World Bank Approves $600Mn Loan

New Delhi: The World Bank has cleared a blend of loan and concessional credit of $600 million to India for strengthening its rural cooperative credit structure to transform access to financial services for the country''s poorer farmers. While $300 million will come as a loan from the International Bank for Reconstruction and Development (IBRD) with 20 years maturity, comprising a five-year grace period, the remaining amount would be in the form of concessional credit from the International Development Assistance (IDA) with 35 years to maturity. As many as 12 States have inked pact with the Centre and the Nabard for the rural cooperative credit structure reform programme.

The 12 States that have inked the MoU with the Government and Nabard are Andhra Pradesh, Arunachal Pradesh, Bihar, Gujarat, Haryana, Madhya Pradesh, Maharashtra, Orissa, Rajasthan, Uttar Pradesh, Uttarakhand and West Bengal. Better access to finance for India''s rural poor is absolutely critical for higher rural growth, for decreasing inequality and ultimately alleviating poverty.

Re Ends Stronger At 40.83/$

Mumbai: The rupee strengthened by 16 paise against the greenback backed by good supplies and closed at 40.83 on June 28, up from the previous close of 40.99/41. The domestic currency opened a bit weaker at 40.95 and saw an intra-day low of 41 before ending the day at 40.83. Market participants exp ect the rupee to trade in the 40.75-41.10 range this week. In forwards, the six-month premia closed at 2.91 per cent (3.34 per cent) while the 12-month closed at 2.83 per cent (3.03 per cent).

FM Introduces New Profession Of Tax Return Preparers

Hyderabad: Introducing a new profession of tax return preparers, an initiative declared by Union finance minister P Chidambaram in his last budget, is hoped to trigger the income tax (I-T) compliance among small and marginal income sections, besides giving a feedback on their income patterns. About 3,000 qualified tax return preparers are going to be produced via the National Institute of Information Technology (NIIT), the nodal agency to train and issue certificates as tax return preparers. The creation of professional tax return preparers outside the department will remove the fears normally seen among the small income individuals about I-T, besides helping them to file returns. The government is targeting to further simplify the procedures to make tax compliance a normal practice among all sections of society.

FM Expresses Optimism Worldclass Infrastructure In 10 Years

New Delhi: The Finance Minister, Mr P. Chidambaram, has expressed confidence that India would within the next ten years succeed in putting in place infrastructure that would be equal to the best in the world. The Finance Minister noted that the full growth in GDP has exposed the grave inadequacies in the country''s infrastructure sectors. The Committee on Infrastructure Financing, which submitted its report in May 2007, has advised that the aim for infrastructure investment should be revised from $ 320 billion to $384 billion at 2005-06 prices, which is equivalent to $ 475 billion at current prices. The real challenge lies beyond the resources, Mr Chidambaram underscored the need to look for innovative mechanisms and instruments to channelise the funds into the infrastructure projects.

Karnataka Govt Plans To Expand E-Governance Initiative

Bangalore: The Karnataka government plans to set up 20 more BangaloreOne outlets in the city and also expand its reach to five other cities in the state. The decision to expand the reach of BangaloreOne outlets was taken after the success of the e-governance initiative in 20 centres across Bangalore city. BangaloreOne is the integrated citizens service project of the government of Karnataka, engaged in offering the delivery of a variety of services to the citizens for and on behalf of various government departments, utilities and other agencies through public-private partnership through a 24/7 one-stop shop concept.

The government is preparing to expand the citizens service project to five other cities like Hubli-Dharwad, Mysore, Belgaum and Gulbarga in the next few months. In Hubli-Dharwad the centres will be known as HDOne or Hubli-DharwadOne and similarly in other cities the name of a particular city will be added to the name. At present, 20 counters are generating a business of Rs 2 crore per day for six lakh transactions and within the next few months the government plans to increase the number of transactions to 12-15 lakh per day. The new counters are being opened at MS Building, Indiranagar, Jayanagar shopping complex, Wipro campus at Electronic City and National Games complex in Koramangala. The department is also in negotiations with Income Tax and Commercial Tax departments for collecting income tax and commercial tax on their behalf through BangaloreOne centres.

WB Govt Introduces Incentives For SMEs

Kolkata: Bengal government on June 27, declared an incentive scheme for Micro and Small Scale Enterprises to boost growth of small enterprises in the state. The West Bengal Incentive Scheme 2007 for Micro and Small Scale Enterprises will be applicable to micro and small enterprises in the manufacturing sector set up on or after April 2007. The incentives comprise state capital investment subsidy ranging from 17 per cent to 35 per cent and interest subsidies ranging from 25 per cent to 30 per cent. The scheme also comprises waiver of electricity duty for a period of 5 years from the date of commercial production and 30 per cent reimbursement of electricity charges for a period of 5 years from the date of commercial production.

Township To Receive $200Mn FDI

Mumbai: The state government''s industrial infrastructure subsidiary MIDC will jointly build an integrated township with New York-based realty firm at Hinjewadi on the outskirts of Pune which is known for housing some of world''s best-known IT companies like Infosys, Wipro, Oracle, IBM among others. Vornado will infuse $200 million in the township project which will be built up over the next five years. The project will be developed jointly by MIDC and Vornado, and a special pur-pose vehicle (SPV) has been floated to execute the township project called Vornado-Hinjewadi Township Pvt Ltd.

Indian Industry Less Restrained By Red Tapism

New Delhi: Indian industry seems to feel less constrained by factors such as red tapism, cost of financing, shortage of skilled labour and lack of business orders when it comes to its growth, in comparison to other BRIC countries. While 37 per cent of Indian businesses consider red tape a major restraint for growth, 60 per cent in Brazil consider it the most vital factor. About 59 per cent of Russian businesses face problems due to red tape while expanding, followed by Poland at 55 per cent. However, businesses experiencing the least restraints from red tapism were from Singapore (16 per cent), Spain (17 per cent) and Sweden (19 per cent).

Canada Bullish Of Trade Ties With India

Montreal: Canada and India are set to explore trade ties and investment opportunities. This clearly was the sense that came out from the Agri Business Forum that was part of International Economic Forum of the North Americas held recently in Montreal. India was the center of attention at the agribusiness forum where day-long deliberations centered on the theme Embracing the future agriculture and agri-food priorities and partnership opportunities for India and Canada. Canada is already a large supplier of agricultural commodities such as pulses and wheat to India; and is keen to further expand its share. India has emerged as a large buyer of Canadian pulses and wheat, and expected that India would soon start to import Canadian canola oil (rapeseed oil) too.

Re Ends Lower At 40.99/$

Mumbai: The rupee weakened by almost eight paise and closed at 40.99/41 against the greenback due to weak domestic stock market. The home currency opened at 40.97, touched an intra-day low of 41.06 to finally close at 40.99/41, against the previous close of 40.92/93 on June 26. The six-month forward premia is at 3.34 per cent (2.97 per cent) and 12-month premia is at 3.03 per cent (2.81 per cent).

Singapore Eyes Karnataka''s Potential

Mangalore: Singapore is keen to explore the potential of Karnataka in various sectors. There are ample opportunities for exploring the potential in areas such as IT park development, township development and infrastructure development. While Singapore companies have adopted various such projects in Bangalore, there are also opportunities in tier-II cities such as Mangalore and Mysore. The number of Indian tourists visiting Singapore increased by 12.9 per cent in 2006 over the previous year. He said that 6.59 lakh Indian tourists visited Singapore in 2006.

Assam Attracts Thailand Investors

Guwahati: Empowered with a cornucopia of natural resources and bordering on neighbouring countries, the North Eastern Region (NER) has emerged as a focus point for investors. In a development of sort, Thailand is the first country in the East Asian region to understand the potential significance of sub-regional cooperation even as it is forging free trade areas at a frenetic pace with various countries. Thailand has emerged as a major investor in India as it is the third largest investor from the Association of South East Asian Nations (ASEAN) region after Singapore and Malaysia. Assam offers immense opportunities for economic engagement with Thailand and the areas for such cooperation and investment collaboration comprise power, oil and natural gas, tea industry marketing part and not production part, bio-fuels and of course tourism, horticulture and food processing. Thailand has unquestionable expertise in tourism as it attracts 11 million tourists a year and they seek to tie-up with that country and they also showed interests in promoting tourism and food processing sector.

Centre''s Net Direct Tax Collection Increases

New Delhi: The Centre''s net direct tax collections have recorded 52.9 per cent growth in the period between April and June 23 to Rs 42,678 crore. Advance tax collections (first instalment) have reached Rs 18,717 crore. This represents a 27.52 per cent increase over advance tax collections of Rs 14,678 crore registered in the period up to June 23. The due date for the first instalment of advance tax was June 15. For the current fiscal, the Centre is aiming direct taxes collection of Rs 2,67,490 crore.

Indo-Thai FTA May Be Signed By Sept

New Delhi: The Indo-Thai free trade agreement (FTA) is likely to be inked by September. The pact will initially cover goods and include services and investment at a later stage. The inking of the deal covering goods is likely to be over by September. Thailand has accorded to begin parallel negotiations for including goods, investment and services in the FTA. After the FTA on goods becomes effective, provisions relating to investment and services will be added to it. Negotiations on goods are at an advanced stage, though those on services and investments are yet to cover significant ground. The FTA covering trade in goods is likely to be effective by 2010.

Re Ends Tad Lower At 40.92/$

Mumbai: The rupee weakened by five paise on demand for greenback and closed at 40.92/93 on June 26, lower than the previous close of 40.87/88. The home currency opened at 40.94/96 and saw an intra-day high of 40.89 and a low of 41.01 before ending the day at 40.92/93. The rupee saw an intra-day high of 40.89 spurred by some dollar selling by some foreign banks and large corporates. In forwards, the six-month premia closed at 2.97 per cent (2.43 per cent) while the 12-month closed at 2.81 per cent (2.55 per cent).

India, Thailand Bilateral Trade Developing Strongly

New Delhi: Bilateral trade between India and Thailand reached $2 billion in the first eight months of fiscal 2006-07. The growth in bilateral trade in the recent years came up for discussion during the meeting between the Commerce and Industry Minister, Mr Kamal Nath, and the Commerce Minister of Thailand, Mr Krirk-Krai Jirapet. Meanwhile, the Thailand Prime Minister, Mr Surayud Chulanot, is to start his three-day official visit to India from June 26.

Japan Plans To Invest $30Bn In Core Sector

Kolkata: Akira Amari, Japan''s minister for economy, trade and industry, is likely to declared an investment of $30 billion in infrastructure projects during his visit as the head of the largest ever-Japanese delegation towards the end of this month. The package will comprise building a high-speed freight railway system between New Delhi and Mumbai, a port in Gujarat, and industrial complexes in Rajasthan. The delegation, comprising over 60 executives of 15 companies, will visit New Delhi and Mumbai and have meetings with industry bodies like the CII and Ficci. India is a major supplier of iron ore to Japan. In fact, Mitsui owned the country''s second largest iron ore exporter, Sesa Goa, till a couple of months ago. Nippon Steel is looking at a joint venture with Tata Steel.

Re Closes At 40.88 Against Dollar

Mumbai: The rupee declined against the dollar on demand for greenback. The domestic currency opened at 40.77/79 and closed at 40.87/88, against the previous close at 40.75/76. In forwards, the six-month premium closed at 2.43 per cent (2.67) and the 12-month ended at 2.55 per cent (2.67).

Ficci Recommends To Boost SMEs

New Delhi: The Federation of Indian Chamber of Commerce and Industry (Ficci) has suggested a five-point strategy to boost development of small and medium enterprises (SMEs) via the cluster-based approach. These points are technology and quality upgrade, low-cost financing, linkages between Indian and overseas SME clusters, marketing and export promotion and training, and skills upgrade. It is of the view that lack of an inter-institutional synergy, dearth of committed NGOs and industry bodies, and paucity of good service providers has led to limited success of various initiatives undertaken so far.

WB Service Tax Collection Declines

Kolkata: The West Bengal service tax department collected Rs 1,500 crore as tax in the fiscal 2006-07, against the aim of Rs 1,700 crore. It targets to collect Rs 2,095 crore in 2007-08. The department will issue show cause notices to all the defaulters soon. Apart from construction services, other sector where the non-compliance was high was security agency services, clearing and forwarding and banking and financial services. In Kolkata and adjoining areas the level of non-compliance was still high compared with other metros. Last year, Mumbai contributed Rs 12,500 crore the highest contribution by any metro to the Rs 40,000 crore Central service tax kitty. However, a number of new services included in the Finance Act, 2007 like telecommunication, mining, service component in work contract, content service, asset management and design services were expected to increase this year''s collection. Also, this year consequent to the increase in threshold limit of exemption for small service providers from Rs 4 lakh to Rs 8 lakh, the limit for obtaining service tax registration had been raised from Rs 3 lakh to Rs 7 lakh. Nearly 10,000 service providers having works contract had been identified in West Bengal and had been sent mailers for registration and payment of service tax.

Karnataka Cabinet Apporves To Form2 New Districts

Bangalore: The Karnataka Cabinet has cleared the proposal to form two new districts to decentralise administration and reduce the burden on the existing districts. The two new districts to be carved out are Ramanagaram and Chikkaballapura. Ramanaragam, represented by chief minister HD Kumaraswamy, will be carved out of Bangalore Rural District. Chikkaballapura, located 52 kilometres from Bangalore, will be carved out of Kolar district. With this, the number of districts in Karnataka will touch 29 from the existing 27. The government has already made a budgetary allocation of Rs 72.58 crore this fiscal to create the needed infrastructure in the two new districts.

Huge scope for Indo-Australian trade expansion

Hyderabad: The diverse supply base of Australia in sectors such as food and beverages, consumer goods and IT and communications will permit for significant bilateral investments between Australia and India. The current investment between the two nations was over $1 billion from each side. There is still huge scope for expansion in investment and trade. The Indo-Australian trade stood at $10 billion in the last fiscal. The centre would offer consulting services to the traders and exporters on various aspects of trade regulations. The fundamental target is to cut down the transaction costs for the exporters and provide a pool of relevant data for exports in all key sectors.

CII, Canadian council to analyse feasibility of FTA

New Delhi: The Confederation of Indian Industry (CII) and Canadian Council of Chief Executives have accorded to study feasibility of India-Canada Free Trade Agreement (FTA) at a meeting of the India-Canada CEOs Forum held in Montreal. The Foreign Investment Protection Agreement (FIFA), which is being discussed between India and Canada, is the first step towards FTA between the two countries. The two sides have set a aim of $20 billion bilateral trade and $5 billion bilateral investment flow. Mr Kamal Nath, Minister of Commerce and Industry, who addressed the forum, told CEOs that India and Canada must seize this opportunity to significantly increase two-way trade and investment flows.

India, Canada aims $20bn trade in 5yrs

New Delhi: India and Canada have decided to work towards $20-billion aim of trade in goods and services within five years. The target was set by the India-Canada CEOs Roundtable conducted at its first meeting in New Delhi last March, by seizing the opportunity of current buoyant trends in goods and services trade, the Union Minister of Commerce & Industry, Mr Kamal Nath. Last February, the Aditya Birla group company Hindalco purchased Novelis for around $6 billion. In April, the Essar Group bought Algoma Steel for $1.7 billion. The Minister said this trend is likely to remain and that more Canadian companies will infuse in India, to exploit the synergies that exist between the two sides. Earlier, Mr Nath, on an official visit to Canada from June 16 to 18, had bilateral meetings with Mr David Emerson, Minister of International Trade, Canada, and Mr Dalton McGunity, Premier of Ontario, besides bilateral negotiations with the Premier of Quebec. India and Canada have also concluded talks for a bilateral investment protection agreement to give an impetus to the two-way investments.

Karnataka poised to achieve 100% financial inclusion

Karnataka will soon become the second state in the country to achieve 100 per cent financial inclusion, by September 2007. Kerala was the first state in the country to achieve the target by June-end this year. Financial inclusion means the delivery of banking facilities or services to all people in a fair, transparent and equitable manner at affordable cost. Financial inclusion has the potential to improve the financial condition and standards of life of the poor and the disadvantaged. In Karnataka, Gulbarga was the first district to achieve 100 per cent financial inclusion, on December 31, 2006. Based on the experience gained in Gulbarga, a uniform strategy was adopted for achieving a 100 per cent financial inclusion in rest of the state. Accordingly, as of April-end nine other districts achieved the target of 100 per cent financial inclusion through their lead banks.

India, Japan to strengthen trade relations

Chennai: To beef up trade relations between small and medium enterprises (SMEs) in India and Japan, the Indo-Japan Chamber of Commerce and Industry has proposed establishing an SME desk that will explore opportunities to outsource work between the two nations. According to Japanese Consul-General, Mr Kazuo Minagawa, Japan''s declining population and consequently shortage of youngsters opting for jobs with SMEs were driving the sector to explore outsourcing options in India.

Priority sector credit rises by 26.5pc in Karnataka

Bangalore: Commercial banks in Karnataka have performed extremely well in all the banking parameters in Karnataka during fiscal 2006-07. Under the priority sector the banks have paid out Rs 22,000 crore, a growth of 26.75 per cent compared to the previous fiscal. The areas the banks helped include crop production and investment credit to land development, minor irrigation, farm mechanisation, sericulture, dairy development, piggery and bee keeping. Under the farm sector, the banks could paid out Rs 13,388 crore during the year. The ground level credit flow to agriculture has increased from Rs 4,749 crore in 2003-04 to Rs 13,388 crore in 2006-07, recording a three-fold growth within three years compared to Centre''s stipulation of 100 per cent growth. The banking sector in the state has performed exceedingly well under all key parameters. For the present fiscal 2007-08, the SLBC aims to achieve 22 per cent growth in credit disbursal at Rs 26,829 crore.

BPO: India far ahead of China

China''s push to become an alternate BPO hub for MNCs tackling soaring wages and high attrition rate in India remains a distant dream as its offshore market is developing slower than expected, a study says.Despite significant government support and huge level of visibility on the global arena, China''s offshore market has not taken off as expected and still has a long way to become a potential alternative to India, technology research firm Forrester said in a report. Multinational firms, considering China as a ''quick-fix'' solution to deal with rising costs and high attrition of employees in other offshore locations like India, would be sorely disappointed by the country''s slowing offshore momentum, the report said. When we first looked at China''s offshore and global delivery model nearly two years ago, the country was widely viewed as the key challenger to India for offshore supremacy. However, our latest research shows that to date, the market has not taken off as expected, John McCarthy, Forrester''s vice-president said.

FM to issue 2 master circulars on service tax

New Delhi: The Finance Ministry is expected to chalk out draft version of two master circulars on service tax, which when finally issued will consolidate all existing service tax circulars issued by the Government since 1994. They will soon issue two master circulars. One will deal with taxable services and matters related to taxability. The other would purely be on procedures. Indications are that the two master circulars would come into force from July 1, after giving some time for the public to put forth their views on these circulars.

All the existing service tax circulars would be deemed withdrawn once the master circular was issued. Currently, about 97 services are under the service tax net and the Central Government hopes to collect service tax revenues of about Rs 50,200 crore in fiscal 2007-08. The Rustagi Report, which was submitted to the Government in February 2007, had segregated the circulars and instructions issued by the Revenue Department into three categories - to be withdrawn, to be retained and to be modified.

Pressure on FM to finalise tax aspects

New Delhi: Pressure is rising on the Finance Ministry to look into various aspects of the reverse mortgage scheme and take decisions on tax treatment at the hands of both the borrower and the lender under such a scheme. With reverse mortgages deducting in a small way in the Indian market, bankers and prospective users of this product are keen that all taxation issues are addressed upfront by the Ministry as a matter of precaution. The Ministry was looking into the taxation aspect and no final view has emerged on the taxation policy on reverse mortgages.

India-China trade crosses $11.4 b in first 4 months

Trade between India and China has risen 56.8 per cent in the first four months of this year (2007), and has crossed $11.4 billion, the Foreign Secretary, Mr Shiv Shankar Menon, said. Both sides expressed satisfaction at the developments in the bilateral relations since the two leaders met in New Delhi in November 2006. Mr Menon quoted the Chinese President as saying that the relationship had reached the stage of fast-track growth. The two countries discussed their respective positions on climate change, an issue on which they, as some of the fastest growing consumers of energy, are expected to be under pressure when they meet the G-8 on June 8. The US President, Mr George Bush, gave enough hints of this when he said that India and China need to be part of any global discussions on setting targets for cutting greenhouse gas emissions.

Rupee Depreciates By 14 Paise Against Dollar

The rupee declined by about 14 paise against the greenback on speculation that the central bank was buying dollars to curb its appreciation. The rupee opened at 40.54/56 and saw an intra-day low of 40.72 to end the day at 40.66/67 down from the previous close of 40.52/53.

Exports Drop 10-12% Edge, Says Ficci Report

New Delhi: Exports in 11 sectors, including textiles, garments, and electronics, which comprise 50% of the country''s total exports, have become less competitive by 10-12 per cent, according to a study by Ficci. The study, submitted to the National Manufacturing Competitiveness Council (NMCC), attributed this to the rising rupee and hardening interest rates. Readymade garments, which constitute 8.2 per cent of exports, lost price competitiveness by 8-15 per cent, the study says. Between April and May, the fall in exports was 20-50 per cent. The profit margins in the sector are likely to be hit by 2-5 per cent, the study notes. Textile exports lost price competitiveness by 8-10 per cent and dipped by 25-40 per cent between April and May. Chemicals, which contribute 8 per cent to the export basket, became costlier by 7-8 per cent due to the rising rupee. The export turnover of the sector during April-May could be down by 11-6 per cent, said the study. Exports from the electronics sector during April-May are likely to fall by 25 per cent.

Centre Raises Tax Exemption Limit For Senior Citizens

Senior citizens who have made deposits under the Senior Citizens Savings Scheme will not be under tax deduction at source (TDS) on interest earnings up to Rs 10,000 in a financial year. This is because the Government has hiked the threshold limit for exemption on TDS on the interest paid under this scheme to Rs 10,000, from the current level of Rs 5,000 in a financial year. The Senior Citizens Savings scheme was launched in 2004 and offered 9 per cent interest to depositors aged 60 years and above. A depositor can invest a maximum of Rs 15 lakh in the scheme, which has a lock-in period of five years. Apart from the Senior Citizen Scheme, the Finance Ministry has also now hiked the threshold limit for TDS exemption for interest (other than interest on securities) paid by banking companies and cooperative societies engaged in the banking business. The threshold limit has been pegged at Rs 10,000 as against the earlier specified amount of Rs 5,000 in a financial year

Govt To Use $5 Billion For Infrastructure Projects

The government has decided to borrow $5 billion from the country''s foreign exchange reserves to fund infrastructure projects. The amount, a little less than 3% of the country''s $204-billion forex reserves held by the Reserve Bank, will be loaned to a new overseas subsidiary of the India Infrastructure Finance Company, a proxy for the government. This company will use the funds to finance capital imports of Indian companies, especially in the infrastructure sector. Part of these funds could also be used to co-finance foreign borrowings for such projects, primarily capital expenditure, in line with a proposal made by finance minister P Chidambaram in this year''s Budget. A government official said the $5-billion borrowing and returns on the funds will be guaranteed by the government. It will also commit to the central bank a return in excess of 3.5% on loans taken from the reserve. The official said the move to borrow from the central bank and use it for infrastructure has been found to be legally tenable.

Inflation Inches Closer To 5% Target

New Delhi: The Finance Minister, Mr P. Chidambaram, said on May 31, that the inflation has declined to 5.06 per cent for the week ended May 19 from 5.27 per cent in the previous week. The key wholesale price inflation rate is usually declared at noon every Friday. Inflation has been falling for four consecutive weeks. The Committee reviewed the situation and the inflation has come down again. The annual rate of inflation, calculated on point-to-point basis, stood at 5.44 per cent (Provisional) for the week ended May 5 as compared to 5.66 per cent (Provisional) for the preceeding week.