Time To Look Beyond 9% Growth: FM

At a time when Mahindras are in the race for Landrover and Jaguar and pharmaceutical majors like Dr Reddy''s Laboratories and Ranbaxy are targeting buyouts in Europe Union Finance Minister has encouraging words for them.The Mahindras, the Birlas, the L&Ts, the Reddys, all of you award winners today, must go out and buy businesses the world over, said Union Finance Minister P Chidambaram at NDTV Profit annual Business Leadership Awards.

Chidambaram also promised India Inc of cheaper funding and government backing on acquisitions going beyond the 9 per cent growth of GDP.Citing the example of Tata Corus deal Finance Minister said scale is only possible by inorganic growth. We must look to beyond 9 per cent. And how do we do that? We do that by building global businesses, Chidambaram said.If any of you thinks that he can build a global business through the organic way, I am sorry to disappoint you-you are wrong, he added.

According to ICICI''s Global Investment Outlook report, the total equity deals struck by Indian companies have crossed $50 billion in 2007 while in the same timeframe last year the equity deals stood at $13.5 billion.Finance Minister has certainly given India''s business barons both big and small plenty of food for thought. And it is also likely that we now see a fresh impetus to possible global takeover deals by corporate India.

India Inc Negative About Biz Outlook

Even as the International Monetary Fund (IMF) has emanated optimism on the Indian economy, India Inc appears to think otherwise. The industry here is less optimistic about the business outlook this quarter than it was on the previous quarter or even for the quarter a year ago, according to a survey by RBI, in its latest report on the macro and monetary developments. Besides, private equity flows could slow down following monetary tightening by central banks. Painting a not too optimistic picture of the real economy, RBI''s business expectation index for July-September''07 declined by 3% over the previous quarter from 51.7 to 49.5. The index was compiled after surveying over 1,000 corporates. The survey based on net response (difference between those who were optimistic and those pessimistic) on quarter ahead expectation about the industrial performance was less favourable on most parameters. The respondents were not too optimistic on many of the major parameters such as overall business situation, production, working capital finance, order books, capacity utilisation, exports, employment and profit margin. In the banking sector, in spite of the slowdown in credit offtake, the real estate sector accounted for the highest growth of 69.7% between May 2006 and May 2007, among various segments that banks gave loans.

Other personal loans too grew at 56.8%. Home loans followed by infrastructure and trade loans accounted for the highest quantum in absolute terms during the period. The central bank has noted that asset price inflation, essentially that of stock and bullion have ended up being much higher than goods and services inflation. Stock markets have been booming on account of large foreign investor interest here.

India-Pak Trade Talks To Embark On Tomorrow

With the intention of taking bilateral relations to a new high, India and Pakistan will kick off talks here tomorrow on establishing fibre optic telecom link, allowing banks to open branches and increasing trade volume via the Atari rail link. The two-day Secretary level talks will be held as part of the ongoing composite dialogue that includes boosting trade and economic ties between the two neighbours. The agenda includes not only widening the trade basket, but encompasses services like use of IT in medicine and export insurance, an official said. The Indian side will be led by Commerce Secretary G K Pillai, while his counterpart Syed Asif Shah will lead the Pakistan delegation. India is pushing for export of tea to Pakistan while the neighbouring country wants to sell its cement here. They will also discuss ways to improve trade from Munnabao-Khokrapar rail link and transport of molasses by wagons. The two countries will deliberate on protecting Basmati rice from unauthorised patenting by way of getting joint registration with the WTO under the ''Geographical Indications''. Despite fast growth in the last two years, bilateral trade remains at 1.4 billion dollars with India enjoying trade surplus.

DST Uses Remote Sensing To Calculate Crop Production Data

New Delhi: The Department of Science and Technology is trying to calculate the total crop output in the country using remote sensing technology over the next six months. The DST has worked out an algorithm using various inputs like rainfall, moisture content in soil and plant properties to arrive at crop estimates. If the project is successful, the data will available much faster than the present methodology being used by the National Sample Survey Organisation (NSSO). The crop output estimates are arrived at by the crop cutting experiments of sample areas by the NSSO, with inputs from Department of Agriculture. The pilot project, carried out for Haryana, for crops like mustard, wheat, cotton and paddy, has been successful.

Applying the newly developed model, the DST arrived at the production estimates for Haryana for 2004-05, 2005-06, 2006-07 and compared it with the NSSO data for validation. The data for 2005-06, which had a variation with the NSSO crop production data, happened to be closer to procurement data of the Haryana. Incidentally, according to DST, the production in Haryana in 2005-06 was lower due to excess heat. Now, the StateGovernment has asked weekly reports from the DST that can show soil moisture content, rainfall, sowing and the extent of green-cover for each village.

AP To Ask For Rs 14,800 Cr From Centre

The Andhra Pradesh government will be seeking a enormous Rs 14,800 crore funds, of which Rs 5,998 crore would be additional central assistance for agriculture during the Eleventh Plan period at a day-long review of agriculture, infrastructure and projects pertaining to the state. Finance minister P Chidambaram, agriculture minister Sharad Pawar, deputy chairman of Planning Commission Montek Singh Ahluwalia, and secretaries of various departments will accompany the Prime Minister. An important proposal on the agriculture front from chief minister YS Rajasekhara Reddy would be to request the Centre to increase the minimum support price (MSP) for all foodgrain crops in a bid to increase production. Besides, the government has lined up proposals worth Rs 1,280 crore meant for measures to improve the productivity of various crops from the present average of 2,000 kg per acre to 4,000 kg per acre during the current year. The chief minister would brief the Prime Minister and the Union ministers on various steps being initiated by the state government for improving agriculture and infrastructure.

On the infrastructure front, the state government would seek Rs 8,800-crore assistance in the form of gap funding as well as grant for various projects in roads, energy and other sectors. An inter-city high speed rail corridor between Visakhapatnam and Hyderabad is among the new proposals to be presented before the Prime Minister. The government would also seek approval and speedy execution of 19 national highway four-laning projects, refinery project of ONGC, petrochemical region at Visakhapatnam, domestic gas pipeline network project, and gap funding for the Hyderabad outer ring road project besides irrigation projects.

Rs 50,000 Cr Makeover Plan For Mumbai

A massive Rs 50,000-crore makeover plan is underway for the financial hub to create world-class infrastructure and set up an integrated urban transport system that will combine the suburban rail network with a metro rail system, hovercrafts and sea links.For the integrated urban transport system, a unified authority called the Urban Transport Management Authority will be set up to bring about an integrated fare structure and linkages among different modes of transport.

The integration will attempt to create a coordinated routine and scheduling for the rail, rapid transit system, bus services and water transport. It will also work on unification of fare structure, rationalisation of redundant services and a coordinated public information system.

With this integrated approach, Maharashtra Special Projects Secretary Sanjay G Ubale said, a commuter can buy a single ticket at the starting point and use different modes of transport like suburban rail, metro, waterways and road transport to reach a final destination.

As part of the project, Mumbai will have nine metro corridors that will be mostly elevated and connect various suburban points. The project will also upgrade the three-railway suburb network and create a Worli-Nariman Point sea link, an East Island Freeway and a waterway between Borivli and Nariman Point. The plan, to be completed by 2015, will also provide for inter-modal terminals at various points for transfers between different modes of transports.

Tax Consultants Come Heavily On New IT Return Forms

Criticising the finance minister for introducing the ''complicated'' 29-page Income Tax returns (ITR) forms and doing away with the ''Saral'' form, the Mysore unit of the Tax Consultants Association of India (TCAI) has demanded the rectification of the faults in the new forms, option to file ITRs in the old 2D Saral and extension of the last date to file returns up to December 31. The local TCAI office-bearers met the Mysore IT Commissioner and proposed to represent their 14 demands to the Finance Minister and the Prime Minister. Listing the faults in the newly-introduced forms, Mysore Centre president SV Kumar told that the CBDT''s direction to the assessees not to file enclosures with ITR 1 to 8 will deny them the benefits of tax deductions like LIC, PF and other savings and on payment of property tax and capital gains.

COINDIA To Put In Rs 15 Cr On Infrastructure

Coimbatore: The Coimbatore Industrial Infrastructure Association (COINDIA) has decided to spend Rs 15 crore on common infrastructurefor the engineering industry. The projects would be completed by the year end. According to the source, the domestic pump and motor industry is likely to witness a 10 per cent growth over the levels achieved in 2004-05, with the exports from this sector growing two-and-a-half times since 2004. The export is now at Rs 80 crore. Foundries could show 25 per cent growth in the last two years and itsturnover is likely to cross the Rs 2,000-crore mark with direct exports including that of industrial valves accounting for Rs 400 crore.

MP To Set Up Three IT SEZs

The Madhya Pradesh Government has announced plans to set up three information technology SEZs in Bhopal, Gwalior and Jabalpur in partnership with the private sector and involving an investment of Rs 2,550 crore. The state government, which is implementing the SEZ projects through the Madhya Pradesh State Electronics Development Corporation, has already received approval from the Centre.

The IT-SEZ in Bhopal would come up on a 180-acre plot with an investment of Rs 1,500 crore, while the 40-acre Gwalior project is slated to cost Rs 350 crore. The estimated cost of the 90-acre SEZ in Jabalpur is about Rs 750 crore. The official said the state government is expected to soon get clearance from the Ministry of Environment and Forests after which the projects will take off. The Madhya Pradesh government wants to develop information technology sector and is seeking investments from IT majors in a host of software and IT-enabled services. The BJP ruled state is also keen on promoting SEZs and has so far remained free from any opposition against these zones. About 14 SEZ projects have been approved in the state.

Growth Rate To Touch Double Digit

India''s growth rate for 2006-07 may be revised upwards from the current estimate of 9.4% to almost 10%. This is because growth has been more robust than estimated in both agriculture and manufacturing, according to highly-placed government sources. Since the base for comparison has become larger, one could argue that this year''s growth would be lower. But that is an arithmetic view of growth. The economic factors that drove growth to the touching distance of 10% last fiscal could sustain the momentum this year, too, to keep the growth rate above 9%, according to senior economists in the government.

The economy''s managers can take heart. If containing inflation at a yearly average of 5.4% was a creditable achievement when growth was estimated at 9.4%, the same task seems even more creditable when it turns out that growth was 10%. Looking forward, the central bank could consider relaxing its tight grip on monetary expansion a bit, considering that real expansion could be larger than what it has been bargaining for. The 2006-07 growth rate in the agricultural sector is turning out to be higher than 2.7%, as estimated by the Central Statistical Organisation earlier. The revised growth rate in the sector could be 4% or more.

Likewise, the manufacturing growth rate will be higher than the estimated 12.3%. The combined effect of these two factors could take GDP growth up in the range of 9.8-9.9%, sources said. The higher agriculture output will result mainly from an upward revision in the kharif output by about 4 million tonnes during the fiscal. The rabi output, too, has been estimated to be higher than anticipated. The GDP had expanded by 9% in 2005-06 and 7.5% in 2004-05. Per capita income has grown by 8.4% during the period under review as against 7.4% growth in the previous year, as per the CSO data.

CII: India, US Must Remove Trade Barriers

New Delhi: India and the US should work together to remove trade barriers to increase bilateral trade and investment flows. Speaking at a seminar on US-India Trade and Investment Issues and Opportunities organised by the Confederation of Indian Industries (CII), Dr Dua said that both the countries must dismantle trade barriers to strengthen bilateral trade relationship. India remains to face delays in visa and work permits, prohibition and quotas on foreign providers, non-recognition of India''s professional qualifications and labour certification requirements.

India''s exports to the US have more than increased from $8.5 billion in 2001 to $17.3 billion in 2006 while India''s imports from the US have been increasing at a higher pace than exports during the same period. Since US is the key market for services exports from India, the Indian services export to the US has the scope to reach $65 billion by 2010. The industry secretary also pointed out that the US companies should increase investment in India''s infrastructure sectors such as roads, ports, telecom, power and airports.

NCAER Biz Confidence Index Declines

New Delhi: Business confidence in India declined in the first quarter of the financial year by 8.8 per cent from the last quarter of the previous fiscal.The latest quarterly Business Expectations Survey for July 2007 by economic think tank National Council of Applied Economic Research (NCAER) saw the Business Confidence Index (BCI) declining across sectors for the second consecutive quarter. In April, the index had fell by 3.8 per cent over its January level. The BCI''s fall in the current round should be seen in the context of slower momentum of economic activity, which is normal for the first quarter of any financial year.

The decline from the first quarter of the previous financial year is also 8 per cent. The decline is across sectors, in terms of the following four main components overall economic conditions, investment climate, financial position of the firms and capacity utilisation. The fall, at 15.6 per cent, was the sharpest in the capital goods sector. Services witnessed a fall of 18.7 points, the intermediate goods sector 10.3 points, the consumer durable goods sector 6 points and the non-durables sector 4 points. The decline is the highest in the northern region and the lowest in the southern region. Big and small firms showed less buoyancy than mid-sized firms.

I-T Returns Through Post Offices Withdrawn

The government has withdrawn the facility for taxpayers to submit income tax returns through post offices, which was introduced last year, and assesses must file returns by July 31.

The decision to accept I-T returns through post offices has been withdrawn, which was taken last year due to extraordinary circumstances of threat of strike by income tax employees, a senior Income Tax official said.

The last date for filing income tax returns is July 31 for salaried individuals, self-employed, small enterprises with a turnover of less than Rs 40 lakh and professionals with receipts of less than Rs 10 lakh a year.

Though tax payers are advised to submit their returns by July 31, but in certain unavoidable circumstances they can submit returns till March 31 provided they have deposited all due taxes, the official said.

However, technically, they can still get a show cause notice from assessing officers, asking why action should not be taken against them for not submitting returns.

IMF Revises India''s GDP Forecast To 9%

Buoyant global economic outlook has prompted the International Monetary Fund (IMF) to revise upward India''s Gross Domestic Production (GDP) growth rate by 0.6 per cent to 9 per cent for 2007.

Major upward revision has been made for emerging markets with growth projection for China, India and Russia being raised substantially, IMF said in its update on the World Economic Outlook (WEO) on Wednesday.

IMF had revised India''s GDP forecast to 9 per cent over the projection made in April this year. The WEO update has also revised the growth forecast for 2008 by 0.6 per cent to 8.4 per cent.

The Economic Advisory Council to the Prime Minister, headed by former Reserve Bank Governor C Rangarajan, had on July 16 pegged the country''s economic growth rate at 9 per cent in 2007-08.

The RBI, however, in its Annual Policy Statement had projected a growth rate of 8.5 per cent. India has recorded a GDP growth rate of 9.4 per cent during 2006-07.

IMF has also revised the forecast for world economic growth to 5.2 per cent, up by 0.3 per cent from the projection made in April.The growth rate for China, however, has been revised by 1.2 per cent to 11.2 per cent and for Russia by 0.6 per cent to 7 per cent.

CST Collections Records 8.88% Growth

New Delhi: Central Sales Tax (CST) collections registered 8.88 per cent increase in fiscal 2006-07 to Rs 19,749.21 crore compared with Rs 18,138.18 crore collected in fiscal 2005-06. This growth rate is fairly below expectations and also much lower than the near 20 per cent increase in collections witnessed in fiscal 2005-06. Annual CST collections during 2004-05 was about Rs 15,000 crore. A four-step phaseout of CST has already been initiated, with the ceiling rate reduced from 4 to 3 per cent on April 1 this year. States have pegged the total revenue loss due to the decrease in CST at about Rs 6,350 crore during 2007-08. Given the growth trend in CST collections in 2006-07, sources said that the estimation of revenue loss of Rs 6,350 crore for 2007-08 may be on the higher side.

Rupees Ends At 40.35 Against Dollar

Mumbai: The rupee weakened by eight paise against the greenback on July 25, due to dollar purchasing by some nationalised banks. The home currency eased from its nine-year high to close at 40.35, down from the previous close of 40.27. The rupee opened at 40.29/30 and saw an intra-day high of 40.27 before ending the day at 40.35. In forwards, the six-month premia closed at 1.14 per cent (0.96 per cent) while the 12-month ended at 1.40 per cent (1.29 per cent).

FM Urges Excise Department To Check Evasion In VAT

NEW DELHI: The excise department could take the assistance of state governments data bank on value-added tax (VAT) collections besides carrying out high-impact audits to track evasion. Finance minister P Chidambaram has urged the department to work closely with the state governments to share information. This exercise was done with Andhra Pradesh, and now they have decided to replicate it all over India. The department could gather data from states on VAT collections in specific products, industries and cities to detect non-disclosure. The exchange of information could assist the department in tracking excise evasion. The excise collections saw a growth of just 6.8% in the first quarter of this fiscal as against a 25% growth in VAT collections. The high-impact audits are a part of the department''s plan to plug revenue leakage from industries such as steel, chewing tobacco, gutkha, copper and furnace oil. The high-impact audit must cover assesse products or sectors which are prone to tax evasion.

The high-impact audits will be based on certain internal risk parameters targeted at detecting evasion. Elaborating on other measures taken to curb duty evasion, the finance minister said it was now mandatory for assesse with duty liability of more than Rs 50 lakh to make e-payment of excise duty. They are slightly behind on excise, a shade behind on service tax, but at the moment we have no grave concerns in respect to budgetary targets. Excise duty collections grew to Rs 25,161 crore in the first quarter against Rs 23,560 crore in Q1FY06, a growth of 6.8%. Service tax fetched 31.6 % more to the exchequer at Rs 7,257 crore against Rs 5,514 crore in the same period last fiscal.

Minister Carefulness Against Bill-Less Trading

Coimbatore: In order to help the trade and industry, the Tamil Nadu Government had in the 2007-08 Budget offered sales tax relief for 61 specific products contrary to the Centre''s VAT guidelines. According to the Tamil Nadu Commercial Taxes Minister, Mr M. Ubhayathullah, 30 goods were freed from VAT, while the rate on another 31 items was cut down from 12.5 per cent to 4 per cent. Mr Ubhayathullah cautioned against bill-less trade urging the Government chose to lower the VAT rate on the belief and also on the assurances from the trade that it will bring about higher tax compliance. But some traders continued with bill-less trading, betraying the Government''s faith on offering moderate tax regime and affecting the smooth implementation of VAT. Coimbatore contributes normally 10 per cent of Tamil Nadu''s total revenue from commercial taxes.

As against the State''s total revenue of Rs 19,817 crore collected in 2006-07, the Coimbatore division contributed Rs 1,267 crore. The division''s tax earning during April-June 2007 was Rs 417 crore as against the State''s overall tax collection of Rs 4,262 crore. The cumulative tax collection displayed a healthy 20 per cent annual growth despite the variations in the month-wise revenue. But the tax collection from Coimbatore has for the first time showed a negative growth of Rs 4 crore during June 2007 when the total collection decline to Rs 134 crore compared with June 2006 revenue of Rs 138 crore.

Chennai I-T Dept To set Up 40 Special Counters

Chennai: The income tax department in Chennai is gearing up to manage the last minute rush. The department will open 40 special counters for senior citizens and the physically-challenged to handle about 250,000 taxpayers, who are hoped to submit their returns over the next few days. Income tax department said about 313,941 salaried people filed their returns last year and the department hoped about 3.2 lakh salaried people to file their returns this year. The last date to file income tax for those deriving income from salaries is July 31, 2007.

While 70,174 salaried taxpayers submitted their returns as on July 23, about 250,000 taxpayers are hoped to submit their returns over the next few days. Thanks to the boom in manufacturing and IT sectors, Tamil Nadu has recorded impressive tax collections in recent years. Total direct tax collections for the Tamil Nadu region stood at Rs 14,891 crore in 2006-07 and the department expects this to reach Rs 17,400 crore in the fiscal 2008. The total collections for 2004-05 stood at Rs 8,344 crore. The special counters at the income tax office (Aayakar Bhavan) will function from July 27 to July 31, including July 28-29. The department has also mulled separate counters for salaried assessees coming within the Tambaram jurisdiction.

Coimbatore sees decline in June ST collection

Coimbatore: The implementation of value added tax (VAT) in Tamil Nadu likely to be smooth. But the mid-term analysis of revenue collection that has brought forth a negative growth in sales tax collection to the extent of Rs 4 crore for June from Coimbatore sales tax division has startled the Commercial Tax authorities. The monthly VAT collection from the division including the industrial belt of Coimbatore, Nilgiris and Tirupur during June fell to Rs 134 crore as compared to Rs 138 crore for the same period of previous year.

The State Commercial Taxes Minister, Mr M. Ubayathullah, presiding over the first ever interactive meet with the trade and industry on VAT implementation held on July 25, gave out the tax collection break-up for January-June 2007 for the region (see table). Expressing worry over what he called the huge loss in revenue from the Coimbatore division, the Minister cautioned the trade/industry on short collection of levy saying that the state government took care to implement the VAT rates on consensus basis often by conceding to the trade''s demand for lowering the taxes in order to achieve greater compliance. The sales tax collection showing an average 20 per cent annual growth would maintain its tempo beyond August and the increase in revenue would reflect in the 2007-08 fiscal. Of the 4.22 lakh registered dealers for sales tax in the State, Coimbatore division accounted for about 73,000. Of the predictable tax collection of Rs 19,817 crore from the State last year, Coimbatore accounted for Rs 1,267 crore. The tax collected from Coimbatore trade during April-June this year worked out to Rs 417 crore compared to the entire State''s Rs 4,262 crore.

Call To Increase Investment Flows From EU

Hyderabad: If the foreign direct investment (FDI) into the country was $15.72 billion during the financial year 2006-07, the contribution of the European Union (EU) countries was a minuscule 0.2 per cent. The reasons for low EU interest is due to quality inconsistency of Indian products, infringement fears on IPR (Intellectual Property Rights), procedural delays and lack of transparency. There is need and a big potential for an accelerated growth of FDI from EU countries in the near future, a meeting of the EU-India Trade and Investment here has felt.

To make this happen, a joint programme of the EU and India called the IFD (EU-Investment Facilitation Desk) has created a two-year initiative with about €13.35-million fund. The IFD was in the process of setting up a few quality-testing labs that meet the EU and global standards. The equipment would arrive shortly and would become functional and help Indian exporters. India has to look for more FDI. The exports, which were $120 billion, need to go up substantially and the EU countries definitely offer good scope, once their worries are addressed. Several industry representatives from the State participated in the meeting.

FM Optimistic On Indirect Taxes

New Delhi: The Union Finance Minister, Mr P. Chidambaram, on July 24, showed confidence that the revenue department will meet the budget estimate on indirect taxes for fiscal 2007-08 even as he admitted that the performance so far appeared to be slightly behind on the excise duty front and a shade behind on service tax collections. For 2007-08, the Centre has estimated the budget estimates for indirect taxes at Rs 2,78,013 crore. Elaborating on the first quarter revenue collection performance, Mr Chidambaram said that customs duty collections are ahead of target and registered a 20 per cent increase to Rs 23,570 crore in April-June 2007 as compared to Rs 19,677 crore in the same period last year.

While excise duty collections grew 6.8 per cent in April-June 2007 to Rs 25,161 crore (Rs 23,560 crore), service tax collections in the first quarter grew 31.6 per cent to Rs 7,257 crore (Rs 5,514 crore). The appreciation of the rupee against the US dollar has not had an adverse impact on the customs revenues of the Centre during the first quarter this current fiscal. -oil imports have gone up and price of oil has also gone up. The customs revenues had not been affected by rupee appreciation. Non-oil imports during April-May 2007 stood at $26.55 billion, which is 49.41 per cent increase over the $17.77 billion imports in the same period last year.

FM Wants To Strengthen Audit Of Excise Accounts

New Delhi: Worried over the high degree of excise duty evasion in certain sectors, the Finance Minister, Mr P. Chidambaram, seeks to strengthen the audit of excise accounts. He has also urged the State Governments to share information on state-level value added tax (VAT) collections with the excise department to help identify cases of excise duty evasion. The audit must yield larger revenues. On the issue of sharing of information on VAT collections by the States with the Centre, the Finance Minister said that, as a rule, the trend in VAT collections must be more or less reflected in the trend in excise collections. If there is an upswing in the VAT collections of a product manufactured and sold, likewise there must be an upswing in excise collections from that product. Mr Chidambaram also said that the revenue department at the Centre had already undertaken an information sharing exercise with the Andhra Government officials.

The Finance Minister also pointed out that a number of measures had already been taken to curb excise evasion. The Government has made it mandatory for assesses with excise duty obligation of over Rs 50 lakhs to make e-payments only. Mr Chidambaram highlighted that 89 per cent of excise duty collections are made through e-payment mode. Meanwhile, in a significant change in the pattern of excise duty collections, Mr Chidambaram said in fiscal 2006-07 the payment through Cenvat credit exceeded the cash payment through personnel ledger account (PLA). The negative spin is there may be misuse of Cenvat credit.

Rupee Ends At 40.27 Against Dollar

Mumbai: The rupee reached a fresh nine-year intra-day high of 40.20 backed by strong FII inflows into the domestic stock market. The rupee closed at 40.27 against the greenback on July 24, about two paise up from the previous close of 40.29. The home currency opened at 40.25/26, and saw an intra-day high of 40.20 before ending the day at 40.27. Unless there is some change in policy as far as foreign currency inflows are concerned, the rupee will continue to show substantial strength. In forwards, the six-month premia closed at 0.96 per cent (0.65 per cent) while the 12-month closed at 1.29 per cent (1.13 per cent).

India, Korea Commence Negotiations On Opening Mkts

NEW DELHI: India and South Korea on July 24, began negotiations by discussing their initial offers in the Comprehensive Economic Partnership Agreement (CEPA) targeted at opening their markets to each other through reduction as well as elimination of duties. The official level discussions will take up a host of issues comprising how a particular item would qualify for duty reduction via the process known as ''rules of origin,'' covering substantial items of trade. Indian negotiators would have to tackle the conflict of interest between Korean firms like LG and Hyundai, which have established large manufacturing base here, and their compatriots in Seoul which are keen only to sell goods to Indian consumers without investing in establishing facilities. India has so far maintained the cost advantage not only in services but manufacturing as well. After a green signal from a Joint Study Group, Seoul and New Delhi have held several rounds of technical level talks. Both India and South Korea are in the process of inking a large of number of FTAs covering merchandise goods, services and investment.

Customs, Excise Chiefs To Convey Meet On July 24

New Delhi: The Union Finance Minister, Mr P. Chidambaram, will open the All-India annual conference of the chief commissioners and director-generals of Customs and Central Excise here on July 24. The two-day conference will start with performance appraisal of the Central Board of Excise and Customs (CBEC) in areas such as revenue, trade facilitation, enforcement etc. There would also be some detailed discussions on status of automation initiatives of CBEC. Other issues such as measures to improve compliance levels in indirect taxation, dispute resolution, goods and services tax and emerging challenges before customs would also be discussed.

IIA To help UP Govt Implement VAT

Lucknow: The Indian Industry Association (IIA), an apex body of Micro Small and Medium Enterprises (MSME) in Uttar Pradesh, is all set to assist the state government implement Value Added Tax (VAT) in the state. This was disclosed in a seminar conducted by the chamber titled ''Preparation for implementation of VAT in UP''. The chamber proposes to workout a recommendation, on this study, to be submitted to the UP government by August 15. Recently, the Uttar Pradesh government made its stand clear on the implementation of VAT in the state, after which the government machinery swung into action to do the groundwork for the same. They should therefore try to clarify certain important issues immediately regarding refunds, openings stocks, treatment of outstanding credit, assessment procedures, compounding of tax, verification practices and set-offs,. Thirty industrialists and experts from Punjab, Haryana, Uttarakhand, Himachal Pradesh, Delhi, Rajasthan and Madhya Pradesh, attended the seminar.IIA said keeping in view the apprehensions of small businessmen, IIA should advise a threshold limit of at least Rs 10,00000 for the applicability of VAT.

Ministers On SEZs To Take Final Decision On Infrastructure Limit

New Delhi: The empowered group of ministers on special economic zones (SEZs) will, at its next meeting, take a final decision on permitting infrastructure development in the non-processing area of the zones. The commerce ministry had, in March, put on hold this change in the SEZ rules. Earlier, a developer could have built more hospitals, schools, housing units and other social infrastructure in the non-processing area than cleared by the board of approval. According to the rules, at least 50 per cent of a zone has to be dedicated to core activity in the processing area. The remaining part of the zone, known as the non-processing area, is for support infrastructure.

For each activity, a zone developer has to take the approval of the board and conform to the quantum of area allowed. SEZ experts said not permitting the development of additional area was not healthy for the developers plans. Most developers, while purchasing land from the state government authorities, enter into land-use agreements. There is no surety that the board will permit the entire quantum of the area in a non-processing area to be developed.

EPF Board Retains 8.5% Rate

Bowing to pressure from Left-backed trade unions, the Employees Provident Fund Board has agreed to continue paying 8.5 per cent interest rate to its nearly four crore subscribers for fiscal 2006-07.Amid protest by some trade union representatives, it has been decided to pay 8.5 per cent interest rate on provident fund, Labour Minister Oscar Fernandes said.

The decision to retain 8.5 per cent interest will put a burden of Rs 450 crore on the EPF fund.However, sources said that the deficit could be offset from a surplus of Rs 590 crore lying in the Interest Suspense Account, Contingency Reserve and Special Reserve Fund.The Board will submit its recommendations to the Finance Ministry, which is expected to notify the rate shortly.

Fernandes said the EPF had constituted a sub-committee to assess the Board''s finances. The report of the committee placed before the meeting for deliberation found that there would be a surplus of Rs 595 crore with the board.Even after paying 8.5 per cent interest rate, the fund would be having a surplus of Rs 83 crore. The EPF has a corpus of Rs 94,000 crore including pension fund. Referring to the demand of trade unions to pay higher interest rate, he stated that the board had fixed interest rate only for the previous year. Fernandes said the board also discussed the government''s suggestion to invest five per cent of the corpus in the stock market but no decision was taken. However, representatives of the Left-affiliated trade unions rejected the decision of the board, while demanding at least 9.5 per cent interest rate.

Health Spending Outstrips Economic Growth

Spending on health is continuing to outpace economic growth with most countries having seen a near doubling of expenditure as a share of national income over the past 25 years, the Organisation for Economic Co-operation and Development reported on July 18.

Per capita health spending has increased by more than 80 per cent in real terms between 1990 and 2005, outpacing the 37 per cent rise in gross domestic product per head.

In 1970, across the OECD, health accounted for just 5 per cent of GDP. By 2005 that had reached 9 per cent with a quarter of OECD countries now spending more than 10 per cent of national income on health. The US continues by a huge margin to be the biggest spender at 15.3 per cent of GDP in 2005. Switzerland and France both spend more than 11 per cent, while Germany, Belgium, Austria, Portugal and Greece spend more than 10 per cent, with Canada and Australia not far behind. The UK spent 8.3 per cent of GDP on health in 2005 with further growth planned that is likely to take it up to the OECD and European Union average.

Rising demand for healthcare means governments must either raise taxes or social security contributions, cut spending elsewhere or make people pay more out of pocket. There are huge variations around the world as to how much people pay directly for healthcare.

In the UK, a mere 13 per cent of health expenditure comes out of pocket against 57 per cent in Greece and 51 per cent in Mexico. In the US, half of all expenditure is covered either by out-of-pocket payments (13 per cent of the total) or private health insurance.

EPF Rates May Be Retained At 8.5%

Amidst indications of retaining 8.5 per cent interest, the EPF board will meet on Monday to decide the rate for 2006-07 and 2007-08 for its four crore subscribers.Monday''s meeting, after half a dozen such exercises failed to finalise the rate, assumes significance in the light of Labour Minister Oscar Fernandes'' statement that the government will try to retain the present rate.

Though EPF''s earnings allow a maximum of 8.25 per cent interest, the Central Board of Trustees is likely to settle for 8.5 per cent interest with the Left-backed trade unions strongly objecting to any further cut.

As the rate could not be thrashed out in the past meetings, Fernandes said efforts would be made this time to evolve a consensus so that the EPF interest is not lowered.The EPF Board at its last meeting on May 27 had decided to have a fresh look at the matter on July 2, but that meeting was later called off.While Leftist trade unions are opposing any cut in the rate from the existing 8.5 per cent, Fernandes is of the view that for 2006-07, the rate of interest would depend on the funds available with the EPF.The higher rate of interest offered by commercial banks would be taken into account for future calculations.

Infrastructure Fund For State Govts: FM

The apathy of state governments toward infrastructure development prompted the Centre to announce a Rs 100 crore corpus to help them in preparatory work of projects coming up with public-private participation. It would be a revolving fund that will get replenished from successfully bid projects. In case it needs to be topped up, it would be topped up through budgetary support, Union Finance Minister P Chidambaram said at a conference of Chief Secretaries on Public-Private Partnership (PPP). The fund, to be called India Infrastructure Project Development Fund, would bear up to 75 per cent of development costs of projects till the bidding stage, he said. If the bidding is successful, the amount given to states would be treated as interest free loans and in case the exercise fails, the assistance would be converted into grant. In case of successful bidding, the money would be recovered from those who get the contract, he said.

States Reach Consensus On Tax On 44 New Services

New Delhi: State Finance Ministers have come to a consensus on the list of 44 new services of intra-State nature on which service tax could be imposed by the Centre and passed on to them as part of the compensation package for central sales tax (CST) phaseout. The Chairman of the Empowered Committee of State Finance Ministers, Dr Asim Dasgupta said that the common man would not be affected on services like education and health and indicated that only services consumed by the richer sections will be brought under service tax. Moreover, States have decided to exclude artistes and sportspersons from the ambit of the 44 services. The list of the 44 new services forms part of the 77 identified services whose entire service tax proceeds is to be shifted to the States by the Centre during 2007-08. The other 33 services are already under the tax net of the Centre.

Ministry Seeks FDI In SEZs Supervised

New Delhi: The defence ministry has warned against giving permission to FDI in special economic zones from countries of concern and unfriendly entities, asserting that a national security exception clause be introduced to regulate overseas investment. According to fresh norms being suggested by the ministry, foreign participation in sensitive sectors and from countries and entities of concern should be subject to appropriate screening irrespective of the fact whether the FDI is permitted via automatic route or the Foreign Investment Promotion Board. It also seeks an institutional mechanism for defining policies, which should include feedback and control.

Armed forces have urged the government to keep SEZs at least 10 km away from the country''s borders and 20 km from sensitive installations like airfields, radars and communication. The norms, which will govern approval of SEZs, also include a provision that IT and ITeS zones should also be at a distance from military installations to avoid interference with ground-to-ground communication and radar pick-up. The defence ministry, which is represented on the Board of Approvals, has also advised that SEZs in coastal areas should be cleared only after taking the view of the armed forces.

Uttarakhand Wants To Provide Fresh Boost To Industry

Dehra Dun: Faced with stinging criticism that the industrial process was being hampered, the Uttarakhand government is trying hard to give a fresh impulsion to industrialisation and call new proposals for the hilly region.For this, the government is asking proposals from industrial houses to establish small and eco-friendly industries in the state''s hills. An action plan has been drafted to promote village industries, agriculture-based units and cottage industries, adding Rs 6.25 crore has been earmarked for it.

Chief Minister BC Khanduri is also keen to witness industrialisation on a firm footing and has told bureaucrats to work more on calling investments in both the hilly and the plain regions. Khanduri has already made a passionate appeal to industrial houses to set up small eco-friendly units in the hills also. Udyogmitra, a government body established to promote industries in the state, will now meet every three months and try to give an impetus to industrial growth in the state. The chief minister, during his recent meetings, had told various industrial associations that 1633 new proposals worth Rs 300 crore had poured into Uttarakhand ever since his government came to power. 800 industrial units had began production with an investment of Rs 4,000 crore. Forty thousands people had received employment through these industrial units.

NRIs May Rival MNCs As Investors In Indian Economy

The single-largest source of foreign capital into India, non-resident Indians, may one day become the prime source of investment in the domestic economy. A new report on remittances to India says NRIs now see India as an investment destination and are already leaving their mark in real estate and the stockmarket. Muzaffar Chishti of the Migration Policy Institute, author of The Phenomenal Rise in Remittances to India: A Closer Look, says the most striking evidence of the fact that NRIs are seeing the Indian economy as an opportunity is the rise of so-called private transfers.

There are two main types of NRI remittances. The most well-known type is inward remittance i.e. when an NRI wires or sends money to an individual in India, usually a relative. The other type is private transfer i.e. when an NRI deposits foreign exchange into a rupee account and then spends it inside India.

The little-noticed trend, says Chishti, is how fast private transfers have grown. Between 2000-01 and 2005-06 private transfers grew by 88 per cent, more than double the rate of inward remittances. The former exceeded the latter by $ 2.3 billion last year.

Ultimately, A Bill For Unorganised Sector

New Delhi: The social security package for the unorganised sector is finally about to open as a Bill regarding this is to be tabled in the coming Parliament session. The Bill proposes a social security package in the form of health insurance, pension and provident fund benefits for the unorganised sector. The government expenditure on social security for the unorganised sector so far has been confined to short-lived schemes like the Krishi Samajik Suraksha Yojana and the present government''s National Old Age Pension Scheme. The proposed expenditure on social security for the majority of the workforce coming under the unorganised sector is 0.17 per cent of the GDP. However, the draft Billl on social security has been criticised for not mentioning any financial commitment.

India Sees 10 Percent Economic Growth If Farm Output Recovers

India''s economy could touch annual growth of 10 percent in the financial year beginning April 2008, provided its ailing farm sector picks up.''Achieving a 10 percent growth in 2007-2008 (April-March) is tough, but it is possible in 2008-2009,'' Finance Minister Palaniappan Chidambaram told economists at a function in New Delhi on Tuesday.

''That will be a fitting finale for the government''s five-year tenure,'' Chidambaram said, adding the target could be achieved only if India increased farm output.''It will be possible to push up the economic growth by improving the performance of agriculture, which has been stagnating,'' the minister said.

Agriculture contributes a fifth of India''s economic output and is a direct or indirect source of income for two-thirds of its population.Annual per capita food grain production shrunk from 207 kilograms in 1995 to 186 kilos last year. The rate of agricultural growth fell from five percent in the mid-1980s to less than two percent in the past five years.

India, the world''s second-largest wheat producer, exported no wheat last year after shortages forced it to import the commodity for the first time in six years.

Rupee Appreciates 5 Paise Against Dollar

Mumbai: The rupee improved by about five paise against the greenback on July 19 backed by strong dollar supplies into the domestic market. Rupee closed at 40.35/36, up from the previous close of 40.40/41. It opened at 40.38/40 and saw a high of 40.35 but immediately slipped to 40.42 levels due to dollar buying by a few nationalised banks, before ending the day at 40.35/36. Market participants expect the rupee to strengthen to 40.33 levels. In forwards, the six-mon th premia closed at 1.64 per cent (1.18 per cent) while the 12-month premia closed at 1.77 per cent (1.57 per cent).

Deshmukh Clarifies On Land Acquisition For SEZs

The Maharashtra government has announced its sand on the floor of the assembly on Thursday that it has not acquired any land for a private SEZ developer anywhere in the state. Chief minister Vilasrao Deshmukh said that the government would not go beyond the purview of section 6 of the Land Acquisition Act of 1894. At the same time, the government refused to either withdraw section 6 or stay its effective promulgation.

This clarification on section 6 is likely to quell the controversy surrounding the Maha Mumbai SEZ proposed by Reliance Industries in Raigad. The imposition of section 6 had been viewed as an attempt by the state government to take over agricultural land for industrial purposes and had triggered widespread protests among farmers in the region. Earlier, revenue minister Narayan Rane told the House that section 6 did not mean that the government has acquired land or the farmers have parted with their land. Industry minister Ashok Chavan said Maharashtra had to decide once and for all whether it wanted to continue with industrial growth to retain its position as the topmost investment destination in India. He said the government would appreciate concerns about labour laws in SEZs, while notifying the state Act on SEZs.

The Opposition had demanded that existing labour laws should not be totally exempt in SEZs. Mr Chavan also promised changes in the definition of ''domicile'' to facilitate maximum employment for locals in SEZ units. At present, a person has to stay continuously at a place for 15 years to qualify for employment with the government or a government-sponsored agency.

PM For More Autonomy To PSUs

Concerned over time spent by heads of public sector firms in ''boundary management'', Prime Minister Manmohan Singh has asked the government to become more transparent in regulating. It should be our endeavour to empower public enterprises by easing the bureaucratic and political hold of government over them, he said after releasing a book titled ''The Indian CEO - A Portrait of Excellence.

Singh said the book concludes that dealing with external environment - defined by government in case of public sector companies and dubbed as ''boundary management'' - was the most important challenge facing public sector executives in India. I agree with an important conclusion of your study that the relationship between business and the government as regulator needs to become more transparent, more predictable, less uncertain and less time consuming, he said.He asked ministries to grant full operational autonomy to public sector enterprises, to enable them to compete and succeed in global market.

Rupee Slips Against Dollar

Mumbai: The rupee slipped by about four paise against the greenback on July 18 due to concerns about a loss of risk appetite among global investors prompting traders to pare their holdings. Rupee opened at 40.34/36 and saw a low of 40.45 before closing at 40.40/41, down from the previous close of 40.36/37. Market participants expect the ru pee to strengthen this week. In forwards, the six-month premia closed at 1.18 per cent (1.41 per cent) while the 12-month closed at 1.57 per cent (1.65 per cent).

Import Of Sensitive Items Slip By 8 Per Cent

Import of sensitive items numbering 350 being monitored by the Department of Commerce from time to time bearing in mind their sensitivity to domestic markets has shown a decrease of close to 8 per cent during the first two months of the current fiscal.Total import of sensitive items for the period April-May 2007 has been Rs 2,606 crore as compared with Rs 2,828 crore during the corresponding period last year. While the gross import of all commodities during the same period of the current year was Rs 1,48,054 crore as compared with Rs 1,21,305 crore during the same period last year, import of sensitive items constitute 2.3 per cent and 1.8 per cent of the gross imports during last year and current year respectively. Import of edible oils, fruits and vegetables (including nuts), cotton and silk products of small-scale industries, spices, marble and granite and milk and milk products have shown a decline at broad group level during the period, whereas imports of automobiles, rubber and alcoholic beverages have shown increase during the period under reference.

Planting Operations For Autumn Season Begin

Udhagamandalam: By planting a lupin seedling in a prepared bed the Joint Director of Horticulture, the Nilgiris, R. Selvaraj, set in motion the planting operations for the autumn season at the Government Botanical Garden (GBG) here on Wednesday. Pointing out that the activity had begun on schedule, the Manager, GBG, N. Mani told ''THE HINDU'' that if all goes well the flowers would be in full bloom by the middle of September.

Stating that the conditions for planting were ideal, he said that about two lakh seedlings would be planted over the next few days. The total number of varieties would be 50 and all of them would be short duration plants. Among the varieties which were being planted in about 70 to 80 beds were calendula, aster, lupin, marigold, ageratum, cuphea, cosmos, coreopsis and lady''s lace. Flowers like salvia, delphinium and dahlia which had been planted during the summer season have not been removed. Expressing the hope that the weather over the next few weeks would be a mixture of sunshine and rain, Mr. Mani feared that another extended wet spell would lead to plants rotting in their beds.

Unorganised Sector Labour Bill Expected In Monsoon Session

The Ministry of Labour intends to present the much-awaited Unorganised Sector Workers Social Security Bill in Parliament during the ensuing monsoon session, the Labour Minister, Mr Oscar Fernandes, told the Parliamentary Consultative Committee on Labour. The Bill looks at to set up tripartite Social Security Advisory Boards at the national and State levels for agricultural and non-agricultural workers in the unorganised sector. The proposed legislation would provide the structure for formulation and notification of suitable welfare schemes for different sections of unorganised sector workers both by the Central and State Governments. These schemes would pertain to life and disability cover, health insurance and maternity benefits and old age protection, the Minister informed the members of the consultative committee.

Mr Fernandes said following a meeting chaired by the Prime Minister earlier, the Committee of Secretaries chaired by the Cabinet Secretary was directed to verify the numbers, estimate possible contribution of the Government, list out various issues relating to modalities of implementation and collate and evaluate various State-level initiatives.

Nath Asks For PM''s Intervention For Quick Tax Relief To Exporters

New Delhi: Due to fall in growth of exports in rupee terms, commerce minister Kamal Nath has sought Prime Minister Manmohan Singh''s intervention for speedy notification of service tax waiver for exporters. Earlier, the minister had announced the steps in the annual supplement to the Foreign Trade Policy in April, and was to be implemented within a month. The move was aimed at benefitting exporters as the rupee has risen by 6-14% against major currencies such as the US dollar, pound and euro, since August last year. During April-May 2007-08, exports rose 18% in dollar terms, but merely 6% in rupee terms.

RBI Turns down Easing Of FDI, ECB Norms For Core Sector Funding

New Delhi: The Reserve Bank of India has turned down proposals to relax external commercial borrowing (ECB) and foreign direct investment (FDI) norms for infrastructure financing companies as well as to enhance foreign institutional investment in debt papers. Classification of a separate non-banking finance company (NBFC) category and relaxing norms for ECB and FDI may not be desirable as it creates opportunities for regulatory arbitrage, the Reserve Bank of India (RBI) said in its comment to the finance ministry on the proposal.

Rupee Closed At 40.37 Against Dollar

Mumbai: The rupee closed at 40.36/37 against the previous close of 40.35/37. The domestic currency opened at 40.36/37 and saw an intra-day high of 40.33 backed by strong dollar supplies before ending the day at 40.36/37. Market participants expect the rupee to strengthen further this week. In forwards, the six-month premi a closed at 1.41 per cent (1.77 per cent) while the 12-month premia closed at 1.65 per cent (1.86 per cent).

FM Confident Of Achieving Tax Target

If P Chidambaram has any one group to thank despite what people perceive it is the taxpayer. Once again it seems that the government kitty is set to swell and the taxman is all set to meet if not overshoot this year''s target.Direct taxes worth over Rs 41,000 crore have been collected between April and June which is 15 per cent of the budget target of 2,67,490 crore. This is despite the fact that tax refunds worth Rs 5000 crore have yet to be given.

''Confident of achieving target, some allowance for refunds but on target,'' said P Chidambaram, Finance Minister.One interesting puzzle for the finance minister remains as to why the pool of taxpayers is not growing sharply while the number of returns being filed continues to grow. For instance number of return filers has jumped by 41 lakh in the last three years but the total number of taxpayers has only gone up by 19 lakh, but the FM is not complaining.Strong revenue numbers is keeping foreign views on India intact despite worries on a tight monetary policy and a strong rupee taking away India''s competitiveness.

Rupee Up Against Dollar

Mumbai: The rupee spruced up against the greenback. Rupee opened at 40.36/37, touched an intra-day low of 40.42 but crept up to end at 40.35/37, against the previous close at 40.42. There has been good supply of dollar from Foreign Institutional Investors as well as exporters. Market participants expect the rupee to be range bound this week. In forwards, the six-month premium closed at 1.77 per cent (1.99) and the 12-month ended at 1.86 per cent (1.93).

Kerala Govt Earmarks Rs 498 Cr For Coastal Conservation

Thiruvananthapuram: The Kerala Government has rolled out schemes worth Rs 497.68 crore for conservation of coastal regions, said the Revenue Minister, Mr K.P. Rajendran. Replying to a calling attention motion in the State Assembly on July 16, the Minister said that 352 villages in nine tsunami-hit districts would stand to benefit from the implementation of these schemes. A sum of Rs 120 crore has been allocated for construction of seawalls along vulnerable stretches, while Rs 284 crore has been earmarked for general rehabilitation programmes. A sum of Rs 93.68 crore will be allotted for social forestry schemes, conservation of estuaries and conduct of training programmes on conserving natural wealth along the shorelines. Other major heads that attract specific allocations are: Rs 163 crore for sustaining fisheries-based living; Rs 92.5 crore for rebuilding of coastal roads; and Rs 132 crore for ramping up drinking water supply. A separate Rs 100-crore scheme has been envisaged for the tsunami-ravaged belt of Alappad, Arattupuzha, Andhakaranazhi and Edavanakad along the coast, spread over Kollam and Ernakulam districts.

Rising Rupee Worries Policy Makers

Rising rupee is not just a matter of concern for India''s exporters but it is a challenge for policy makers too. And they now want to choke out what they see as not the most needed source of dollar flows into the country. So the PM''s economic think-tank has a message for corporate India and its hunger for cheap overseas debt-tighten your belt. Last fiscal India Inc raised over $16 billion as ECB proceeds, so far in this fiscal the figure has already crossed $21 billion and is growing.

PSU Banks Push For Fee Based Income

Public sector banks are struggling to hold on to market share and in doing that they are trying to lure customers by offering more than just withdrawals and deposits.Bank of Baroda (BoB) has become the latest public sector bank to aggressively push non-banking services through its extensive branch network. Over the next 6-12 months Bank of Baroda will start selling insurance products through its branches as part of its life insurance JV.

BoB will also offer wealth management products through its asset management subsidiary and also plans to get in the mutual fund business by the end of this year Our major priority is to increase fee based income for bank. We are getting into offering a full suite of services, we are getting into life insurance, wealth management etc, said Anil Khandelwala, CMD, Bank of Baroda.

''Crop Production To Rise By 2.6 Pc, Foodgrains 0.9 Pc''

Despite the initial slowdown in sowing due to lower than expected rainfall in June 2007, crop production is likely to rise by 2.6 per cent in FY 08 as against the meagre 0.9 per cent increase this fiscal. However, foodgrain production is projected to grow by a marginal 0.9 per cent to 214-million tonnes in FY 08 as compared with 211.8-million tonnes in FY 07, the Centre for Monitoring of Indian Economy (CMIE) said in its monthly review of the Indian economy here.

The higher growth in crop production largely reflects the recovery in oilseeds production during the year. Its production is projected at 26.9-million tonnes in FY 08, up by 16 per cent as against the 23.3-million tonnes produced in FY 07, the report said. Foodgrains production may show a little improvement due to a marginal increase in rice and wheat production. In FY 08, rice production is projected to see a marginal 0.2 per cent increase over last year''s 91-million tonnes while wheat production is projected to go up to 74.2-million tonnes in FY 07.

Lack Of Water Can Cripple Indian Economy - Per Capita Water Storage In India Is Alarmingly Low

Very soon the world will realize that it is not oil that runs an economy. It is the amount of usable water per capita that really guides economic prosperity and growth. It is true India has gained in growth and affluence. But the growth is in a very narrow segment of the upper middle class - the well-educated, English-speaking elite.

But what haunts India is not oil and gas but per capita water storage. Even the metros in India receive water in taps just for few hours daily in contrast to 24 hour tap water supply in many countries with less water resources and scanty rainfall.

Despite receiving an annual rainfall of about 1170 mm which is equivalent to 4000 billion cubic metes (BCM), India consumes just 1123 BCM water annually which comprises 690 BCM of surface water and 423 BCM of ground water that can be replenished. The ground water scenario in India is alarmingly low compared to that of the developed nations like America. The agriculture, the habitat, and the major industries are water dependent. Sooner or later, the world will find alternative fuels to replace crude oil and natural gas. But something the world will take millions of years is to find an alternative to water.

Orissa Pension Burden Decline To 8.4Pc

Bhubaneswar: Pension payment as a percentage of total revenue receipts has fell in Orissa. It was 8.47 percent in 2006-07 while the national average was 9.08 percent during the same period. The ratio of pensions to the total revenue receipts was 10.63 percent in 2004-05 compared with 10.05 percent for the country as a whole. Significantly, prudent fiscal management and the findings of the group constituted by the Reserve Bank of India (RBI) in February 2003 to study pension liabilities of the state governments came in handy to help the finance department. The RBI group advised introduction of Contributory Pension Scheme (CPS) for the state government employees in place of existing non-contributory defined benefit pension scheme.

Industry Opposed To Quota Law

Sunil Bharti Mittal President of CII arrived at the Prime Minister''s Office on Saturday.The Prime Minister''s Office had asked Mittal and his colleagues from FICCI and Assocham for a progress report on affirmative action.

In other words what had they done to give SC/ST candidates employment in the private sector? What they got was a roadmap to help SC/STs join the private sector without a quota.We are working on the area of education, employability and employment. All the three chambers are working towards this, said Mittal.

Even last year when the government had suggested that the private sector reserve jobs for SC/STs, industry bodies like CII, FICCI and Assocham had opposed it.They are still opposed to it and the government didn''t seem too happy.It has been three years of this government and they have done nothing, said Ram Vilas Paswan, Fertilizer Minister.What India Inc says this is what will help SC/STs get jobs.

Industry bodies will train about 5,000 SC ST students every year by adopting 50 industrial training institutes across the country. They will pay half the Rs 750 stipend that trainees get every month.Industry bodies say they have identified 110 districts where there is over 40 per cent SC/ST population and the government should announce an incentive package for investors to set up plants in these districts.

Re Ends Lower At 40.50/$

Mumbai: The rupee weakened by about 10 paise against the dollar on July 13, due to dollar purchasing by banks and major corporate houses. It opened at 40.38/39 and quickly strengthened to 40.35 which was the intra-day high; the rupee then shed its gain due to dollar buying and saw an intra-day low of 40.7450. The home currency closed at 40.50, down from the previous close of 40.40. In forwards, the six-month premia closed at 2.09 per cent (1.87 per cent) and the 12-month closed at 2.02 per cent (1.98 per cent).

WB Ranks Fifth In Attracting Investments

Kolkata: West Bengal has ranked fifth wooing investments, according to the Investment Climate Survey conducted by the Indian Chamber of Commerce (ICC). There were about 150 respondents to this survey who are top management executives of different companies. About 17 Indian States were taken into consideration for this survey. Maharashtra has topped the list followed by Tamil Nadu, Gujarat and Karnataka. The survey report, however, stated that infrastructure and connectivity issues, labour and work culture, bureaucracy and red-tapism are the major constraints for industrial growth in the State. The respondents also felt that land acquisition for industrialisation has been an area of worry in the State and has suggested that rehabilitation packages should be finalised before land acquisitions.

Customs Duty Collections Records 19.8Pc Growth In Q1

New Delhi: Customs duty revenues of the Centre remain to be optimistic, with collections in the first quarter of the current fiscal registering a 19.8 per cent increase to Rs 23,571 crore as compared to Rs 19,677 crore collected in the same period last year. In June 2007, customs duty revenues of the Government increased to Rs 8,183 crore compared with Rs 7,059 crore in the same month last year. Excise duty collections for April-June 2007 improved by 6.8 per cent to Rs 25,161 crore (Rs 23,560 crore). In June 2007, the Centre’s excise duty collections was Rs 9, 313 crore (Rs 8,657 crore). Service tax collections during April-May 2007 stood at Rs 5,878 crore against Rs 4,163 crore in the same period last year. In May 2007, the Centre’s service tax collections was Rs 3,001 crore (Rs 2,188 crore).

Tamil Nadu Implements VAT Resourcefully

Madurai: Tamil Nadu has not received a great loss since the introduction of value added tax (VAT) in the State while the revenue in many other States has gone down. The comfortable position is due to the efficient implementation of VAT by the officials assisted by the VAT Monitoring Committee. The small shortfall, pegged to be around Rs 500 crore could be made good by the Centre to the extent of 75 per cent.

Slump In Manufacturing Pulls Down IIP To 11.1Pc In May

New Delhi: Slowdown in manufacturing pulled down the Index of Industrial Production (IIP) marginally to 11.1 per cent in May from 11.7 per cent in the corresponding month last year. While the mining and electricity sectors came better in May, manufacturing fared poorly in the month, with growth rate at 11.9 per cent from 13.3 per cent during the corresponding month in 2006-07, reveals the quick estimates of IIP issued by the Government. The mining sector registered a growth of 3.7 per cent against 2.9 per cent in May 2006, while the power sector performed much better by virtually doubling growth rate to 9.4 per cent from 5 per cent.

The cumulative growth rate during April-May stood at 11.7 per cent as against 10.8 per cent during the same period last year. During April-May, the mining, manufacturing and electricity sectors registering growth rates of 3 per cent (3.2 per cent in April-May 2006), 12.7 per cent (12.2 per cent) and 9 per cent (5.5 per cent) respectively. The growth rates of intermediate goods and consumer goods too decelerated to 9.1 per cent and 9.8 per cent from 12.5 per cent and 10.5 per cent respectively in May 2006.

Kerala, UAE Set Up Joint Working Group

Thiruvananthapuram: Kerala and the United Arab Emirates (UAE) have formed a joint working group to discover industrial and commercial projects in the State to which investments from the UAE can be attracted. The idea of a joint working group emerged during the visit of the Industries Minister, Mr Elamaram Kareem, to the UAE from April 27 to May 9 this year. The UAE has expressed interest in infusing in petrochemical complex, power projects and infrastructure development projects in the State. The UAE-based Emirates Investment Group, a major financial and investment institution there, has also shown interest in making investments in Kerala. The Principal Secretary, Industries, Mr T. Balakrishnan, Secretary, Industries, Mr P.H. Kurien, Managing Director of Infrastructures Kerala Ltd (InKEL), Mr John Mathai, the Principal Secretary, Finance, Mr Jose Cyriac, and the Managing Director of Kerala Industrial Infrastructure Development Corporation (Kinfra), Mr A.S. Suresh Babu, will represent the State in the joint working group.

Turkey Looks For Indian Investments

New Delhi: Turkey has chose India as a strategic partner to speed up the growth of the countr. The growing domestic market-qualified and cost-effective labour in Turkey is favourable to Indian companies to infuse in infrastructure development and manufacturing. Turkey is enhancing the role of private sector in the economy by setting up the key markets to competition and regulation by independent agencies. Indian investors have lot of opportunities in Turkey as the country has initiated structured reforms in public sector, social security, financial sector and tax structures. Improved investment environment and accelerated privatisation in Turkey will provide Indian companies an access to the EU, Central and Eastern Asian markets.

Re Ends Marginally Lower At 40.41/$

Mumbai: The rupee slightly depreciated against the greenback as nationalised banks bought dollars. The domestic currency opened at 40.40/42, reached an intra-day high of 40.36 and finally closed at 40.40, against the previous close of 40.38. In forwards, the six-month closed at 1.87 per cent (1.71) and the 12-month ended at 1.98 per cent (1.82).

41 SEZs To Come Up For Approval On July 12

New Delhi: Within a week of a Parliamentary committee seeking the Government to put a freeze on notification of special economic zones (SEZs), the Board of Approval will meet July 12, to consider 41 cases, the clearance of which will take the total clearances above 500. The Board of Approval, headed by Commerce Secretary GK Pillai, will consider granting formal clearances to the Mukesh Ambani-promoted Navi Mumbai SEZ and a Hindalco Aluminium SEZ in Orissa. The Navi Mumbai SEZ was deferred twice on issues, including protection of villagers rights, raised by the revenue department.

The proposal for a multi-product SEZ in Chhindwara, Commerce Minister Kamal Nath''s Lok Sabha constituency, is also coming up for clearance. The SEZ proposals of other prominent companies listed for tomorrow include that of Unitech, Parsvnath and Videocon. Undue haste in approving SEZs and their proliferation has contributed to the resistance against the policy. Of the 41 proposals listed for July 12, meeting, 31 require formal clearance while the others are coming for sanctions in principle.

India, South Africa Bilateral Trade To Touch $15Bn By 2011

MUMBAI: Bilateral trade between India and South Africa is hoped to cross USD 15-billion by 2011. Presently the trade between the countries is only USD 4 billion. In a bid to encourage bilateral trade and give a platform for SMEs in both countries, a business conclave is being organised in Johannesburg by Indian Merchants Chamber and Business Unity South Africa from August 1-3.The conclave is aimed at forging an all-round strategic partnership between India and South Africa. The conclave would also be aimed at identifying business opportunities, forging technical collaborations and joint ventures.

Delhi Customs Confident Of Achieving Revenue Targets

New Delhi: Due to strong growth in volume of capital goods and electronic item imports in the first quarter of current fiscal, the Customs Department in the Delhi zone is confident of achieving the revenue targets set by the CBEC for fiscal 2007-08. Imports of capital goods, electronic items and cellular towers have shown strong growth in the first quarter. The Central Board of Excise and Customs (CBEC) had estimated the customs revenue target for the Delhi zone at Rs 11,070 crore for 2007-08. This represents a 15-per cent increase over the collection level of Rs 9,600 crore in 2006-07. The number of documents processed by the customs department has also shown a sharp increase.

Re Ends Higher At 40.38/$

Mumbai: Backed by strong dollar supplies into the domestic market, the rupee strengthened by five paise against the greenback on July 10. The home currency opened at 40.39/40 and after trading in a narrow range throughout the day, closed at 40.38, up from the previous close of 40.43. In forwards, the six-month premia closed at 1.71 per cent (1.79 per cent) while t he 12-month closed at 1.82 per cent (1.85 per cent).

India, Russia To Establish JTF On Trade

India and Russia will establish a joint task force (JTF) to encourage bilateral trade to a level of $ 10 billion by 2010 from the present two billion dollars. The JTF will be established by the end of this year when Prime Minister Manmohan Singh visits Moscow for summit talks with President Vladimir Putin, Commerce Secretary G K Pillai at a meeting of Joint Study Group (JSG) on economic cooperation here. The proposed task force would monitor implementations of recommendations, covering goods, services and investments, as given in a 150-page-report prepared by the JSG. JTF would be a time-bound mechanism with the final goal of inking comprehensive economic cooperation agreement (CECA) and free trade agreement (FTA) with Russia, once it joins WTO.

Infrastructure Sector Registers 8.7Pc Growth In May

New Delhi: Due to high growth rate in petroleum refinery product output and higher production of finished carbon steel, the index for infrastructure industries reported a growth of 8.7 per cent in May this year compared with 7.2 per cent in May 2006. During the first two months of the current fiscal (April-May), the overall growth rate of refinery products is estimated at 15 per cent (12.6 per cent). Production of finished carbon steel went up by 11.8 per cent in May (10.7 per cent), though for the April-May 2007 period the growth rate slowed down marginally to 10.1 per cent (10.4 per cent). Electricity generation increased by 9.3 per cent (5.1 per cent) in May this year.

Re Ends Tad Higher At 40.44/$

Mumbai: The rupee appreciated by almost two paise against the greenback on July 9, backed by strong FII inflows into the domestic stock market but traders felt that the gains were checked by suspected RBI intervention in the market. The domestic currency opened at 40.41 and traded in a narrow range to finally close at 40.43 , up from the previous close of 40.45. In forwards, the six-month premia closed at 1.79 per cent (2.48 per cent) while the 12-month closed at 1.85 per cent (2.37 per cent).

Punjab Govt To Relook Approves Of Projects

Jalandhar: The big commercial projects, construction on which is already in progress, likely to be in trouble as the Punjab government will relook the approve of 18 such projects in which digging for parking was permitted up to the level of minus three flours. Digging to such a depth would not be allowed and all these projects would be put under the scanner. These projects will not be allowed to create any threat to human life, which was imminent with such deep digging as safety of surrounding buildings was being jeopardised. The issue of rights for advertising on public places throughout the city given to a private company by the previous regime on build-operate-transfer basis would also be probed and a report would be furnished within two weeks.

Mumbai Fed Remake Seeks Foreign Investment

Mumbai: The Remaking of Mumbai Federation (RoMF), a body of associations of various stakeholders keen in the planned redevelopment of Mumbai, has led a delegation to the Shanghai conference of global body Council on Tall Buildings and Urban Habitats to attract international investment and partnership. The delegation is planning to ink a MoU with investors in the two-day conference, which concludes on July 10. With around 20,000 dilapidated buildings identified in Mumbai by the State Government, the RoMF plan looks at increasing the permissible Floor Space Index and channelising a part of the proceeds to improve infrastructure facilities and more mass-housing.

CMCTEC Leads 3 Tech Firms To India Export Deals

CMC Technology Export Centre (CMCTEC), a partnership between Massey University''s e-centre Limited and Indian IT leader CMC, announced today that it has brokered three new export deals for New Zealand technology firms with its Indian partners. CMCTEC Head of Commercial, Dr Hamish Coop, said the deals represented considerable success for the CMCTEC''s new export model within its first six months.

Small Enterprises Bullish About Growth

New Delhi: Despite hardening of interest rates and the apprizing rupee in the last few months, a majority of micro, small and medium enterprises (MSMEs) are optimistic about the business scenario. Sixty per cent of the survey respondents were optimistic about the general business scenario, 33 per cent hoped the business situation to remain the same, while only 7 per cent of the respondents felt a downtrend in the general business scenario in comparison with the previous year. Sixty-nine per cent of the respondents hoped more than 10 per cent growth in their production and 21 per cent of respondents hoped production for the company to be between 5 and 10 per cent. The survey also indicated that 71 per cent of the respondents envisaged an increase in employment by their company as against only 2 per cent respondents anticipated decline in employment, while 27 per cent respondents hoped a status quo as regard the employment in their company.

India Likely To Miss Export Aim By $15Bn

New Delhi: The country is likely to miss the export target of $160 billion for 2007-08 by at least $15 billion due to the beefing up rupee, an Assocham study has said. The study, which dealt with the currencies of various countries, found that the rupee appreciated by 8.35 per cent between January and June this year, second only to the 9.25 per cent appreciation of the Brazilian real in the same period. The Thai Baht strengthened by 7.56 per cent, the Russian rouble by 2.08 per cent and the Chinese yuan by 1.82 per cent. The appreciation and derogation vis-a vis the dollar, of all these competing countries, is a determinant and key parameter of the growth of Indian exports.

Economic Activity In SEZs Concern Over Tax Loss

New Delhi: The Department of Commerce continues to bet on high economic activity in special economic zones (SEZs) to counter concerns of likely enormous revenue loss from the tax incentives conferred on SEZ developers and units. It had submitted to the Parliamentary Standing Committee on Commerce, which went into the functioning of SEZs, that there would actually be a gain to the exchequer if the economic activity takes place as planned. The Department showed that there would be large indirect tax revenue for the Government by way of consumption by those employed in the units. This would outweigh the revenue loss of about Rs 90,000 crore earlier estimated by the revenue department. In its submission, the Department of Commerce noted that the Finance Ministry had pegged tax loss to the tune of Rs 90,000 crore. Forty per cent of the turnover is normally paid by way of wages and salaries.

Till date, about 128 SEZs have been notified and Rs 44,142 crore worth of investments made. Total exports from the notified zones are hoped to be about Rs 67,000 crore during 2007-08. Over the next four years, total investments in SEZs are hoped to be about Rs 3.6 lakh crore. The revenue department had last year pegged tax lossof about Rs 90,000 crore. With more SEZs now in the fray, the revenue department expected the losses to be much higher.

Rupee Appreciates Against Dollar

Mumbai: The rupee up by two paise on July 5 against the greenback on strong FII inflows into the market. Rupee opened at 40, which was also the intra-day high and saw a low of 40.51 before ending the day at 40.43. In forwards, the six-month premia closed at 2.2 8 per cent (2.09 per cent) while the 12-month closed at 2.27 per cent (2.18 per cent).

IT collections up 50 p.c. in AP

Income-tax collections in the State during the first quarter of the current fiscal registered 50 per cent growth over the corresponding period last year, aggregating to over Rs. 2,000 crore, said Chief Commissioner, Income-Tax, Andhra Pradesh, D.V. Dharmik.He was speaking to presspersons after the official launch of www.taxyantra.com, a website that allows Indians file their tax returns from anywhere in the globe.

There were an estimated 12,000 small, medium and big companies operating in the State and such user-friendly products like TaxYantra will go a long way in widening the IT Department''s tax-payer base, Mr. Dharmik said.The product is an initiative of four Indian School of Business (ISB) alumni. M. Rammohan Rao, the ISB''s Dean, said the school actively encouraged entrepreneurship by creating the right learning environment.

Earlier, Nitin Vyakaranam, Director, ''arthayantra'', the company that came up with the e-filing facility said the website had logged over 50,000 hits in the past four days since the announcement was made.

FM clears 10 FDI proposals

Finance Minister P Chidambaram has cleared 10 proposals for foreign investments including one by Morgan Stanley Mauritius Company (Morgan) to invest Rs 1,894 crore to carry out securities sales, trading and broking, merchant banking and corporate advisory services and other NBFC activities. The total proposals approved amount to Rs 2,340 crore. The proposals were earlier cleared by the Foreign Investment Promotion Board (FIPB) in it meeting held on June 22. Morgan will invest in a mix of equity and compulsorily convertible preference shares to be issued by Morgan Stanely India Securties. The proposal attracts Press Note 1.Another proposal by Chennai-based Rakindo Developers to invest Rs 407 crore through a JV to make downstream investment in construction development projects was also approved.A proposal by Japan''s Furukawa Electric to invest Rs 19 crore through a JV company with a foreign equity of up to 51% to undertake design, development, manufacture, testing, assembling, marketing, selling, distributing and servicing of wire harness for two-wheelers and automobiles was also given the green signal.Among other proposals cleared include Daimler Chrysler India''s proposal for extension of present activity to cover local manufacturing of commercial vehicles, Colorcon''s plea to allow prospective royalty payment on domestic or export sales without any restriction of time limit, introduction of foreign equity up to 40% by Netherland''s FMAP Publishing in Next Gen Publishing, Power Supply Systems Holdings proposal to introduce foreign equity up to 100% in Indian Investee company and Luxottica Holland BV''s proposal for setting up of WOS to undertake wholesale cash and carry trading in the eyewear industry.

Surge in trade deficit touches a record $6.2 billion in May ''07

Merchandise trade data for May 2007 further confirms that India is at the peak of its investment cycle. The surge in trade deficit, due to a 42% rise in non-oil imports, touched a record $6.2 billion in May 2007, up from $4.3 billion laste year. As expected, imports of project goods and machinery rose the fastest, indicating the huge investments by India Inc. Exports failed to keep pace with the imports and grew by just 18% during the month. The trend of imports outpacing export growth has begun since 2004-05. It was the time when Indian industry had recovered from recession. A resilient industrial activity is expected to keep demand for imports high in the coming months as well. Stronger rupee in the past couple of months would also have helped importers by making imported goods relatively cheaper. On the other hand, exports failing to meet pace of imports have ballooned the trade deficit. Exports rose just 18% in May 2007, lower a year ago. This is not a sudden development; exports have been decelerating for the past five months. A slower growth in the US economy could be the reason for the southward trend in exports.

Rupee strengthens 9 paise

On the strong FII inflows and good dollar supplies into the market, the rupee strengthened by almost nine paise against the greenback on July 4. Rupee opened at 40.56/57 and closed the day at 40.45, up from the previous close of 40.54/55. The supplies seem to be very strong which will cause further strengthening of the rupee helping it to appreciate to 40 or even below 40 levels.

Rupee Strengthens 10 Paise Against Dollar

Mumbai: The rupee appreciated by 10 paise on strong dollar supplies. The domestic currency opened at 40.60, touched an intra-day high of 40.44 before closing at 40.54/55, against the previous close of 40.65/66. The home currency could not sustain the level of 40.44 due to RBI intervention in the forex market. Dealers said RBI is expected to intervene a ctively in the market to restrict the rupee in the range of 40.60-40.70. The six-month forward premia is at 2.13 per cent (2.07 per cent) and 12-month premia remained unchanged at 2.26 per cent.

Orissa Fixes VAT Target At Rs 4028Cr

Kolkata/ Bhubaneswar: Encouraged by the optimism observed in the sales tax and value added tax collection during the past few years, the Orissa government is looking at collecting Rs 4028 crore VAT during 2007-08. The government has mopped up Rs 376.77 crore by May 2007, which is 9.36 percent of the budget estimates for the current fiscal. According to state finance minister Prafulla Ghadei, the actual collections during 2005-06 and 2006-07 were more than the budget estimate. He said, in 2005-06 the total collections from sales tax/value added tax and central sales tax (CST) were Rs 3029.32 crore. This was Rs 889.32 crore more than the budget estimate for that year. The trend continued in 2006-07 with the total collections from these heads provisionally put at Rs.3812.55 crore. This was also about Rs. 995 crore more than the budget estimates.While the tax and non-tax revenue collections for 2005-06 was estimated at Rs.5071.29 crore, the actual achievement was Rs. 6534.18 crore , which exceeded the target by about Rs.1462 crore. The collection from this source was estimated at Rs.6452.99 crore in 2006-07.

Pepper Future Falls

Kochi: Pepper futures declined on July 3, on reports of decline in Vietnam prices and lack of purchasing support. Bearish activities also said to have contributed to the decline. Indian prices for this grade remained competitive. There was no selling pressure in the primary markets and hence spot prices ruled firm at previous levels. July contract on NCDEX on Tuesday declined by Rs 69 a quintal to Rs 15,173. On NMCE, July contract declined by Rs 195 a quintal to Rs14,700. The decline in other contracts was from Rs 125 to Rs 168 a quintal. Spot prices ruled firm on July 3, at Rs 14,200 (un-garbled) and Rs 14,800 (MG 1).

Industry Corridor To Cost $90 Billion: Nath

An industrial corridor between Delhi and Mumbai to be built by the government with Japanese assistance will cost $90 billion, almost double an earlier estimate, Trade Minister Kamal Nath said on Monday.The cost of the project, spread over seven years, had been revised up as the corridor will have state-of-the-art ports, airports and uninterrupted power supply, Nath told reporters after a meeting with his Japanese counterpart, Akira Amari.

The project to link India''s political and financial capitals will be funded by the Indian and Japanese governments, Japanese firms, and money raised by Indian firms issuing shares in Japan.I hope the Delhi-Mumbai industrial corridor will become a foundation to trigger an industrial revolution in India, Amari told a business conference.The project will include a high speed rail freight corridor, new power capacity of 4,000 megawatts, three new sea ports and six airports.

Rupee Appreciates By 5 Paise

The rupee appreciated by 5 paise against the greenback on July 2 backed by good dollar supplies into the market. The home currency opened at 40.66/67, saw an intra-day high of 40.62 before closing the day at 40.65/66. There has been reasonably good supplies throughout the day. RBI was not seen in the market. Market participants expect the rupee to trade in the 40.50-40.85 range. In forwards, the six-mo nth premia closed at 2.07 per cent (2.53 per cent) while the 12-month closed at 2.26 per cent (2.57 per cent).

Direct Tax Collections Rose By 54%

The Centre''s net direct tax mop up rose by 54.4 per cent in the first quarter of the current fiscal to Rs 44,139 crore against Rs 28,579 crore in the same period in the previous year. While corporate tax collections rose 21.8 per cent during April-June 2007 to Rs 32,607 crore (Rs 26,766 crore), personal income-tax collections increased by 36.5 per cent to Rs 17,511 crore (Rs 12,826 crore). Official sources said that fringe benefit tax collections during April-Jun e 2007 stood at Rs 834 crore (Rs 189 crore). Securities transaction tax collections stood at Rs 1,343 crore (Rs 1,217 crore). Banking cash transaction tax collections stood at Rs 159 crore (Rs 117 crore).

Kerala Govt Mulls Ban On Organised Retail

The Kerala Government is all set to bring in legislation to prevent multinational companies and larger Indian companies from entering the retail sector.The Left Government says that opening up of the retail sector would harm consumers in Kerala and also affect the strong PDS network.

So far as the allies are concerned West Bengal has invited others. I tell you there is something wrong with the Kerala government, said a harried and perplexed congress minister Subodh Kant Sahay, Minister for Food Processing. Retail outlets from Reliance or Big Bazaar may not be seen in Kerala if the state government has its way. The state government plans to ban the entry of private players in the retail sector which many be see as an essential part of urban lifestyle.

A legislation is expected shortly, which if passed would make Kerala the first state in the country to do so. The move comes months after the Kerala government cleared 6 out of 70 proposed retail outlets by Reliance in Kochi. Now the government says even these will be cancelled once the law is passed.

States Look At VAT Breather For Rice, Wheat, Pulses

New Delhi: After the Centre, it is the turn of the states to check inflation. Later this month, they will discuss a proposal to exempt rice, wheat and pulses from value added tax (VAT). Most states levy 4 per cent VAT on the three items of mass consumption, while some states do not tax them at all. The Empowered Committee of State Finance Ministers on VAT will meet on July 21 to take a view on whether rice, wheat and pulses should be brought under the exempted category. Prices of food products, including wheat and pulses, have been blamed for the spurt in inflation, which touched a two-year high of 6.7 per cent in January. It has since softened to around 4 per cent.

Food inflation, which rose to about 10 per cent in January this year, now hovers at 5 per cent. Food articles carry a weight of 15.4 per cent in the Wholesale Price Index basket. To control the prices of wheat, the Centre banned futures trading as well as exports, allowed duty-free import of wheat and raised its procurement price by Rs 150 a quintal. It has also banned futures trading in some pulses and asked its agencies to import 1.5 million tonnes of pulses during the year.

India Inc Likely To Mobilize Funds In Japan Via DR

Japan is likely o may soon allow Indian companies to raise fund through depository receipts (DR). The proposed Japanese depository receipts (JDR) could be linked to the financing model of $90bn Delhi-Mumbai industrial corridor. In fact, the Japanese version of the American depository receipts (ADR) will allow Indian companies to woo Japanese investors even without listing in their stock exchange, in addition to promoting the company''s brand name in Japan. The amount of Japanese household finance assets is estimated to be around $12.5 trillion. The plan is likely to be finalised in the first week of July when president of Tokyo Stock Exchange Taizo Nishimuro will visit India as part of Japan''s trade and industry minister Akira Amari''s deligation. Representatives of five financial institution including Mitsubishi UFJ Trust and Banking Corporation, Daiwa Securities SMBC Co and Nomura Holdings will also accompamy the team. In fact, ADRs enable US investors to buy shares in foreign companies without undertaking cross-border transactions. ADRs carry prices in US dollars, pay dividends in US dollars, and can be traded like the shares of US-based companies.

Fiscal Deficit Stands At 41.2% In Apr-May Of Year''s Target

Robust revenue receipts, predominantly from taxes, and cut expenditure enabled the Centre to restrain fiscal deficit during the first two months of 2007-08 to 41 per cent of this financial year''s target against 48.5 per cent in April-May last year. Fiscal deficit was at Rs 62,135 crore, which is 41.2 per cent of the budget estimate of Rs 1,50,948 crore for entire 2007-08, according to figures released by the Controller General of Accounts. However, revenue deficit, which is excess of current expenditure over current receipts, is higher at 83 per cent of the budget estimates for the current fiscal against 81 per cent during the first two months of last year. This is despite revenue receipts standing at Rs 25,899 crore, constituting 5.3 per cent of this year''s target of Rs 4,86,422 crore against 4.8 per cent in April-May last year. Revenue expenditure was also pruned effectively -- non- plan revenue expenditure at Rs 65,876 crore was 17.2 per cent of the estimates for this fiscal against 17.8 per cent last year, while plan revenue expenditure at Rs 19,358 crore was 11.1 per cent against 18.6 per cent last year. Over 83 per cent of revenue receipts in the first two months of this fiscal came from tax revenues, which stood at Rs 21,725 crore constituting 5.4 per cent of this year''s target of Rs 4,03,872 crore. In the first two months last fiscal, tax revenue constituted 4.6 per cent of that year''s budget estimates. Budget for this financial year targeted fiscal deficit to be contained to 3.3 per cent of GDP and revenue deficit to 1.5 per cent of GDP.