New Delhi, October 30
Prime Minister Manmohan Singh today said his government will move ahead with reforms in labour and financial sectors, but investment in the rural sector would be the real growth engine for the economy to expand by 9-10 per cent.

He, however, said, reforms process has many dimensions. “Increased investment in rural infrastructure, more emphasis on health and education is probably of greatest importance.”

“We need to push forward the reforms process in the areas you have mentioned and we will do so,” Singh said while replying to a question by Rajya Sabha MP NK Singh on stalled reforms in labour, insurance and the financial sector.

The Prime Minister was addressing the HT Leadership Summit here.

“An environment conducive to the growth of entrepreneurship in the urban economy as well ensuring greater government involvement in rural development is required,” he said.

The fact that our savings rate is 35 per cent suggests that this is a realisable goal, the Prime Minister said, adding that the challenge for the political leadership at the national and state levels would be to ensure this outcome.

Underlining that the states will have to shoulder the responsibility of the Centre in development, he said, each of the initiative of the Centre to be successfully implemented, we need pro-active and creative leadership at the state and district levels.

Stating that the real change in India would come when we get the right kind of state and local leadership, a forward-looking, modern and compassionate leadership that strengthens the foundations of our Republic. The focus of the debate on leadership for building a new India should, therefore, shift to the states.

“The main challenge in the next decade would be to achieve and sustain high rates of economic growth and ensure that it remains remains equitable,” the PM stated.

Making it clear that development of rural areas and uplift of social classes would be crucial to building the India of tomorrow, he said his government had taken a series of initiatives aimed at investing in rural and urban infrastructure, generating maximum employment and improving productivity of farm economy.

To a question about reforms, particularly in labour, insurance and financial sector, being stalled, he said, “We need to push forward the reforms process in the areas you mentioned and we will do so, year 2020 is not far away.”

The PM asserted that the Indian economy would grow by 6-6.5 per cent in the current fiscal despite being affected by the global financial crisis and drought in the country. 

Nicosia, October 30
India is planning a major headway in generating energy through solar sources. It has approached Cyprus which has made considerable headway in that direction to develop solar power plants ranging between one MW and 50 MW. An MoU was signed here today in the presence of visiting Indian President Pratibha Patil for providing solar power to India.

The MoU states that NORASCO, UPTURN of DALCO company and CASE NEUBERG of the CASE group of companies will supply solar photovoltaic systems, kits and technology for solar energy projects in India.

It also states that CASE will be Indian technology and engineering partners for setting up turnkey solar energy plants in India and NORASCO will provide project finance and investments of EURO 50 million in solar energy sector in India between 2010 and 2015. The Photovoltaic Technology Group of University of Cyprus (PVT Group) also signed an MoU with NORASCO whereby PVT Group will act as a technology consulting partner for developing solar energy projects and solar energy education in India.

President Pratibha Patil’s three-day visit underlined the growing socio-economic and trade ties between India and Cyprus. As pointed out by official sources, every successive Cypriot President has paid an official visit to India and Patil is currently reciprocating this gesture. But business is more important and a high-level business delegation of the CII and ASSOCHAM is also present here to put its business weight behind President Patil’s trip.

The Cypriots, with a nation small in size but rich in per capita income, on their part are enthusiastic about and buttressed the importance of growing economic ties and reciprocity. So the president of Cyprus Chamber of Commerce and Industry Manthos Mavrommatis pointedly mentioned how double taxation in India is discouraging Cypriots from investing generously in India and pleaded with the President of India to cut out double taxation between India and Cyprus.

New Delhi, October 30
Finance Minister Pranab Mukherjee will share his perception on exit strategy at the G-20 Finance Ministers meeting in Scotland, starting from November 6.“So far we are concerned, I think I shall have to watch situation for the economic progress in the second quarter and third quarter.

 Perhaps, I may be in a position, I am not asserting that position, to articulate it exit strategy, sometimes when the D-day will come,” Mukherjee said at the Hindustan Times Leadership Summit here today.

Economic recovery is there but it was halting and slow, Mukherjee said.

The FM’s comment on exit strategy will be significant for the world economy because of the investments waiting to come into the country. Besides, it will signal that the Asia’s second largest economy is back on the growth track.

He said instead of blanket exit strategy for all nations, each country should devise their own plans depending on their economic situation.

“We are strongly advocating that at different points of time, the crisis was held by the country concerned, and they know where the shoe pinches, therefore instead of having any blanket exit strategy all over the world, let the states make an assessment in the context of the situation prevailing at that point of time and take appropriate decision,” he said.

“Growth is likely to pick up from the October-December quarter of FY10 and the country can return to 9 per cent growth in the next two years,” the FM said.

Private investments the world over, especially from the West, is looking at economies that are growing and have been able to decouple with the US. India, despite its fall in exports (most of which are US and EU bound), has been able to maintain a good growth rate because of buoyancy in domestic demand. Most of the demand for consumer goods and automobiles has been from the strong rural growth due to strong social sector programmes carried out in the hinterland.

In its fiscal stimulus measures to perk up the slowing down economy, the government had cut excise duty by 6 per cent, service tax by 2 per cent in phases and increased planned expenditure.

The government has also sought broad political consensus to clear the crucial legislations, including the labour and the insurance bills, to push forward the reforms.

“We don’t have the required majority in the two Houses (of Parliament) to clear the bills ... a broad political consensus is needed,” Mukherjee said.

Stressing on fiscal consolidation, he said the target must be to bring back fiscal deficit within prudent limits.

The FM said the fiscal deficit must be contained and brought back to 5.5 per cent by 2011-12 from 6.8 per cent now.

New Delhi, October 30
Finance Minister Pranab Mukherjee today said there was a possibility of delay in introduction of the Goods and Services Tax (GST) from scheduled date of April 1, 2010.

"I am trying to stick to the time schedule, but I will not be surprised if there is slippage of a few months," Mukherjee said at the Hindustan Times Leadership Summit here.

The Finance Minister's comments came on a day when states finance ministers deliberated on various aspects of GST structure at a meeting here.
In fact, Mukherjee also said, "Right now, the empowered committee of state finance ministers is meeting in Delhi. It means that we are seriously trying for convergence of the views, I am going to have meeting on 10th of next month." He said convergence has been arrived at on many issues and divergence is limited.

"But at the same time, it will take some legislative measures, including the Constitutional amendment, and that has its own space," he said.

When asked about the Finance Minister's comments on the issue, Empowered Committee chairman Asim Dasgupta said, "Our collective target is April 1, 2010, and on this we will have discussions with the Finance Minister." The Empowered Committee has already constituted a working group on suggesting Constitutional amendments and model GST Act.

Some states like Madhya Pradesh and Gujarat have suggested that there should not be any hasty implementation of GST.

"There is a case for it getting delayed. There are many issues which have to be solved, many complications which are also there," Madhya Pradesh Finance Minister Raghavji said after the meeting of the Empowered Committee on GST.

He added that there should not be a hurry in implementing GST as this is a radical reform in the tax structure.

GST, which will subsume excise duty and service tax at the central level and VAT at the state level, is aimed at giving common market structure to India.

For inviting public comments, the Empowered Committee will come out with a discussion paper on GST by November 10.

"We will put our GST discussion paper for wider circulation on November 10 along with that there would be frequently asked questions. The draft was circulated, states have given their views. So we have taken a convergent position now. This would be our first discussion paper. It would be followed by a second discussion paper," Dasgupta said.

Mumbai, October 30
The country's largest private sector lender, ICICI Bank, today reported a 76 per cent growth in consolidated net profit at Rs 1,144.57 crore during the second quarter ended September 30, 2009.

Total income declined to Rs 14,595.85 crore during the July-September quarter from Rs 15,590.46 crore in the same period a year ago, ICICI Bank said in a filing to the Bombay Stock Exchange.

Lower losses in life insurance business and higher profits in other subsidiaries were reflected in the surge in net profit of the company. The bank has cut down heavily its operating expenses although its net interest income has come down.

On a standalone basis, ICICI Bank posted a net profit of Rs 1,040.13 crore during the September quarter, a 2.56 per cent increase over the year-ago period.