Tighter Secretarial Norm By Midpoint At Home 5 Years - May 08, 2009

The Comptroller and Auditor General of India (CAG) is looking at the option to move from cash to accrual basis within the next five years in order to change the way government accounts are presented. The accrual-based financial statements are expected to provide more appropriate financial performance''s presentation as well as position of the government.

The government currently follows the cash basis accounting, where the cash was recorded in the books only upon receiving it. However, it doesn''t consider the receivables. Under India''s constitutional provisions, the account of the Union and the states shall be kept in the way prescribed by CAG.

The accrual accounting system would be based on Indian Government Financial Reporting Standards (IGFRS) issued by the Government Accounting Standards Advisory Board (GASAB) of the CAG of India.

The CAG recently had held a conference on accrual basis accounting to deliberate on the issue of migration from cash to accrual basis accounting and it laid down the roadmap for migration process.

Govt, Realty Cos To Undertake Low Cost Housing In Rural Areas - May 06, 2009

ASSOCHAM has suggested the government and realty players to jointly undertake low cost housing projects in the rural areas where the shortage of houses is estimated more than 47.43 mn upto 2012.

According to ASSOCHAM report on Rural India, central government has spent Rs.189898.56 crore for constructing 171 lakh houses under the ''Indira Awaas Yojana"meaning that the cost per house comes as Rs.1,11,000.

However, the government could not achieve the desired results fully due to various problems like land availability, clearances by forest department, delay in release of funds and lack of basic amenities in the houses constructed.

Between FY2000-01 to FY2006-07, the government was able to achieve 99% of the physical target of construction of houses. However, the achievement rate fell to 51% in FY2007-08. Number of houses constructed in FY2007-08decreased to 10.9 lakh, from average 15 lakh in preceding three years.

ASSOCHAM President, Sajjan Jindal said in the report that there is a huge backlog of house requirement which needs to be fulfilled and suggested that the Indira Awaas Yojana Scheme under the umbrella of ''Bharta Nirman'' programme should be renovated for more effectiveness.

RBI Transfer In The Direction Of Govt, Eases Borrowing - May 06, 2009

The government of India in consultation with Reserve Bank of India decided to transfer Rs280 billion from the MSS cash account to the normal cash account of the Government of India on May 2, 2009, a move that would ease the pressure on record market borrowings planned for 2009/10.

RBI aims to move a total of Rs330 billion from the market stabilisation scheme (MSS) in this year. However, the outstanding amount under the MSS account was Rs427.73 billion on May 2, the RBI said. Moreover, it has also bought back federal bonds in recent weeks to ensure adequate investor appetite for new auctions.

RBI in early March had given Rs120 billion to the government from the MSS account in order to meet a sudden surge of borrowings in the closing weeks of the 2008/09 fiscal year.

Moreover, the Central bank has taken a series of measures to ensure the government''s net borrowing plan of Rs3.09 trillion in the fiscal year would go through smoothly without disrupting markets and sending yields shooting up.

Libor Dip May Cheer India Inc - May 06, 2009

The stock market cheerleaders have more reasons to rejoice. The three-month Libor (London Inter-Bank Offered Rate), an international benchmark interest rate used to price corporates loans has dipped below 1% for the first time on Tuesday and this is an indication that banks are more willing to lend. Corporate India may not only witness the softening of its interest costs on all foreign loans but could also find it easier to raise cheaper dollars to refinance the more expensive bridge loans.

However in the domestic arena, RBI in a move that could also lower interest rates on rupee loans, announced that it would close the second reverse repo window for accepting surplus fund from banks. With this, the local banks would now left with little options but to lend as much as Rs 40,000-50,000 crore. However, if they select to invest the surplus money in government or corporate bonds, it would lead to plummeting yields on these papers.

RBI from now onwards will conduct only one reverse repo in the morning while the afternoon reverse repo will be held only on reporting Fridays. But, it''s the drop in Libor that could have a more far-reaching impact on financial markets.

Government And Realtors To Undertake Low Cost Housing - May 05, 2009

As the India''s real estate sector struggling with the depressed demand due to the global recession and high cost of borrowing, industry body Assocham has suggested that the government and realty players should jointly undertake the projects of low cost houses of 47.43 million by 2012 in rural areas.

The chamber said the government has constructed 171 lakh houses with an expenditure of Rs 1,89,898.56 crore. However, the desired results under the scheme have not been fully achieved due to various issues like the land availability as well as clearances by the forest department, delay in release of funds and lack of basic amenities in the constructed houses, it said.

According to the Assocham President Sajjan Jindal, there is huge demand for low-cost houses in rural areas that needs to be fulfilled and recommended that the Indira Awaas Yojana Scheme, (IAY) under the umbrella of ''Bharta Nirman'' programme, should be restructured.

He also added that there is a strong case for private sector participation to bring in right technology for such types of houses and ensure fast completion of the projects.

Global Slump Would Further Hurt Abroad Sales By Indian Firms - May 05, 2009

India''s exports contracted by a third in March to $11.5 billion which is sixth straight fall and many of the analysts have a view that global economic slump would further hurt overseas sales by Indian firms in the month ahead.

Import shrunk by 34% to $15.56 billion in March''09 from a year earlier due to a slowdown in Asia''s third largest economy and volatile global crude prices Clc1, narrowing the trade deficit to $4 billion in March''09 from $6.32 billion a year ago.

India''s exports stood at $168.7 billion in the fiscal year to March, up paltry 3.4% form 2007/08, while imports grew 14.3% to $287.8 billion in 2008/09 as per official data.

Exports account for nearly 16% of India''s gross domestic product, which is a notch below a downwardly revised 2008/09 fiscal year target of $170 billion.

The trade deficit expanded 34% to $119 billion in 2008/09 from $88.5 billion in the previous year.

Indias Exports Take A Rain Check 33.3 Per Cent - May 04, 2009

India''s exports dropped 33.3 per cent in March as against corresponding period of previous year. With this, reduction reported for the sixth month in a row under the impact of a slowdown in major global markets.

Exports fell to $11.51 billion in March last fiscal, from $17.25 billion in the same month of the previous financial year, while imports dropped 34 per cent to $15.56 billion, leaving a monthly trade deficit of $4.05 billion, according to official figures. Exports contracted 12.1 per cent to $12.8 billion in October 2008, showing a negative trend for the first time in five years.

For April-March 2008-09, the country''s cumulative exports increased by 3.4 per cent to $168.70 billion. Growth for the first half of the fiscal was 30.9 per cent. Imports in April-March 2008-09 went up by 14.3 per cent to $287.75 billion. The trade deficit for the period has mounted to $119.05 billion.

India Has Got Black Money Details From Germany: Government - May 04, 2009

On 2nd May, the government said that it has already secured significant information from Germany and income-tax sleuths were following it up. The government was assuring the Supreme Court that it was trying to retrieve black money stashed in tax havens abroad.

The finance ministry revealed this in a 27-page affidavit to the apex court in response to a lawsuit accusing the government of doing precious little to retrieve Indian black money to the tune of Rs.70 trillion stashed abroad.

In its affidavit, the government also told the court that its persistent efforts in collaboration with international community have also resulted in Switzerland agreeing to make its secretive banking laws and norms more transparent in tune with the global standards.

Director Priya V.K. Singh of the Department of Revenue under the finance ministry told the court that following repeated efforts since Feb 27 last year, the government got the information on Indians with secret accounts in LGT Bank of Liechtenstein March 18 this year.

FDI In Retail Can Improve Production, Says Proficient - May 04, 2009

Foreign direct investment in organized retail can boost business and bring in a outbreak of economic activity to India by global players, an expert with a US-based think-tank said on 2nd May. "FDI (in organised retail) is allowed in most of the countries in the world ... why not here.

If the government opens it to FDI, there will be a flurry of (activity) by foreign players who will not only bring in investible funds but also global expertise and knowledge, much needed to develop this growing sector," the International Food Policy Research Institute Director (Asia) Ashok Gulati said.

FDI in multi-brand retail is not allowed in India and it is permissible only for the wholesale cash and carry firms and in the single brand retail.

The organized retail is growing annually by more than 70 per cent since 2002. However, since the multi-brand domestic retail sector is in the immaturity stage, it has shown significant expansion on a low base, Gulati said on the sidelines of a function.