New Delhi, February 26
The economic growth slipped drastically to 6 per cent in the third quarter of the fiscal, around the same level witnessed during global financial meltdown, even as the government partially rolled back stimulus on the premise that the economy is on a rebound.

The drastic slippage could be gauged from the fact that the economy grew by 7.9 per cent in the previous quarter, which raised the hopes that the economy is now on sustained recovery trajectory.

Economic growth in the third quarter came down due to a 2.8-percentage points contraction in farm output due to the worst drought in 40 years as well as a 2.2-percentage points downward spiral in community, social and personal services, the government said.

The growth is almost same as witnessed after deepening global crisis impacted the economy from the middle of September 2008. In the third quarter of the last fiscal, the economy expanded by 5.8 per cent as per the provisional estimates.

However, this figure now stands revised at 6.2 per cent, according to the GDP data released today.

To achieve a 7.2 per cent growth this fiscal, as estimated by the Central Statistical Organisation, the economy would have to grow by over 8 per cent in the current quarter. However, Finance Secretary Ashok Chawla said, “The slow growth is not very surprising.” He said performance had to improve in the fourth quarter to achieve growth at the level of CSO estimates.

Planning Commission deputy chairman Montek Singh Ahluwalia, however, said, "It (economic growth) is on expected lines and we are hopeful of 7.2 per cent growth this fiscal." The government is expecting a 7.5 per cent GDP growth this fiscal. The manufacturing sector continued its upward march expanding by 14.3 per cent against 1.3 per cent in the same period last year.

Construction grew by 8.7 per cent against 6.5 per cent, mining and quarrying by 9.6 per cent versus 9.5 per cent and construction by 8.7 per cent compared to 6.5 per cent.

However, electricity, gas and water supply slowed down to 4.9 per cent from 7.4 per cent.

Services like trade, hotels, transport and communication rose to 10 per cent from 8.5 per cent and trade, while financing insurance, real estate and business services expanded by 7.8 per cent against 7.1 per cent.

While it may be argued that economic growth is down because of contraction in farm output and hence rollback of stimulus might not impact economic recovery.

However, community, social and personal services are also down, which means that the impact of higher salaries given to Government employees are now petering out. — PTI

I feel this is a very clever and balanced Budget. The increase in the tax slabs will create consumer demand, resulting in strong economic growth. The containment of the deficit at 5.5 pc of GDP is a positive feature. I feel the FM will be able to better this number as his estimates of income from divestments seem to be understated.

New Delhi/Mumbai, February 26
The excise duty hike in the Budget has had an immediate impact on the auto sector with major auto-makers, including Tata Motors, Maruti Suzuki, Hyundai, Honda and General Motors, announcing plans to hike prices of vehicles by up to Rs 41,000.

Two-wheeler makers like Hero Honda and TVS Motors also followed suit by announcing rise in prices of their models.

Tata Motors said it would increase prices of its vehicles following the increase in excise duty to 10 per cent.

"Following the excise duty hike in the Budget, we may hike prices by up to Rs 60,000-70,000 for heavy vehicles and Rs 5,000-6,000 for smaller vehicles," it said. Maruti Suzuki also hikes the prices of its models between Rs 3,000 and Rs 13,000 (ex-showroom, Delhi) from midnight tonight.

Hyundai Motor India also said it would increase prices between Rs 6,500 and Rs 25,000. Honda Siel Car said it would also hike prices by Rs 13,000 to Rs 41,000 from tomorrow. General Motors said prices of its models would go up by Rs 6,200-22,000.

In the two-wheeler segment, Hero Honda said it would hike prices by Rs 500-1500 across all models. TVS Motors said prices of its models would go up between Rs 350-1,200. — PTI

New Delhi, February 26
Gold is likely to become costlier by at least Rs 100 per 10 grams, while silver may become expensive by Rs 500 per kg as the Finance Minister has proposed to raise the customs duty on these precious metals.

In his Budget speech for 2010-11, Finance Minister Pranab Mukherjee has proposed that customs duty on gold and platinum will increase to Rs 300 per 10 grams from Rs 200 per 10 grams. On silver, the import duty has been raised to Rs 1,500 per kg from Rs 1,000 per kg.

“Gold prices will go up by Rs 10,000 per kg, while silver will become costlier by Rs 500 per kg after the import duty is imposed,” brokerage firm Karvey Comtrade analyst said. Gold spot prices in the national capital ruled at Rs 16,960 per 10 grams, while in Mumbai it was at Rs 16,930 per 10 grams and in Ahemdabad it was at Rs 16,920 per 10 grams.

The analyst said higher import duty would have an immediate impact on the domestic demand as jewellers were expected to pass on the burden to the consumers. This would also have an impact on import of gold and silver, the analyst added. — PTI

Chandigarh, February 26
The Budget proposals for 2010-11 presented by Finance Minister Pranab Mukherjee today got a thumbs up from the industry in the region. Growth-oriented and progressive is how the industry doyens in the region have interpreted the Budget 2010-11. However, Punjab and Haryana have been completely ignored while offering of a package as has been offered to Bundelkhand.

With increased spending on infrastructure, agriculture and a clear focus on inclusive growth, the Finance Minister has got kudos from the industry.

Talking to TNS here today, Satish Bagrodia, managing director, Winsome Yarns and past chairman of PHDCCI, said this was a good Budget, considering that the FM was working under constraints of a huge fiscal deficit. “The three issues of inclusive growth - education, health and infrastructure - have got a good fund allocation, which is bound to give a fillip to the GDP growth. A very positive thing about the Budget has been that it paves the way for moving towards rupee convertibility, which will improve the country’s grading as well as increase FDI flows. But for the textile sector, not many incentives have been announced and no funds have been allocated for Technology Upgradation Funds Scheme (TUFS),” he said.

Agreeing with him, Gunbir Singh, chairman, Punjab State Council of the CII, said the Budget was maintaining the growth momentum. “This is a careful Budget, sustaining the growth rate. The focus on social infrastructure will definitely boost growth. The calibrated breakaway from the subsidy policy (in fertilisers and bringing subsidies in fiscal accounting), too, will be helpful in the long run,” he said.

Amarjit Goyal, chairman, Modern Steels, too, termed this as a progressive Budget and lauded the phased exit of sops granted to the industry. “However, Punjab and Haryana have been completely ignored while offering of a package, as has been offered to Bundelkhand. This region, too, was hit by the drought, but we managed to produce record quantity of paddy. Punjab had sought a Rs 1,400 crore compensation, while Haryana had sought Rs 1,000 crore compensation, which has been ignored by the Centre. The postponement of Goods and Services Tax for a year and failure to reduce the Central Sales Tax (from 2 per cent to 1 per cent) in the coming fiscal, is not good for the trade and industry,” he said.

However, not everyone is happy with the Budget. Though the Finance Minister has also announced an increase in deduction in research and development (from 150 per cent to 200 per cent) for pharma and auto sector, the small scale pharma sector here is not amused.

Jagdeep Singh, president of the Punjab Drug Manufacturers Association, said this would be beneficial only to the multinational drug manufacturers.

New Delhi, February 26
Sticking to its last year’s projection, the government has again said it will be looking to garner a whopping Rs 35,000 crore from the auction of third-generation radio spectrum, which is due on April 9.

Having come out with the details of the 3G spectrum auction yesterday, Finance Minister Pranab Mukherjee in his Budget estimates for 2009-10 has included a sum of Rs 35,000 crore as expected revenue from auction of 3G spectrum.

Having decided to give licence to a minimum of three telecom operators in each of the 22 circles and more in five circles, the amount quoted by the Finance Minister, although on the higher side, could well be achieved in the auction.

The department of telecommunication collects spectrum charges akin to royalty for the use of spectrum as well as the licence fee for possession of wireless equipment from service providers having telecom service license.

Just few days before the Budget, government had decided to fix the reserve price at Rs 4,040 crore (Rs 40.4 billion) and had projected a minimum collection of Rs 25,000 crore.

The auction, when happens would allow telecom firms to offer services such as high-speed Internet and video downloads on mobile phones.

The sale has been deferred twice. The finance ministry wanted the floor price of the auction to be Rs 4,040 crore double of what the DoT had suggested.

According to the Notice Inviting Applications (NIA) for 3G spectrum auction in 22 circles, most of the circles, including four metros, Delhi , Mumbai, Kolkata and Chennai, would have three private players.

The five states which would have four operators are Punjab, West Bengal, Bihar, Himachal Pradesh and Jammu and Kashmir.

The document said all successful bidders would be allowed to offer 3G services on commercial basis from September 1, this year.

3G technology enables offering high-speed Internet and a wide range of multimedia services, including mobile broadband.