| Dump or adapt: India's aid ache |
| NISHIT DHOLABHAI |
| New Delhi, Aug. 22: India is considering a proposal to jettison a World Bank development project if a decision to keep out Arunachal Pradesh, apparently under Chinese pressure, is not revoked. The programme, called the Northeast Livelihood Project, is the latest to get caught in alleged Chinese misgivings about India pursuing welfare schemes in the northeastern state over which the two countries have a territorial dispute. If the Indian government sticks to the view that Arunachal cannot be excluded, a similar programme will be taken up by the Planning Commission instead of the World Bank. The project, aimed at investing in self-help groups and generating employment opportunities in the Northeast, had originally envisaged an investment of $200 million (over Rs 960 crore). So far, the World Bank has cleared the programme for only Sikkim, Tripura, Nagaland and Mizoram, citing constraints in "supervisory capabilities" in covering all eight states in the region. But Indian sources said Chinese reservations were suspected to have played a role in truncating the project. The minister for development of Northeastern Region, B.K. Handique, said: "The World Bank approved the project for only four states, while we wanted all the Northeast states, including Arunachal, to be covered. So the government is asking the Planning Commission to do it." The minister declined comment on a specific question if a China hand was being suspected but said with a laugh: "Interesting that the Left-ruled Tripura was not left out." Handique, however, added: "We should not make a big ruckus about it and let it affect bilateral relations or the negotiations on the borders. We should exercise restraint." "We have told the Planning Commission to design an alternative scheme. But there is another view to retain the World Bank project and have a similar project for the other (four) states by the Planning Commission. We will consult Arunachal MPs before finalising anything," Handique said. Arunachal Congress leaders are angered by repeated attempts by Beijing to prevent development funds from flowing into the state. "They had tried it during the ADB funding also, but they could not succeed," said Congress MP Takam Sanjoy. He was referring to Chinese attempts to prevent a $60-million project of Asian Development Bank (ADB) for the frontier state. Beijing's objections to the ADB project earlier this year fell through after all members, except China, voted to grant approval for the India plan. The Chinese foreign ministry was quoted as saying in June that the country was dissatisfied with the ADB adopting a document involving disputed territories. Soon afterwards, the World Bank told Delhi that the livelihood programme could be approved only for two districts each in the four states. Some officials in the Northeast ministry feel that India should exert pressure on the World Bank and persuade it to include Arunachal rather than pull out altogether. The course of the negotiations and the outcome have assumed significance because China is now a key voice in global financial aid management, especially after promising $40 billion to the International Monetary Fund. |
"I will talk to Mukherjee on some issues in Delhi tomorrow during which I will also raise the price rise issue," Banerjee said here before leaving for the capital.
Besides the price rise, she would also take up with Mukherjee the problems faced by the Primary Teachers Training Institute (PTTI) and the problems of jute industry.
The PTTI students wanted an assurance from the Left Front government that they would be recruited for 57,000 vacant post of primary teachers in the state.
"Swiss law and even OECD's Model Tax Convention do not permit fishing expeditions, in other words, the indiscriminate trawling through bank accounts in the hope of finding something interesting."
"This means that India cannot simply throw its telephone book at Switzerland and ask if any of these people have a bank account here," a top official at Swiss Bankers Association said from Basel.
The secrecy shield provided by Swiss banks have always been a big issue in India, including during the campaign for this year's general elections, and the government recently said that it has approached Switzerland seeking details about bank accounts held by Indians there.
Finance minister Pranab Mukherjee recently informed Parliament that the government was committed to unearthing black money within and outside the country.
"Swiss authorities, I am told, have agreed for negotiations (on the issue)... We have already taken it (the issue of black money) not only with Swiss authorities but other nations as well," Mukherjee said.
Last week, the US reached an agreement with Switzerland, under which top Swiss bank UBS AG turned over details of 4,450 secret accounts to the Internal Revenue Service.
So far in August, the foreign institutional investors (FIIs) have been net sellers on eight trading sessions, of a total of 15, data available with the Securities and Exchange Board of India (SEBI) shows. FIIs were net sellers of stocks worth Rs 1,112 crore in the last week alone, which followed a net sale worth about Rs 3,000 crore in the previous week.
Marketmen, however, feel that the outflow in the past few weeks is unlikely to deter the fund flow in the coming days as overseas investors are still flush with funds and are waiting for cheaper valuations to enter the market. "After pulling out money from the emerging markets, FIIs are now siting on huge profits. They are confident of the India growth story and will turn net investors going ahead," SMC Global Vice-President Rajesh Jain said.
With the foreign funds taking back their money to their home countries, the Bombay Stock Exchange's barometer Sensex lost 2.74 per cent so far in August and is currently trading around the 15,000 levels. Last week, the Sensex fell by 1.11 per cent to close at 15,240.83 points.
Last week, FIIs were the gross buyer of shares worth Rs 10,116.9 crore, while they sold equities valued at Rs 11,229 crore, resulting in a net sale of Rs 1,111.9 crore.
"FIIs are dominant force in market and their buying and selling would continue to impact the market movement. However, they are looking on emerging economies now and would invest in these countries as their returns are expected to be higher in the coming days," Unicon Financial CEO G Nagpal said.
Till now this year, FIIs have remained bullish on the Indian equities and the overseas investment in the stock market touched Rs 35,460 crore (USD 7.3 billion) in 2009.
Moreover, debt market emerged as a preferred investment destination for overseas investors last week as the segment saw a net inflow of Rs 542 crore. Interestingly, FIIs, so far this year, have sold debt instruments worth Rs 715.40 crore, as per the SEBI data.
Companies like state-run Oil and Natural Gas Corporation and Reliance Industries should be given freedom to fix natural gas price that
Delivering the inaugural lecture at the Rajiv Gandhi Institute of Petroleum Technology at Rae Bareli yesterday, he said government "should give freedom to producers to market their gas provided the price determination is at arms-length and on a transparent basis, which avoids transfer pricing or deliberate under pricing."
"This would mean, inter alia, long-term prices to be linked to international crude oil prices providing transparency like in our LNG contracts," he said in his lecture titled 'Towards A New Natural Gas Policy'.
Advocating further liberalisation of gas markets in the country, the former finance secretary called for improving regulatory regime.
"In recent years, there have been instances of unilateral deviations from the stated policy and practices regarding the Production Sharing Contracts and this needs to be eschewed if we want to make any radical gains in finding new gas which is indeed there to tap," he said.
"Exploration and production of hydrocarbons is inherently hugely risky and such policy instability makes it even riskier thus discouraging the oil companies."
Kelkar said he was mindful of the currently "high octane dispute" over natural gas from the Krishna-Godavari basin field between Mukesh Ambani-led Reliance Industries and Anil Ambani Group's Reliance Natural Resources Ltd.
"This dispute has now gone to the Supreme Court. I have therefore made every effort (in preparing this lecture) to observe the 'Lakshman Rekha'."
He cited the Australian regulatory model, which has very detailed provisions for pricing, production pipelines, operations, including the tariffs and safety as also enforcement of competition policies to curb potential abuse arising out of possible monopolistic power.
"With such incentives and regulatory approach, we will find that a number of oil companies will be forthcoming to invest in our gas sector along with new technologies and improved oil field practices," he said.
"To achieve such an outcome, I should reemphasise the importance of having an upstream and gas regulatory agency which is fair, transparent and technically at par with the best oil companies of the world."
Kelkar said to create competitive national gas market a national gas pipeline grid - NATGAS grid -- must be built.
"One possible way of promoting gas markets could be that even where the cross-country or inter-state pipelines are under the private sector, 25-30 per cent of capacity of such pipelines can be 'crown' capacity which can be either on 'carried interest' or 'participating interest' basis and such capacity will be available to any buyer or supplier of gas with the toll charges which are determined by the regulator," Kelkar said.
This would enable the development of gas market in India where third party suppliers and buyers can use the common carrier, he said.
The new gas policy, he said, will increase energy security by enhancing sharply the supply of natural gas, reduce import of crude oil and would lead to investment in power and fertiliser sectors.
"It will also lead to better price discovery and greater choice for consumers. We will see that the long-term contractual gas prices will be aligned to international crude oil prices in a transparent manner," he said.
"One of the most important benefits of this policy approach is it will help us to eliminate the humongous levels of subsidies the country is incurring on the nitrogenous fertilisers and LPG. Such an elimination of subsidies will provide fiscal space to the Union government to increase investments in areas such as environmental protection and for the reduction of public debt," he added.
The Reserve Bank, which made third party ATM transactions free from April, has said not more than Rs 10,000 can be withdrawn each time they are used and limited the number of such transactions to five a month
Top News
The Anil Ambani Group's Reliance Airport Developers Ltd (RADL) has bagged contracts worth a total Rs.63 crore (Rs.630 million) to develop airports at Yavatmal, Nanded, Osmanabad, Latur and Baramati in Maharashtra...
Hyderabad: India has a huge potential to involve retail investors in the stock markets but they are not coming out to invest because they have learnt a lesson from the Satyam Computer fraud, feels Madhav Mehra, president of the London-based World Council for Corporate Governance.
New York: Having found her to be the most powerful women in India after the country's ruling alliance chairperson Sonia Gandhi, business magazine Forbes has also named ICICI Bank chief Chanda Kochhar among four women from across the world to watch out for in the next 12 months.
Mumbai: Irked by allegations of favouritism, Petroleum Minister Murli Deora Saturday said his ministry had better things to do than go around supporting Mukesh Ambani-led Reliance Industries Limited (RIL). "How do you say that... Don't we have any other work," Deora shot back when asked about Anil Ambani group's ad-campaigns in newspapers alleging that the ministry was favouring RIL.
New Delhi: Irked by allegations of favouritism, Petroleum Minister Murli Deora today said his ministry had better things to do than go around supporting Mukesh Ambani-led RIL.
New Delhi: States will not review the current sales tax rates on jet fuel as of now, even as the troubled aviation industry demanded reduction in the levy.
Dubai: India remained the largest market and primary driver of air traffic growth of UAE's second largest airport in Abu Dhabi, with 18.9 per cent more Indians travelling through the facility this year.
Tokyo: Honda Motor Co. Will join two domestic rivals in introducing electric cars, seeking to market the environmentally friendly vehicles in the United States in the first half of the 2010s, sources said today.
New Delhi: A majority of the unions representing the 32,000 employees of state-owned Air India have rejected the management's decision to cut the productivity-linked incentive (PLI) scheme 50 per cent across the board till a new formula is fixed in three months.
New Delhi: Faced with the prospect of the 10-digit series of mobile numbers being exhausted soon, owing to the rapid growth in mobile telephony, the Centre for Development of Telematics (C-DOT), a telecom research and development organisation, is studying whether the Unique Identity Number could be converted into mobile numbers.
New Delhi: Prime Minister Manmohan Singh is not intervening or mediating in the Ambani brothers' gas dispute, though he believes that the two top industrialists should patch up in national interest, an official in Prime Minister's Office said.
New York: US stocks soared to fresh year highs on a record jump in existing-home sales in July and Federal Reserve chief Ben Bernanke's comments that global recovery prospects "appear good."
Mumbai: Monsoon worries and Asian markets led Sensex to a topsy-turvey session this week.
New York: Oil prices jumped to a new high for the year after Federal Reserve Chairman Ben Bernanke said that the US economy is nearing a recovery and other economic data backed him up.
Kolkata: Encouraged by improving consumer sentiment, consumer durables companies have lined up new product launches and are increasing their advertising and marketing spends by anywhere between 10 and 60 per cent this year. They believe sales will increase by 30-40 per cent in the festive months, even as analysts say the optimism is misplaced. According to Nielsen survey, 74% Indians are bullish on personal finances.
New York: Investor optimism about the global economy has soared to its highest level in nearly six years, with fund managers across the world putting their cash back into equity markets, a Merrill Lynch survey has said.
Another piece of bad news that might affect market prices is the official announcement that China's current-account surplus has fallen 32% in the first half of 2009 from a year earlier. This is the first decline in current account surplus in five years, the State Administration of Foreign Exchange (SAFE) said.
SAFE said the surplus in the first half of 2009 came to $130 billion. The main reason for the decline is falling exports although outbound investments by Chinese companies looking for foreign pastures may have contributed some of it, analysts said.
The last two weeks saw Chinese stocks lose 20% of their value raising questions about the stability of the local market and its impact on world markets.
Although the Shanghai Composite Index closed up 1.7% on Friday due to heavy trading on shares of banks, there were serious questions on whether the market will finally get over the downward trend. The index finished 2,961 points on Friday marking a 2.8% decline for the week.
Nearly half of the 1,678 listed companies have so far met the statutory requirement of submitting their halfyearly results to the Shanghai and Shenzhen stock exchanges . The 879 companies that submitted their books have reported profits of $17 billion reflecting 18% decline in profits as compared to the first half of 2008.
The fate of the remaining companies will be known after the August 31 deadline for submitted the accounts. Market experts feel a good number of companies delaying the submission of reports may be having problems balancing their books.
The worst performers included steelmakers and non-ferrous companies' including Angang Steel Company , which reported a loss of 1.563 billion yuan ($229 milllion ). Jigang Group, Laigang Group and Yunan Copper posted losses of 100 million yuan ($15 million) each.
Companies engaged in finance , coal and white spirit sectors recorded better performances . The Bank of Communications topped the earnings list with its first-half profit up 22% year on year to 15.5 billion yuan ($2.2 billion).
Now, Rs 24,000 per year for MBBS study?
Sources said apart from the planned 10 colleges, the number could go up to 20 in future as ESIC looks to start its own medical colleges to meet a shortfall of doctors in ESI hospitals meant for treatment of insured persons. The ESI scheme is for welfare of workers and is fed by contributions from employers and employees.
The Corporation is proposing a bond of five years for graduates who will have to serve in its hospitals in lieu of inexpensive education fees. The entire cost will have to reimbursed in case of those who leave in the bond period. As this in itself may not act as much of a disincentive, there is a possibility the clause could be reviewed.
The ESI move will add new medical colleges offering affordable medical education even as an army of MBBS aspirants wades through entrance examinations each year to find a place in 130 affordable government colleges. Those who fail to make the cut turn to 136 private colleges, many of which charge high fees and even more for "capitation" seats.
An expert committee recommendation on the fee structure is being put before ESIC for approval. It says undergraduate medicine students be charged Rs 24,000 tuition per year for the first four years. The tuition fee would be half for the final year during which an MCIstipulated stipend will be paid for internship. The same fee is to be charged from MD students who would, on the other hand, receive Junior Residency Pay.
Besides tuition fee, university charges would be as per actuals while hostel and mess charges would be decided separately . The plan for affordable education to attract the best talent to ESI colleges competes favourably with other government and private colleges. The committee determining the fee structure found that Delhi University charges the least (Rs 240 per annum) while it goes upto Rs 1 lakh in other government colleges.
If the education costs are low, they have also raised a few eyebrows. Critics say it would ultimately have to be subsidised by ESIC to meet the shortfall in expenditure, thereby burning a hole in the pockets of employers and employees. They argue the government should foot the subsidy.
The Corporation, however, argues that "commercial" considerations cannot be applied. "ESI scheme works on an insurance model and hence each medical college cannot be considered as a separate entity (from ESI) for the purpose of determining economic viability ," it says, adding, "ESI scheme is providing a social security and it is not a commercial entity."
The Corporation, which has hospitals in all states, proposes to start super speciality treatment in these colleges and save money spent on referral of members to non-ESI hospitals. The expenditure is said to be Rs 100 crore this year.
| Punjab scraps Reliance deal |
| OUR BUREAU |
| Aug. 22: The Punjab government has terminated an agreement with Reliance Retail to set up a Rs 5,000-crore farm-to-fork project, possibly the first retail venture of Mukesh Ambani to be formally abandoned by a state. The venture — once hailed as the harbinger of the "second green revolution" but jinxed from the start — had been firmed up in 2006 when a Congress government headed by Amarinder Singh was in power. The Akali Dal and the BJP, now governing the state, had opposed the project then. When the new regime came to power in February 2007, Reliance had gone slow on the venture, fearing that the plug could be pulled any moment. Reliance had faced opposition in Uttar Pradesh and Jharkhand, too, but the agreements were not scrapped. In Bengal, the group has opened some outlets but the comprehensive project is yet to take off. "It would have been untenable for the new government in Punjab to allow the project after opposing it earlier," a source said, terming the termination "political". The Punjab government said the company had not complied with the terms of the memorandum of understanding. The objective was to build farm infrastructure and deliver the produce to dining tables. The government had, in return, agreed to allot over 1,000 acres to Reliance Industries at a concessional rate. |
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