Mandate Manipulation planned as reforms to continue.
Consolidation in the banking system means disaster for the mango men for whom a new political party launched in New Delhi by Civil Society at least for name shake, AAM AADMI.Mandate Manipulation planned as reforms to continue.
Indian Holocaust My Father`s Life and Time, Chapter: Nine Hundred Twenty Eight
Palash Biswas
Mobile: 919903717833
Skype ID: palash.biswas44
Email: palashbiswaskl@gmail.com
Stating some consolidation in the banking system was inevitable, Finance Minister P Chidambaram today said India must have two or three world size banks.What does the finance minister mean? Literally he hints at imminent superseding of the state bank of India which represents the nationwide banking network. He means private banks owned by corporate houses to be allowed, should replace SBI. It means disaster for the mango men for whom a new political party launched in New Delhi by Civil Society at least for name shake, AAM AADMI.Arvind Kejriwal today unveiled his party and called it the Aam Admi party aiming at the constituency claimed so far by the Congress and minutes after his announcements tweeted that congress loses Aam Admi today.Referring to the slogan of the ruling party "Congress ka haath aam admi ke sath" he added that from now onwards congress support will be for Vadra's, Kalmadis and the BJP.Meanwhile, you may not feel respite despite the fact that the standoff between the government and the opposition over whether there should be voting in Parliament over the decision to allow FDI in multi-brand retail worsened on Friday, with the BJP turning down government's request for help with the passage of crucial legislations linked to financial sector reforms.BJP conveyed its decision not to facilitate the passage of bills to finance minister P Chidambaram during a meeting he held with leaders of opposition in the two Houses, Sushma Swaraj and Arun Jaitley.Bills passed or not passed, it would not stop the finance minister to do exactly what he intends to do. The corporate government of India is quite habitual to bypass the parliament killing the consttitution.Meanwhile,FDI crusader,Mamata promises 1 crore new jobs in West Bengal!
However,with the impasse in Parliament continuing, government on Thursday reached out to the main opposition with home minister Sushilkumar Shinde meeting BJP leader Sushma Swaraj after which he hoped the matter could be resolved by Monday. "Yes, I have talked to her a little bit," Shinde told reporters outside Parliament while referring to his meeting with the leader of opposition in the Lok Sabha. Asked by when the current impasse could be resolved, the home minister said, "Let's see. I hope that by Monday the matter will be resolved...I am trying to settle it by tomorrow (also). Let's see."
Just see!Finance minister P. Chidambaram on Saturday reiterated the ministry’s pitch that Reserve Bank of India (RBI) should allow more banks to come up rather than wait for the Banking Regulation Act to get amended.
“It is the government’s intention to urge RBI to quickly make the finalization of guidelines (for new bank licence) and allow application for new banks,” Chidambaram said at the launch of Bank for the Buck, by Mint’s deputy managing editor Tamal Bandyopadhyay.
“We can’t open 1,000 branches, we can’t achieve financial inclusion ... Unless new licences are given,” he said.
Chidambaram said the laws have remained the same or have become even stricter now than what it had been in 1993 when new bank licences were given last. “Hence, there is no reason why RBI should delay giving new licences,” he said.
RBI governor D. Subbarao recently said that unless legal issues are clear, RBI cannot give licences for new banks.
Chidambaram said the government will continue with its reforms process.
“The flame of reform is still very much alive... I have in my list over a 100 items and I look at that list everyday to see how much progress we are making.”
Among other issues, the government’s priorities include formation of the proposed National Investment Board (NIB) that would cut through the bureaucracy of getting permission from multiple authorities for any projects.
The finance minister said Prime Minister Manmohan Singh has assured the minister to bring out a paper on NIB in two weeks.
“Chances of financial reforms Bill being passed in this Parliament session is extremely good.”
He also urged the private investors to invest more in projects and cautioned cash-rich PSU firms to spend more.
On the other hand,Two time Gujarat chief minister Narendra Modi looks all set for a landslide victory in the assembly election this December as per ABP News AC Nielsen opinion poll which suggests that the BJP strongman will get a 2/3 rd majority bagging 124 seats in the 184 seat assembly. 62% of the voters in Gujarat also want to see Modi to play a national role in 2014 Lok Sabha election.
Modi baiters – Keshubhai Patel of the newly formed Gujarat Parivartan Party and rebel BJP member Kannubhai Kalsaria – might not be able to make a significant dent against the Gujarat chief minister and will end up damaging the Congress party, dividing the anti-Modi votes the opinion poll says. Congress seats are likely to fall from 59 in 2007 to 51 this time. However, Congress party will maintain its 38 percent vote share, the poll says.Although the BJP vote share could see a slight decline from 2007 when it was 49.12%, the opinion poll indicated that even with 47 percent vote share in 2012 assembly poll, a massive 62% of the urban voters want to see the Gujarat chief minister take on a larger national role in 2014 general election. The opinion poll indicated that 53 percent of the total Gujarat voters want Modi in Delhi leading the party for the Lok Sabha polls.Gujrat however, sends only 26 seats to the Lok Sabha.
With big ticket investments not pouring into West Bengal according to her government's plans, Chief Minister Mamata Banerjee on Saturday promised creation of a crore jobs in the state over the course of time.
"My target is to create employment for one crore people through self-help groups, cooperatives, non-governmental organisations and various government projects," Mamata said after inaugurating the West Bengal State Handicrafts Fair in Kolkata.
Mamata said that 17,000 new small industries, providing employment to 1.54 lakh people, have come up in the state after her government came to power in 2011.
"Setting up of 15,000 other schemes to provide work to 1.12 lakh people are under process and they will start functioning soon," she said.
The Mamata Banerjee government promised to rope in big industrial projects in the state. But so far, the plan has not been much success with entrepreneurs expressing concern over policy issues like land acquisition. Leading industry lobbies have also voiced their concern over the law and order situation.
The Chief Minister said that world-class marketing centres for small-scale industries would be set up at Shantiniketan in Birbhum district, and Kolkata's Rajarhat and Rabindra Sarobar areas.
"The land has been identified at Shantiniketan. Lot of tourists from India and abroad visit Shantiniketan. They can buy small-scale industry products from there. It will help the craftsmen," she said.
Mamata announced that her government would set up marketing hubs in all sub-divisions for the small and cottage industries sector. To boost the handloom sector, she said the workers would be given the work of stitching dresses worn by the state government's disaster management group.
An Economic Times exclusive report exposes the mandate manipulation scheme of the corporate government of India which means that despite stiff opposition the reform regime has to continue for further disaster. ET reports:
Monday will see UPA-II playing what it hopes will be its biggest election card - the nationwide cash transfer scheme that aims to put a total of Rs 3.2 lakh crore per year in the bank accounts of 10 crore poor families, starting January next year.
The per family/per year cash transfer amount will be Rs 32,000, almost three times the average annual earning of a below-the-poverty-line (BPL) family. The cash transfer will replace subsidies for kerosene, LPG, small pension payments as well as wages from job guarantee schemes.
This means, according to senior officials in the PMO who spoke on condition of anonymity, the cash transfer scheme will be "fiscally neutral" since existing indirect subsidies will be replaced by direct cash transfers.
PMO officials said the "big difference" in this welfare reform will be a "huge spending impact on the economy" - poor families will have much more cash at their disposal. Massive in administrative scope and political ambition, the rollout is expected to be completed by April 2014, just in time for the scheduled general elections - the formal announcement will be made by Prime Minister Manmohan Singh on Monday.
Singh will chair a meeting of the national committee on direct cash transfers before greenlighting the scheme. The committee's members are the ministers of finance, rural development, HRD, labour, petroleum, fertiliser and women and child welfare, as well as the deputy chairman of the Planning Commission, Montek Singh Ahluwalia, and the chairman of the Unique Identification Authority of India ( UIDAI), Nandan Nilekani.
The showpiece welfare reform has the full backing of Congress President Sonia Gandhi, senior party officials said, requesting they not be named. Congress strategists are looking at cash transfers as the 'NREG of UPA-II', a senior leader said.
However, many senior officials in the government, speaking on condition of anonymity, said the success of this massive welfare reform was critically contingent on Aadhaar, the electronic platform-based system for providing unique identification numbers for all residents, covering at least 80% of the population.
Aadhar is critical because the cash recipients' bank accounts will be opened on the basis of their identification number - a process designed to eliminate diversion of welfare cash to non-BPL residents. The Aadhar number is the means to making basic banking services accessible to the poor as well as ensuring there's no leakage during cash transfer.
Aadhar's coverage has so far been limited to urban areas in the three years since its launch. "As of now, we have enrolled 250 million, i.e. approximately one in every four Indians. The goal is to make it one in every three Indians by 2013, and by 2014, every second Indian will have an Aadhaar number," Nilekani told ET.
http://economictimes.indiatimes.com/news/economy/policy/et-exclusive-pm-to-announce-nationwide-cash-transfer-scheme-on-monday/articleshow/17344755.cms
Government payouts towards pensions, scholarships and subsidies worth thousands of crores of rupees will be directly transferred to bank accounts of beneficiaries in 51 districts spread over 15 states from January 1, Finance Minister P Chidambaram said today.
Aimed at checking pilferage, the ambitious government scheme based on Aadhaar-enabled mechanism will cover the entire country by end of 2013.
"We have only five weeks to roll out and once roll-out begins, we want roll-out to be completed in 600 odd districts in India...Larger number of districts will be added every quarter," he said while speaking at the annual banking 'Bancon' conference in Pune.
Addressing chairman and managing directors of several leading banks, Mr Chidambaram said that Prime Minister Manmohan Singh has called a meeting on Monday to discuss issues related to direct cash transfer of subsidy.
The government's major subsidy bill, which includes payments towards food, fertiliser and petroleum, was pegged at Rs. 1.8 lakh crore in the current fiscal. The outgo is expected to increase in view of the high prices of crude oil in the international market.
"Beginning January 1, 2013, (in) 51 districts of India, we wish to transfer all payments of Government of India directly to beneficiary through Aadhaar enabled bank accounts", the Minister said.
Aadhaar, a 12-digit number, serves as a proof of identity and address anywhere in the country. The UIDAI has already issued 21 crore Aadhaar cards.
On growth, he said India is facing a difficult situation because the pace of economic expansion has declined to about 5.5 per cent in the first quarter of 2012-13. The growth in the second quarter is likely to be 5.5 per cent, he said.
The economy was growing by over 8 per cent in the two financial years before slowing to nine-year low of 6.5 per cent in 2011-12.
The Finance Minister said that to overcome the difficult economic situation, there is a need to find innovative ways to increase output of goods and services.
"We have to overcome this difficult situation through innovation, through finding ways of increasing the production of goods and services," he said adding that finding new ways to help the poor depends on high economic growth both for jobs and income.
He called upon the banks to play an active role in reviving the economy.
"I genuinely and sincerely believe that banks represent the heart of the financial system and it is banks that will drive the revival of India's economy and putting India's economy on high growth path," the minister added.
He further said that India needs to have at least two or three world size banks.
The Minister said consolidation in the banking system was inevitable.
"Finding new business models will inevitably lead to some consolidation... We must create at least 2 or 3 world size banks. China has done it. And if India wants to be and as it will be the third largest economy in the world...we must also have one or two world size banks and some consolidation is inevitable," he said.
Country's largest lender State Bank of India (SBI) has acquired board approval for merger of its remaining five associates with itself. It has already amalgamated two of its subsidiaries.
Later talking to reporters, Chidambaram said RBI has the powers to issue new bank licences and expressed the hope it will take the process forward, "appreciating" government's position.
"Finding new business models will inevitably lead to some consolidation. We should not fear consolidation. I know there is pride and identity, but ultimately some consolidation would have to take place in the banking system in this country," he said at the Bancon-2012 meet in Pune.The statement should be taken very seriously, I warn.
Finance Minister P. Chidambaram today made it clear to RBI that it has the powers to issue new bank licences and expressed the hope it will take the process forward “appreciating” Government’s position.
“Let me emphasise that the three powers that RBI want are already there with the RBI. It is already there in the regulation; it is there in the powers to grant the banking licences.
“I am sure the RBI acknowledges and appreciates the well-considered position of the Government and will take the process forward,” he told reporters here after inaugurating the two-day annual national banking summit (Bancon 2012).
"We must create at least 2 or 3 world size banks. China has done it. And if India wants to be and as it will be the third largest economy in the world...we must also have one or two world size banks and some consolidation is inevitable," he said. Chidambaram further said that while consolidation takes place among top banks, there would also be place for local area banks.
"In fact, I regret that the idea of the local area bank which was started in 1996 stopped after first three licences were given. I think there is place for a local area bank for serving people of the region, local area, drawing strength from those people and serving those people, he added.
Country's largest lender State Bank of India (SBI) has acquired board approval for the merger of the its remaining five associates with itself. It has already amalgamated two of its subsidiaries.
SBI merged one of its associate, State Bank of Saurashtra, with itself in 2008 besides merging itself with State Bank of Indore in 2010.
Banking Regulation Act
The Finance Minister said amendments to the Act are simply to formalise powers that the central bank is seeking and bring them together into the legislation.
Last week, after Chidambaram asked the regulator to start the process of issuing the much-delayed new banking licences, on November 16, RBI Governor D. Subbarao had said it would be not possible without fulfilling the enabling conditions.
Asked whether the RBI has formally responded to the Ministry that new licences could not be issued without the Bill being passed, Chidambaram said: “well, I don’t know if a formal reply has been received to the letter that we sent 10 days ago. I don’t know what their formal position is.”
Asked whether he is confident of getting the Act passed in the ongoing winter session of Parliament, the Minister replied in the affirmative. “I am pretty confident that the Banking Regulation Act will be passed as early as possible,” Chidambaram said.
“Even if the RBI picks up the thread and resumes the process that was started about a year ago of finalising the guidelines and issuing the first licence, that is going to take six to eight months and the occasion to invoke these extraordinary powers will not come the next day,” he said.
“The occasion to invoke these extraordinary powers will come only when that bank does something wrong. And that is not going to happen one day after the licence is granted.
“Therefore, by the time the occasion arises, the powers will be there in the Banking Regulation Act. So as stated by the then Finance Minister’s Budget speech, we must take the process of finalising the guidelines and receiving applications for new bank licences as early as possible,” Chidambaram said.
The RBI is seeking powers to supersede the board of an erring bank, to authorise the acquisition of shares beyond five per cent in a bank holding company, and an exit policy in case of irregularities.
Norms for new licences
On November 15, Chidambaram said he had asked RBI to finalise the guidelines for new licences and start accepting applications for the same pending passage of the Banking Regulations Bill.
The last time the RBI allowed new private banks was in 2002 prior to which it allowed new players in 1991-92.
The RBI issued the final guidelines for new banks in August 2011, including those floated by corporates, but is waiting for the necessary legal powers before it proceeds further. The bank licences were initially slated to be issued way bank in 2008-09.
However, the Finance Ministry wants the RBI to speed up the process, under provisions of the Companies Act, without waiting for amendments to the existing banking laws, in its effort to create a positive sentiment among investors and the industry.
The amendments to the Banking Regulations Act will invest the RBI with supervisory powers over private companies that would enter the banking sector.
BJP sources said Chidambaram had requested the opposition's assistance for Banking Laws (Amendment) Bill, Insurance Laws (Amendment) Bill, Pension Fund Regulatory and Development Authority Bill, Prevention of Money Laundering (Amendment) Bill and Securitization (Amendment) Bill.Times of India reports.
The meeting took place a day after Swaraj and Jatiley, along with party veteran L K Advani, disregarded Prime Minister Manmohan Singh's invocation of national interest to stick to their insistence that the debate in Parliament over government's contentious FDI decision should happen only under a rule which allows for voting. "Punish the government, but don't punish the country," the PM is learnt to have told his guests as he worked on them to drop their demand for voting on the FDI decision.
The government is opposed to the demand because it can cause discomfiture to partners and outside supporters like DMK, SP and BSP. The three parties, critical for the government's survival, have opposed the decision to let in global supermarket chains but don't want to yank the rug from under Congress's feet yet.
The political trapeze may get difficult if Parliament debates the FDI measure under a voting clause: a situation in which they will be under compulsion to translate their professed opposition into a vote against the decision.
Government managers have successfully negotiated such situations in the past, and the prospect of success in persuading SP and BSP is rated high even by political opponents. Government managers, exasperated with dealing with SP and BSP, known for their bare knuckle negotiating tactics, would like to avoid ceding any leverage to the UP outfits; even to the DMK.
BJP and Left are reconciled to being outmaneuvered in a parliamentary vote, but have kept up with their demand chiefly with a view to harass the UPA by sharpening the contradictions within its own fold over the FDI decision. Although it is unlikely to persist with its stand at the cost of causing the washout of yet another session of Parliament, party managers are happy at the prospect of getting another opportunity to force a headcount over FDI.
As it happens, government has to carry out Supreme Court's order to change Foreign Exchange Management Act guidelines in order to let global retail giants set up shop. The process will require the government to take Parliament's consent through statutory resolutions; in other words, another chance for the BJP to seek to torment the government by challenging its partners to live up to their stated opposition to FDI in retail.
Chairman of State Bank of IndiaBSE -0.47 % said that the bank's approach towards merger and acquisition will be limited to its associate banks and it has no immediate plans to cut lending rates now. Economic Times reports.
Speaking at the sideline of the sideline of the Bankers' Conference organised by Bank of MaharashtraBSE -1.27 % in Pune, Pratip Chaudhuri said that the bank already merged two of its bank with SBIBSE -0.47 % in the past and will take call on other associate banks later.
SBI had seven associate banks with majority stake. Of this, it had merged two of its associate banks -State Bank of Indore and State Bank of Saurashtra-with itself. His response follows comment made by finance minister,, P Chidambaram today on need to the have large banks adding that consolidation is inevitable.
With regards to base rate, he said that the bank's Alco has decided against lowering rates immediately, since their rate at the9.75% is the lowest in the country.
On credit growth he said that the demand for corporate continues to be poor even in the first two months of the third quarter. "Retail is still driving growth. We are seeing 30% growth in retail loans," he said at the sideline of the conference..
He further said, "Around 25% of the growth in the retail home loan growth is due to migration of customers from other banks and home loan companies with remaining 75% is fresh customers."
On capital infusion he said that bank has asked for Rs 4000 crore and government has said that it would keep SBI well capitalised. He said that the bank would prefer a rights issue since it would give small investors opportunity participate the issue.
On Kingfisher Airlines, he said that the banks has yet not heard about any fresh capital infusion from the promoter yet and the lenders will be meeting next week on this. SBI has an exposure of rs 1400 crore to Kingfisher AirlinesBSE 1.86 % whose flying license has been suspended.
SBI to meet FinMin next week on rights issue: Pratip Chaudhuri
PUNE: State Bank of India BSE -0.47 % will hold discussion with the Finance Ministry next week on the much-delayed rights issues plan of the bank, its Chairman Pratip Chaudhuri said today.
"We will have a consultation with the Finance Ministry officials next week on the rights issue because they have to give their share in the rights issue," Chaudhuri told reporters on the sidelines of the two-day annual banking summit Bancon 2012 here today.
The chairman, however, did not detail the size of the issue. Last year, it was planning to launch an over Rs 20,000 crore issue.
State Bank has been waiting for a go-ahead from the government, which owns 58.7 per cent in the bank, for an over Rs 20,000 crore rights issue since the middle of FY11. The process was started during the term of the past chairman O P Bhatt.
The government has been delaying the rights issue as its own finances have been constrained for too long now as fiscal deficit had hit a 5.8 per cent of GDP last fiscal.
While denying permission to launch a rights issue last year, the government had infused over Rs 7,800 crore into the bank.
Last week, the Finance Ministry had said that it may allow its banks to raise funds through qualified institutional placement.
Banks need capital to maintain their solvency ratio apart from driving business and SBI's core capital has been dipping driven down by rising bad loans and the resultant provisions.
At the end of the September quarter, SBI had capital adequacy ratio of 12.63 per cent with tier-I capital at 8.97 per cent. The RBI mandated requirement is 8 per cent.
"If we include the profits, the tier-I capital will go above 10 per cent by the end of this fiscal and above 11 per cent if the government infuses some funds," Chaudhuri had said on the earnings day.
Despite reporting a robust 30 per cent rise in net profit to Rs 3,658 crore in the September quarter as it set aside lower amount for provisions, though its bad assets soared to 5.15 per cent of its gross advances and 2.44 per cent to net advances.
In absolute terms, the gross non-performing assets rose to Rs 49,202.46 crore, while net NPA rose to Rs 22,614 crore. The net NPA addition stood at Rs 13,200 crore against Rs 11,400 crore a year ago.
But the bank made 37 per cent less provisions for NAPs at Rs 1,837 crore compared to Rs 2,921 crore reported in the same period last fiscal, as the bank has made higher provisions in the previous quarter.
Betting On Divestment
Hind Copper disinvestment success gives govt hope of achieving Rs 30,000 cr selloff target and reining in fiscal deficit
http://www.businessworld.in/en/storypage/-/bw/betting-on-divestment/649690.30752/page/0
The government's ambitious Rs 30,000-crore disinvestment programme got a boost on 23 November as the 5.6 per cent stake sale in Hindustan Copper was a resounding success. The Rs 810 crore raised by the government kickstarted the disinvestment process, crucial for reining in a ballooning fiscal deficit target. However, state-run Life Insurance Corp of India and State Bank of India were among the bigger buyers of shares, indicating muted interest from private sector investors.
Encouraged by the success of Hindustan Copper disinvestment, finance minister P Chidambaram appeared confident that the government would be able to meet the Budget target of raising Rs 30,000 crore from stake sale in public sector undertaking during the current fiscal.
"I am happy that issue has been fully subscribed. This is the resumption of the disinvestment process and we will go forward with the disinvestment processes as approved by the CCEA between now and March," Chidambaram told reporters in New Delhi.
"...I hope that we can collect the targeted Rs 30,000 crore," he added.
The bids received were for more than 51.6 million shares or 5.6 per cent shareholding, that were put on offer in the first tranche. The shares were offered at Rs 155 apiece, a 41 per cent discount to 22 November's closing price of HCL on the BSE.
The government offered 37.01 million shares, or 4 per cent of the company, but had the option to sell a further 51.71 million. The government is likely to exercise the overallotment option and allocate all shares for which it received bids, two sources with direct knowledge of the matter said.
HCL shares closed at Rs 213.05, down 20 per cent from its last close on BSE.
Actual bids may be even higher as stock exchanges are yet to complete the compilation of data of all the bids that were received since the opening of the process at 0915 hours this morning. It closed at 1430 hrs.
HCL had kept 25 per cent of the issue reserved for mutual funds and insurance companies.
"No single bidder other than mutual funds and insurance companies shall be allocated more than 25 per cent of the size of the sale," the company added.
The share sale took place on a separate window of the stock exchanges -- BSE and NSE.
The government is banking heavily on disinvestment programme to rein in its fiscal deficit. It had revised the target to 5.3 per cent of the GDP. Global rating agencies have threatened to downgrade India's sovereign credit rating to junk if it fails to rein in its deficit, which is ballooning because of higher spending on food, fuel and fertiliser subsidies and poor tax receipts.
Just last month, Finance Minister P. Chidambaram raised the fiscal deficit target to 5.3 per cent of GDP for the current financial year to end-March 2013 from a previous target of 5.1 per cent.
In fact, pushing forward its disinvestment agenda, the government on 22 November approved sale of its 9.5 per cent stake in the country's largest power producer NTPC that could fetch as much as Rs 13,000 crore.
The government has decided to disinvest minority stake in Rashtriya Ispat Nigam Ltd, Hindustan Aeronautics Ltd, Bharat Heavy Electricals Ltd and Steel Authority of India Ltd.
Besides, stake sale in Hindustan Copper Ltd, MMTC Ltd, National Aluminium Company Ltd Oil India Ltd, NTPC Ltd and NMDC Ltd would also take place by December 20.
The government managed to raise Rs 14,000 crore through share sales in the previous fiscal year, less than half its Rs 40,000 crore target.
Earlier this month, the government pushed back a decision to sell a stake in state-run National Aluminium Co, in a deal that could have raised about $270 million. Last month, state steelmaker Rashtriya Ispat Nigam Ltd shelved an IPO due to disagreement with bankers over pricing, sources with direct knowledge of the matter said.
LIC saves Hind Copper o
Indian Holocaust My Father`s Life and Time, Chapter: Nine Hundred Twenty Eight
Palash Biswas
Mobile: 919903717833
Skype ID: palash.biswas44
Email: palashbiswaskl@gmail.com
Stating some consolidation in the banking system was inevitable, Finance Minister P Chidambaram today said India must have two or three world size banks.What does the finance minister mean? Literally he hints at imminent superseding of the state bank of India which represents the nationwide banking network. He means private banks owned by corporate houses to be allowed, should replace SBI. It means disaster for the mango men for whom a new political party launched in New Delhi by Civil Society at least for name shake, AAM AADMI.Arvind Kejriwal today unveiled his party and called it the Aam Admi party aiming at the constituency claimed so far by the Congress and minutes after his announcements tweeted that congress loses Aam Admi today.Referring to the slogan of the ruling party "Congress ka haath aam admi ke sath" he added that from now onwards congress support will be for Vadra's, Kalmadis and the BJP.Meanwhile, you may not feel respite despite the fact that the standoff between the government and the opposition over whether there should be voting in Parliament over the decision to allow FDI in multi-brand retail worsened on Friday, with the BJP turning down government's request for help with the passage of crucial legislations linked to financial sector reforms.BJP conveyed its decision not to facilitate the passage of bills to finance minister P Chidambaram during a meeting he held with leaders of opposition in the two Houses, Sushma Swaraj and Arun Jaitley.Bills passed or not passed, it would not stop the finance minister to do exactly what he intends to do. The corporate government of India is quite habitual to bypass the parliament killing the consttitution.Meanwhile,FDI crusader,Mamata promises 1 crore new jobs in West Bengal!
However,with the impasse in Parliament continuing, government on Thursday reached out to the main opposition with home minister Sushilkumar Shinde meeting BJP leader Sushma Swaraj after which he hoped the matter could be resolved by Monday. "Yes, I have talked to her a little bit," Shinde told reporters outside Parliament while referring to his meeting with the leader of opposition in the Lok Sabha. Asked by when the current impasse could be resolved, the home minister said, "Let's see. I hope that by Monday the matter will be resolved...I am trying to settle it by tomorrow (also). Let's see."
Just see!Finance minister P. Chidambaram on Saturday reiterated the ministry’s pitch that Reserve Bank of India (RBI) should allow more banks to come up rather than wait for the Banking Regulation Act to get amended.
“It is the government’s intention to urge RBI to quickly make the finalization of guidelines (for new bank licence) and allow application for new banks,” Chidambaram said at the launch of Bank for the Buck, by Mint’s deputy managing editor Tamal Bandyopadhyay.
“We can’t open 1,000 branches, we can’t achieve financial inclusion ... Unless new licences are given,” he said.
Chidambaram said the laws have remained the same or have become even stricter now than what it had been in 1993 when new bank licences were given last. “Hence, there is no reason why RBI should delay giving new licences,” he said.
RBI governor D. Subbarao recently said that unless legal issues are clear, RBI cannot give licences for new banks.
Chidambaram said the government will continue with its reforms process.
“The flame of reform is still very much alive... I have in my list over a 100 items and I look at that list everyday to see how much progress we are making.”
Among other issues, the government’s priorities include formation of the proposed National Investment Board (NIB) that would cut through the bureaucracy of getting permission from multiple authorities for any projects.
The finance minister said Prime Minister Manmohan Singh has assured the minister to bring out a paper on NIB in two weeks.
“Chances of financial reforms Bill being passed in this Parliament session is extremely good.”
He also urged the private investors to invest more in projects and cautioned cash-rich PSU firms to spend more.
On the other hand,Two time Gujarat chief minister Narendra Modi looks all set for a landslide victory in the assembly election this December as per ABP News AC Nielsen opinion poll which suggests that the BJP strongman will get a 2/3 rd majority bagging 124 seats in the 184 seat assembly. 62% of the voters in Gujarat also want to see Modi to play a national role in 2014 Lok Sabha election.
Modi baiters – Keshubhai Patel of the newly formed Gujarat Parivartan Party and rebel BJP member Kannubhai Kalsaria – might not be able to make a significant dent against the Gujarat chief minister and will end up damaging the Congress party, dividing the anti-Modi votes the opinion poll says. Congress seats are likely to fall from 59 in 2007 to 51 this time. However, Congress party will maintain its 38 percent vote share, the poll says.Although the BJP vote share could see a slight decline from 2007 when it was 49.12%, the opinion poll indicated that even with 47 percent vote share in 2012 assembly poll, a massive 62% of the urban voters want to see the Gujarat chief minister take on a larger national role in 2014 general election. The opinion poll indicated that 53 percent of the total Gujarat voters want Modi in Delhi leading the party for the Lok Sabha polls.Gujrat however, sends only 26 seats to the Lok Sabha.
With big ticket investments not pouring into West Bengal according to her government's plans, Chief Minister Mamata Banerjee on Saturday promised creation of a crore jobs in the state over the course of time.
"My target is to create employment for one crore people through self-help groups, cooperatives, non-governmental organisations and various government projects," Mamata said after inaugurating the West Bengal State Handicrafts Fair in Kolkata.
Mamata said that 17,000 new small industries, providing employment to 1.54 lakh people, have come up in the state after her government came to power in 2011.
"Setting up of 15,000 other schemes to provide work to 1.12 lakh people are under process and they will start functioning soon," she said.
The Mamata Banerjee government promised to rope in big industrial projects in the state. But so far, the plan has not been much success with entrepreneurs expressing concern over policy issues like land acquisition. Leading industry lobbies have also voiced their concern over the law and order situation.
The Chief Minister said that world-class marketing centres for small-scale industries would be set up at Shantiniketan in Birbhum district, and Kolkata's Rajarhat and Rabindra Sarobar areas.
"The land has been identified at Shantiniketan. Lot of tourists from India and abroad visit Shantiniketan. They can buy small-scale industry products from there. It will help the craftsmen," she said.
Mamata announced that her government would set up marketing hubs in all sub-divisions for the small and cottage industries sector. To boost the handloom sector, she said the workers would be given the work of stitching dresses worn by the state government's disaster management group.
An Economic Times exclusive report exposes the mandate manipulation scheme of the corporate government of India which means that despite stiff opposition the reform regime has to continue for further disaster. ET reports:
Monday will see UPA-II playing what it hopes will be its biggest election card - the nationwide cash transfer scheme that aims to put a total of Rs 3.2 lakh crore per year in the bank accounts of 10 crore poor families, starting January next year.
The per family/per year cash transfer amount will be Rs 32,000, almost three times the average annual earning of a below-the-poverty-line (BPL) family. The cash transfer will replace subsidies for kerosene, LPG, small pension payments as well as wages from job guarantee schemes.
This means, according to senior officials in the PMO who spoke on condition of anonymity, the cash transfer scheme will be "fiscally neutral" since existing indirect subsidies will be replaced by direct cash transfers.
PMO officials said the "big difference" in this welfare reform will be a "huge spending impact on the economy" - poor families will have much more cash at their disposal. Massive in administrative scope and political ambition, the rollout is expected to be completed by April 2014, just in time for the scheduled general elections - the formal announcement will be made by Prime Minister Manmohan Singh on Monday.
Singh will chair a meeting of the national committee on direct cash transfers before greenlighting the scheme. The committee's members are the ministers of finance, rural development, HRD, labour, petroleum, fertiliser and women and child welfare, as well as the deputy chairman of the Planning Commission, Montek Singh Ahluwalia, and the chairman of the Unique Identification Authority of India ( UIDAI), Nandan Nilekani.
The showpiece welfare reform has the full backing of Congress President Sonia Gandhi, senior party officials said, requesting they not be named. Congress strategists are looking at cash transfers as the 'NREG of UPA-II', a senior leader said.
However, many senior officials in the government, speaking on condition of anonymity, said the success of this massive welfare reform was critically contingent on Aadhaar, the electronic platform-based system for providing unique identification numbers for all residents, covering at least 80% of the population.
Aadhar is critical because the cash recipients' bank accounts will be opened on the basis of their identification number - a process designed to eliminate diversion of welfare cash to non-BPL residents. The Aadhar number is the means to making basic banking services accessible to the poor as well as ensuring there's no leakage during cash transfer.
Aadhar's coverage has so far been limited to urban areas in the three years since its launch. "As of now, we have enrolled 250 million, i.e. approximately one in every four Indians. The goal is to make it one in every three Indians by 2013, and by 2014, every second Indian will have an Aadhaar number," Nilekani told ET.
http://economictimes.indiatimes.com/news/economy/policy/et-exclusive-pm-to-announce-nationwide-cash-transfer-scheme-on-monday/articleshow/17344755.cms
Government payouts towards pensions, scholarships and subsidies worth thousands of crores of rupees will be directly transferred to bank accounts of beneficiaries in 51 districts spread over 15 states from January 1, Finance Minister P Chidambaram said today.
Aimed at checking pilferage, the ambitious government scheme based on Aadhaar-enabled mechanism will cover the entire country by end of 2013.
"We have only five weeks to roll out and once roll-out begins, we want roll-out to be completed in 600 odd districts in India...Larger number of districts will be added every quarter," he said while speaking at the annual banking 'Bancon' conference in Pune.
Addressing chairman and managing directors of several leading banks, Mr Chidambaram said that Prime Minister Manmohan Singh has called a meeting on Monday to discuss issues related to direct cash transfer of subsidy.
The government's major subsidy bill, which includes payments towards food, fertiliser and petroleum, was pegged at Rs. 1.8 lakh crore in the current fiscal. The outgo is expected to increase in view of the high prices of crude oil in the international market.
"Beginning January 1, 2013, (in) 51 districts of India, we wish to transfer all payments of Government of India directly to beneficiary through Aadhaar enabled bank accounts", the Minister said.
Aadhaar, a 12-digit number, serves as a proof of identity and address anywhere in the country. The UIDAI has already issued 21 crore Aadhaar cards.
On growth, he said India is facing a difficult situation because the pace of economic expansion has declined to about 5.5 per cent in the first quarter of 2012-13. The growth in the second quarter is likely to be 5.5 per cent, he said.
The economy was growing by over 8 per cent in the two financial years before slowing to nine-year low of 6.5 per cent in 2011-12.
The Finance Minister said that to overcome the difficult economic situation, there is a need to find innovative ways to increase output of goods and services.
"We have to overcome this difficult situation through innovation, through finding ways of increasing the production of goods and services," he said adding that finding new ways to help the poor depends on high economic growth both for jobs and income.
He called upon the banks to play an active role in reviving the economy.
"I genuinely and sincerely believe that banks represent the heart of the financial system and it is banks that will drive the revival of India's economy and putting India's economy on high growth path," the minister added.
He further said that India needs to have at least two or three world size banks.
The Minister said consolidation in the banking system was inevitable.
"Finding new business models will inevitably lead to some consolidation... We must create at least 2 or 3 world size banks. China has done it. And if India wants to be and as it will be the third largest economy in the world...we must also have one or two world size banks and some consolidation is inevitable," he said.
Country's largest lender State Bank of India (SBI) has acquired board approval for merger of its remaining five associates with itself. It has already amalgamated two of its subsidiaries.
Later talking to reporters, Chidambaram said RBI has the powers to issue new bank licences and expressed the hope it will take the process forward, "appreciating" government's position.
"Finding new business models will inevitably lead to some consolidation. We should not fear consolidation. I know there is pride and identity, but ultimately some consolidation would have to take place in the banking system in this country," he said at the Bancon-2012 meet in Pune.The statement should be taken very seriously, I warn.
Finance Minister P. Chidambaram today made it clear to RBI that it has the powers to issue new bank licences and expressed the hope it will take the process forward “appreciating” Government’s position.
“Let me emphasise that the three powers that RBI want are already there with the RBI. It is already there in the regulation; it is there in the powers to grant the banking licences.
“I am sure the RBI acknowledges and appreciates the well-considered position of the Government and will take the process forward,” he told reporters here after inaugurating the two-day annual national banking summit (Bancon 2012).
"We must create at least 2 or 3 world size banks. China has done it. And if India wants to be and as it will be the third largest economy in the world...we must also have one or two world size banks and some consolidation is inevitable," he said. Chidambaram further said that while consolidation takes place among top banks, there would also be place for local area banks.
"In fact, I regret that the idea of the local area bank which was started in 1996 stopped after first three licences were given. I think there is place for a local area bank for serving people of the region, local area, drawing strength from those people and serving those people, he added.
Country's largest lender State Bank of India (SBI) has acquired board approval for the merger of the its remaining five associates with itself. It has already amalgamated two of its subsidiaries.
SBI merged one of its associate, State Bank of Saurashtra, with itself in 2008 besides merging itself with State Bank of Indore in 2010.
Banking Regulation Act
The Finance Minister said amendments to the Act are simply to formalise powers that the central bank is seeking and bring them together into the legislation.
Last week, after Chidambaram asked the regulator to start the process of issuing the much-delayed new banking licences, on November 16, RBI Governor D. Subbarao had said it would be not possible without fulfilling the enabling conditions.
Asked whether the RBI has formally responded to the Ministry that new licences could not be issued without the Bill being passed, Chidambaram said: “well, I don’t know if a formal reply has been received to the letter that we sent 10 days ago. I don’t know what their formal position is.”
Asked whether he is confident of getting the Act passed in the ongoing winter session of Parliament, the Minister replied in the affirmative. “I am pretty confident that the Banking Regulation Act will be passed as early as possible,” Chidambaram said.
“Even if the RBI picks up the thread and resumes the process that was started about a year ago of finalising the guidelines and issuing the first licence, that is going to take six to eight months and the occasion to invoke these extraordinary powers will not come the next day,” he said.
“The occasion to invoke these extraordinary powers will come only when that bank does something wrong. And that is not going to happen one day after the licence is granted.
“Therefore, by the time the occasion arises, the powers will be there in the Banking Regulation Act. So as stated by the then Finance Minister’s Budget speech, we must take the process of finalising the guidelines and receiving applications for new bank licences as early as possible,” Chidambaram said.
The RBI is seeking powers to supersede the board of an erring bank, to authorise the acquisition of shares beyond five per cent in a bank holding company, and an exit policy in case of irregularities.
Norms for new licences
On November 15, Chidambaram said he had asked RBI to finalise the guidelines for new licences and start accepting applications for the same pending passage of the Banking Regulations Bill.
The last time the RBI allowed new private banks was in 2002 prior to which it allowed new players in 1991-92.
The RBI issued the final guidelines for new banks in August 2011, including those floated by corporates, but is waiting for the necessary legal powers before it proceeds further. The bank licences were initially slated to be issued way bank in 2008-09.
However, the Finance Ministry wants the RBI to speed up the process, under provisions of the Companies Act, without waiting for amendments to the existing banking laws, in its effort to create a positive sentiment among investors and the industry.
The amendments to the Banking Regulations Act will invest the RBI with supervisory powers over private companies that would enter the banking sector.
BJP sources said Chidambaram had requested the opposition's assistance for Banking Laws (Amendment) Bill, Insurance Laws (Amendment) Bill, Pension Fund Regulatory and Development Authority Bill, Prevention of Money Laundering (Amendment) Bill and Securitization (Amendment) Bill.Times of India reports.
The meeting took place a day after Swaraj and Jatiley, along with party veteran L K Advani, disregarded Prime Minister Manmohan Singh's invocation of national interest to stick to their insistence that the debate in Parliament over government's contentious FDI decision should happen only under a rule which allows for voting. "Punish the government, but don't punish the country," the PM is learnt to have told his guests as he worked on them to drop their demand for voting on the FDI decision.
The government is opposed to the demand because it can cause discomfiture to partners and outside supporters like DMK, SP and BSP. The three parties, critical for the government's survival, have opposed the decision to let in global supermarket chains but don't want to yank the rug from under Congress's feet yet.
The political trapeze may get difficult if Parliament debates the FDI measure under a voting clause: a situation in which they will be under compulsion to translate their professed opposition into a vote against the decision.
Government managers have successfully negotiated such situations in the past, and the prospect of success in persuading SP and BSP is rated high even by political opponents. Government managers, exasperated with dealing with SP and BSP, known for their bare knuckle negotiating tactics, would like to avoid ceding any leverage to the UP outfits; even to the DMK.
BJP and Left are reconciled to being outmaneuvered in a parliamentary vote, but have kept up with their demand chiefly with a view to harass the UPA by sharpening the contradictions within its own fold over the FDI decision. Although it is unlikely to persist with its stand at the cost of causing the washout of yet another session of Parliament, party managers are happy at the prospect of getting another opportunity to force a headcount over FDI.
As it happens, government has to carry out Supreme Court's order to change Foreign Exchange Management Act guidelines in order to let global retail giants set up shop. The process will require the government to take Parliament's consent through statutory resolutions; in other words, another chance for the BJP to seek to torment the government by challenging its partners to live up to their stated opposition to FDI in retail.
Chairman of State Bank of IndiaBSE -0.47 % said that the bank's approach towards merger and acquisition will be limited to its associate banks and it has no immediate plans to cut lending rates now. Economic Times reports.
Speaking at the sideline of the sideline of the Bankers' Conference organised by Bank of MaharashtraBSE -1.27 % in Pune, Pratip Chaudhuri said that the bank already merged two of its bank with SBIBSE -0.47 % in the past and will take call on other associate banks later.
SBI had seven associate banks with majority stake. Of this, it had merged two of its associate banks -State Bank of Indore and State Bank of Saurashtra-with itself. His response follows comment made by finance minister,, P Chidambaram today on need to the have large banks adding that consolidation is inevitable.
With regards to base rate, he said that the bank's Alco has decided against lowering rates immediately, since their rate at the9.75% is the lowest in the country.
On credit growth he said that the demand for corporate continues to be poor even in the first two months of the third quarter. "Retail is still driving growth. We are seeing 30% growth in retail loans," he said at the sideline of the conference..
He further said, "Around 25% of the growth in the retail home loan growth is due to migration of customers from other banks and home loan companies with remaining 75% is fresh customers."
On capital infusion he said that bank has asked for Rs 4000 crore and government has said that it would keep SBI well capitalised. He said that the bank would prefer a rights issue since it would give small investors opportunity participate the issue.
On Kingfisher Airlines, he said that the banks has yet not heard about any fresh capital infusion from the promoter yet and the lenders will be meeting next week on this. SBI has an exposure of rs 1400 crore to Kingfisher AirlinesBSE 1.86 % whose flying license has been suspended.
SBI to meet FinMin next week on rights issue: Pratip Chaudhuri
PUNE: State Bank of India BSE -0.47 % will hold discussion with the Finance Ministry next week on the much-delayed rights issues plan of the bank, its Chairman Pratip Chaudhuri said today.
"We will have a consultation with the Finance Ministry officials next week on the rights issue because they have to give their share in the rights issue," Chaudhuri told reporters on the sidelines of the two-day annual banking summit Bancon 2012 here today.
The chairman, however, did not detail the size of the issue. Last year, it was planning to launch an over Rs 20,000 crore issue.
State Bank has been waiting for a go-ahead from the government, which owns 58.7 per cent in the bank, for an over Rs 20,000 crore rights issue since the middle of FY11. The process was started during the term of the past chairman O P Bhatt.
The government has been delaying the rights issue as its own finances have been constrained for too long now as fiscal deficit had hit a 5.8 per cent of GDP last fiscal.
While denying permission to launch a rights issue last year, the government had infused over Rs 7,800 crore into the bank.
Last week, the Finance Ministry had said that it may allow its banks to raise funds through qualified institutional placement.
Banks need capital to maintain their solvency ratio apart from driving business and SBI's core capital has been dipping driven down by rising bad loans and the resultant provisions.
At the end of the September quarter, SBI had capital adequacy ratio of 12.63 per cent with tier-I capital at 8.97 per cent. The RBI mandated requirement is 8 per cent.
"If we include the profits, the tier-I capital will go above 10 per cent by the end of this fiscal and above 11 per cent if the government infuses some funds," Chaudhuri had said on the earnings day.
Despite reporting a robust 30 per cent rise in net profit to Rs 3,658 crore in the September quarter as it set aside lower amount for provisions, though its bad assets soared to 5.15 per cent of its gross advances and 2.44 per cent to net advances.
In absolute terms, the gross non-performing assets rose to Rs 49,202.46 crore, while net NPA rose to Rs 22,614 crore. The net NPA addition stood at Rs 13,200 crore against Rs 11,400 crore a year ago.
But the bank made 37 per cent less provisions for NAPs at Rs 1,837 crore compared to Rs 2,921 crore reported in the same period last fiscal, as the bank has made higher provisions in the previous quarter.
Betting On Divestment
Hind Copper disinvestment success gives govt hope of achieving Rs 30,000 cr selloff target and reining in fiscal deficit
http://www.businessworld.in/en/storypage/-/bw/betting-on-divestment/649690.30752/page/0
The government's ambitious Rs 30,000-crore disinvestment programme got a boost on 23 November as the 5.6 per cent stake sale in Hindustan Copper was a resounding success. The Rs 810 crore raised by the government kickstarted the disinvestment process, crucial for reining in a ballooning fiscal deficit target. However, state-run Life Insurance Corp of India and State Bank of India were among the bigger buyers of shares, indicating muted interest from private sector investors.
Encouraged by the success of Hindustan Copper disinvestment, finance minister P Chidambaram appeared confident that the government would be able to meet the Budget target of raising Rs 30,000 crore from stake sale in public sector undertaking during the current fiscal.
"I am happy that issue has been fully subscribed. This is the resumption of the disinvestment process and we will go forward with the disinvestment processes as approved by the CCEA between now and March," Chidambaram told reporters in New Delhi.
"...I hope that we can collect the targeted Rs 30,000 crore," he added.
The bids received were for more than 51.6 million shares or 5.6 per cent shareholding, that were put on offer in the first tranche. The shares were offered at Rs 155 apiece, a 41 per cent discount to 22 November's closing price of HCL on the BSE.
The government offered 37.01 million shares, or 4 per cent of the company, but had the option to sell a further 51.71 million. The government is likely to exercise the overallotment option and allocate all shares for which it received bids, two sources with direct knowledge of the matter said.
HCL shares closed at Rs 213.05, down 20 per cent from its last close on BSE.
Actual bids may be even higher as stock exchanges are yet to complete the compilation of data of all the bids that were received since the opening of the process at 0915 hours this morning. It closed at 1430 hrs.
HCL had kept 25 per cent of the issue reserved for mutual funds and insurance companies.
"No single bidder other than mutual funds and insurance companies shall be allocated more than 25 per cent of the size of the sale," the company added.
The share sale took place on a separate window of the stock exchanges -- BSE and NSE.
The government is banking heavily on disinvestment programme to rein in its fiscal deficit. It had revised the target to 5.3 per cent of the GDP. Global rating agencies have threatened to downgrade India's sovereign credit rating to junk if it fails to rein in its deficit, which is ballooning because of higher spending on food, fuel and fertiliser subsidies and poor tax receipts.
Just last month, Finance Minister P. Chidambaram raised the fiscal deficit target to 5.3 per cent of GDP for the current financial year to end-March 2013 from a previous target of 5.1 per cent.
In fact, pushing forward its disinvestment agenda, the government on 22 November approved sale of its 9.5 per cent stake in the country's largest power producer NTPC that could fetch as much as Rs 13,000 crore.
The government has decided to disinvest minority stake in Rashtriya Ispat Nigam Ltd, Hindustan Aeronautics Ltd, Bharat Heavy Electricals Ltd and Steel Authority of India Ltd.
Besides, stake sale in Hindustan Copper Ltd, MMTC Ltd, National Aluminium Company Ltd Oil India Ltd, NTPC Ltd and NMDC Ltd would also take place by December 20.
The government managed to raise Rs 14,000 crore through share sales in the previous fiscal year, less than half its Rs 40,000 crore target.
Earlier this month, the government pushed back a decision to sell a stake in state-run National Aluminium Co, in a deal that could have raised about $270 million. Last month, state steelmaker Rashtriya Ispat Nigam Ltd shelved an IPO due to disagreement with bankers over pricing, sources with direct knowledge of the matter said.
LIC saves Hind Copper o
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