New Delhi, July 18
Finance Minister Arun Jaitley has assured that the government will take more policy measures apart from the Budget proposals to revive the economy.

“There are a series of steps that we have to take. The Budget was only some of those steps. It was directional. It only shows direction. There will be many steps which will be taken outside the Budget. It is not necessary that everything is announced in the Budget,” Jaitley said while replying to the discussion on the Budget in the Lok Sabha.

Jaitley while defending the government’s approach said there is no contradiction in being pro-poor and pro-business. He said resources are required for providing services for the poor which can only be available if there is enough economic activity.

Among the three changes in Budget provisions for Punjab, Jaitley announced Rs 50 crore as initial contribution for setting up drug de-addiction centres in the state.

“A national effort must go behind the problem of drug addiction in several parts of the country particularly in the border states next to the Pakistan border and particularly Punjab has seen this problem in a very challenging way. Therefore, to fight this, we plan to establish drug de-addiction centres in Punjab and I am proposing a sum of Rs 50 crore as initial contribution for this”, Jaitley said.

The Finance Minister also announced a special fund of Rs 2,000 crore in NABARD as affordable credit to agro-processing units being designated as food park. He also announced restoration of accelerated depreciation in wind energy sector.

For reviving the economy, the Finance Minister spelt out the approach that had gone into Budget making which includes bringing civility in tax regime, maintaining low tax rates, rationalising the subsidy system and boosting infrastructure and housing.

The first stage consideration of the Budget was completed today with the Lok Sabha approving it. Now, the second stage consideration will involve discussion on demands for grants followed by the approval of the Finance Bill.

He said the government is trying to restore confidence of domestic and foreign investors by bringing “civility” in taxation system and remove the perception of “tax terrorism”. He said the restrospective taxation had been a defining moment which had scared investors and called for a broad political consensus on economic policy.

He said the government preferred low taxes to encourage economic activity and it is the wish of Prime Minister Narendra Modi also. “If you put higher taxes on products, people will buy products from outside. Lower taxes will increase economic activities,” he said.

Referring to signs of pick up in the economy on indicators like exports, capital inflows and industrial sector as per the recent data, Jaitley said this could not be termed as a “trend” but early signs of recovery.

Referring to the housing sector, the minister said he would endeavour to bring about a situation wherein buying a house would be cheaper than taking one on rent.

On the subsidy policy, the minister felt it was lopsided as even well-off people avail of it through schemes like education scholarship and oil, putting more burden on the exchequer.

“We have reached a situation where subsidy burden is too high. Subsidies at times can become unquantifiable amount given to unidentified people. It is this situation which we need to correct,” he said.

FM’s prescription

* A special fund of Rs 2,000 crore in NABARD for giving affordable credit to agro-processing units

* Restoration of accelerated depreciation in the wind energy sector

* To woo domestic and foreign investors by bringing ‘civility’ in taxation system and remove the perception of ‘tax terrorism’

New Delhi, July 18
Even as Railway Minster Sadananda Gowda laid emphasis on promoting Public-Private Partnership (PPP) projects in the recent Railway Budget in a bid to improve the financial health of the public sector behemoth, the CAG has warned against it saying the projects are marred by many follies.

In the performance audit report on the PPP projects in the Indian Railways, which was laid in both Houses of Parliament today, the CAG said execution of the projects is marred by arbitrary concession periods, weak project monitoring, lack of a model concession agreement that lead to delays in project execution and additional financial burden of Rs 128 crore.

The report says the Indian Railways executed eight PPP projects since 2000 through Special Purpose Vehicles out of which CAG sampled six projects for clarity, transparency, and completeness of concession agreement and financial prudence. These six projects which cost about Rs 2,167 crore include four gauge conversion projects and two ongoing new line projects.

The report says the Railways faltered in assessing the economic viability of Hasan-Mangalore gauge conversion and Obulavaripalle-Krishnapatnam new line project. The internal rate of return in both these projects was less than the benchmark provided by the Ministry of Finance.

Even the assessment of Internal Rate of Return (IRR) in other four projects was ‘unrealistic’ according to CAG report. The concession agreement for the Hasan-Mangalore Gauge conversion project had no provision to address the sub-ordinate debt. A liability of Rs 79 crore is now on the Special purpose vehicle in which the Railways has 41% equity.

The reports said Ministry of Railways did not formulate any Model Concession Agreement for PPP projects. Considerable delay was observed between formation of SPVs and signing of the concession agreement. 

Railways’ report card

* Weak project monitoring, lack of a model concession agreement led to delays in project execution and additional financial burden of Rs 128 crore

* CAG says the Railways faltered in assessing the economic viability of Hasan-Mangalore gauge conversion and Obulavaripalle-Krishnapatnam new line project

* Even the assessment of Internal Rate of Return in other four projects was ‘unrealistic’, according to CAG report

New Delhi, July 18
Manila-based Asian Development Bank (ADB) has upgraded India’s economic growth forecast to 6.3% in 2015-16 on hopes of speedy reform process.

The multilateral funding agency, however, has retained forecast of 5.5% growth in India this year.

“With Parliamentary elections over, India is expected to pursue long-delayed reform. India’s growth forecast is maintained at 5.5% in fiscal year 2014-15 but upgraded to 6.3% in FY 2015-16 as expected reform bears fruit,” it said.

Earlier, ADB had projected 6% growth for India in the financial year.

Pinning hopes on improved outlook for the largest economy (India) in South Asia, it said expansion in the sub-region is expected to reach 5.4% in 2014 and pick up to 6.1% in 2015.

ADB said developing Asia remains on track toward steady growth in 2014 despite slower-than-expected growth in the US in the first quarter. “Developing Asia as a region continues to perform well.

The pace of the growth moderation in the People’s Republic of China is in line with our expectations while the stage is set for India to pursue reform that could unlock its growth potential,” said ADB deputy chief economist Juzhong Zhuang. — PTI

New York, July 18
In a surprise move, Google’s chief business officer India-born Nikesh Arora, regarded as among the top lieutenants at the internet search giant, is leaving the company after almost 10 years.

Arora is moving to Japan’s SoftBank Corp as vice-chairman, according to a post by Google CEO Larry Page on his social network site.

Page said Omid Kordestani, who was Google’s business founder and led the sales teams for many years, will take over from Arora on a temporary basis.

Earlier in April, Vic Gundotra, Google’s India-born senior vice-president and one of the creators of Google Plus, had left the company.

In a post on Google Plus, Gundotra had said he will be “forever in debt to the Google+ team”. Earlier in March, Google had announced that Arora would receive a bonus of $3.5 million, the highest amount paid to a top executive at the company for performance in FY2013. — PTI

New Delhi, July 18
Indirect tax collection inched up by 4.6% in the April-June quarter of the current fiscal due to decline in customs duty and excise duty collections, reflecting slump in manufacturing activity, according to a Finance Minsitry official.

Indirect tax mop-up comprising excise, customs and service tax stood at around Rs 1.13 lakh crore in the first quarter of 2014-15 fiscal, as against Rs 1.08 lakh crore in the corresponding period a year ago, a Finance Ministry official said.

The growth at 4.6% is far less than 25% increase envisaged in the Budget for the full 2014-15 fiscal. Excise collection contracted 0.2% during the quarter to over Rs 35,159 crore.

Customs collection has declined by 3.1% to over Rs 39,549 crore during April-June period against Rs 40,796 crore in the same period a year ago. — PTI

BRIEFLY

HDFC Fund raises $250m for realty investments
New Delhi: HDFC Property Fund, a part of HDFC group, on Friday said it has raised $250 million (over Rs 1,500 crore) for investing in residential property in major cities across India. “The fund plans to focus on investing primarily in residential property developments in major cities across India,” it added.— PTI

United Bank to ‘name and shame’ wilful defaulters
New Delhi: United Bank of India will soon embark upon process to ‘name and shame’ its wilful defaulters as part of its effort to recover dues. As part of this, the bank will publish photographs of defaulters and other details in newspapers and at notice boards of bank branches. — PTI

Bonds worth Rs 2,521 cr to be auctioned for FIIs
New Delhi: The NSE will auction on Monday government debt securities worth Rs 2,521 crore for overseas investors, whose total investment has crossed 97% of the permitted limit. The auction follows robust interest shown by foreign investors for the sale of government bond investments to the tune of Rs 7,152 crore last month. — PTI

Mahindra, GE Aviation ink agreement
New Delhi: Mahindra Aerospace and GE Aviation have signed a pact for co-operation in manufacturing of aerostructures. The agreement will enable GE Aviation, Hamble to define possibilities for placing existing work and to collaborate on new opportunities with Mahindra Aerospace, Mahindra group said. — PTI

Wipro signs $1.1 billion deal with ATCO
Bangalore: Wipro has entered into a multi-million dollar dual pact with ATCO through which India’s third largest software services company will provide a complete suite of outsourcing solutions to the Canadian firm and acquire its IT services arm. — PTI