the budget proposals would go a long way in building people and building India.

However, the CII hoped that the expected proposals of the Sixth Pay Commission have been kept in mind while balancing the budget, since any provision for that did not seem apparent from the finance minister’s speech.

The cornerstone of the budget has to be the obvious fillip that it would provide to consumption in the country and thereby pump up a demand-led growth cycle. This would supplement the neutral stance that the RBI has indicated in the last monetary policy review, said the CII release.

Dr L.K. Malhotra, president, PHDCCI, said political considerations have clearly dominated the economic decision- making, particularly while writing off the huge debt of farmers. The economy should be insulated from the possible adverse affect of this largesse to enable it to take advantage of across-the- board reduction in general Cenvat rate.

While complimenting the finance minister for giving special consideration to agriculture, education and health in a move to promote inclusive growth, Dr Malhotra said some positive features for manufacturing, such as reduction in excise, status quo in peak customs duties, deductions for R&D and innovation initiated by industry were commendable.

“By laying the strong foundations for a sustained inclusive growth, including double-digit economic growth, particularly by focusing on building `Human Skill Development Bank’, tremendous boost to agrarian economy and paving way for PPP in education and health, the finance minister has even exceeded expectations of corporate sector in his budget proposals”, said Assocham president Venugopal Dhoot and its president-elect Sajjan Jindal. The chamber accorded 8 marks out of 10 to the budget.

Complimenting the finance minister, Assocham said it has provided succor to small and marginal farmers who were groaning under heavy debt burden and struggling hard for survival. It is a much-needed step in right direction. However, waiving off loans was not the ultimate solution and therefore it suggested for creating a mechanism to monitor various laudable schemes announced to ensure that their deliveries reach the targeted groups.

"We realise that it was an election Budget. However, a lot of aspects of it have confirmed that the finance minister has done a remarkable job," Ficci president Rajeev Chandershekhar said. "The finance minister has ensured that the growth momentum will continue...and we, as an industry, are completely sure that we will be able to maintain the 9 per cent growth," he added.

New Delhi, February 29
Confirming fears of a slow down expressed in the Economic Survey, India’s GDP expanded by a tardy 8.4 per cent in the third quarter of 2007-08 primarily due to sluggishness in manufacturing and construction sectors.

According to quarterly estimates of Gross Domestic Product (GDP) released by the government today, October- December quarter was the worst in 2007-08 in terms of economic growth (8.4 per cent), which in turn can pull down full year growth to 8.7 per cent as feared by the Economic Survey.

While the growth rate of the manufacturing sector came down to 9.3 per cent during October-December 2007 from 11.3 per cent in the corresponding period previous year, the construction sector growth rate dipped to 8.4 per cent from 10.8 per cent during the same period.

The Economic Survey, tabled by Finance Minister P Chidambaram in Parliament yesterday, had said growth would fall to 8.7 per cent as the economy faced the challenges of poor performance by infrastructure and industrial sectors.

The GDP growth rate during nine month period (April- December 2007) worked out to be 8.9 per cent down from 9.6 per cent during the corresponding period last year.

The agriculture and allied sector growth rate during Q3 declined to 3.2 per cent from 3.4 per cent in the corresponding quarter in the last fiscal.

The GDP growth rate was 9.3 per cent in the first quarter of this fiscal before it dipped to 8.9 per cent in Q2. The third quarter of 2007-08 is also the worst quarter in terms of growth since April 2006.

The growth rate of the mining and quarrying sector dipped to 4.9 per cent in Q3 from 6.1 per cent during the corresponding period last fiscal.

Similarly in the financing, insurance, real estate and business services segment of the economy the growth rate declined to 11.6 per cent from 14.7 per cent during the corresponding quarter in the last fiscal.

The only sector, which performed better in Q3, was community, social and personal services that recorded a growth rate of 7.6 per cent, up from 5.6 per cent in the corresponding quarter in 2006-07.

As regards the nine-month period (April-December 2007), the manufacturing sector growth rate slipped to 9.9 per cent from 11.7 per cent in the corresponding period, confirming the fears of slowdown.

The signs of slowdown was also visible in the construction sector, which recorded a growth rate of 10 per cent during the nine-month period, down from 11.9 per cent in the corresponding period in the previous financial year. — PTI

New Delhi, February 29
The statement of civil aviation minister Praful Patel that the ministry would “continue to pursue the finance ministry and the states for rationalisation of taxes on the aviation turbine fuel,” sums up it all for the aviation industry, specially the domestic industry which is already facing major losses.

There was a major hope in the industry that the Budget would bring some hope for them with reduction in the cost of jet fuels, which account for over 45 per cent of operational costs of carriers, which are among the highest in the world.

The industry at present bleeds with the unfriendly cuts that aviation turbine fuel (ATF) causes to its bottom line. What is more every state in the country charges duty on the fuel differently, greatly affecting the working of the airlines.

A move from the finance ministry to rationalise the duty on the fuel would have meant that states would also have to follow suit bringing around a major relief for the airlines, which also feel pinched in comparison to the international airlines.

Airlines say while the fuel in India accounts for more than 45 per cent of the total cost of operations, in most other countries it is in the range of 18-20 per cent.

In India the fuel is heavily taxed, with local prices 70-80 per cent higher than international prices.

According to the data obtained from the Federation of Indian Airlines (FIA), an apex industry body which has been formed by scheduled Indian carriers, the price paid by carriers in Dubai is $ 620 (Rs 24,806) per kilolitre (KL) and in Singapore $ 577 (Rs 23,064) per KL. In sharp contrast, Indian carriers pay $1,000-1,125 (Rs 40,000 to 45,000) per KL depending on the taxes levied by the states. These vary between 4 and 38 per cent.

According to ministry official, the fuel costs Rs 45,537 per KL in Kolkata, followed by Hyderabad at Rs 44,241 per KL and Thiruvananthapuram at Rs 43,907 per KL. It is the cheapest in Delhi at Rs 39,767 per KL.

These prices are applicable only to domestic carriers for domestic operations and in order to tide over high fuel costs, airlines levy a fuel surcharge of as much as Rs 1,650 on all passenger tickets.

New Delhi, February 29
The equity support to Central PSUs have been lowered to Rs 16,436 crore in the fiscal 2008-09, as against Rs 16,742 crore in the current year, indicating their reducing dependence on the government.

Presenting the Union Budget for 2008-09, Finance Minister P Chidambaram said the government proposed to provide Rs 16,436 crore as equity support and Rs 3,003 crore as loans to Central public sector enterprises (CPSEs).

The government support to such PSUs in 2007-08 was to the tune of Rs 19,635.65 crore, comprising Rs 16,742.4 crore by way of equity and Rs 2,893.25 crore through loans. This has been reduced marginally to Rs 19,439.77 crore for 2008-09, with equity of Rs 16,436.37 crore and loan of Rs 3,003.4 crore.

The government would also encourage more CPSEs to get listed on the stock exchanges. As of now 44 such firms have raised money from the public, Chidambaram said.

“It is the policy of the government to list more CPSEs in order to unlock their true value and improve corporate governance,” Finance Minister P Chidambaram said in his Budget speech presented in Parliament.

SCOPE, the body of CPSEs, said listing of more CPSEs on the stock exchanges would unlock the true value of the companies and help improve their corporate governance, which is crucial for making them globally competitive. 

New Delhi, February 29
The government has introduced three schemes viz Aam Admi Bima Yojana, Rashtriya Swasthya Bima Yojana and Indira Gandhi National Old Age Pension Scheme to provide social security to workers in the unorganised sector in a phased manner.

Finance minister P Chidambaram today said Rs 1,000 crore will be spent on a social security scheme for unorganised workers. The scheme, which was launched on October 2, 2007 called Aam Admi Bima Yojana, will now extend to death and disability insurance cover through Life Insurance Corporation of India to rural landless households. The central government will bear 50 per cent of the premium of Rs 200 per year per person. Chidambaram said in anticipation of the Unorganized Sector Workers’ Social Security Bill, 2007 being made into law, the government introduced the schemes. He said Rashtriya Swasthya Bima Yojana will be implemented with effect from April 1, 2008.

He added that the Indira Gandhi National Old Age Pension Scheme, which was in large with effect from November 19, 2007 to include all persons over 65 years falling under BPL category, proposed to allocate Rs 3,443 crore in 2008-09 as against Rs 2,392 crore in 2007-08 because of expansion of coverage from 87 lakh to 157 lakh beneficiary under the scheme.

New Delhi, February 29
Costly petroleum products and some food items pushed inflation rate to nine-month high of 4.89 per cent for the week ended February 16, vindicating the cautious approach adopted by RBI in its quarterly monetary review.

The data partly captures the rise in petroleum prices announced on February 14. The government hiked petrol and diesel prices by Rs 2 and Re 1 a litre, respectively.

The wholesale price index-based inflation rate was 4.35 per cent in the week preceding the one under review, and 6.05 per cent in the corresponding week a year ago, according to official figures released today.

This is the fourth week in a row when inflation rate is more than 4 per cent and is nearing RBI tolerance level of 5 per cent for the current fiscal.

During the week under review, prices of petrol moved up by six per cent, high-speed diesel oil and light speed diesel oil by 3 per cent each, while bitumen got costlier by 6 per cent.

While prices of wheat, maize, urad and fruits and vegetables declined one per cent, gram got expensive by 3 per cent, and jowar by 2 per cent.

In his Budget speech today, Finance Minister P Chidambaram said that keeping inflation under check is one of the cornerstones of the government’s policy. — PTI

Ludhiana, February 29
Secondary steel producers here are unlikely to pass on the benefit of the proposed reduction of customs duty on scrap in the union budget to steel consuming units.

Producers said high rates of iron ore would mitigate the benefit that would accrue as a result of the cut in duty on high melting scrap to zero and in excise duty by 2 per cent that was proposed by the finance minister today.

Rates of iron ore, which forms over 50 per cent of their raw material, increased by more than Rs 500 per metric tonne today, which would mitigate the benefit that could have accrued to consumers, they said.

The finance minister should have dwelt on the issue of export of iron ore, which he did not, rued producers.

"The effect of proposed duty cut will roughly be Rs 1,000 per metric tonne. However, we do not think that consumers would stand to benefit much as rates have already started increasing," said K.K.Garg, president of North India Induction Furnace Association.

Duty cut was one of the key demands of Ludhiana's steel consuming industry that went on a continuous protest for 11 days against rising steel prices. However, the reduction failed to cheer industry.

Industrialists are now waiting for impact on prices of steel produced by large steel producers.

The finance minister proposed to reduce the customs duty on non-alloy steel from 15 per cent to 10 per cent and to increase the excise duty on steel from 8 per cent to 12 per cent so that the countervailing duty would be applicable on imports. Industrialists said until large producers passed on the benefit to secondary producers, small and medium units were unlikely to benefit much.

"We have our doubts that steel consuming industry would benefit much.

No effective measures were announced to tackle the rising steel rates, which are affecting the industry badly," said V.P.Chopra , president of Federation of Small Industries Associations, minerals and industrial raw materials.

Chandigarh, February 29
The small and medium enterprises (SMEs) in the region have been left high and dry by the Finance Minister, as he presented his budget proposals today. With no relief in corporate tax or reduction in excise duty, the industry feels that they have been ignored at the cost of the farm sector.

The general sentiment in the industry is that while the farm sector has been compensated for large-scale rural indebtedness, the demands of the manufacturing sector, which is the growth driver for the economy, have not been considered. The steel industry was hoping for a cut in excise duty so that the steel prices would come down. “However, only the custom duty of 5 per cent on the scrap has been abolished. This would not bring any relief to the small steel industry,” says Amarjit Goel, CMD of Modern Steels, Mandi Gobindgarh.

Even though the government has enhanced allocation under the Technical Upgradation Fund Scheme (TUFS) from Rs 911 crore to Rs 1090 crore for the textile sector, the textile majors in the region say that this is too little considering the losses suffered by the sector in wake of rupee appreciation. Satish Bagrodia, chairman, Winsome Group, said that for quite some time the textile units in the region have not received any funds under the TUFS. As a result, there is a lot of apprehension and no new investments are being made in this sector, he adds.

Even the agro-processing sector in the region is not too happy. Sanjeev Nagpal, managing director of Nasa Agro Industries, says that rather than giving a loan waiver, the focus should have been on value addition in the farming sector by promoting agro-processing sector.