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What an indicator!2012 Nobel Peace Prize is awarded to the European Union!
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The European Union won the Nobel Peace Prize on Friday for promoting peace, democracy and human rights over six decades in an award seen as a morale boost as the bloc struggles to resolve its economic crisis.What an indicator!2012 Nobel Peace Prize is awarded to the European Union!The world's large economies such as the US, India, China and the Eurozone are showing signs of "tentative stabilisation" and an uptick in new orders, an HSBC survey has said.The European Union won the Nobel Peace Prize on Friday, a choice that celebrates Europe’s post-World War II economic and political integration but comes as the 27-nation body confronts widespread criticism over its handling of a massive debt crisis that is by far the biggest challenge of its existence.The award honored the struggle in Europe to not only hold the union together in the wake of the debt crisis, but also to deepen integration across a vast swath of the region stretching from the isles of Greece to the Scottish Highlands, from the ports of Portugal to northern Finland. But the choice, announced to audible gasps from a room of journalists in Oslo, comes as the E.U. has come under international fire for its bureaucratic and plodding handling of the crisis, as well as for foisting onto its heavily indebted members a crushing austerity that has crippled domestic economies and sparked social unrest in nations such as Greece and Spain.The Washington Post reports.The award served as a reminder that the EU had largely brought peace to a continent which tore itself apart in two world wars in which tens of millions died.The EU has transformed most of Europe "from a continent of wars to a continent of peace," Nobel Committee Chairman Thorbjoern Jagland said in announcing the award in Oslo.
At home,reform drive is pushed hard amidst civic human rights suspended in biometric digital citizenship regime,In the October 4 cabinet meeting, where 18 proposals were cleared, the PM ensured that discussions don't hold up other items listed for the day.Now, stung by scams and scandals, the PM launches scathing attack on frivolous use of RTI.The government showcases its hypocricy while talking on land reforms, right tofood security and right to education. Public welfare is not aconcern in the free market economy, but reforms have to covered up with government social activism which stands exposed with latest move by the prime minister. Voicing concern over frivolous and vexatious use of RTI Act, Prime Minister Manmohan Singh on Friday said the citizens' right to know should definitely be circumscribed if it encroaches on an individual's privacy. On the other hand,cautioning the Congress-led UPA government against making any 'hasty' announcements in the name of reforms, key ally DMK on Friday said decisions should be based on deep consultations and prospects."My opinion is that hasty decisions and announcements in the name of economic reforms should be avoided. They should be taken after deep consultations and keeping in mind the future prospects of the country," DMK president M Karunanidhi said.Responding to a set of questions in party organ "Murasoli," he cited lack of consensus among UPA ministers over the proposed National Investment Board (NIB) and said media opinions were also against it.The proposed NIB, touted as the next major economic reform by the Manmohan Singh government and backed by finance minister P Chidambaram, is expected to act as a catalyst for large projects, including roads, petroleum and mines.It has, however, come under flak from Union environment minister Jayanthi Natarajan and KC Deo holding the tribal affairs portfolio.Karunanidhi, whose DMK is the second largest UPA constituent with 18 Lok Sabha MPs, continued to voice concern against FDI.
Govt aims to divest stakes in Oil India Ltd, Hindustan Copper Ltd and National Aluminium Co Ltd by November.The Food Minister, KV Thomas today said his ministry will take a time-bound decision on the Rangarajan Panel's recommendations for sugar sector decontrol.The Rangarajan Committee today recommended deregulation of the sugar sector by giving freedom to mills to sell sugar in the open market. Hailing the recommendation by the Rangarajan Committee to decontrol the sugar industry, Indian Sugar Mills Association (ISMA) today said the suggestions if adopted by the Centre would help the industry in achieving faster growth and attracting investments.At the same time, the government on Thursday allowed an increase of Rs 50 per tonne in urea prices, although it maintained that the hike was not meant to lower subsidies but to move to a more efficient system. The increase will translate into the cost of a bag of urea going up by Rs 2.50, the chemicals and fertilizers department said in a statement, and will be used to provide incentives to retailers to acknowledge that they had received fertilizer from the company.The government has, however, opted not to increase urea prices immediately given the protests it may generate from political parties.The hike approved by the Cabinet Committee on Economic Affairs on Thursday came along with a decision to pay subsidy to fertilizer companies only after an acknowledgement was received from the retailers. This acknowledgement will be tracked through an electronic system to check leakages from the system.The new system is part of a shift towards rolling out a direct cash transfer mechanism for paying the subsidy directly to a farmer's bank account, which is seen to be more efficient. The current system where the payment is made to the fertilizer companies is seen to be prone to misuse and the new tracking mechanism is expected to help ensure that only "genuine sales" get subsidies.
Government aims to divest stakes in state-owned companies Oil IndiaBSE -0.11 % Ltd, Hindustan CopperBSE -1.25 % Ltd and National AluminiumBSE 0.30 % Co Ltd by November, the official in charge of the government's divestment programme said on Friday.One of the divestments could take place by the last week of October, Mohd. Haleem Khan, secretary at the department of divestment, said.New Delhi aims to raise 300 billion rupees ($5.5 billion) through share sales in state-run companies in the current fiscal year that ends next March, but has thus far drawn a blank as weak market conditions have deterred public issues or auctions.
Singh, once blamed by political rivals for the alleged policy paralysis, led the last cabinet meeting to take 18 decisions in just one-and-a-half hours. The cabinet committee on economic affairs (CCEA) approved five items in 30 minutes while the cabinet committee on infrastructure (CCI) decided three in 15. The cabinet, CCEA and CCI cleared 44 proposals after just three meetings.The cabinet committee on political affairs took barely 20 minutes to decide on the sensitive issue of reducing LPG and diesel subsidy. Insurance laws amendment was the 12th item on the list, while pension fund amendments, the company bill and forward contracts regulation bill were the 13th, 15th and 17th items respectively. “As a lot of ground work had already been done on these issues, the items were virtually cleared without major discussion,” a senior minister said.
Meanwhile,it shows that the industrial sector still remains weak. The headline inflation data and reform steps from the government will remain key to the monetary policy.Inflation data will likely shape up as the most important economic indicator ahead of the RBI's policy review on October 30.However, there is a strong possibility of the RBI cutting rates on 30 October. The finance minister has already given a heads up and the government has undertaken some constructive moves although meaningful quantitative and qualitative fiscal correction still remains on a wish list. But it is far better for the RBI to come clean by cutting rates rather than ease while hiding behind a faade. Just beause, showing signs of turnaround, industrial production grew by 2.7 per cent in August, reversing the trend of contraction witnessed during the previous two months.However, the overall factory output, as measured by the Index of Industrial Production (IIP), grew at a slower pace than 3.4 per cent recorded in August 2011.On sequential basis, IIP contracted by (-) 0.18 per cent in July and (-) 1.8 per cent in June.In any case, the RBI's walk does not follow its own hawkish talk. It has already undertaken stealth easing by improving liquidity conditions that have prompted banks to cut rates. It is probably the only central bank in the world worried about inflation but also undertaking actions that facilitate lower lending rates by banks. Unless the impediments to investment are removed, there is unlikely to be a significant turnaround in the near future. From the central bank's policy point of view, the headline inflation number remains crucial, and the factory output print coming a little higher than expected is not going to make a big difference.
Expressing disappointment over slow growth of the industrial production, India Inc today asked the Reserve Bank to cut interest rate at which the central bank lends to banks to help boost investments.
"The IIP figures are disappointing. What is of serious concern is the sharp drop in electricity production even as the manufacturing sector continues to stagnate due to faltering investments," CII Director General Chandrajit Banerjee said in a statement.
"There is a fine balance required to be maintained between the right to information and the right to privacy, which stems out of the fundamental right to life and liberty. The citizens' right to know should definitely be circumscribed if disclosure of information encroaches upon someone's personal privacy. But where to draw the line is a complicated question," he said.
Amidst differences within the government on setting up of National Investment Board (NIB), industry body Ficci today supported the proposal stating that such an institution will enable faster clearances of projects.
In a letter to Prime Minister Manmohan Singh, Ficci President R V Kanoria said it is possible to have NIB "without violating any existing Act or rule as the intention is to speed up the decision making process and not bypass any law".
Environment and Forrest Minister Jayanthi Natarajan on October 9 has written a letter to the Prime Minister, expressing very serious concern over the move and contending that it would benefit only large investors and not ordinary local people.
The proposal for setting up NIB was expected to be considered by the Union Cabinet on October 10 but it has been put off amid opposition from some sections of the government.
Kanoria said there is a need for an institution which has the ability to get things done in a time bound manner.
Citing CMIE figures, he said that projects worth Rs 1.8 lakh crore got shelved during April-August period primarily because of problems related to land acquisition, environmental clearances and lack of fuel and mineral linkages.
"Needless to mention that if these projects are implemented it would be self stimulating for economy's growth without any additional fiscal burden," he added.
Kanoria further said that different countries have adopted varied models for coordination and speedy execution and there have been many successful examples of such mechanisms.
"Countries like China, Malaysia and Germany have all developed very competitive manufacturing and infrastructure sectors, and the common thread in all these have been an effective implementation mechanism ensuring linkages within the different sectors of the economy," he said.
Addressing the seventh Convention of Central Information Commissioners, the Prime Minister said, "There are concerns about frivolous and vexatious use of the Act in demanding information disclosure of which cannot possibly serve any public purpose."
Singh said such queries besides serving little productive purpose are also a drain on the resources of public authorities, diverting precious man-hours that could be put to better use.
"Sometimes information covering a long time-span or a large number of cases is sought in an omnibus manner with the objective of discovering an inconsistency or mistake which can be criticised," he said. Touching upon the area of public-private partnerships, the Prime Minister said blanket extension of the RTI Act to such bodies may discourage private enterprises to enter in partnership with public sector whereas a blanket exclusion may harm accountability of public officials.
A panel set up by Prime Minister Manmohan Singh has suggested the deregulation of the Rs 80,000 crore sugar sector and recommended that mills be freed from the obligation of supplying subsidised sugar to the government for sale under the public distributio(PDS)n system .Finanacial Express reports.The committee, headed by Prime Minister's Economic Advisory Council chairman C Rangarajan, also pitched for freedom for mills to sell sugar, recommending the deregulation of the sector that has been stymied by tight government controls for decades now. The report has been submitted with the Prime Minister on Friday.
At present, mills are mandated to sell 10% of their output to the government for the PDS at cheaper rates that cover just around 70% of their cost of production. The government also fixes the quarterly quota of sugar that mills are required to sell in the open market, aimed at discouraging hoarding and keeping supplies steady.
If implemented, the scrapping of levy burden alone would leave an additional Rs 3,000 crore a year with the cash-starved sector, but it will also raise the Centre’s food subsidy burden correspondingly. "Levy amounts to a cross-subsidy between open market and PDS sugar and is not in the interest of the general consumer or the development of the sugar sector. Therefore, levy sugar may be dispensed with," the report said.
The panel has also mooted linking of sugarcane price to the rates of its byproducts and suggested 70% of the ex-mill prices of sugar and those of each of its three major by-products--bagasse, molasses and press mud--be fixed as the dues to be paid to farmers for cane supplies. Moreover, the benchmark price fixed by the Centre--called the fair and remunerative price (FRP)--be the minimum rate for cane purchases, it added.
"The actual payment for cane dues would happen in two steps. The first would be the payment of a floor price, based on the FRP as per extant mechanism. The rest of the payment of cane dues will be done subsequent to publication of half-yearly ex-mill prices, on the lines indicated," the report said. It has also suggested a liberal export and import policy on sugar.
The panel's recommendations follow other recent reform measures announced by the government, including raising the price of subsidised fuel to trim the fiscal deficit and opening up of the retail sector to foreign supermarkets. The country is the world's biggest sugar consumer and second-largest producer after Brazil.
"It's a very positive report. Industry welcomes it. If government accepts the report, sector will grow at a faster pace and there will be lot of investment at all levels including farmgate," ISMA Director General Abinash Verma said when asked about his comments on the report.
Verma said the decontrol of the sector would be in the interest of all stakeholders, including farmers, millers and consumers.
The industry has been for a long time demanding the government do away with the systems of regulated release mechanism and levy sugar obligations.
Under regulated release mechanism, the Centre fixes the quantity of sugar that mills can sell in the open market and ration shops. The levy sugar system, on the other hand, stipulates the mills to sell 10 per cent of their production to the government at below market price for ration shops.
"The sugar decontrol will lead to a stable and predictable environment," Verma said.
Industrial output during April-August, as per official data released today, was 0.4 per cent down from 5.6 per cent in the same period in 2011-12.
Manufacturing, which accounts for the bulk of industrial production, rose 2.9 per cent in August, lower than 3.9 per cent from a year ago. The growth for the April-August was flat, as against 6 per cent growth in the year-ago period.
Commenting on the data, PMEAC Chairman C Rangarajan said, "IIP numbers indicate there is some turnaround as far as manufacturing sector is concerned. I do expect in coming months the growth rate will further pick up and for year as a whole we can still see manufacturing growth at 3-4 per cent".
The IIP number, which has turned around in August, is also expected to respond to the slew on reforms initiatives taken by government recently.
"The IIP numbers have been very volatile and the lower base is resulting in these numbers being on the higher side.
The inflation is high and it would be difficult for RBI to cut interest rates," Kassa Group Director Siddharth Shankar said.
The RBI is scheduled to come out with the second quarter monetary policy review on October 30 and the September inflation numbers are scheduled on Monday. Wholesale Price Index-based inflation in August stood at 7.55 per cent.
As per today's data, retail inflation moderated to 9.73 per cent in September, from 10.03 per cent in August.
Reacting to the IIP numbers, the BSE Sensex declined about 70 points and was at 18,774 at 11.09 hrs. Later, it fell further and was down 141.37 points or 0.75 per cent.
Electricity output slumped to 1.9 per cent in August, from 9.5 per cent in the same month last year.
"Given the fact that electricity sector's growth is slowing down since April 2012, government should now ensure that it resolves the implementation issues like land acquisition, environmental clearances related to various infrastructure projects on urgent basis," Ficci said.
Capital goods output contracted by 1.7 per cent in August, as against 4 per cent growth in August, 2011. Mining output in August grew by 2 per cent as against contraction of 5.5 per cent in same month last year.
Consumer goods production was up 5 per cent in August as compared to a meagre growth of 2.1 per cent in same month last year.
Expressing disappointment over the IIP numbers, industry has demanded rate cut from the RBI to kickstart investments.
"While the recently announced reform measures have revived business confidence to some extent, what is required now is a commensurate action from the RBI with a cut in repo rate. This has become a necessity to kick-start the investment cycle," CII Director General Chandrajit Banerjee said.
The government has already said it is committed to take steps to revive the economy, even though ratings agency Standard & Poor's has threatened downgrading the country's rating to junk if reforms initiatives are not undertaken.
"24 months is a long time... You will see a lot of reform, a lot of change, a lot of strengthening of the Indian economy," Finance Minister P Chidambaram said yesterday.
India's economic growth had fallen to a nine-year low of 6.5 per cent in 2011-12. The International Monetary Fund (IMF) has projected the economy to grow by 4.9 per cent in 2012.
The wave of reforms measures introduced by the Indian government is starting to reverse negative perceptions that had built up due to actions such as the retrospective tax on Vodafone, InfosysBSE -5.36 % founder NR Narayana Murthy said on Thursday.Economic Times reports.
"The fact that we have seen a set of reforms has brought a lot of confidence to people. It's already bringing a change of perception of India outside India. I was out of the country for the last 20-odd days in UK, US, Brazil and France. Everywhere they did ask me about the fact that the government brought reforms. I do believe that if we keep this going we will bring in a change of perception about India," Murthy said.
The finance ministry is considering the recommendations of the Shome Panel, which has proposed deferment of tax-avoidance rules for three years and has also called for making the retrospective tax prospective.
Murthy stressed that the government should accept the panel's recommendations and scrap the amendment. "We will have to work on the rolling back of taxation on retrospective basis. That is a very important thing and has caused considerable consternation in the minds of foreigners that how could a country like India do this."
Murthy, the chairman emeritus of Infosys, has in the recent past been scathing in his remarks about the policy paralysis that has afflicted the second tenure of the Congress-led UPA government.
"The issue is, compared to the respect that we enjoy in the global arena, have we performed well? I meet many CEOs outside India and as against mention of India once for every time, China was mentioned three times about six-seven years ago. Today China is mentioned 30 times and India is not mentioned even once, so that in some way," he had said in an earlier interview with ET Now.
But on Thursday, Murthy said it would be cynical to assume that the government was only motivated by the desire to avert a sovereign downgrade. "We have to appreciative of the government but we have to show to the outside world that we believe in the execution of those policies, as much as we believed in the announcement of those policies."
In the few weeks, the government has tried to change that perception by introducing a blitzkrieg of reforms. This includes clearing the decks for foreign direct investment in sectors such as aviation and multi-brand retail and proposing legislation to raise the foreign investment limit in insurance and to modernise the Companies Bill.
When asked about other areas that needed government intervention and reform, Murthy said: "We have to also work on labour reforms and reforms in the area of education. We also have to work on consensus between states and centre and to create an environment that is business-friendly."