PM Assures Armed Forces Of Pay Hike

Prime Minister Manmohan Singh has for the first time reassured the defence services that their grievances over the Pay Commission report will be dealt with. The military has been extremely upset with marginal pay hikes proposals for mid-level officers and jawans. Several officers in all three services have already put in their papers. The Pay Commission has recently submitted its report and some apprehensions have been expressed by certain sections of the civil services on parts of the report, he said addressing senior officers on the Civil Services Day in New Delhi. ''''They will quit in droves if you don''t pay them more,'''' that''s what the service chiefs had told Defence Minister AK Antony after the sixth Pay Commission''s recommendations set off a storm of protests in the armed forces a month ago. So the prime minister''s words on April 21 were reassuring.

''''Some concerns and apprehensions have been expressed by some sections of the civil services on some parts of the report. Government has already set in motion a mechanism for hearing and redressing these grievances. I would like our civil and defence services to be properly rewarded,'''' said Manmohan. The Prime Minister''s words are, perhaps, also meant to egg on the committee of secretaries which was set up after the service chiefs complained. ''The fundamental issue is a fresh IIM graduate starts with a Rs 50,000 or Rs 60,000 a month, but a colonel from the Army, after 26-27 years, 10-15 years of separation, really doing things by the country, takes home a salary of about Rs 25,000 or Rs 26,000,'''' said Col Gopal Karunakaran.

PM, FM Confident Of Bringing Down Inflation Rate

Prime Minister Manmohan Singh and Finance Minister P Chidambaram today expressed confidence that inflation will come down in the wake of Reserve Bank''s decision last night to hike Cash Reserve Ratio (CRR).

"Let us hope so," the Prime Minister said in response to a question on whether inflation would come down following measures taken to contain spiralling prices. Chidambaram, however, had a word of caution, saying miracles should not be expected on the price front. Pointing out that the Government does not have control over prices of imported items, he exuded confidence that international prices would moderate in the next few weeks.

"I am confident that the international prices would also moderate in the next few weeks," he told reporters on the sidelines of a function to release commemorative coins on 1857 War of Independence. Chidambaram said the RBI''s decision to hike CRR would suck out over Rs 18,000 crore, reducing liquidity to that extent. The Reserve Bank yesterday had announced a 0.5 per cent hike in CRR in two phases-- first phase on April 26 and the second on May 10-- to tame the soaring inflation that is hovering above seven per cent. CRR is the mandatory cash deposit that banks keep with the central bank at all times.

Azad Takes Up Sop Exemption Issue With PM

NEW DELHI: The Centre’s move to restrict area-based excise exemption benefits in Jammu & Kashmir, Kutch and the North-East has drawn the ire of the concerned state governments. Jammu & Kashmir chief minister Ghulam Nabi Azad has taken up the issue with prime minister Manmohan Singh. In a letter to the prime minister, Mr Azad has sought reinstatement of the benefits pointing at the impact of the move on the industry in the state.

The Centre’s special area-based exemption package, aimed at encouraging investments in specific region, is applicable in hill states of North-East, Uttarakhand, Himachal Pradesh and J&K. All manufacturing units set up in these regions between 2003 and 2010 are exempt from excise duty for 10 years and income tax for the first five years, followed by a 50% income tax waiver in the remaining five years.

While in the case of Himachal and Uttarakhand, there is a complete waiver and the manufacturers do not pay any duty at all, in the case of North-East, J&K and Kutch, the benefit is provided through duty rebate.

The decision to restrict the sop was taken by the Cabinet. Subsequently, the Central Board of Excise and Customs (CBEC) had on March 28 issued a notification which restricts the excise exemption benefit only to value addition carried in the state.

The government has provided rates at which the rebate would be in relation to the value-addition specified with the item. A large number of FMCG, pharma and metal companies which had set up units in these states are understood to be bearing the brunt of the move.

The area-based excise exemption is prone to rampant misuse and the CBEC move was primarily aimed at plugging the loophole to allow only genuine manufacturers to avail the benefit.

PM Expresses Confidence On Achieving 9% Growth

Prime Minister Manmohan Singh on Feb 15 expressed optimism on achieving 9 per cent growth rate. However, he admitted the country cannot be completely insulated from chilly global winds that may blow in its direction. Speaking at Ficci''s golden jubilee auditorium where a picture of Mahatma Gandhi smiled down on the gathering from the backdrop, Dr Singh echoed his theme that industrialists served as trustees of society. He took pains to describe what his government has done over four years and, for the next five years through the 11th Five-Year Plan, proposed to build physical and social infrastructure that industry needs to sustain growth. The prime minister also explained why battling inflation was top priority of his government. An important policy stance we have adopted to ensure that growth is more inclusive has been to keep inflation under check... Some of you are not happy about our emphasis on inflation control. I see things differently. Inflation is an iniquitous tax. It hurts the poor more than the rich. Dr Singh said the government''s initiatives in agriculture and rural development, infrastructure, education and healthcare, along with efforts to keep inflation under check, would step up economic growth and make it more inclusive. In all, prime minister''s speech appeared as an attempt at showcasing the UPA government as the rightful custodian of impressive and inclusive economic growth. PM gave his government credit for higher growth and putting in place the basic architecture necessary for ensuring the growth is broad-based.

Economy Will Grow Despite US Turmoil: PM

The Indian economy can sustain an economic growth of 9-9.5 per cent despite the global financial turmoil, even as it hopes for steps by the US to contain the damage, Prime Minister Manmohan Singh said on Jan 25. We live in an increasingly interdependent world and therefore an international financial crisis could impact on the growth of emerging countries including our own, Manmohan Singh stated. As far as the Indian economy is concerned, we are not affected in the sense our banks don''t have lending of that sort, which has led to the crisis, he added, as he referred to the turmoil in the US caused by indiscriminate lending. The prime minister''s comments came a day after an agreement between the leaders of the US House of Representatives and the George W. Bush administration on a $150 billion package to avoid an economic recession in the US.The package included payments to some 115 million Americans to help overcome the mortgage crisis and new tax breaks for both large and small companies in a bid to step up investments.

Corrections Part Of Market Process: PM

Ascribing the steep fall in Indian share market indices to a correction, Prime Minister Manmohan Singh on Jan 21 said the value of shares in India will continue to grow as fundamentals of the economy remained strong. I am confident the markets will grow in an orderly fashion, the prime minister said in New Delhi. From time to time, some corrections are part of market process. The remarks came in the wake of the 30-share sensitive index (Sensex) of the Bombay Stock Exchange (BSE) registering its steepest intra-day fall Jan 21, losing over 2,000 points, as sentiments were down over fears of recession in the US. As trading came to a close, the Sensex made a marginal recovery, but was still down 1,408.35 points, or 7.41 per cent, in what was the steepest closing fall since May 2004.

Earlier, the finance ministry also advised caution on the part of investors and said the fundamentals of the Indian economy were strong and that the steep fall in Indian indices was lower that those in other Asian economies. Today''s market fall reflects the continuing uncertainties in the global economy and not any change in the fundamentals of Indian economy, said the statement, issued after the markets closed on Jan 21. Investors should take informed and responsible decisions in the situation and not be led by market rumours or any unwarranted apprehensions

Yechury Writes To PM Demanding Higher Allocation For ICDS

NEW DELHI: CPI(M) on Friday slammed the Government for not granting necessary funds for Integrated Child Development Scheme (ICDS) which addresses key issues like infant and maternal mortality and sought allocation of Rs 12,000 crore for the scheme in the next budget.

In a letter to Prime Minister Manmohan Singh, CPI(M) leader Sitaram Yechury said the present allocation of Rs 4,761 crore for the scheme was "too meager to meet the requirements".

Despite achieving a steady growth of 8-9 per cent, "India continues to be in an unenviable position of 128 in the human development index, because of high infant mortality rate, child mortality rate, maternal mortality rate, illiteracy rate among others", he said.

"In spite of this alarming situation, the government has failed to make the necessary financial allocation to ICDS, which has been addressing these issues, in the last budgets," he pointed out.

He drew the Prime Minister's attention to his assurance to expand the ICDS, enhance the wages of Anganwadi workers and helpers and to consider the demand for ex gratia for workers and helpers during a meeting with him last year.

After the meeting in August, 2006, the government set up a review committee to examine the demands raised by Anganwadi workers and it submitted its report around a year ago.

"I am constrained to inform you that till today, neither have its recommendations been made public nor has the government taken any action on the assurance given by you," he said.

Yechury demanded an allocation of Rs 12,000 crore for ICDS, which include Rs 2,500 cr for improving the conditions of anganwadi workers, in the next budget.

PM, Brown To Talk Financial Reforms

NEW DELHI: The lack of progress in the financial sector reforms will come up for discussion when British prime minister Gordon Brown meets prime minister Manmohan Singh here on Monday.

Ahead of Mr Brown’s visit to India, British high commissioner Sir Richard Stagg maintained that India would gain more from liberalisation in banking and legal sectors than the UK. On legal services, the high commissioner’s pitch was that the UK would lose more than India if it liberalised legal services. He said liberalisation would make India into a dynamic legal centre. “From our perspective, the likely loser of the outcome of liberalisation will be the UK. There will be fewer Indian lawyers going to the UK... The UK and US law firms will move away from a high-cost economy,” he said.

Aware of the resistance from Indian lawyers here and those practising in the UK, he said those groups could be compensated by the government. “Almost all win except for groups of people who have narrow sectoral interests,” he said.

On banking sector reforms, the high commissioner said the move was essential for India and would encourage competition in the banking sector. “We strongly believe this is a mutual-benefit agenda and will bring benefits to India,” he said. Interestingly, the British government is also scouting for opportunities for its firms in the financial and legal services in China.

This is said to be part of Mr Brown’s agenda in China.

However, the UPA government is keen to push financial sector reforms, but has been unable to make any forward movement in the face of opposition from its Left allies. In fact, finance minister P Chidambaram recently said he was surprised by people who wanted 9%- plus GDP growth but did not want any changes in the structure of the banking and other sectors.

One of the aims of the Indo-UK summit is to strengthen business and trade linkages. According to government figures, the UK is India’s fourth largest global trading partner and the second largest in the EU, with annual two-way trade of around 8.5 billion euros in 2006. India is also the second-largest investor in the UK, in terms of number of projects, investing over £1billion.

Mr Brown and Mr Singh will look at increasing these linkages, but at the same time, will focus on other aspects of the strategic relationship. The two leaders are expected to discuss civilian nuclear cooperation, counter terrorism, climate change, business cooperation and regional issues. Mr Brown packed itinerary includes attending a women’s empowerment event, an entrepeneurship summit and being conferred an honourary degree from Delhi university.