New Delhi, December 19
India is lagging behind several countries in per capita income due to different levels of development and various other factors, Parliament was informed Wednesday.

"Yes... India continues to be a developing economy," Minister of State for Parliamentary Affairs & Planning Rajeev Shukla told the Lok Sabha in a written reply.

He was responding to a query on whether the country is lagging behind several countries in per capita income.

Per capita GDP (nominal) vs per capita GDP (PPP) of select countries (Source: UNDP, 2011)

Per capita of income is a measure of the amount of money that is being earned per person.

The minister said the reasons for differences in the per capita income of different nations can be attributed to the levels of development besides other factors such as natural resource endowments, economic policies, political stability, differences in skills and technologies, population level, etc.

India's per capita GDP on purchasing power parity (PPP) basis was US $3,403 in 2010 and is estimated at $3,662.69 in 2011 and $3,851.31 in 2012, he added.

The Central Statistics Office has been compiling estimates of rural and urban break up of per capita net domestic product (NDP), for the base years of the National Accounts Statistics (NAS) series, Shukla said.

"The latest base year is fiscal 2004-05. The per capita income at current prices for the year 2004-05 is estimated at Rs 16,414 in rural areas and Rs 44,172 in urban areas." The per capita net national income rose by 5.2% while wholesale price index based inflation was at 8.9% in 2011-12.

In 2010-11, per capita net national income grew by 6.4 per cent against a WPI inflation rise of 9.6 per cent. In 2009-10, it was 6.6 per cent and 3.8 per cent, respectively.

To a query on measures being taken by the government to improve growth momentum and contain inflationary pressures, Shukla said: "On the growth front, steps have been taken to increase FDI that would contribute to both greater capital inflows and over the long run, higher productivity thereby inducing growth." — PTI

Washington, D.C., Dec 19
Frustrated by their inability to wring more "fiscal cliff" concessions out of President Barack Obama, Republicans in the U.S. House of Representatives announced Tuesday night that they expect to pass their own tax bill as a backup plan to avert the tax hikes and automatic budget cuts set to occur in January.

No one expects the bill, which would extend low tax rates except on income of $1 million and above, to pass the Democratic-controlled Senate. President Barack Obama's latest position puts the threshold for income tax hikes at $400,000.

While the move, called "Plan B" by Republicans, may not prompt Obama to give further ground in his negotiations with House Speaker John Boehner, it could allow Republicans to argue they did what they could to stop tax hikes and the full impact of the "fiscal cliff," which the Congressional Budget Office and economists have said could trigger another recession.

"Why not put on the floor something that's what most Americans think the president is talking about, which is protecting from tax increases everybody but truly millionaires and billionaires?," said Republican Representative Pat Tiberi of Ohio. When it dies in the Senate, he said, "that's not our problem. We can't be held responsible for what the Senate does."

Polls have consistently suggested that the public is likely to blame Republicans for failure to reach a deal ahead of the December 31 deadline for action.

After important concessions in recent days from both Obama and Boehner, Republicans expressed frustration that the president had not moved further.

The White House seemed unconcerned by the Republican tactic, and stressed Obama's willingness to compromise further.

"The president has demonstrated an obvious willingness to compromise and move more than halfway toward the Republicans," White House spokesman Jay Carney told reporters, adding that Obama is making a "good faith" effort to reach a compromise.

Still, the mood on Capitol Hill was guardedly optimistic. — Reuters

New Delhi, December 19
Corporate entities interested in setting up new banks, including Reliance and Religare, have begun doing the groundwork after a key Bill was passed in the Lok Sabha Tuesday evening. In a major step to reform India's banking sector, the Lok Sabha had passed the Banking Laws (Amendment) Bill, 2011, paving the way for foreign investments in the sector and establishment of new private banks.

The bill will allows the RBI to supersede boards of private sector banks and increase the cap on voting rights of private investors in PSBs to 10% from 1%. The central bank wanted the government to amend the banking laws before starting the process towards issuance of new banking licences.

The major groups interested in seeking new banking licenses, whenever RBI decides to give them, include Anil Ambani-led Reliance Group, financial services conglomerate Religare group, Larsen & Toubro and Shriram group.

Welcoming the passage of the bill in Lok Sabha, Religare Enterprises chief Shachindra Nath said that "it is important that new banks are brought in to contribute towards the overall financial inclusion and development agenda".

"We’re now waiting for the Bill to be passed in the upper house and the RBI to come out with its final guidelines post which we would evaluate how we align our banking business model with the regulatory intent," Nath said. "Given the underpenetration of banking and financial services in a country as large as India, it’s important new banks are brought in to contribute towards the overall financial inclusion and development agenda," he said.

When contacted, a spokesperson for Reliance Capital, the financial services arm of the Reliance group, also welcomed the passage of the bill in the Lok Sabha, but did not comment further.

While the process of granting new banking licences have been underway for quite some time, the government has recently indicated that a framework could be put in place soon for allowing new players in this business. The RBI had issued draft guidelines in August 2011 for issuance of new banking licences, while in July 2012 it released the comments and suggestions received by it.

The Religare group and Reliance Capital have shown their interest in starting new banks ever since a proposal was floated to issue new licenses. — PTI

Zürich/London, December 19
Swiss bank UBS admitted fraud and accepted a $1.5 billion fine on Wednesday for its role in manipulating global benchmark interest rates.

Dozens of UBS staff rigged the Libor rate, which is used to price trillions of dollars worth of loans, in collusion with brokers and traders at other banks, according to an investigation by authorities in multiple countries.

The controversy is expected to ensnare other big lenders and spark criminal and civil lawsuits against individuals involved. The penalty UBS agreed with US, UK and Swiss authorities far exceeds the $450 million levied on Britain's Barclays in June, also for rigging Libor, and the second largest ever imposed on a bank.

"This is an endemic banking industry problem and shows how far the industry has fallen, failing itself and its customers," said Neil Dwane, chief investment officer for Allianz Global Investors.

"For the future it shows that without strong regulation and strong and new management throughout most of the biggest banks, there can be no reasonable expectation that they will improve their behavior substantially — at least UBS now has strong new management."

Shares in the Swiss lender rose 1.6% to hit a 17-month high of 15.5 francs ($16.97) in early trade as investors judged the worst was over.

"You can see from the stock movement that the fine is already baked in," said Markus Jordi, principal at Zurich-based investment manager Cosmos Capital. "The bank has already kicked out some traders, apologized, said it will shut down parts of the investment bank and overhauled management."

The UBS fine comes a week after Britain's HSBC agreed to pay a record $1.92 billion to settle a probe in the United States into laundering money for drug cartels.

UBS's unit in Japan pleaded guilty to one count of fraud relating to manipulation of benchmark rates, including the yen Libor. The Libor benchmarks are used for trillions of dollars worth of loans around the world, ranging from home loans to credit cards. — Reuters

Chandigarh, December 19
Having designed various mobile applications for some of the world’s top cellphone makers, city-based digital solutions provider Click Labs is now set to open its sales, marketing and design office in San Francisco. The startup firm is an initiative of a local entrepreneur, Samar Singla, 27, who has designed many popular mobile gaming applications.

Because of his expertise in developing native, web and hybrid mobile apps for all mobile platforms, Singla was invited to AppNation IV last week (an annual event where app developers gather to exchange ideas and define the rapidly growing app market).

Singla said his firm now has clients in 25 countries. “Initially I was working as a freelancer and acquired small projects from companies in Silicon Valley in the US. But later I started getting clients from everywhere,” he added.

“Opening our US office next year will be a big boost for Click Labs. It will help us get inputs in graphics and solutions design and thus add value to our apps.We’ll be hiring design experts and a marketing team there to manage our global business,” he said. Quizzed about his next big idea, he said he was working on an app on the lines of couch surfing to connect tourists looking for home stay options in India.