New Delhi, December 25
India and China will be the keys for the global economy to grow by even a modest 3 per cent in 2013, after bouts of debt turmoils across continents pushed it to fiscal precipice and an anaemic growth rate in 2012 left policymakers and politicians at crossroads.

Coined by the influential US Federal Reserve chief Ben Bernanke, 'fiscal cliff' — better described as a combination of spending cuts and tax hikes — seems to be the lingo for the problem-ridden world economy in the New Year.

If emerging markets such as India and China grappled with spiralling inflation and risks of asset bubbles, the US and Europe remained almost stagnant despite record low interest rates in 2012.

Adding to the economic gloom, the 17-nation euro zone, a grouping of nations that share the common currency euro, continued to be bogged down by debt crisis which also took roots in Italy and Spain while suffocating Greece.

Though slow revival is happening in some emerging economies and developed nations, as the International Monetary Fund (IMF) recently said, “The outlook for growth remains weak with appreciable downside risks.”

Going by IMF projections, the world economy is likely to expand 3.3 per cent this year, way lower than 3.8 per cent growth seen in 2012. The other projections call for a growth rate of 2-3 per cent for the global economy in 2013.

To start from Europe, the epicentre of debt crisis, the economic situation is jittery and the eurozone has again slipped into recession — generally referred to as two straight quarters of negative growth. Hundreds of billions of dollars worth bailout money has been absorbed by ailing Greece but the debt turmoil has only spread to other European nations, even pulling down some governments.

While excessive risk taking ways triggered the 2008 financial collapse in the US, now it is austerity as well as lack of strong united actions among European nations that is roiling the world economy.

For instance, the euro area economy shrunk by 0.1 per cent in the 2012 September quarter, following a contraction of 0.2 per cent in the previous three months.

Moving away from the sick Europe, emerging markets such as India and China too are reeling under slowdown pangs. However, compared to many of the ailing developed economies, these nations are the remaining bright spots in the dark economic firmament.

However, expectations are high for China to return to 8 per cent and India to over 6 per cent growth in 2013, which in turn would help global economy to achieve a modest growth.

As a corollary, jobless rate are as high as nearly 12 per cent in some European countries while it is in high single digit in the US.— PTI

New Delhi, December 25
White collar job creation in urban centres of the organised sector has declined by over 21 per cent in 2012 across various sectors of the economy, according to a study by the industry body Associated Chambers of Commerce and Industry of India (Assocham).

A total of over 5.3 lakh jobs were generated across India according to a study titled ‘Job Trends Across India in 2012’.

The study sourced inputs primarily from data tracked on a daily basis for vacancies posted by about 4,000 companies via job portals and job advertisements for about 56 cities and 32 sectors offering job opportunities.

“Delhi and National Capital Region (NCR) topped in job creation followed by Mumbai, Bangalore, Chennai and Kolkata in the five metro centres.

Information technology (IT) ranked on top with over 2.1 lakh jobs generated in the sector. Academics and education ranked second with over 34,500 jobs generated in the sector followed by insurance, banking, automobile, financial services, manufacturing, engineering, hospitality and IT hardware are other leading job generating sectors.

Interestingly, only the academics and education sector registered an upward spiraling job generation growth of over 16 per cent in the first six months of the current year. While the job generation growth dipped by over 10-50 per cent in the remaining sectors during this period.

According to the analysis, the aviation sector registered a job generation growth rate of over 78 per cent in the latter half of the year followed by the sports sector and the retail sector. While rest of the sectors registered a dip in job generation ranging over one to 46 per cent during this period.

The analysis shows that job market has slightly recovered during the course of the past six months as the employment generation growth rate declined by about 15 per cent between July-December while the job generation growth in India declined by over 25 per cent during the first six months of the year, the study said and the change is presumably due to slew of positive steps taken by the government during this period.

Sector wise employment

• 2.1 lakh jobs in information technology
• 34,500 jobs in academics and education
• Over 27,100 jobs in insurance sector
• 24,500 jobs in banking 

New Delhi, December 25
The long-pending Bill seeking to raise FDI limit to 49 per cent in the insurance sector remained stuck in 2012, although going ahead the sector may see some action with the government expected to extend tax sops to boost the sagging industry.

Prodded by Finance Minister P Chidambaram, the tax authorities and insurance regulator IRDA are working on the possibility of removing service tax on first premium and create separate exemption limit for pension schemes.

A slew of incentives being considered by the Finance Ministry may provide 
the much-needed booster dose to the life insurance industry.

The Department of Revenue is examining whether, in addition to the National Pension Scheme (NPS), some insurance pension products — as approved by IRDA —may be included in the separate limit over and above the limit of Rs 1 lakh under Section 80C of the Income Tax Act, 1961, for the purpose of income tax deduction on the premium paid.

Besides, the department is looking into the proposal of exempting annuity policy from service tax in line with the NPS and may reduce the levy on single premium products.

The CBDT is considering whether the total sum paid for post-retirement medical scheme could be made eligible of income tax deductions. The announcements by the Finance Minister are expected to stimulate the growth of the sector.

“I am sure all the draft guidelines will be finalised in the first quarter of the year. I am also confident that 2013 will see the collaborative efforts to grow the life insurance sector gaining further strength. This will result in a clearly laid out roadmap for the sector,” Max Life Insurance managing director Rajesh Sud said.

Echoing similar views, Reliance Life Insurance president and executive director Malay Ghosh said, “We hope to see several enabling regulations, as mentioned by the Finance Minister, in the next few months to drive stable growth for the industry in the coming years.”

The key initiatives expected by the industry include bancassurance, open architecture, use and file product approval process and simplifying agency licensing process.

During 2012, the Cabinet approved the much-delayed Insurance Bill, for approval and passage in Parliament so that foreign investors can pump in more funds into the capital intensive sector.

The government had introduced the Insurance Bill in the Rajya Sabha in December 2008 to improve and revise laws relating to the sector in the wake of private participation.

The insurance amendment Bill is an omnibus legislation to change parts of three Acts: Insurance Act 1938, Insurance Regulatory and Development (IRDA) Act 1999, and General Insurance Business Nationalisation Act. — PTI

New Delhi, December 25
The government needs to audit spectrum usage and refarming of airwaves to ensure efficient utilisation of the natural resource, the 12th Five Year Plan document has said.

The 12th Plan (2012-17) said a “significant amount of additional spectrum” would be needed with the introduction of new technologies, high bandwidth applications and increasing user base.

“While effective spectrum planning in this regard needs to be carried out, the requirement of spectrum in 60 GHz and above bands for all backhaul purposes, an audit of spectrum usage and refarming of spectrum to ensure the efficient utilisation should also be taken into account during the 12th Plan Period,” it added.

Under the refarming of spectrum, telecom operators with 900 MHz airwaves will have to give these up and bid for the less efficient 1800 MHz at current prices.

These telcos will be allowed to retain 2.5 MHz spectrum in the 900 mhz band, but that will also have to happen at auction determined prices.

The 12th Plan targets provision of 1,200 million connections, mobile access to all villages and increase rural teledensity to 70 per cent, broadband connections of 175 million by 2017.

It also envisages making available additional 300 MHz of spectrum for IMT services and making India a hub for telecom equipment manufacturing by incentivising domestic manufacturers with thrust on IPR, product development and commercialisation.

"The 12th Plan Programmes for the telecom sector are guided by the National Telecom Policy (NTP) 2012. The thrust of NTP 2012 is on raising the competitiveness of the telecom sector of India, to make it a world leader,” the document said.

The 12th Plan suggests that the Universal Service Obligation (USO) Fund needs to be leveraged for providing incentives for pilot projects, fixed wireline/wireless phones, use of renewable energy sources, telecom infrastructure and for wireline broadband in rural difficult terrain and Left wing extremist (LWE) areas.

On financing of the telecom sector, the document said the sector should be allowed to access funding from Indian Infrastructure Finance Company (IIFCL).

“Telecom Finance Corporation may be created as a vehicle to access funds at competitive rates to facilitate the funding needs of this sector on requirement,” it said.

Rationalisation of levies and taxes in the sector may also be reviewed from time to time to ensure affordable delivery of services to consumers, it added.

Further, it added that development of new applications, VAS and devices would be triggered by e-Governance projects and growth of broadband in rural areas. — PTI

New Delhi, December 25
Terming "cosy" relations between management and auditors of a company as key to accounting frauds, the Corporate Affairs Minister Sachin Pilot has said such a nexus would not be allowed anymore as lawmakers have become smarter after Satyam scam.

"Sometimes, the auditors get into too cosy a relationship with the management, which creates a lot of problems," Pilot said.

To tackle this issue, the government is creating a new quasi-judicial body, National Financial Reporting Authority (NFRA), which would look after the quality of audit, compliance by auditors as also the disclosures that they make, Pilot said.

"Basically, it would be the nodal body to look after all financial reporting. It can suspend the licence of auditors when they find something is irregular," he said.

The minister said there have been issues related to auditors that had led to various accounting frauds, including in the case of high-profile Satyam Computer scam.

"We have had auditors issue. After Satyam, hopefully we have become smarter. Now, no auditor can audit a company for more than five years," Pilot said.

Way back in early 2009, erstwhile Satyam Computer's founder and then chairman B Ramalinga Raju had admitted that the company's accounts had been falsified for years, although the auditors did not notice any accounting fraud.

Later, the company auditors were also found to be guilty in that case during various investigations into what had emerged as the country's biggest ever corporate fraud.

Pilot said NFRA will become an oversight body with quasi-judicial powers and supersede all other institutions.

Asked about the entities, which would be covered by NFRA, Pilot said they would include all the auditors.

"Anything that goes into reporting of financial statements, this body will oversee the quality, the kind of work they are doing and any complaints... NFRA can even debar them including the cost accountants," he added.

The minister further said Company Secretaries would be classified as key management personnel after the new Companies Bill comes into force.

"So they (Company Secretaries) do not fall under NFRA reporting but they have a direct responsibility if something goes wrong in the company. They have much larger responsibility and accountability," he added.

"If there is prima facie evidence of your influence in decision making, then you are part of the decision making process. You can't escape from it," Pilot said.— PTI

San Francisco, December 25
A lawsuit is seeking to stop Instagram from changing its terms of service, saying the Facebook-owned smartphone photo-sharing service is breaching its contract with users.

The class action lawsuit filed Friday by the Southern California-based Finkelstein and Krinsk law firm called on the federal court to bar Instagram from changing its rules.

"Instagram is taking its customers property rights while insulating itself from all liability," the law firm said in the filing, which also demanded that the service pay its legal fees.

"In short, Instagram declares that 'possession is nine tenths of the law and if you don't like it, you can't stop us.'"

Facebook said the complaint was "without merit." "We will fight it vigorously," the social network added.

Changes to the Instagram privacy policy and terms of service had included wording that allowed for people's pictures to be used by advertisers at Instagram or Facebook worldwide, royalty-free.

Last week, Instagram tried to calm a user rebellion by apparently backing off the changes, due to come into effect from January.

"I want to be really clear: Instagram has no intention of selling your photos, and we never did. We don't own your photos, you do," Instagram co-founder and chief Kevin Systrom said in a blog post.

But the lawsuit, filed in San Francisco, argues that Instagram didn't backpedal enough and that customers who leave the service still forfeit their rights to any photos that they had previously shared on the service.

"The purported concessions by Instagram in its press release and final version of the new terms were nothing more than a public relations campaign to address public discontent," the complaint said.

Tens of thousands of Instagram users in the state of California are eligible to join the class action lawsuit.— PTI