Economic Policy

Top Five Chit funds Of West Bengal

2013-04-28T17:39:00.001-07:00

Saradha chit fund scam: The top five among Bengal's flourishing financial grey market--Economic Times

The unravelling of Saradha has lifted the curtains on Bengal's flourishing financialgrey market where the plot is getting thicker by the day. Atmadip Ray, Anuradha Himatsingka & Sutanuka Ghoshal look at the top five among the cast.

Rose Valley Real Estate Construction

Gautam Kundu

Gautam Kundu, owner of the Rose Valley Group of companies, says he started life as an LIC agent years ago after losing almost his entire family in a car accident. Kundu used to run chit funds, but insists he does not anymore. But that is not what the Securities & Exchanges Board of India ( Sebi) thinks. It has repeatedly asked Kundu and many others to shut them down and stop taking new deposits. Even after Saradha's collapse, Kundu is unfazed. "We are asset driven," he told ET.

And when depositors queued up at his office immediately afterSaradha's collapse, Kundu instantly met the redemption pressure with a smile, signing off Rs 10 crore worth of cheques at a shot.

Among Rose Valley's many businesses, tourism figures prominently. Unlike Saradha, whose media businesses shut down when its promoter decamped, Kundu's media operations, he says, are doing fine.

Brand Value Communications, a group company, owns TV channels like News Time Bangla, News Time Assam, News Time Orissa, Rupasi Bangla, Dhoom Music and Dhoom Bangla. Rose Valley Patrika brings out a daily broadsheet called Khabar 365 Din and a film magazine Cinema Ebong.

Films are another passion and Rose Valley has produced a number of Bengali films. Kundu also bought into the IPL team Kolkata Knight Riders (KKR) for Seasons V and VI. His company's logo is now on their shirts. That makes it obligatory for Shah Rukh Khan, Gautam Gambhir and Brendon McCullum to shoot for Rose Valley ad films on Kundu's resorts. And then there is real estate. "We have been quietly acquiring land at attractive rates. We have some 5,000 acres across Bengal, Tripura, Assam, Maharashtra, Madhya Pradesh and Orissa," Kundu told ET.

Is he close to the Trinamool Congress? Of course, say sources. But then, Kundu is said to have been close to Opposition CPM as well as Tarun Gogoi's Congress administration in Assam.

Saradha Realty India Ltd

Sudipta Sen

After its dramatic collapse, the life of secretive Saradha chief Sudipta Sen has come into intense focus. In keeping with his low-key image, he drove a humble Tata Sumo. Sen used to conduct business late at night, with meetings that started at midnight or 1 AM. Saradha's senior executives, mostly young women, were compelled to stay back till 3 AM or later. Bangla media reports that Rs 30 crore has

been traced to two bank accounts in the name of Debjani Mukherjee, executive director of Saradha, who was with Sen when he was arrested in Sonamarg. Sen relished anonymity, refused to be photographed and got annoyed if asked about his past.

Among the many bizarre stories circulating about him is that he was forced to get his face reconstructed by plastic surgery after being mauled by attack dogs. Sen was born Shankaraditya Sen and got involved with the Naxalbari movement in the 1970s and was even jailed in 1971-72. In the late 1990s, he resurfaced as Sudipta Sen. With a new identity, Sen started as a real estate broker in the late 1990s in Kolkata. The money-circulating schemes began in the mid-2000s. This eventually morphed into nearly 100 companies, including his flagship Saradha Realty India, launched in 2008. Some of his other businesses were Saradha Properties, Saradha Biogas Production, Saradha Multipurpose Himghar, Saradha Livestock Breeding and Saradha Ad Agency.

Today, Sen is accused of duping lakhs of poor investors. He also being blamed for running a handful of newspapers in Bangla, English and Urdu as well as a clutch of TV channels to the ground and driving around 1,200 journalists and technicians out of their jobs. But his infatuation with media was naive: one journalist remembers him ordering that none of his papers should carry ads on the front page. If any advertisement had to go, it would have to be of his own companies.

Sen was a smooth talker, something that could have helped him build bridges with investors and politicians. Trinamool MP Shatabdi Roy was a brand ambassador, another MP, Kunal Ghosh, headed his media operations. Madan Mitra, a Bengal minister, headed his agents' association. Chief Minister Mamata Banerjee herself used to grace his functions.

MPS Greenery Developers

Pramatha Nath Manna

I am a farmer and I have hardly any time to give interviews. Contact me after a week or else talk to my media advisor Raja Banerjee," and the mobile connection snapped. That was Pramatha Nath Manna, CMD of MPS Group. Manna comes from a well-heeled rural family of east Midnapore, a stronghold of the Trinamool Congress. Sometime in 1990, Manna came in contact with agro-scientist GB Manna of Bidhanchandra Krishi Viswavidyalaya. He urged the MPS group chief to enter organic farming.

Around 1994, Manna bought around 500 acres in Jhargram to start farming ventures. MPS started producing organic fruits and vegetables, milk, anti-biotic free fish and chicken, eggs, mutton and different non-GMO farm products. Today MPS has 10 companies within its fold.

Around 1999, MPS got involved in a collective investment scheme (CIS) and applied for a licence in March, 2000. MPS claims that Sebi did not issue a licence, and the firm went to court. After a long, legal fight, it gave out a provisional licence.

"MPS group is mopping up funds under the CIS scheme according to a court order and the group has been regular in its payments. The CIS scheme is run by MPS Greenery Developers Ltd, the parent company of the group," said media advisor Raja Banerjee.

The 50-year old Manna's entry into the resorts business also has a history. Initially, a few cottages were built on the land in Jhargram, to house its employees. Later, Manna realised that tourists might like the place. Today MPS Resorts & Hotels can accomodate 300 people.

MPS now has offices in Mumbai, Bangalore, Guwahati and other locations in India. These offices have been bought by Manna. "He is a workaholic and never relaxes. If there is a bandh in Kolkata, he will fly to Bangalore a day before so that not a single day is lost," says Banerjee.

After the collapse of Saradha, MPS has scrambled to contain the fallout with large advertisements in Bangla papers. These claim an unaudited turnover in 2012-13 of `1,223 crore and a profit of `67 crore. It is supposed to have assets of `4,550 crore and a liability of `1,810 crore. Said Banerjee, "Our assets are 2.5 times our liabilities, so why should we worry?

i-Core E-Sevices

Anukul Maiti

In 2010, when Mercedes launched its SUVs in India, the first person to buy it was in Bengal: Anukul Maiti, chairman and managing director of iCore group.

Maiti chose an iridium silver Mercedes GL 350 CDI, shelling out a staggering Rs 72.66 lakh. But that wasn't his first set of luxury wheels. He would barrel down highways in a Toyota Land Cruiser Prado. Maiti also owns a top of the line BMW 7 series sedan, a Tata Safari, a Maruti Swift and a Tata Indigo.

Maiti's employees, most of who are agents for iCore's collective investment schemes, recall seeing him alight from expensive cars. But of the man himself, they have very little to say.

To track him down, as many of his depositors might want to do too, ET tried to reach him at his office, in central Kolkata's Rafi Ahmed Kidwai Road. We were rebuffed at the gate by security personnel.

"Nobody is here," said the guards. "Everyone has gone out for meetings. Please come on some other day."

When we wanted to meet the other directors of the company, Kanika Maiti, Radheshyam Giri, Chandan Dey or Swapan Roy, the guards said they were unavailable.

Maiti started his career selling fast moving consumer goods and financial products. In 2007, he started iCore with the financial support from his wife, family and friends.

In a remarkable burst of diversification, in six years he expanded into iron and steel, cement, housing finance, apparel, jewellery, retail, mobiles, paint and even toothpaste and toothbrush manufacturing. By 2012, Maiti had roped in celebrities like Jaya Prada, Mahima Chaudhry,Karishma Kapoor and sportsmen like Baichung Bhutia and Harbhajan Singh to endorse his brands. In October 2010, Maiti said at a press conference that iCore would make a public offer of equity to raise Rs 500 crore. This was after the great crash of 2009 and the market for IPOs was effectively dead. Unsurprisingly, iCore's offer could not hit the market. If he had been able to raise the money, iCore might have launched new FMCG products, apart from steel and cement-making.

Like most money raising companies, Maiti's iCore wanted to venture beyond Bengal: there were plans for cement grinding units in Tripura and Orissa.

Among the group companies are iCore E Services, iCore Gems & Jewellery, Durgapur Cement, Riju Cement, iCore Planet, iCore Iron and Steel, iCore Paints, iCore Housing Finance Corporation, iCore Apparel, Mega Mould India, iCore Super Cement among others.

Maiti was also the vice president of Mohun Bagan between 2008 and 2011. But now, after New Delhi asked the Serious Fraud Investigation Office (SFIO) to start a probe on iCore and other companies suspected of duping investors with money-pooling schemes, the flamboyant Maiti has disappeared from plain sight.

Outside the office, agents of iCore crowd around. "Maiti is answerable to us. We have to face angry depositors. Where is he hiding today?" asks an angry agent.

Sumangal Industries

Subrata Adhikary

Till recently, an ad on Bangla news channels exhorted people to invest their money with a potato marketing scheme. Returns would hinge on the profits from growing, selling and exporting the humble tuber.

The advertisements have disappeared after the collapse of Saradha, but unlike other money market operators,Subrata Adhikarycof Sumangal Industries, is still around, and defiant. "Why should I go away? I have not cheated anyone. My clients and customers are agitated after the Sebi order followed by the Saradha fiasco. They call me at odd hours questioning my activities and schemes," Adhikary told ET.

The Sebi order to stop taking deposits took Sumangal by surprise. "The order barred us from raising money from April 10, 2013. But we got it on April 13. Since we were hanged without being given a chance to argue our case, we decided to file a writ petition in the Calcutta High Court on April 17. I have a legitimate business and intend to grow it further in future," Adhikary said.

The man from Mogra in Hooghly district was always determined to start his own business, even when his savings were a meagre Rs 1 lakh. In 1999, he set up a unit to make car and inverter batteries at the backyard of his Mogra home. Thus was born Adhikary Electro Chemicals. Brothers Somnath and Lakshman joined him soon.

Adhikary wanted to expand his business, but lenders turned him down. Finally, a loan of Rs 18 lakh from the West Bengal Financial Corporation came forth. There was no looking back since then.

In 2010, Sumangal Industries was incorporated to operate as a multi level marketing company. Funds collected were to be invested in existing as well as future projects. Today, Sumangal claims it is a conglomerate of 14 companies dealing with battery, potato, export-import, education, hotel, tourism and healthcare. Its turnover is pegged at Rs 50 crore. Sumangal employs 250 people in 3,300 square feet of office area. The company website gives an insight into its activities. "We have nothing to hide," Adhikary told ET.

http://economictimes.indiatimes.com/news/politics-and-nation/saradha-chit-fund-scam-the-top-five-among-bengals-flourishing-financial-grey-market/articleshow/19773013.cms

Higher Tax Rate for Super Rich Is the Only Remedy, Not Lowering Of Interest Rate To Handle Current Fiscal Crisis

2013-01-03T19:39:00.003-08:00

Government will have to impose higher tax rate on Super Rich class of people who have accumulated huge wealth by exploiting poor and middle class families of the country.

Government will have to increase investment in productive projects and decrease spending on consumption. GOI will have to increase investment to increase real employment opportunities and stop voter friendly policies like MANREGA or Food for Scheme or Mid day meal or distributing gifts to voters on the eve of election.

Government will have to stop focusing on low interest regime which helps only Corporate sector and that to undesirable extent. Due to low interest rate, poor and middle class families do not want to keep their idle money in banks but prefer investing in Gold. Due to poor rate of interest available on deposits made in banks , rate of growth in house hold savings comes down and investment capacity of the government and the bank to invest in productive projects or lend for manufacturing or farm sector is adversely affected .

NOT only this, tendency of poor and middle class as also that of rich and super rich class to invest more in gold unnecessarily inflates demand of Gold and also give rise to unwarranted rise in import of gold. More and more investment in Gold not only affects bank's deposit base but also causes deficit trade balance and inflates current account deficit of the country.

Further rise in prices of land is caused by enhanced investment in land by common men as also by rich men instead of keeping money in banks. This give rise to rise in price of land, houses and ready made flats which again affects the purchasing capacity of common men. To add fuel to fire, Government has given all tax concessions to real estate builders to boost up demand of houses and thus helped builders to increase the prices of flats to undesirable and unreasonably higher extent.

As such it is necessary for GOI to revisit the policy of reformation, withdraw stimulus packages allowed in the name of global recession in the year 2008 and 2009 and make all economic policies friendly to common men and at the same time giving all encouragement to those who are real businessmen, who believes in regulated and reasonable price and who do not exploit common men only because they enjoy monopoly of business.

GOI will have to force super rich to contribute more and more for poor and common men and to contribute in social welfare scheme. At the same time politicians will have to stop exploiting corporate , rich and super rich class in the name of election and at the same time gear up administrative machinery to clear the pending projects in shortest time frame.

GOI will have to adopt Uniform Interest Rate regime as was prevalent before launch of reformation era in the year 1991.Unwarranted competition in interest rate structures among 28 nationalized banks which are daughters of the same government must be stopped in the interest of the bank and the country as a whole.

Transfer of business from one bank to other results in profit to one strong bank and loss to some other weak bank . After all they all banks are organs of the country and they should be dictated and governed by same set of policies.

Unwarranted war on interest rate among government banks results in loss of some banks and profit to other banks and ultimately affects the income of investors and depositors of some bank or the other. Focus of bank is centered on earning profit by competing in interest rate and not on increasing quality of their asset base and quality of theri service standards which are prime requirement for the growth of the country.

4 JAN, 2013, 06.43AM IST, DEEPSHIKHA SIKARWAR & T K ARUN,ET BUREAU

Tax the super-rich at a higher rate: C Rangarajan, PMEAC chairman

NEW DELHI: C Rangarajan, a key economic advisor to Prime Minister Manmohan Singh, has said the government could consider imposing a marginal taxrate higher than the current 30% on those with "substantially higher income", becoming the first Indian policymaker to contemplate higher taxes after the US raised taxes on the wealthy for the first time in two decades.

"We must debate unconventional ideas. Fiscal deficitcannot be contained by curbing expenditure alone; we must raise revenue as well. We have to think of not just administering existing taxes better, but also of new ones. Why can't we think of having a rate of tax higher than the current peak of 30% on substantially higher incomes?" Rangarajan told ET in an interview.

The veteran economist, a former RBI governor, also called for rethinking the current policy under which dividends were tax-free in the hands of investors, though companies pay a dividend distribution tax of 16%. In the conversation with this paper, Rangarajan questioned the logic of taxing dividends at a rate lower than the top marginal tax rate.

But these leaps of taxing innovation, he cautioned, will have to wait till sentiment has revived and the economy has resumed its growth momentum. "I am not saying that we should rush in as sentiment is just now picking up, and we should not create a situation where what we have gained is lost. But at the same time, we need to look at the various possibilities of raising revenues," he said.

India taxes income at three rates - 10%, 20% and 30% - though the actual top rate is higher, at around 33%, due to various surcharges. These rates were fixed in 1997 by Finance Minister P Chidambaram, who held the portfolio at the time.

At a lecture to honour Raja Chelliah, a function presided over by Rangarajan, Chidambaram called for a debate on inheritance tax.

Earlier this week, the US Congress voted for raising taxes on rich Americans, as part of the resolution of the crisis over the so-called fiscal cliff. The US legislation raises taxes on individuals earning more than $400,000 per year, and on couples earning more than $450,000.

http://economictimes.indiatimes.com/news/economy/policy/tax-the-super-rich-at-a-higher-rate-c-rangarajan-pmeac-chairman/articleshow/17878163.cms

Is FDI Only Solution to India's Fiscal Problems? What Caused Fiscal Problems?

2012-10-05T19:14:00.002-07:00

देसी दौलत लूटेंगे विदेशी

।।अतुल कुमार अंजान।।
(लेखक भाकपा नेता हैं) ( collected from Hindi daily newspaper 'Prabhat Khabar' 6th Oct. 2012)
यूपीए -2 सरकार सत्ता में आने के बाद से ही अपने पहले दौर के आर्थिक सुधारों को समय-समय पर लागू करती एवं आगे बढ़ाती रही है. अपनी हर नयी नीति को वह जनपक्षीय बताती रही है. साथ ही यह गारंटी भी देती रही है कि यह आमजन के हित में होगा, मुद्रास्फीति को कम करने के साथ-साथ महंगाई पर भी लगाम लगायेगा.

लोकलुभावन वादे के तहत यह भी कहा जाता रहा है कि इस विकास की छलांग लंबी होगी और युवाओं के लिए रोजगार के नये व असीमित साधन सामने आयेंगे. लेकिन यूपीए-1 और यूपीए-2 सरकार के समूचे कार्यकाल में रोजगार के अवसर बढ़े हैं या घटे हैं? आकलन करने पर पता चलता है कि संगठित व असंगठित, दोनों ही क्षेत्रों में आर्थिक सुधारों के नाम पर जो नीतियां लागू की गयीं, उससे काम पर लगे लाखों लोगों को बाहर का ही रास्ता दिखाया गया.

नवउदारवादी आर्थिक नीतियों के चलते साढ़े तीन लाख से ज्यादा छोट-मंझोले उद्योग बंद हो गये हैं. दिल्ली से कोलकाता जाते वक्त रेल की पटरियों के दोनों ओर पहले जिन चिमनियों से धुआं निकलता दिखता था, अब वहां की राख ठंडी हो गयी है. अर्थव्यवस्था में तथाकथित उछाल और 8 फीसदी विकास दर के बाद भी देश में भूखे सोने वालों की तादाद क्या कम हुई है? आखिर क्या कारण है कि 8 फीसदी विकास दर हासिल करने के बाद भी दुनिया के आधे भूखे भारत में हैं और ये बिना खाये सोने को मजबूर हैं. आधे भूखे लोग दुनिया के 204 देशों में सोते हैं. खून की कमी की शिकार दुनिया की 43 फीसदी महिलाएं भारत में ही हैं. संयुक्त राष्ट्र की रिपोर्ट के अनुसार दुनिया के कुपोषित बच्चों का 45 फीसदी से अधिक हिस्सा भारत में है. जिन देशों की विकास दर दो फीसदी है, वहां की आधी आबादी भूखी और कुपोषित बच्चों की विशालतम संख्या लिये नहीं है. यहीं मूल प्रश्न उठता है कि यह विकास किसका और किसके लिए है?

डॉ मनमोहन सिंह की आर्थिक नीतियों से देश के 12 करोड़ अभिजात्य वर्ग के लोग थोड़ा-बहुत आनंद उठा रहे हैं. उनके लिए महंगाई मुख्य समस्या नहीं है. प्रधानमंत्री 17 बार देश को आश्वासन दे चुके हैं कि सरकार महंगाई रोकेगी. विगत 15 अगस्त को लालकिले से प्रधानमंत्री ने कहा था कि कुछ ही दिनों में महंगाई रुक जायेगी. लेकिन एक महीने बाद ही महंगाई को नयी बुलंदी पर पहुंचा दिया गया. डीजल के दाम पांच रुपये लीटर बढ़ने और एलपीजी गैस पर से सब्सिडी वापस लेने से खानपान की दैनिक आवश्यकताओं की कीमत 15-20 फीसदी बढ़ गयी है. राजधानी दिल्ली में पिछले एक हफ्ते में आलू 15 रुपये प्रतिकिलो से बढ़ कर 28 रुपये पर पहुंच गया है. प्रधानमंत्री मनमोहन सिंह के दावों का क्या हुआ?

विदेशी कंपनियां बीमा क्षेत्र व पेंशन की दौलत को लूट ले जायेंगी. लेकिन यह कहा जा रहा है कि इससे रोजगार के नये अवसर पैदा होंगे. अभी बीमा क्षेत्र से अजिर्त धन भारत की विकास योजनाओं में लगता है. सार्वजनिक क्षेत्र की बीमा कंपनियां धन संग्रह कर उसे योजना आयोग को देती हैं, जिसे ग्रामीण व बुनियादी विकास की योजनाओं पर खर्च किया जाता है. अकेले स्वच्छ जल की व्यवस्था के लिए गांवों-शहरों में ऊंची-ऊंची टंकियों के निर्माण में 80 फीसदी धन एलआइसी का लगा हुआ है. विदेशी बीमा कंपनी व विनिवेश से आया धन देश को शुद्ध पानी पिलायेगा या अपना मुनाफा कामयेगा? इस सीधे प्रश्न का जवाब अर्थव्यवस्था के लंपटीकरण के लिए जिम्मेवार सोनिया गांधी और मनमोहन सिंह को देना ही चाहिए.

जिंदगीभर नौकरी कर पैसा बचा कर अपनी बेटी की शादी करने या रहने के लिए मकान बनाने या वृद्धावस्था में आर्थिक सहारे को सुनिश्चित करने के लिए जिंदगी भर अपनी आवश्यकताओं को काट-काट कर पेंशन राशि जोड़ने वाले पेंशनधारकों के पैसे को विदेशी कंपनियों को देने का अधिकार मनमोहन व सोनिया को कैसे प्राप्त हो गया? पेंशनधारकों का पैसा शेयर बाजार, जुआघर में विदेशी कंपनियों द्वारा लगाये जाने के बाद हुए नुकसान की जिम्मेवारी क्या सरकार लेगी? क्या सौ रुपये की पेंशन की राशि पर प्रति वर्ष 115 रुपये देने का वादी मनमोहन सिंह की यूपीए सरकार करेगी? इस गरीब देश में परदेशी दौलत को देशी दौलत लूटने का अधिकार यूपीए सरकार क्यों देना चाहती है? दावे हो रहे हैं कि इससे देश विकसित हो जायेगा, पर जब प्रधानमंत्री सात साल में महंगाई को रोक नहीं सके, तो अब उन पर कैसे भरोसा किया जाये? अब तो
यही कहेंगे-
बड़ी-बड़ी बातों के चक्कर में छोटी भी गयी.
पतलून की चाहत में लंगोटी भी गयी.

http://www.prabhatkhabar.com/node/215130

सुधार के ये कदम काफी नहीं

।।प्रो अरविंद मोहन।।
(लेखक अर्थशास्त्री हैं)
मौजूदा यूपीए सरकार राजनीतिक दलों के विरोध को दरकिनार कर जिस प्रकार आर्थिक सुधार के फैसले ले रही है, उससे साफ जाहिर होता है कि अब सरकार के पास आर्थिक विकास दर को आगे बढ़ाने के दूसरे विकल्प नहीं रह गये है. लेकिन महत्वपूर्ण सवाल यह है कि क्या इन फैसलों से अर्थव्यवस्था पटरी पर लौट आयेगी? जवाब है, फिलहाल ऐसा नहीं लगता. अगर ये फैसले दो साल पहले लिये गये होते, तो आज अर्थव्यवस्था की स्थिति ऐसी नहीं होती. मसलन, विमानन क्षेत्र में अगर सरकार पहले ही विदेशी पूंजी की इजाजत दे देती, तो आज इस क्षेत्र की स्थिति खराब नहीं होती. अब अत्यंत खराब माली हालत वाली विमानन कंपनियों में शायद ही कोई विदेशी निवेशक निवेश करना चाहेगा.

सरकार की गलत नीतियों के कारण जब अर्थव्यवस्था की बुनियाद ही कमजोर हो जाये, तो केवल विदेशी पूंजी के सहारे इसे दुरुस्त नहीं किया जा सकता है. देश की आर्थिक स्थिति सुधारने के लिए बड़े पैमाने पर सुधार करने की जरूरत है. राजस्व और मौद्रिक नीति को सख्त बनाना जरूरी है. पिछले कुछ वर्षो से भ्रष्टाचार के मामले लगातार सामने आने के कारण सरकार नीतिगत फैसले लेने में शिथिल पड़ गयी थी. इन्फ्रास्ट्रक्चर की कई योजनाएं पूंजी के अभाव में लटक गयीं. बिजली, सड़क, बंदरगाह के विकास थम से गये. भ्रष्टाचार बढ़ने और नीतिगत स्तर पर ठहराव के कारण घरेलू और विदेशी निवेशकों का भरोसा कम होने लगा. हालात ऐसे हो गये कि वैश्विक स्तर पर खराब आर्थिक स्थिति के बावजूद विदेशी निवेशक भारतीय बाजार से पैसा निकालने लगे, जबकि भारत का बाजार इतना बड़ा है कि यहां मंदी के दौरान भी काफी संभावना थी. इस तरह जब सरकार के सामने आर्थिक और राजनीतिक मोर्चे पर विकल्प सीमित हो गये, तो उसने अपनी छवि बेहतर करने के लिए कड़े फैसले लेने का निर्णय किया.

इन फैसलों के कारण राजनीतिक भी हैं और आर्थिक भी. फैसलों के राजनीतिक होने का अंदाजा प्रधानमंत्री के उस बयान से लगाया जा सकता है, जिसमें उन्होंने कहा कि वे लड़ते हुए जाना पसंद करेंगे. अगर प्रधानमंत्री को लड़ते हुए ही जाना था, तो ऐसे फैसले पहले ही ले लेने से उन्हें किसने रोका था? आर्थिक मोर्चे पर लगातार खराब होते हालात के बाद पहले रिटेल में और अब बीमा और पेंशन क्षेत्र में एफडीआइ की सीमा को बढ़ाने का फैसला कर सरकार ने संदेश देने की कोशिश की है कि वह आर्थिक सुधार के नये उपायों को लागू करने से अब पीछे नहीं हटने वाली है. यह वही सरकार है, जो अपने सहयोगियों के विरोध को देखते हुए ऐसे फैसले पर आगे नहीं बढ़ पा रही थी. विरोध खास कर बीमा, रिटेल और पेंशन में एफडीआइ को लेकर था, लेकिन विकास योजनाओं को आगे बढ़ाने से किसी राजनीतिक दल को ऐतराज नहीं था.

अर्थव्यवस्था के पटरी से उतरने का कारण है भ्रष्टाचार के मामलों का उजागर होना, नीतिगत स्तर अनिर्णय की स्थिति और सरकार के खर्चो में बेतहाशा वृद्धि. इसी बीच वैश्विक आर्थिक मंदी का असर गहराया, जिसने भारतीय अर्थव्यवस्था को भी अपनी चपेट में ले लिया. आर्थिक विकास की दर गिरने से मनमोहन सिंह के आर्थिक प्रबंधन और छवि पर प्रतिकूल असर पड़ रहा था. मध्यवर्ग पहले ही महंगाई के कारण यूपीए सरकार से नाखुश है. इस बीच विकास दर गिरने के साथ नौकरियों के सीमित होने के कारण मध्यवर्ग के सपनों पर चोट पहुंचने लगी. 2009 के आम चुनावों में कांग्रेस को मध्यवर्ग का बड़ा समर्थन हासिल हुआ था. ऐसे में मध्यवर्ग के बढ़ते असंतोष को कम करने के लिए मनमोहन सिंह और कांग्रेस के सामने आर्थिक सुधार को आगे बढ़ाने के अलावा कोई विकल्प नहीं बचा था.

2009 के आम चुनाव में यूपीए को जैसा जनादेश मिला था, उससे उम्मीद थी कि सरकार यूपीए-1 की गलतियों से सबक लेते हुए सभी मोर्चो पर बेहतर प्रदर्शन करेगी और नीतियों के क्रियान्वयन में तेजी आयेगी. लेकिन बीते तीन वर्षो में नीतियों के स्तर पर सरकार दिशाहीन व असहाय दिखी. समय के साथ यह स्थिति और भी खराब होती गयी. यूपीए सरकार की दूसरी पारी का आर्थिक और राजनीतिक, दोनों स्तरों पर प्रदर्शन निराशाजनक रहा है. मनमोहन सिंह को देश में आर्थिक सुधार करने का श्रेय दिया जाता है. उनकी सरकार को दूसरी बार मिले जनादेश में वामदलों के समर्थन की जरूरत नहीं रह गयी, जो आर्थिक सुधारों को आगे बढ़ाने के कई कदमों का विरोध कर रहे थे. लेकिन यूपीए-2 सरकार का प्रदर्शन पहले से भी खराब हो गया.

दूसरे कार्यकाल में यूपीए सरकार के आर्थिक कुप्रबंधन के कारण अर्थव्यवस्था की स्थिति बिगड़ गयी और विकास दर को दोहरे अंक में ले जाने का सपना कहीं गुम हो गया. आर्थिक स्तर पर सरकार की दिशाहीनता के कारण गवर्नेस प्रभावित हुआ. जब हालात हाथ से निकलने लगे तो सरकार ने मजबूरी में आर्थिक सुधार के फैसले लेने में तेजी दिखायी.

जिस प्रकार 1991 में आर्थिक हालात खराब होने के बाद मजबूरी में आर्थिक सुधार की नीतियां लागू की गयीं, उसी प्रकार मौजूदा फैसला भी मजबूरी का परिणाम है. इन फैसलों पर अमल कितना आगे बढ़ पायेगा, यह गुजरात और हिमाचल प्रदेश में इसी साल हो रहे विधानसभा चुनावों के नतीजों से तय होगा. इन्हीं नतीजों से यूपीए सरकार के कार्यकाल का निर्धारण भी होगा. रिटेल की तरह बीमा और पेंशन क्षेत्र में एफडीआइ की सीमा बढ़ाये जाने का विरोध भाजपा शायद नहीं करेगी, क्योंकि भाजपा के नेतृत्व वाली एनडीए सरकार ने ही इन क्षेत्रों में 26 फीसदी एफडीआइ की इजाजत दी थी. भाजपा सुधार विरोधी पार्टी के तौर पर नहीं दिखना चाहेगी, क्योंकि पार्टी ऐसा करेगी तो मध्यवर्ग के बड़े तबके का समर्थन खो सकती है. भारत में बीमा और पेंशन के क्षेत्र में विस्तार की काफी संभावनाएं हैं. विदेशी पूंजी निवेश की सीमा बढ़ाने से इस क्षेत्र में बड़े पैमाने पर पूंजी निवेश होगा और लोगों के लिए रोजगार के नये अवसर सामने आयेंगे. निवेशकों में भारतीय बाजार के प्रति भरोसा बढ़ेगा.

लेकिन केवल विदेशी पूंजी निवेश से ही आर्थिक हालात नहीं सुधरेंगे. हालात बदलने के लिए संस्थागत खामियों को दूर करना होगा, गवर्नेस को पारदर्शी बनाना होगा. बीमा और पेंशन में एफडीआइ की सीमा बढ़ाने के अलावा सरकार को इन्फ्रास्ट्रक्चर योजनाओं पर तेजी से अमल करना होगा. इससे दूसरे क्षेत्रों में भी रौनक लौटेगी, जो अर्थव्यवस्था की सेहत के लिए फायदेमंद होगा.

http://www.prabhatkhabar.com/node/215131?page=show

Manmohan Style Reformation

New definition of REFORMATION as advocated and propagated by learned Prime Minister Mr. Manmohan Singh, learned Finance Minister Mr. Chidambram and their followers in RBI and in government is nothing but inviting foreigners to save Indian economy. Since 1991 learned economists of this country like Manmohan Singh could not solve the issue of financial crisis said to be created by Pre-1990 governments are now depending on foreigners to solve the same financial crisis aggravated by so called reformists during last two decades.

It is ironical that responsibility of treatment and rejuvenation of Indian sick economy has been given to those foreigners who have completely damaged the economic health of their own countries. Foreign destructors have become protectors of Indian economy in the eyes of Indian reformists. USA and European countries are themselves in acute financial crisis but they are good in the eyes of Indian politicians. Reformation in its new Awtar is nothing but foreign investment in India and giving all freedom to corporate houses and imposing all restrictions on Indian common men.Now India has to accept FDI oriented Indian economy as desired by Manmohan singh led UPA government.

Students who have chosen the Economic, political science, human science or social welfare or public administration or financial management as prime subject, they should know the new meaning of reformation propagated by Manmohan Singh led UPA government. Students should take class from Manmohan Singh to learn more about reformation and understand the greater dimension of reformation as defined by economist Manmohan Singh. Students should read the newspaper ‘Economic Times’ daily to read their definition of Reformation. Reformation means growth of capitalism and giving keys of all treasuries to corporate houses and foreigners.

Click on following link to read more

http://jaindanendra.blogspot.in/2012/10/manmohan-style-reformation.html

Total Wealth of Top 100 Rich people

2012-10-03T18:15:00.002-07:00

Forbes list of Indian billionaires is based on an annual assessment of wealth and assets compiled and published by Forbes magazine on March 2012.

India currently has 48 "US dollar billionaires" after United States, China and Russia whose (individuals with a total net worth of one billion dollars and above), accounts for roughly 4.5% of the global total of 1,226 billionaires across the six continents.

One billion dollars means roughly 50 billion rupees and that means 5000 crore rupees.

Total wealth of top 100 rich persons comes to 246 billion US Dollars and that means top 100 riches persons of India has total wealth of

246 X Rs.5000 crores = Rs.12 30 000 crores. I f we add the volume of black money parked in domestic and foreign banks , the total value of wealth will be many times more.

Above is outcome of Policy of Reformation propagated by Economist Dr. Manmohan Singh and his Government.

If we consider the total wealth of top hundred companies /corporate houses I think the figure will be more voluminous and unimaginable.

It is believed that Top 100 of Indian population has accumulated wealth equivalent to more than 99.99 percent of total wealth of India.

India is still called as socialistic secular sovereign republic

Will anyone of you list the benefits given to poor and middle class in the tenure of Manmohan Singh and how the same is more than what was available to them before 1991

Chandra Sekhar ex- Prime Minister of India has been accused of selling Gold in the year 1990 to save the image of the country. There is no doubt in it that the cause of fiscal crisis and current account deficit which erupted during the tenure of Chandra Sekhar was not created during his four month rule but the outcome of faulty policies of preceding government only.

Manmohan Singh appeared then as Awtar of God to save the economy by introducing policy of reformation.

After two decades of his reformatory rule in India , same Manmohan Singh is now constrained to sell landed property to save the economy, forced to sell the public sector undertakings in the name of disinvestment, forced to reduce subsidy on fuel and fertilizers and lastly forced to go for begging Foreign direct investment (FDI)

During the time of Chandra Sekhar, gold was sold and common men was not forced to suffer the pain caused by price rise.

During the regime of Manmohan Singh called as Doctor in economics and called as number one economist in the world , India is selling land and industries and even then not getting fund to subsidise fuel and fertilizers given to common men.

India has become now number one beggar.......................almost bankrupt and selling age old assets to survive.

Now you have to decide the future ------------------------

A poor person in India sells his land, gold and other valuable assets only when he is unable to survive otherwise. Now the great country India is selling land, old assets and valuables to survive.

A poor man in financial crisis beg help from neighbours, friends and relatives. Similarly India is begging help from foreigners , India needs help of FDI for development of infrastructure, growth of insurance sector, for growth of stock market, for growth of aviation sector and what not . India needs help of Foreigners to boost up retail market.

India expects foreigners will construct cold storage to store even farm produce and will also in developing retail chain to make the product cheaper which domestic companies in view of Manmohan Singh cannot do.

FDI is panacea for all diseases India is suffering.It appears the freedom fighters committed blunder by removing British rule from India. When India cannot survive without the help of foreigners, it is the view of Manmohan Singh and his government to recall foreigners.

Are you still proud of being an Indian and that too under the leadership of Manmohan Singh?

Are secularism and capitalism permanent solution to India's economic problems?

Is it not foolish and as good as wondering in dreamland that India is expecting FDI to solve Indian problems and hence asking for help from foreign countries who themselves are facing more acute financial crisis?

Is political and administrative Corruption the real root cause of all sickness?

This 26th year of tracking global wealth was one to remember, with an all-time high . The 2011 Forbes Billionaires List breaks two records: total number of listees (1,226) and combined wealth ($4.6 trillion). This horde surpasses the gross domestic product of Germany, one of only six nations to have fewer billionaires this year.

Here’s the 2012 top-10 Billionaires in India:

No.1 Mukesh Ambani

Net Worth: $22.3 Billion – As of March 2012

Source: Petrochemicals, oil & gas, inherited and growing
Age: 54 , Citizenship: India

No.2 Lakshmi Mittal

Net Worth:$20.7 Billion - As of March 2012

Source: Steel, inherited and growing
Age:61 , Citizenship: India

No.3 Azim Premji

Net Worth: $15.9 Billion As of March 2012

Source: Software, inherited and growing
Age: 66 , Citizenship: India

No.4 Savitri Jindal & family

Net Worth: $10.9 Billion – As of March 2012

Source: Steel, inherited
Age: 62 , Citizenship: India

No.5 Sunil Mittal & family

Net Worth: $8.1 Billion As of March 2012

Source: Telecom, self-made
Age: 54 , Citizenship: India

No.6 Kumar Birla

Net Worth:$8 Billion – As of March 2012

Source: Commodities, inherited and growing
Age: 44 , Citizenship: India

No.7 Anil Ambani

Net Worth: $7.8 Billion – As of March 2012

Source: Diversified, inherited and growing
Age: 52 , Citizenship: India

No.8 Dilip Shanghvi

Net Worth: $7.4 Billion – As of March 2012

Source: Pharmaceuticals, self-made
Age: 56, Citizenship: India

No.9 Shashi & Ravi Ruia

Net Worth:$7 Billion – As of March 2012

Source: Diversified, inherited and growing
Age: 68, Citizenship: India

No.10 Kushal Pal Singh

Net Worth: $6.4 Billion – As of March 2012

Source: Real estate
Age: 80 , Citizenship: India

Top Richest Person in India

Last updated on: February 7, 2012

Richest in India

Lakshmi Mittal 31.10
Mukesh Ambani 27.00
Azim Premji 16.80
Ravi Ruia 15.80
Savitri Jindal & family 13.20
Gautam Adani 10
Kumar Mangalam Birla 9.2
Anil Ambani 8.80
Sunil Mittal & family 8.30
Adi Godrej & family 7.30
Kushal Pal Singh 7.30
Anil Agarwal 6.40
Dilip Shanghvi 6.10
Shiv Nadar 5.60
Shivinder Singh and Malvinder Singh 4.10
Kalanidhi Maran 3.50
Uday Kotak 3.20
Micky Jagtiani 3.00
Subhash Chandra Goel & family 2.90
Pankaj Patel 2.60
Indu Jain 2.60
G.M. Rao 2.60
Cyrus Poonawalla 2.30
Rajan Raheja & family 2.20
Desh Bandhu Gupta 2.10
N.R. Narayana Murthy & family 2.00
Gautam Thapar 2.00
Sudhir & Samir Mehta 2.00
Aloke Lohia 2.00
Venugopal Dhoot 1.90
Chandru Raheja 1.90
Nandan Nilekani & family 1.80
Ajay Kalsi 1.70
Rahul Bajaj 1.60
Senapathy Gopalakrishnan & family 1.60
Brijmohan Lall Munjal 1.50
Kallam Anji Reddy 1.50
Vijay Mallya 1.40
Ajay Piramal 1.40
Baba Kalyani 1.30
R. P. Goenka 1.30
Rakesh Jhunjhunwala 1.20
K. Dinesh & family 1.20
Rakesh Jhunjhunwala 1.20
Brij Bhushan Singal 1.20
Yusuf Hamied & family 1.10
S.D. Shibulal 1.10
Bhupendra Kumar Modi 1.10
Mangal Prabhat Lodha 1.10
Ramesh Chandra 1.00

Top 50 Richest Person in India - List of Forbes World Billionaires 2011

Forbes released its annual list of the world's wealthiest people, and now the nearly 7 billion of us who aren't on it are searching for it.

No. 1 on the list is Carlos Slim, the Mexican telecommunications magnate who's worth an estimated $74 billion. Slim beat out Bill Gates, No. 2 on the list at $56 billion, by a fat margin after his wealth grew by more than one-third last year. Perennial Top 10-er Warren Buffett appears at No. 3 with $50 billion of worth; and the richest woman, Christy Walton of the Wal-Mart empire, comes in at No. 10.

The number of billionaires in the world is up by 200 from last year to 1,210, with a combined wealth of $4.5 trillion.

And, of course, with $1 billion being cool and all, six members of the Facebook management clan made the list, including Mark Zuckerberg at No. 52.

Steel tycoon Lakshmi Mittal and Reliance chairman Mukesh Ambani were counted among the world's ten richest persons as 50 Indians made it to the Forbes list of World Billionaires 2011.

Here is a complete list of Indian billionaires in order of India Rank, World Rank, Name, Net Worth, Age, Source:

Top 50 Richest Person in India - List of Forbes World Billionaires 2011

1.. 6 Lakshmi Mittal $31.1 B 60 Steel
2.. 9 Mukesh Ambani $27 B 53 petrochemicals, oil & gas
3.. 36 Azim Premji $16.8 B 65 Software
4.. 42 Shashi & Ravi Ruia $15.8 B 67 Diversified
5.. 56 Savitri Jindal & family $13.2 B 60 Steel
6.. 81 Gautam Adani $10 B 48 commodities, infrastructure
7.. 97 Kumar Birla $9.2 B 43 commodities
8.. 103 Anil Ambani $8.8 B 51 Diversified
9.. 110 Sunil Mittal & family $8.3 B 53 telecom
10. 130 Adi Godrej & family $7.3 B 68 Diversified
11. 130 Kushal Pal Singh $7.3 B 79 real estate
12. 154 Anil Agarwal $6.4 B 57 mining, metals
13. 159 Dilip Shanghvi $6.1 B 55 pharmaceuticals
14. 182 Shiv Nadar $5.6 B 65 Information technology
15. 265 Malvinder & Shivinder Singh $4.1 B 38 healthcare
16. 310 Kalanithi Maran $3.5 B 45 media
17. 347 Uday Kotak $3.2 B 51 banking
18. 376 Micky Jagtiani $3 B 59 Retail
19. 393 Subhash Chandra & family $2.9 B 60 media
20. 440 Pankaj Patel $2.6 B 57 pharmaceuticals
21. 440 Indu Jain $2.6 B 74 media
22. 440 G. M. Rao $2.6 B 60 infrastructure
23. 512 Cyrus Poonawalla $2.3 B 69 biotech
24. 540 Rajan Raheja & family $2.2 B 56 Diversified
25. 564 Desh Bandhu Gupta $2.1 B 73 pharmaceuticals
26. 595 N.R. Narayana Murthy & family $2 B 64 Software
27. 595 Gautam Thapar $2 B 50 engineering, paper
28. 595 Sudhir & Samir Mehta $2 B 56 Diversified
29. 595 Aloke Lohia $2 B 52 chemicals
30. 651 Venugopal Dhoot $1.9 B 59 electronics
31. 651 Chandru Raheja $1.9 B 70 real estate
32. 692 Nandan Nilekani & family $1.8 B 55 Software
33. 736 Ajay Kalsi $1.7 B N/A oil
34. 782 Rahul Bajaj $1.6 B 72 motorcycles
35. 782 Senapathy Gopalakrishnan & family $1.6 B 55 Software
36. 833 Brijmohan Lall Munjal $1.5 B 87 motorcycles
37. 833 K. Anji Reddy $1.5 B 69 pharmaceuticals
38. 879 Vijay Mallya $1.4 B 55 liquor
39. 879 Ajay Piramal $1.4 B 55 pharmaceuticals
40. 879 Vikas Oberoi $1.4 B 40 real estate
41. 938 Baba Kalyani $1.3 B 62 Engineering
42. 938 Rama Prasad Goenka $1.3 B 81 Diversified
43. 993 Keshub Mahindra $1.2 B 87 Diversified
44. 993 K Dinesh & family $1.2 B 56 Software
45. 993 Rakesh Jhunjhunwala $1.2 B 50 Investments
46. 993 Brij Bhushan Singal $1.2 B 74 Steel
47. 1057 Yusuf Hamied & family $1.1 B 74 Pharmceuticals
48. 1057 S.D. Shibulal & family $1.1 B 56 Software
49. 1057 Bhupendra Kumar Modi $1.1 B 62 telecom
50. 1057 Mangal Prabhat Lodha $1.1 B 55 real estate

US-GAAP AND Indian-GAAP

2012-09-25T20:16:00.000-07:00

Created By : Kanupriya Keshan

Some of the major differences between US GAAP and Indian GAAP are:

1. Underlying assumptions:

Under Indian GAAP, Financial statements are prepared in accordance with the principle of conservatism which basically means “Anticipate no profits and provide for all possible losses”. Under US GAAPconservatism is not considered, if it leads to deliberate and consistent understatements.

2. Prudence vs. Rules:

ICAI has been structuring Accounting Standards based on the International Accounting Standards ( IAS) , which employ concepts and `prudence' as the principle in contrast to the US GAAP, which are "rule oriented", detailed and complex. It is quite easy for the US accountants to handle issues that fall within the rules, while the International Accounting Standards provide a general framework of accounting standards, which emphasise "substance over form" for accounting. These rules are less descriptive and their application is based on prudence.

3. Format/ Presentation of Financial Statements:

Under Indian GAAP, financial statements are prepared in accordance with the presentation requirements of Schedule VI to the Companies Act, 1956. On the other hand, financial statements prepared as per US GAAP are not required to be prepared under any specific format as long as they comply with the disclosure requirements of US GAAP.

4. Consolidation of subsidiary companies:

Under Indian GAAP (AS 21), Consolidation of Accounts of subsidiary companies is not mandatory. AS 21 is mandatory if an enterprise presents consolidated financial statements. In other words, the accounting standard does not mandate an enterprise to present consolidated financial statements but, if the enterprise presents consolidated financial statements for complying with the requirements of any statute or otherwise, it should prepare and present consolidated financial statements in accordance with AS 21. Thus, the financial income of any company taken in isolation neither reveals the quantum of business between the group companies nor does it reveal the true picture of the Group. Under US GAAP (SFAS 94), Consolidation of results of Subsidiary Companies is mandatory, hence eliminating material, intercompany transaction and giving a true picture of the operations and Profitability of the various majority owned Business of the Group.

5. Cash flow statement:

Under Indian GAAP (AS 3) , inclusion of Cash Flow statement in financial statements is mandatory only for companies whose share are listed on recognized stock exchanges and Certain enterprises whose turnover for the accounting period exceeds Rs. 50 crore. Thus, unlisted companies escape the burden of providing cash flow statements as part of their financial statements. On the other hand, US GAAP (SFAS 95) mandates furnishing of cash flow statements for 3 years – current year and 2 immediate preceding years irrespective of whether the company is listed or not .

6. Investments:

Under Indian GAAP (AS 13), Investments are classified as Current and Long term. These are to be further classified Government or Trust securities, Shares, debentures or bonds Investment properties others-specifying nature. Investments classified as current investments are to be carried in the financial statements at the lower of cost and fair value determined either on an individual investment basis or by category of investment, but not on an overall (or global) basis. Investments classified as long term investments are carried in the financial statements at cost. However, provision for diminution is to be made to recognise a decline, other than temporary, in the value of the investments, such reduction being determined and made for each investment individually. Under US GAAP (SFAS 115), Investments are required to be segregated in 3 categories i.e. held to Maturity Security (Primarily Debt Security) , Trading Security and Available for sales Security and should be further segregated as Current or Noncurrent on Individual basis. Debt securities that the enterprise has the positive intent and ability to hold to maturity are classified as held-to-maturity securities and reported at amortized cost. Debt and equity securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and reported at fair value, with unrealised gains and losses included in earnings. All Other securities are classified as available-for-sale securities and reported at fair value, with unrealised gains and losses excluded from earnings and reported in a separate component of shareholders' equity.

7. Depreciation:

Under the Indian GAAP, depreciation is provided based on rates prescribed by the Companies Act, 1956. Higher depreciation provision based on estimated useful life of the assets is permitted, but must be disclosed in Notes to Accounts.( Guidance note no 49) . Depreciation cannot be provided at a rate lower than prescribed in any circumstance. Similarly , there is no compulsion to provide depreciation at a higher rate, even if the actual wear and tear of the equipments is higher than the rates provided in Companies Act. Thus , an Indian Company can get away with providing with lesser depreciation , if the same is in compliance to Companies Act 1956. Contrary to this, under the US GAAP , depreciation has to be provided over the estimated useful life of the asset, thus making the Accounting more realistic and providing sufficient funds for replacement when the asset becomes obsolete and fully worn out.

8. Foreign currency transactions:

Under Indian GAAP(AS11) Forex transactions (Monetary items) are recorded at the rate prevalent on the transaction date. Year end foreign currency assets and liabilities (Non Monetary Items) are re-stated at the closing exchange rates. Exchange rate differences arising on payments or realizations and restatements at closing exchange rates are treated as Profit /loss in the income statement. Exchange fluctuations on liabilities incurred for fixed assets can be capitalized. Under US GAAP (SFAS 52), Gains and losses on foreign currency transactions are generally included in determining net income for the period in which exchange rates change unless the transaction hedges a foreign currency commitment or a net investment in a foreign entity. Capitalization of exchange fluctuation arising from foreign liabilities incurred for acquiring fixed assets does not exist. Translation adjustments are not included in determining net income for the period but are disclosed and accumulated in a separate component of consolidated equity until sale or until complete or substantially complete liquidation of the net investment in the foreign entity takes place . US GAAP also permits use of Average monthly Exchange rate for Translation of Revenue, expenses and Cash flow items, whereas under Indian GAAP, the closing exchange rate for the Transaction date is to be taken for translation purposes.

9. Expenditure during Construction Period:

As per the Indian GAAP (Guidance note on ‘Treatment of expenditure during construction period' ) , all incidental expenditure on Construction of Assets during Project stage are accumulated and allocated to the cost of asset on completion of the project. Contrary to this, under the US GAAP (SFAS 7), such expenditure are divided into two heads – direct and indirect. While, direct expenditure is accumulated and allocated to the cost of asset, indirect expenditure is charged to revenue.

10. Research and Development expenditure:

Indian GAAP (AS 8) requires research and development expenditure to be charged to profit and loss account, except equipment and machinery which are capitalized and depreciated. Under US GAAP (SFAS 2) , all R&D costs are expenses except intangible assets purchased from others and Tangible assets that have alternative future uses which are capitalised and depreciated or amortised as R&D Expense. Under US GAAP, R&D expenditure incurred on software development is expensed until technical feasibility is established (SOP 81.1). R&D Cost and software development cost incurred under contractual arrangement are treated as cost of revenue.

11. Revaluation reserve :

Under Indian GAAP, if an enterprise needs to revalue its asset due to increase in cost of replacement and provide higher charge to provide for such increased cost of replacement, then the Asset can be revalued upward and the unrealised gain on such revaluation can be credited to Revaluation Reserve ( Guidance note no 57). The incremental depreciation arising out of higher book value may be adjusted against the Revaluation Reserve by transfer to P&L Account. However for window dressing some promoters misutilise this facility to hoodwink the shareholders on many occasions. US GAAP does not allow revaluing upward property, plant and equipment or investment.

12. Long term Debts:

Under US GAAP, the current portion of long term debt is classified as current liability, whereas under the Indian GAAP, there is no such requirement and hence the interest accrued on such long term debt in not taken as current liability.

13. Extraordinary items, prior period items and changes in accounting policies:

Under Indian GAAP (AS 5) , extraordinary items, prior period items and changes in accounting policies are disclosed without netting off for tax effects . Under US GAAP (SFAS 16) adjustments for tax effects are required to be made while reporting the Prior period Items.

14. Goodwill:

Under the Indian GAAP goodwill is capitalized and charged to earnings over 5 to 10 years period. Under US GAAP (SFAS 142), Goodwill and intangible assets that have indefinite useful lives are not amortized, but they are tested at least annually for impairment using a two-step process that begins with an estimation of the fair value of a reporting unit. The first step is a screen for potential impairment, and the second step measures the amount of impairment, if any. However, if certain criteria are met, the requirement to test goodwill for impairment annually can be satisfied without a remeasurement of the fair value of a reporting unit.

15. Capital issue expenses:

Under the US GAAP, capital issue expenses are required to be written off when incurred against proceeds of capitals, whereas under Indian GAAP, capital issue expense can be amortized or written off against reserves.

16. Proposed dividend:

Under Indian GAAP, dividends declared are accounted for in the year to which they relate. For example, if dividend for the FY 1999-2000 is declared in Sep 2000, then the corresponding charge is made in 2000-2001 as below the line item. Contrary to this, under US GAAP dividends are reduced from the reserves in the year they are declared by the Board. Hence in this case under US GAAP, it will be charged Profit and loss account of 2000-2001 above the line.

17. Investments in Associated companies:

Under the Indian GAAP (AS 23), investment in associate companies is initially recorded at Cost using the Equity method whereby the investment is initially recorded at cost, identifying any goodwill/capital reserve arising at the time of acquisition. The carrying amount of the investment is adjusted thereafter for the post acquisition change in the investor’s share of net assets of the investee. The consolidated statement of profit and loss reflects the investor’s share of the results of operations of the investee is carried at cost. Under US GAAP (SFAS 115) Investments in Associates are accounted under equity method in Group accounts but would be held at cost in the Investor’s own account.

18. Preoperative expenses:

Under Indian GAAP, (Guidance Note 34 - Treatment of Expenditure during Construction Period), direct Revenue expenditure during construction period like Preliminary Expenses, Project related expenditure are allowed to be Capitalised. Further, Indirect revenue expenditure incidental and related to Construction is also permitted to be capitalised. Other Indirect revenue expenditure not related to construction, but since they are incurred during Construction period are treated as deferred revenue expenditure and classified as Miscellaneous Expenditure in Balance Sheet and written off over a period of 3 to 5 years. Under US GAAP (SFAS 7), the concept of preoperative expenses itself doesn’t exist. SOP 98.5 also madates that all Start up Costs should be expensed. The enterprise has to prepare its balance sheet and Profit and Loss Account as if it were a normal running organization. Expenses have to be charged to revenue and Assets are capitalised as a normal organization. The additional disclosure includes reporting of cash flow, cumulative revenues and Expenses since inception. Upon commencement of normal operations, notes to Statement should disclose that the Company was but is no longer is a Development stage enterprise. Thus, due to above accounting anomaly, Accounts prepared under Indian GAAP, contain higher charges to depreciation which are to be adjusted suitably under US GAAP adjustments for indirect preoperative expenses and foreign currencies.

19. Employee benefits:

Under Indian GAAP, provision for leave encashment is accounted based n actuarial valuation. Compensation to employees who opt for voluntary retirement scheme can be amortized over 60 months. Under US GAAP, provision for leave encashment is accounted on actual basis. Compensation towards voluntary retirement scheme is to be charged in the year in which the employees accept the offer.

20. Loss on extinguishment of debt:

Under Indian GAAP, debt extinguishment premiums are adjusted against Securities Premium Account. Under US GAAP, premiums for early extinguishment of debt are expensed as incurred.

http://accountantsadda.com/User/Inner.aspx?artid=668

Profit AND Loss, Real or Unreal , Fact or Opinion

2012-09-25T18:54:00.000-07:00

Definition of 'Profit and Loss Statement - P&L

A financial statement that summarizes the revenues, costs and expenses incurred during a specific period of time - usually a fiscal quarter or year. These records provide information that shows the ability of a company to generate profit by increasing revenue and reducing costs. The P&L statement is also known as a "statement of profit and loss", an "income statement" or an "income and expense statement".

The statement of profit and loss follows a general form as seen in this example. It begins with an entry for revenue and subtracts from revenue the costs of running the business, including cost of goods sold, operating expenses, tax expense and interest expense. The bottom line (literally and figuratively) is net income (profit). Many templates can be found online for free, that can be used in creating your profit and loss, or income statement.

The balance sheet, income statement and statement of cash flows are the most important financial statements produced by a company. While each is important in its own right, they are meant to be analyzed together.

What Are the Effects of Profit or Loss in a Business Organization?

The main goal for most businesses is to earn a profit. Generating profits in a business environment often indicates that an organization is offering goods or services desired by consumers at a reasonable price. Developing a strong clientele and a competitive advantage against other companies in the market may require much time and effort on management's part as it seeks to produce desirable goods or services that produce profits. Business organizations that cannot complete these functions may face the prospect of losing money from their operations and dealing with the consequences of financial loss.

Profit Allows for Growth

A positive effect of companies generating operational profits is the ability for companies to expand and grow their operations. Companies often reinvest a certain amount of profits earned from current operations into new business opportunities or expanding current operations to increase business output. These opportunities are usually taken on so companies can increase their market share in the business environment and generate further profits from expanded operations. Companies may also choose to enter foreign economic markets to take advantage of potential profit opportunities in developed or emerging economies.

Profit Improves Employee Livelihood

Business profits often allow companies to improve the livelihood of their owners, managers and employees. This may include increasing compensation levels and offering performance bonuses or additional vacation time. These rewards may also generate positive goodwill with employees. Employees may be willing to work harder and increase their efficiency to achieve more profit for the company. This symbiotic relationship allows the business to generate more profits from business operations and pay a fraction of these profits to employees based on their performance.

Loss Reduces Operations

Losses resulting from business operations have the opposite effect of profits. Companies facing a reduced market share from lower consumer demand or a downturn in the business cycle may be forced to reduce operational output. This reduction may include laying off employees, selling equipment or assets and closing underperforming business facilities. Companies may need to take additional measures depending on the consistency of business losses and whether their initial reduction methods have lessened the impact of operational losses.

Loss Leads to Bankruptcy

Consistent business losses may force the company into bankruptcy. While many businesses try to avoid bankruptcy by selling the business to a competitor or securing additional financing to continue operations, bankruptcy may be the final option. Underperforming small businesses may require the business owner to declare personal bankruptcy, depending on how the company is organized. Business bankruptcy may be a long and arduous process, depending on the size of the company and other aspects relating to business operations. Declaring bankruptcy may also create an economic ripple affecting other companies in the business environment.

26 SEP, 2012, 06.10AM IST, ET BUREAU

Profit and loss can be manipulated, market price gives a better picture of cos' financial position

Collected from Economic times BY

Swaminathan S A Aiyar

(Valuations are different from profits and losses. Profits and losses tell you about the past. But valuations are estimates of the future, and those are necessarily different from past performance.)

The Comptroller and Auditor General's ( CAG) estimates of government losses and corporate gains have stirred much controversy. Supreme Court Chief Justice S H Kapadia attempted to elucidate valuation principles in a recent speech. He reportedly said, "Today, a number of controversies on valuation are discussed but the basic principle of valuation is that loss is a matter of fact and profit or gain is a matter of opinion. Please apply this test to the controversies going on. I do not want to discuss anything further. Loss is a matter of fact and profit and gain is a matter of opinion. So, if you understand these principles, we will be able to judge."

I cannot make sense of this. I know of no principle in economics or audit that says losses are real but profits are not. One principle actually enunciated widely is "cash is a fact, but profit and loss are opinions". That's very different from the Chief Justice's claim.

In 1975, the Press Club asked me to explain a puzzle. Its accounts showed a profit, but it had no money in the bank. Where had the profit gone? I soon found the answer. The accounts showed all receivables as 'income'. But many members had not paid their bills, so the receivables had not been received! There was a paper profit, but a cash deficit. This was no error: audit rules specifically permitted this. This accounting practice was widely used by the biggest corporations. Some showed huge profits, but showed even bigger sums owed to the company by 'sundry debtors'. Such companies had a big paper profit, and even paid taxes on this profit, yet had a cash deficit.

Beyond a point, treating receivables as profits becomes sheer pretence: the sums should be written off as unpayable. Some companies do writeoffs honestly, but others resort to 'ever-greening' dud loans, quite legally. Given such accounting flexibility, loss and profit are clearly matters of opinion, and can be manipulated to suit the company's strategy. Again, a company's balance sheet may not show all assets and liabilities: some can legally be kept off balance sheet. This enables companies to hide enormous liabilities off the books, showing a very healthy but misleading picture on their books. A classic example of this was Enron, which looked highly profitable, but accumulated such huge debts offbalance sheet that these ultimately sank the company. Citibank's off-balance sheet activities helped sink it in the 2008 collapse.

Profit is not a clean, unclut-tered concept. Operational profit is income minus expenses. But after that you have to deduct interest on loans, amortisation of old loans, depreciation and taxes. Here again, much flexibility is legally permissible, allowing a company to show profits or losses as it chooses. Contrary to Kapadia's claim, all losses are not a fact. Back in the 1980s and 1990s, India had many large companies (notably Reliance) that paid no corporate tax.

Why not? Because the government had provided several tax breaks. The old 'investment allowance' allowed companies to deduct a certain percentage of new investment from gross income. Investing in backward areas or highpriority industries was sometimes tax deductible. 'Accelerated depreciation' allowed companies to deduct up to 100% of the value of new equipment in the first year or use, even though the equipment might last decades. 'Weighted deductions' were given for items like R&D — that is, if a company spent Rs 100 on R&D, the tax law permitted the company to treat this as Rs 150 for tax purposes.

In the 1990s, many companies took advantage of thesetax incentives, entirely legally, and reduced their tax liability to zero. The balance sheets they presented to the taxman showed a loss after all deductions, so no tax was payable. Yet, the law allowed the same companies to present a totally different balance sheet to investors, showing bumper profits. That's how zero-tax companies like Reliance enjoyed soaring stock market prices. This charade was finally checked by introducing a minimum alternative tax, ensuring that tax breaks could not be used to escape tax altogether.

Valuations are different from profits and losses. Profits and losses tell you about the past. But valuations are estimates of the future, and those are necessarily different from past performance. Facebook makes little profit, yet is seen as having such a huge future that it commands an astronomical price. By contrast, some profit-making companies sell at a discount because of poor future prospects.

A company with good corporate governance (like Nestle) will have a high market price relative to earnings. But a company with a poor image ( Kingfisher BSE 8.08 %) will have a much lower price, since investors don't trust its accounts.

If a company is believed to have huge hidden bad debts — like Citibank in the US — its market price can be just half its book value. But a bank with a solid reputation — like HDFC Bank BSE 0.34 % — is quoted at five times book value. In sum, all valuations are opinions. The only reality is the actual market price, which fluctuates as valuations of buyers and sellers keep shifting. Whatever Justice Kapadia believes, losses are not a more solid ground for valuation than profits. Losses can be manipulated in balance sheets no less than profits. Cash profits and losses are more real, but even they are uncertain guides to the future. The CAG's valuations cannot but be matters of opinion.

http://economictimes.indiatimes.com/opinion/columnists/swaminathan-s-a-aiyar/profit-and-loss-can-be-manipulated-market-price-gives-a-better-picture-of-cos-financial-position/articleshow/16551582.cms

Loss is a matter of fact and profit, of opinion: CJI Collected from Hindu Business Line

Chief Justice of India S.H. Kapadia on Saturday rejected the notion that the rule of law was an impediment to economic growth, terming it instead the “single largest” stimulant factor.

Further, a “minimum standard of fairness” was being ensured only through the rule of law, he said at an international conference here.

In an apparent reference to the Comptroller and Auditor-General’s report on loss in coal blocks allocation, Justice Kapadia said: “The basic fact is that loss is a matter of fact, whereas profit or gain is a matter of opinion.” In the absence of economic literacy, coupled with legal literacy, “government institutions will suffer… in terms of democracy, and the economy will be in peril.”

The Constitution, he said, had mandated that the government to “… strive for economic democracy,” and without it “political democracy will be at peril.”

Quoting economic data, the Chief Justice said that even an eight per cent GDP growth would generate only 12 million jobs a year, while the country needed 10 million new jobs every year, given that 30 per cent of the population would be looking for employment in the coming years. If the growth slipped to 5.5 per cent for some reasons, a mere 8.25 million jobs would be created a year. Promoting investment, therefore, was crucial to stimulate growth.

Benchmark

He suggested that India align its tax, corporate and commercial laws with the models suggested by the United Nations and the Organisation for Economic Cooperation and Development. “Our benchmark becomes what is stated in the electronic media and the print media. We don’t go into deep studies.”

http://www.thehindu.com/news/national/loss-is-a-matter-of-fact-and-profit-of-opinion-cji/article3927083.ece

Factual losses and profitable opinions

N Sundaresha Subramanian/New Delhi 25 Sep 12 | 12:35 AM

--------------As he (Chief Justice of India Mr. Kapadia ) entered the final week, Kapadia also made a significant contribution to discussions on the allocation of natural resources. Kapadia reportedly said, “Sometimes, we see certain (TV) programmes and we build our perceptions. How many of us know the basic principle of valuation? Today, a number of controversies on valuation are discussed, but the basic principle of valuation is loss is a matter of fact and profit is a matter of opinion."

Some people are even trying to sell this remark as an endorsement of the government’s ‘Mother Earth’ argument. In my opinion, the CJI’s limited point, as is clear from the above quote, was that people should understand these concepts before building castles on numbers.

According to the principle of conservatism, a prudent accountant has to provide for all losses, both present and future, as and when he comes to know about these, whereas profits are booked only when they are actually realised. The motive is to present a “true and fair" picture of the financial position of the enterprise. While all going concerns should ideally follow this principle, tax authorities are not very comfortable with its blanket application as indefinite postponement of profits may hit the revenue.

Interestingly, the much quoted, misquoted and abused “Report no 7 of 2012-13", more famously known as the Coalgate report, does not use the words “profit or loss". The report said, “The financial impact of the benefit to the private allottees has been estimated to the tune of Rs 1,85,591.34 crore as on March 31, 2011, for open cast mines/open cast reserves of mixed mines."

Now, what is “financial impact of benefit" to private allottees? In the hands of private companies, these are profits, therefore, it is just a matter of opinion. They can book it today, they can book it on the day they dig the coal or the day they sell it or they may use a mechanism to distribute it over years. The report added, “The government could have tapped a part of this financial benefit by expediting decision on competitive bidding for allocation of coal blocks."

In this sentence, lies the devil — the part of this financial benefit, which the government could have tapped. Is this not a fact? If this is a fact, then is it not a loss? What is your opinion?

http://smartinvestor.in/market/Features-134965-Featuresdet-Factual_losses_and_profitable_opinions.htm

Why is CJI taking on CAG with a flawed ‘loss’ theory

by R Jagannathan Sep 24, 2012

The outgoing Chief Justice of India (CJI), Sarosh H Kapadia, has given the UPA government much grief, thanks to his Vodafone judgment, but on Saturday he could not but have warmed their cockles with his indirect observations on the 2G scam and judicial activism.

Kapil “zero-loss” Sibal and Palanippan “zero-loss” Chidambaram will feel vindicated.

Though he did not actually criticise the estimates of the Comptroller and Auditor General (CAG) – who had put the presumptive loss on 2G spectrum at Rs 1,76,000 crore and the unintended “gains” in the coal block allocations at Rs 1,86,000 crore – there is no doubt he gave the CAG’s critics, which include the PM, ammunition for the same.

According to a report in The Indian Express, the CJI said: “Loss is a matter of fact and profit and gain is a matter of opinion.” So, by implication, the CAG is talking through his hat.

Has the outgoing CJI’s words aided the cause of Manmohan Singh? Image courtesy PIB.

The CJI expanded on his basic statement thus: “Today a number of controversies on valuation are discussed, but the basic principle of valuation is that loss is a matter of fact and profit or gain is a matter of opinion. Please apply this test to the controversies going on. I do not want to discuss anything further. Loss is a matter of fact and profit and gain is a matter of opinion. So if you understand these principles, we will be able to judge. Our perceptions will become more sound and we know where the shoe pinches.”

Correction, Chief Justice Kapadia. If you are merely saying that the loss figures on 2G and coal blocks depend on the assumptions made by the CAG and are thus mere guesstimates, we are with you. But to claim that “loss is a matter of fact” is also quite wrong.

In accounting principles, loss is a matter of recognition, and not just fact. Unless you are in a business where revenues and costs are accounted for only on a cash basis, loss too is often a matter of opinion.

As any qualified CA can tell you, companies can turn losses into profits, and profits into losses, depending on what revenues or costs they choose to recognise. You can turn a loss into a profit by changing the depreciation method from written down value (WDV) method to straightline, or by valuing inventories and sales differently. A construction company can recognise revenues one quarter earlier or one quarter later, depending on how much of a project is complete, rather than when sales actually materialise. This impacts the loss figure, if any.

In the case of banks, a bad loan can be made good by rescheduling a loan and thus a loss can be turned into a profit. Conversely, by providing for a potential loss in advance, a profit can be turned into a loss – if a bank or company wants to do so. Many small-time promoters, in fact, do this to influence market prices and indulge in insider trading. Smart banks like HDFC, for example, also tweak their income, cost and bad loan recognition norms to smoothen out results from quarter to quarter.

In short, loss is as much a matter of opinion as profit or gain. The CJI could consider this fact to modify his views.

But since the purpose of his observations must have been to contradict the CAG on his 2G and coal block loss figures, let us also deal with them again.

Firstpost would readily agree that the CAG’s sensational loss figures may have grabbed media attention like never before and focused attention on the “losses” per se rather than the real problem: lack of transparency in decision-making and possible attempts to help out crony capitalists.

However, can the CJI really claim that selling 2G spectrum at prices lower than what the market can bear is not a loss to the exchequer? It’s not about the quantum of the loss, but that there was a loss is certain. Similarly, how can one say that there was no loss in handing over coal mines for free to 142 businessmen without a transparent policy?

The CJI is surely right in emphasising that the courts (and the CAG) should not transgress into the policy-making area, but surely it is the CAG’s duty to point out what the costs of a policy were?

Does it make sense for a government – any government – to decide to sell spectrum or allot coal blocks without quantifying the losses and gains?

It is possible to justify free coal block allotments of Rs 1,86,000 crore (as the CAG claims) if the government can equally quantify social or other benefits of a similar amount. It is all right to sell spectrum at 2001 prices, or even give it away free, if there are larger social benefits to be had (teledensity), but governments that want to do this must find a way to quantify the losses and gains, however, presumptive they may seem.

In the absence of this kind of costs-and-benefits calculations, on what legitimate basis can any government decide to go for an auction or a first-come-first-served scheme when it does not know why it is doing so?

CJI Kapadia is surely right to ask everyone to take the loss or gain figures with a pinch of salt, but no government should draw comfort from this. Governments have no right to take policy decisions without trying to at least estimate who will gain or lose. The figures may be wrong or wildly out of whack in hindsight, but they will at least have the legitimacy of a well-thought-out line of reasoning.

The2G and coal block allocations are scams precisely because the government did not do the calculations that the CAG did post facto. The CJI would have done well to emphasise this aspect, rather than just suggest that the loss figures are not fact.

Half-truths are of no use to anybody.

http://www.firstpost.com/india/why-is-cji-taking-on-cag-with-a-flawed-loss-theory-465903.html?utm_source=frontpagepicks&utm_source=article_mumbai

D Subbarao’s point: More revenue and welfare accrue from cheap 2G spectrum than from auctions

ET Bureau Sep 20, 2012, 05.20AM IST

The present RBI governor, Duvvuri Subbarao, was finance secretary when 2G spectrum was allotted to new entrants at 2001 prices in 2008. Deposing before a parliamentary panel on Tuesday, he said that any so-called loss to the exchequer was dependent on assumptions and the numbers anyway were notional. He is correct.

The decision to allot spectrum at Rs 1,650 crore per player, instead of auctioning it for potentially higher rates, increased competition, brought down prices and made the mobile phone a ubiquitous instrument of communication for Indians across income groups. Indeed, our telecom revolution was based on allotting spectrum at reasonable rates. What the government then gave up in terms of revenue maximisation from telecom, was more than made up by the social and economic gains made possible by the communications revolution.

The faster economic growth and superior, networked tax collection efficiency yielded higher tax collections as well, more than offsetting any direct revenue forgone in telecom. This is similar to the experience of Japan and South Korea, which have the world's highest penetration of the latest wireless communications, made possible by the allotment of spectrum by beauty parades, rather than through auctions.

India tried spectrum auctions on two occasions. Both have flopped. In the mid-1990s, the government auctioned telecom licences and companies bid the moon to acquire these. Services were priced as high as Rs 16 per minute, with charges for incoming calls as well. Consumers would not bite, most companies soon failed to pay up, and the government had to scrap the auctions and came to a revenue-sharing regime.

The second instance is more recent, when 3G and 4G spectrum was auctioned in 2010. The government netted Rs 1,06,000 crore, but services are costly, poorly distributed and generally considered a failure. The debt that telecom companies now carry to pay the government upfront for spectrum makes it tough to expand their normal businesses. The lesson should not be lost in the upcoming 2G auctions.

http://articles.economictimes.indiatimes.com/2012-09-20/news/33976900_1_upcoming-2g-auctions-spectrum-auctions-duvvuri-subbarao

CAG VINOD RAI Says : Imputing Motives to CAG Reports to Hit Accountability
Imputing motives to audit reports of CAG would hinder accountability and good governance,CAG Vinod Rai has said.Ascribing political motive to the institution and its officers would only be detrimental to its task of promoting accountability and good governance, he said CPI mouthpiece Janayugam in an interview.

Several times our findings and judgment have been questioned it happened in the Bofors case in the 1980s,in the audit of disinvestment in 1990s,in the coffin case in 2002,and in the spectrum case recently.Every time we were proven right.All these years,we have maintained our objectivity,impartiality and professional competence, he claimed in the interview.He favoured open competition in both government procurement and allocation of resources to achieve value in these transactions.

Existing rules and regulations and processes do not adequately provide requisite transparency.Fair and open competition is the best and most transparent way of achieving value for money in large procurements and also in cases of allocation or lease of public assets or natural resources, he added.

In the 150 year history of the CAG,he says,it has upheld standards and is looked up to for its international levels of competence.CAG has a critical role to play in ensuring transparency and good governance in the country, he said.

The.1,86,000 crore losses to the exchequer because of allocation of coal blocks to private firms and power companies was a most conservative estimate, Rai reiterated.Rai said that the figures in the report were logical and irrefutable.The computations have been made on the basis of sound and reasonable assumptions.We have taken the most conservative alternative in arriving at the financial impact of allocation of coal blocks through the present system. He said he was confident of upholding the credibility of the audit report.
http://mobilepaper.timesofindia.com/mobile.aspx?article=yes&pageid=2&sectid=edid=&edlabel=ETD&mydateHid=25-09-2012&pubname=Economic+Times+-+Delhi&edname=&articleid=Ar00206&publabel=ET

No loss to Govt from 2G spectrum allocation: Sibal

http://www.thehindubusinessline.com/industry-and-economy/info-tech/article1065479.ece

Chidambaram clarifies on ‘zero loss’ in coal block allocations

http://www.thehindu.com/opinion/op-ed/article3832610.ece

Coalgate: Sibal gives another 'zero loss' theory after 2G

http://www.newsbullet.in/india/34-more/34313-coalgate-sibal-gives-another-zero-loss-theory-after-2g

Coal licence cancellation will cause huge loss: Sibal

http://www.thehindu.com/news/national/article3836047.ece

Fiscal Deficit Manipulation

2012-09-25T17:01:00.001-07:00

Kelkar panel questions FY13 Budget maths

Says figures awry, fiscal deficit may cross 6% if reforms not undertaken

Indivjal Dhasmana / New Delhi Sep 26, 2012, 00:30 IST

The Vijay Kelkar panel on fiscal consolidation has questioned the Budget numbers on subsidies and tax receipts for 2012-13, because of which it expects the fiscal deficit to cross six per cent of GDP this financial year if the reforms suggested by it are not undertaken.

The panel wants the finance ministry to meet the disinvestment target of Rs 30,000 crore, as it has got feedback that only Rs 10,000 crore can be mopped up, according to those in know of the development.

he first step on fiscal consolidation is to correct the figures given in the Budget and then recommend measures to rein in the deficit close to the estimates, they add.

KELKAR’S TAKE

Rs 7.71 lakh crore: Budget estimate of tax receipts
Rs 70,000 crore: Amount that Kelkar panel finds tax receipts overestimated by
Rs 1.90 lakh crore: Budget estimate of subsidies
Rs 70,000 crore: Amount by which subsidies were underestimated, says panel
5.1% of GDP: Budget expectation of fiscal deficit
6% of GDP: Panel’s estimate of fiscal deficit if reforms are not undertaken
5.76% of GDP: Fiscal deficit in 2011-12, against Budget estimate of 4.6% and revised estimate of 5.9%

The panel says the Budget has underestimated subsidies by Rs 70,000 crore and overestimated tax receipts by Rs 60,000 crore, they say. According to that, the Budget underestimated the fiscal deficit by Rs 1,30,000 crore.
Adding this figure to the Rs 5,13,590 crore of fiscal deficit given in the Budget, the gap between the Centre’s expenditure and receipts would turn out to be Rs 6,43,590 crore.

Given the GDP figures in the Budget at Rs 1,01,59,884 crore for 2012-13, the fiscal deficit would turn out to be over six per cent of GDP against the estimated 5.1 per cent.

However, the figure would be that much if no reforms happen, the committee is said to have stated.

In the first four months of 2012-13, the fiscal deficit has already crossed 50 per cent of the Budget estimate.

But if the government undertakes reforms on the oil and urea price fronts and the disinvestment targets are met, the deficit could be curtailed significantly, the panel is learnt to have observed. While the government has raised diesel prices by Rs 5 a litre, it is yet to undertake full decontrol of prices. Also, petrol prices remain decontrolled only on paper.

Urea has not been brought under nutrient-based subsidy, and it is the government that fixes prices and subsidies for the fertiliser.

Besides, the panel recommended improving the tax administration to shore up the tax-GDP ratio. The Centre’s tax-GDP ratio has remained below eight per cent since 2008-09 as against 8.81 per cent in the pre-crisis period of 2007-08. The panel gave its report to Finance Minister P Chidambaram earlier this month, but it has not been made public so far.

Those in know do not say by how much the fiscal deficit would ultimately be pruned this fiscal, saying it depends on the reforms carried out by the government. They concede oil reforms are not easy.

While the government has targeted to mobilise Rs 30,000 crore from disinvestment, the feedback the committee got from the ministry was that no more than Rs 10,000 crore could be mobilised thus. As such, the committee recommended meeting at least the target to prune the fiscal deficit.

http://www.business-standard.com/india/news/kelkar-panel-questions-fy13-budget-maths/487645/

FinMin optimistic on fiscal deficit

Despite rising subsidy bill, says fuel price action and other steps in contemplation would keep it at 5.3% of GDP, not more

Indivjal Dhasmana / New Delhi Sep 20, 2012, 00:46 ISTRecent government decisions to rationalise fuel prices have given the finance ministry confidence on reining in the fiscal deficit at 5.3 per cent of gross domestic product (GDP) for 2012-13, against the 5.1 per cent pegged in the Budget.

Independent economists, however, do not agree, and peg it at 5.7 per cent of GDP.

The Vijay Kelkar panel report on fiscal consolidation, which the ministry is expected to put in the public domain this week, could give clarity to the issue.

At a full Planning Commission meeting on Saturday, Finance Minister P Chidambaram had said major subsidies would be 2.4 per cent of GDP, against the 1.9 per cent projected in the Budget. At 1.9 per cent, it was estimated to decline from Rs 216,297 crore in the revised estimates of 2010-11 to Rs 1,90,015 crore in the Budget estimates for 2012-13. However, if subsidies rise to 2.4 per cent of GDP, the number would be Rs 243,837 crore. The net effect will be that the fiscal deficit rises to Rs 5.6 lakh crore against the estimated Rs 5.1 lakh crore, assuming the revenue side of the Budget behaves the way detailed in the document. At this level, the fiscal deficit turns out to be close to 5.5 per cent of estimated GDP (Rs 101 lakh crore).

However, the ministry is confident of curtailing this to 5.3 per cent of GDP, as the disinvestment target could be raised, some more could come from dividends by public sector entities, while non-plan expenditure will be curtailed.

Officials said oil subsidies will be more than projected and the additional amount will be provided in the second supplementary budget. Despite the latest fuel price moves, oil marketing companies (OMCs) are complaining of Rs 1.67 lakh crore of under-recoveries. About 40 per cent of it could come from upstream oil companies, which will leave the government with a subsidy burden of Rs 1 lakh crore. This will be in addition to the Rs 43,580 crore already listed for the OMCs for this year but used for meeting the under-recoveries of 2011-12. Officials said the second supplementary budget might only be for essential items such as the fuel subsidy.

They said the fertiliser subsidy would be close to the projected amount of Rs 60,974 crore against the Rs 67,198 crore in the revised estimates of 2011-12l. They also expect the revenue target to be close to the amount in the Budget on the tax front and some additional inflow of funds from non-debt capital receipts, such as disinvestment (where the budget estimate was Rs 30,000 crore.

The ministry has already told all departments to cut non-plan expenditure by 10 per cent. Some savings could come from this, too, officials say. Besides, public sector units have been asked to invest their surplus cash or give higher dividends to the government. The budget pegged the latter figure at Rs 50,000 crore, almost the same as the revised estimates of 2011-12. With all these, officials said, the deficit could be kept at 5.3 per cent of GDP.

Economists don’t agree. One of them said only Rs 15,000 crore could come from the disinvestment cleared by the cabinet. The cabinet has cleared nine companies for this, of which the auction process could be started in National Aluminium, NMDC, Minerals and Metals Trading Corporation and Oil India.

In the first four months of 2012-13, the government has already run up a little over half of the estimated fiscal deficit for the entire year. In the first quarter, it was 8.1 per cent of quarterly GDP. Devendra Bhatt, director with India Ratings (part of the Fitch group), says the deficit will end at 5.7 per cent of GDP, roughly the same as last year.

http://www.business-standard.com/india/news/finmin-optimisticfiscal-deficit/487040/

Cut the CAD to size

Mythili Bhusnurmath
Monday October 01, 2012, 06:44 AM

"The government is set to take more decisions to accelerate capital markets reforms and attract overseas capital," said a report in this paper last week ( Reforms Juggernaut to Come Rolling into Mkt, ET, September 24, 2012).

It then went on to listthe measures being contemplated by the UPA-II government in its reformist avatar: raising the ceiling on foreign borrowings, easing curbs on portfolio investors and liberalising norms for overseas borrowings.

The reliance on debt flows and fickle portfolio investors might seem at odds with one of the key lessons from the unfolding crises in key member states of the European Union. But the finance ministry, the report adds, is of the view that external commercial borrowings (ECBs) are a source of "long-term, cheap and stable funds".

Unfortunately, the finance ministry is off the mark on all three counts. ECBs are not always long-term. Nor are they always cheap or stable. On paper, ECBs may look cheaper than rupee loans. The flood of liquidity unleashed on the world by the powerful trio - the US Federal Reserve, the European Central Bank and the Bank of Japan - may even translate into cheap and abundant supply of funds.

For now! But a simple comparison of interest rates is misleading. Once the exchange risk or hedging cost is factored in, ECBs are no cheaper, and are often more expensive than rupee loans. A sharp depreciation in the rupee can cost borrowers dear.

Ask corporates that issued foreign currency convertible bonds when the rupee was quoting in the low 40s to the dollar and have to redeem their debt now when the exchange rate is over 50 to the dollar.

There is another problem. The revenue stream for many companies opting for ECBs is in rupees. So, there is no automatic hedge against currency fluctuations. Also, depending on the timing and the quantum of repayment, the resultant demand for dollars can rock the forex market.

Unfortunately, in any discussion of the twin deficits that beset the country today - the fiscal and the current account deficit - the latter barely gets a look in. The fiscal deficit hogs all the headlines though the current account deficit has the potential to cause far more damage. Consider: in a worst-case scenario, the fiscal deficit can be inflated away. But the current account deficit cannot.

Moreover, the fiscal deficit or the excess of government spending is subsumed in the current account deficit - since a large fiscal deficit usually spills over to the current account.

Despite this, the government seems more focused on finding ways to finance the current account deficit than on looking for ways to rein it in. However, any meaningful solution must look at both. Today, we need to find more forex sources to finance our stubborn and dangerously-high current account deficit of about 3.5%. But the search should not increase our dependence on more questionable means of financing. It must also focus on reducing the deficit.

Sadly, we have not seen much action on that front as yet. Exports have slowed down considerably but demand for exports is a function of both price and global economic well-being. So, there is not much we can do to increase exports.

Imports, on the other hand, are more amenable to control. The two main items in our import basket are oil and gold. But demand for oil is largely inelastic since the government is reluctant to let consumers feel the pain of rising global prices. So, the oil import bill will not shrink unless global prices fall or government follows through on the steps taken last month and allows a full pass-through of higher oil prices. This is unlikely.

We could make gold imports less attractive by restoring the public's faith in financial instruments. But that is not going to happen easily or quickly; not when real interest rates are again negative. SBI, for instance, offers an interest rate of 8.5% on deposits over three years even though consumer price inflation has crossed 10%. A negative real return of 1.5% is hardly going to encourage savers to move from gold to bank deposits.

In the short run, allowing corporates to access more overseas debt might increase foreign inflows. But the long-term implications of encouraging debt rather than non-debt inflows could cost us dear.

The RBI annual report puts it well, "To minimise the possibility of external shocks further disrupting India's growth sustainability over the next few years, it is important to not only focus on financing of current account deficit but also on compressing the deficit to lower, more manageable levels.

Otherwise, there are risks to current account deficit from both domestic and external events. In the recent period, current account deficit has been managed by improving debt inflows. However, this has long-term costs for debt sustainability and increases refinancing risks over time."

Despite this homily, the government seems to be toying with quick-fixes, eschewing the more sustainable remedy of reducing the current account deficit by allowing complete pass-through of oil prices and reducing the fiscal deficit. Ironically, the increased reliance on debt comes ata time when many of our external sector parameters have worsened (see accompanying graphic).

It is worth reflecting that we have fewer reserves today when we are a $2-trillion economy than when we were a $1-trillion economy!

Will the finance ministry heed the central bank? In the past, it has paid scant heed. But the newly-appointed chief economic adviser Raghuram Rajan has also flagged the issue. So, perhaps, this time, it will be different.

http://blogs.economictimes.indiatimes.com/myth-n-reality/entry/cut-the-cad-to-size

1 OCT, 2012, 06.19AM IST, SHAJI VIKARAMAN,ET BUREAU

India needs more growth, more public investment:

Vijay Kelkar

Mr. Vijay kelkar former finance secretary and advisor to the finance minister almost a decade ago, has often been one of the first port of calls for India's fiscal managers over the last few years when it comes to working out a blueprint for fiscal consolidation.

Kelkar, who headed the 13th Finance Commission, was told to present a fiscal road map for the medium term by P Chidambaram days after he returned to North Block.

A day after the report of the committee headed by him was made public, in an interview to Shaji Vikraman, he spoke about the approach of the committee and the dangers of not addressing macro economic imbalances. Edited excerpts:

The committee headed by you says that the economy is poised on the edge of a fiscal precipice and draws comparison to the situation reminiscent of 1991. The government's chief economic advisor, Raghuram Rajan, says that we are far from that. Aren't you being alarmist?

What we have said that if the present trend continues, the macro economic problems will get translated into a high fiscal deficit. Last year, we had a fiscal deficit of 5.8 % of GDP and a current account deficit of 4.2 %.

If this trend continues, the current account deficit could go up to 4.3 %.In our report, we have said that going by the trends this year, the fiscal deficit is likely to be 6.1 % of GDP which is far higher than the budgeted 5.1 %. As the Prime Minister said recently, money does not grow on trees. Remember, the Indian rupee is not a reserve currency.

So the options are either we boost exports, draw down our reserves or borrow from the world. At a current account deficit of 4.3 %, we would need $ 80 billion alone. Then there is maturing short term debt which needs further re-rolling. This will further increase the financing requirement. Such a trend would be unsustainable.

At this kind of financing and compared to 1991, the Indian economy is much more dependent on the global economy which itself is in turmoil. Energy prices are also three times higher in real terms compared to 1991 and our energy dependence is much higher now.

That's why there is a greater sense of urgency now especially when you don't have the headroom to counter cyclical policy measures and when you need to generate jobs for millions of young which requires high growth.

The Gangotri of growth deceleration and macro economic problems is the continued high fiscal deficit which also leads to high inflation. So we need to take corrective action swiftly.

Your report has projected a fiscal deficit of 6.1 % of GDP in FY13 in a no-reform scenario. The government has already indicated that it may not meet the target of 5.1 %. Your comments.

If there is no credible action being taken, we have said that fiscal deficit could be 6.1 % in 2012-13 due to a likely shortfall in gross tax revenues of close to 60,000 crore and higher subsidies of about 70,000 crore compared to the budget figures. The gross borrowing requirement is also likely be higher in such a scenario. Our assessment is that if you take corrective measures now, there is tremendous scope for pruning the deficit

You can attack inequitable subsidies, focus on greater tax compliance- an area where there is clearly scope to expand the tax base. The core of our argument is that India needs more growth, more public investment.

Once we have higher growth, there will be a virtuous cycle- deficits will come down, interest rates too and there will be higher private investment which will boost growth and employment. The engine of growth has to be greater momentum in public private investment which will boost growth.

Shouldn't we raise public investment to build infrastructure considering the problems with the PPP model?

It is still possible to boost public investment. The railways have been under investing. But we have also been lagging in power, roads and a number of areas such as airports, seaports and universities and urban infrastructure.

We need to speed up investment...It's important to remove obstacles in terms of regulatory and business climate to encourage investment. All this can be done through proper regulatory architecture and improved governance. We have not said anything that has not been said or done in the last 20 years. We can certainly do these supply side reforms which will boost growth.

The government has indicated that it would be difficult to be guided by your recommendations on cutting subsidies...

Our report shows that there could be a financial crisis for state-owned oil marketing companies if the current trend of under-recoveries continues. There could be a knock on impact on banks too. But why rule out what could be better than expected in terms of policy action or corrective steps.

For instance, there can be better innovations which the government may introduce than what we have outlined which could lead to better outcomes. India has done more than one fiscal correction in the last 20 years. Nothing is beyond us.

Through innovative approaches to divestment and the new instrument of monetising unutilised land with public sector undertakings as we have suggested, we can raise rapidly resources which can be used to finance infrastructure. The unutilised land according to one study can yield 33,000 crore in one city alone. This indicates there are enormous possibilities.

The recent Supreme Court judgement provides clarity and direction for taking steps in handling natural resources including land. All we need to ensure is that the process is fair and transparent. That is the test.

There has been criticism relating to the fiscal burden which could be imposed with the implementation of the Food Security Bill. How do you address this?

The government has multiple objectives such as promoting growth, social equity and macro economic stability. Given the state of the economy, there could be tensions in the pursuit of these objectives. Therefore, while implementing this legislation, the state of fiscal imbalance should be taken into account. That is what we have said.

The committee says that the MNREGA scheme should not be fiscally constrained. Should we attempt to integrate this and other social security schemes, including cash transfers?

The MNREGA scheme is one of the most important social safety nets. We should protect them. Our report says that it is possible to see a demand-led rise in spending under this scheme. Over time we can try and integrate social security measures like food and other things with cash transfers.

You have virtually said that the Direct Tax Code (DTC) should be junked

I am not saying junk it. What we have said is that the present DTC should be reviewed. Implementation of the DTC in its present form, will lead to revenue loss which we cannot afford at this current juncture. But in its present form we need to review it.

You have said in the past too that the GST can be a game changer. Can we afford to hasten such a significant reform without getting the design right?

A well-designed GST is a pre-condition. It is possible to move quicker on it especially since the finance minister, the chairman of Parliament's standing committee on finance and the Chairman of the empowered committee of state finance ministers are all reformers and want to support reforms. So, one should not rule out the possibility that it may happen sooner than later.

The tax to GDP ratio has become a worry for fiscal managers. What would you suggest to broaden and raise this base?

A well designed GST will be a major instrument towards increasing the tax base at the Centre and states. Getting the railways into the service tax net will also add to this.

How pragmatic are some of your recommendations?

The possibilities are interesting. The innovative approaches such as exchange-traded fund will help reduce risks for retail investors while helping diversify their portfolio as also the call option model and the offer sale model will help protect the government's interest and boost the capital market.

http://economictimes.indiatimes.com/opinion/interviews/india-needs-more-growth-more-public-investment-vijay-kelkar/articleshow/16618517.cms?curpg=4

Current account deficit a major cause for rupee fall: Gokarn

CHENNAI, JULY 4:

India’s current account deficit has been a major factor for the downward movement of the rupee. As the current account deficit corrects, be it due to lower oil prices, increased exports or lower imports, it will have the reverse effect, said Dr Subir Gokarn, Deputy Governor, Reserve Bank of India.

Replying to a question on how the rupee managed to gain in the last few days, Dr Gokarn said there is clearly some positive news from the global front, especially after the EU summit and on the domestic front in terms of policy action, particularly the raising of the ceiling on FII investments. These, he said, might have contributed to the rupee strengthening.

Saying that one cannot directly correlate the rupee movement with the open market operations, he said OMOs are driven by judgments on liquidity conditions.

Speaking to a group of media persons on the sidelines of a conference here, Mr Gokarn said the Reserve Bank is continuously focussing on maintaining liquidity within the comfort zone. “Whatever is causing liquidity stress, whether it is the foreign exchange market or something else, we are focused on maintaining liquidity conditions within the comfort zone that we have stated. And that will continue to be the benchmark.”

http://www.thehindubusinessline.com/industry-and-economy/banking/article3602866.ece

WHY COAL IMPORT IS NOT NECESSARY

2012-06-14T17:49:00.000-07:00

14 JUN, 2012, 05.20AM IST, TK ARUN,ET BUREAU ( Collected from The Economic Times)

Despite having one of the world's largest reserves of coal, India is unable to dig it up fast enough

The biggest scam in coal is that despite having one of the world's largest reserves of coal, India is unable to dig it up fast enough. This results in lost production and jobs, imports of expensive coal and petroleum, depreciation of the rupee that could have been avoided, leading to higher inflation.

All discussion of coal scams and auctions would be so much babble without bearing this basic fact in mind. At the root of this scam is the Coal Mines (Nationalisation) Act of 1973. It made coal mining a public sector monopoly.

The law was amended in 1976 to allow captive coal mining for production of iron and steel in the private sector. The law was amended again in 1993 to allow more captive private mining, for power plants and for other notified uses. Under this amendment, in 1996, captive mining was extended to cement plants as well.

Coal India lords over mining coal. The mining is pretty crude: dig large pits and scoop out the coal. No underground mining deploying sophisticated technology and safety measures.

This inefficient monopoly just cannot meet the domestic demand for coal. The country, in the recent past, has had to import coal to fuel power plants built right at the pithead of coal mines, far away from the coast from where coal has to be moved at high cost.

Despite sitting on nearly 100 billion tonnes of coal reserves, waiting to be mined, India today imports more than 70 million tonnes a year. These avoidable imports add to the current account deficit and the rupee's weakness. The weaker the rupee, the more expensive all imported inputs. So, Coal India's inability to mine coal fast enough is a contributory factor to unrelenting inflation in the country as well.

But this is not Coal India's only crime. Indian coal is up to 45% shale and rock, noncombustible material that turns into fly ash in power plants. The sensible thing to do is to remove this non-combustible material before coal is loaded on to trains and sent across the country.

But Coal India does virtually no beneficiation of coal before it is despatched. This means that railway wagons careen around the country carrying useless shale and rock, wasting precious diesel and power in the process.

Roughly 40% of the Railways' earnings come from coal. At least 50% of the energy spent on haulage will be on coal. Since 40% of the so-called coal is shale and rock, 16% of the Railways revenues come from and 20% of its fuel cost is spent on hauling future flyash all over the place.

The most urgent reform required in coal is to scrap state monopoly, open up mining, beneficiation and trading to private enterprise and break up Coal India into half a dozen companies so as to preempt a market-distorting behemoth.

The Indian economy should not be starved of power or burdened with avoidable import bills because of public sector inefficiency and corruption (sometime in the mid-1990s, Coal India suddenly wrote down its stocks by 6 million tonnes - all that coal just vanished!).

No government has had the political will to scrap state monopoly in coal. The Left's ideological opposition came in handy for UPA-I. UPA-II probably relies on Mamata's Left-colonised opposition. Once coal mining is freed up, captive mining, a field where inefficiency and moral hazard run riot, can also be scrapped. Mining should be done by professional miners who dig up coal, pay royalty on the mined coal and pay corporate tax on profits.

http://economictimes.indiatimes.com/opinion/columnists/t-k-arun/despite-having-one-of-the-worlds-largest-reserves-of-coal-india-is-unable-to-dig-it-up-fast-enough/articleshow/14111328.cms

RATE CUT BY RBI IS NOT GOOD

2012-06-14T17:04:00.000-07:00

Why Reserve Bank should not rush to cut rates

Rajas Kelkar, NDTV, 14 Jun 2012 | 10:39 PM

The Reserve Bank of India governor D Subbarao is under intense pressure to make rapid cuts in repo rates that determine the interest rate we pay for money. A section of experts suggest that the onus to stimulate India's economic growth is on the central bank. Many are calling for a 0.25 to 0.5 per cent cut in repo rate on Monday when RBI reviews the monetary policy. Repo rate is the benchmark rate at which RBI lends money to banks.

However, economic growth is a battle that RBI cannot fight alone. There is a need for the government to get its act together. A large number of experts are exasperated as ‘good’ economics is considered as ‘bad’ politics. They do not expect the government to act at all. Hence, they are looking towards the central bank.

It is time for RBI to talk back and tell the government that if it wants interest rates to fall, it has to cut the overall government borrowing and effectively the fiscal deficit.

Here are pointers on why RBI should not hurry to cut rates:

Inflation: The inflation beast is not easy to tame. The wholesale inflation rate is well above 7.5 per cent. Central banks have a primary job of controlling the inflation in an economy. RBI monitors the trajectory of core inflation. What this means in simple terms is that the central bank plots the monthly inflation data on a graph. If it points up north consistently then RBI has no room to cut interest rates. “Our trajectory of core inflation, even after factoring some moderation in global commodity prices, does not show sharp softening in the near term,” said Kotak Securities in a note this morning.

Government expenditure: The central government has been living beyond its means for some time now. The fiscal deficit is likely to be 5.5 per cent of gross domestic product or GDP despite international easing oil prices, according to rating agency ICRA. This is effectively the amount of money the government borrows from RBI to meet annual expenses. Tax revenue could fall short of the budgeted level while inflows of non-tax revenue like telecom spectrum and disinvestment depend on market conditions. “Notwithstanding the recent easing in crude oil prices, fuel subsidies may exceed the budgeted levels,” the agency says. All this means, the government borrowing could surge. RBI needs to tell the government in no uncertain terms that rate cuts are not possible if the government does not cut the overall borrowing.

Subsidies: Budget estimates put subsidies at Rs 1,90,000 crore for 2012-13. They account for a third of the government borrowing or the fiscal deficit. On Thursday, government raised minimum support prices for farmers. This could add to the food subsidy bill. The government does not want to cut subsidies on fuel like diesel, kerosene and liquiefied petroleum gas or LPG. It is also dithering on raising fertilizer prices. The austerity measures announced are not likely to have any significant impact on the budget. In such a scenario, there is little scope for fiscal consolidation.

Slow growth: The high government borrowing hurts the so-called liquidity or money supply as RBI has to meet the government borrowing demand ahead of businesses. As the government borrows more, it increases the cost of borrowing for small and large businesses. This could push RBI to cut the cash reserve ratio or the statutory liquidity ratio or SLR. Banks cannot lend all the money they receive as deposits. They have to maintain a certain percentage of cash at all times. CRR is currently 4.75 per cent and SLR is at 24 per cent. While a cut here could inject liquidity or money into the system, it increases the risk element. RBI has a balancing act to do.

State budgets could strain: States are cutting value added tax and local taxes on fuel to play the populist card. This could hurt their finances that are healthier than the central government. RBI’s June bulletin shows that the budget estimates a revenue surplus of Rs 190 crore for states. This means the revenue expenditure of states is less than their expenditure. To add to that, the government scheme to restructure state-electricity boards could add to the fiscal burden of states. Analysts expect about Rs 40,000 crore worth of debt to be converted into state bonds and increase burden on state budgets. This is not good news for the economy.

http://profit.ndtv.com/News/Article/why-rbi-should-not-rush-to-cut-rates-306200

Donate Shoes After Killing Cows

2012-05-31T19:10:00.001-07:00

Indian government has lost lacs of crores of rupees due to ill-motivated decisions taken by minister of Manmohan Singh’s cabinet and due to faulty actions of UPA government. If one takes into account of all CAG reports of last two three years and make a total of all losses caused by wrong policies of the government, loss caused due to fraudulent acts of Ministers, loss caused due to tax defaults and tax evasion, loss due to bad assets in banks, loss due to write off of bank loans, loss due to tax concessions given to business houses in the name of stimulus package during last three to five years, and unethical rise in black money and exodus of Indian money into foreign banks.

It will come to billion of billion rupees.

Now government has announced some austerity measures to curtail expenses. It is nothing but a drop in ocean.

Billions and billions of rupees have been lost or sacrificed to please a few thousand of business houses and now the corrupt government is pondering over saving a few lacs of rupees on foreign trips and conferences or a few crores of rupees by stopping employment. Pain of poor men will become more painful whereas a few lacs of rich and elite class families will continue to live lavishly.

India’s economic growth has been consistently falling from quarter to quarter, rupee is weakening, fiscal deficit is continuously increasing, inflation is going up and up, price rise is beyond control and so on. Current Financial data indicates that cloud of crisis is looming large on Indian economy. Crisis of economy is worse than that of 1991 when the then government led by learned Chandra Sekhar had to sell gold. Foreign currency reserve can postpone the crisis for a few months but cannot solve the crisis permanently.

Now the question is whether such petty savings earned on account by forcing austerity measures will be able to cope with the critical position of economy of the country.

The answer is simply NO.

There is proverb in Hindi "Gau Mar ke Juta Dan" ( donating shoes after killing cows). Corrupt ministers and politicians in general have caused unprecedented loss to the exchequer and have themselves become billionaire during last five to ten years. On the contrary pain of common men has reached and crosses the level of tolerance.

Government has advised all departments to stop fresh recruitment. It means problem of unemployment will be aggravated and crime will rise day by day.

Can government stop price rise or inflation or fiscal deficit by merely stopping foreign trip of ministers or by curtailing expenses on conferences or by reduction in oil subsidy?

No,

Of course such steps should have rather been the part of permanent policy, but these policies cannot cure the cancer of corruption and cannot mitigate the pain of common men already caused by faulty policies of Manmohan Singh during last two decades.

It is pity that bad policies which have resulted in alarming sickness of economy are still considered by veteran economists as best diagnosis to cure the sickness of economy. Government should at least learn lesson from leaders of sixties and seventies when government used to create job opportunities by adding more and more projects, more and more industries, by adding educational institutes, by helping farmers to increase agriculture output etc.

On the contrary present government always talks of disinvestment and running their current expenses by selling assets created by governments of sixties and seventies.

Policies of liberalization , privatization and globalization has simply and undoubtedly helped only a few lacs of elite class families who have become billionaire and who figure in list of top 500 richest families of the world.

Politicians invariably use to commit blunder and people of India always have to suffer the pain .It is bad luck for Indians and that in India ,politicians change the policies frequently to suit their whims and fancies but do not change their attitude and do not change their culture and intention. Common men are always punished for the fault of politicians.

Lastly even if it is assumed that policy of reformation and that of LPG may help in curing the disease of the country , I hope government failed to ensure that proper and adequate dose of anti-biotic medicines are injected into the blood of sick economy .

Obviously reputed economists like Manmohan Singh, Pranab Mukherjee , Montek Singh Ahuliwalia will do nothing but fuel to fire by their austerity steps taken at a time when common men is already frustrated with current government. Austerity steps announced by the government has now made it clear that the policies announced in 1991 in the name of reformations were not either properly executed or policies were not fit for Indian economy .

Now at least people of India will understand whether they committed a blinder by electing Congress Party to power and by giving unregulated power to person like Manmohan Singh and his cabinet.

The million dollar question is why the great economist failed to visualize the consequences of their so-called good policies ,why did they fail to achieve their goal , why did they failed to predict correct GDP growth, why did they fail to decouple the Indian economy from the pain of global recession and so on.

Will they accept their moral responsibility on growing economic sickness?

Are they not punishable for poor performance and for cheating the common men in the name of reformation?

Top business houses or ministers or corrupt officers will face no trouble even if their expenses are curtailed or reduced to zero. It is only common men who will suffer by so-called harsh measures undertaken by government in the name of curing the economy.

1 JUN, 2012, 06.57AM IST, ET BUREAU

Rupee decline, wobbly markets and 'lowest' GDP growth highlight inept handling of economy by UPA-II government

http://economictimes.indiatimes.com/news/economy/indicators/rupee-decline-wobbly-markets-and-lowest-gdp-growth-highlight-inept-handling-of-economy-by-upa-ii-government/articleshow/13694064.cms
NEW DELHI: India's economic growth plunged to its lowest in nine years during the January-March quarter, deepening the gloom and pessimism that has gripped much of Indian business and highlighting what many economists and industrialists characterise as the inept handling of the economy by the Manmohan Singh-led government, which has sent investor confidence plummeting.

The government, which has often appeared to be in denial, blaming troubles in Europe for the economy's predicament, appeared to hit the panic button on Thursday evening, asking all ministries to cut non-plan expenditure by 10% and banning creation of new posts. Gross domestic product, or GDP, rose 5.3% in the three months to March from a year ago, down sharply from 6.1% in the previous quarter, the Central Statistical Office said in a statement on Thursday.

"This is a wake-up call," said HDFC Non-Executive Chairman Deepak Parekh, who hoped the dire growth numbers would at last lead to some action from the government.

Senior policymakers appeared to be pinning their hopes on the RBI cutting rates. "It is critical to appreciate that there is no scope for any further fiscal stimulus, but if inflation moderates, then RBI has a greater room to exercise its power," C Rangarajan, chairman of Prime Minister's Economic Advisory Council told ET.

Robert Prior Wandesforde, India and South-East Asia economist at Credit Suisse, said in a note: "It will inevitably send shivers down the spines of senior coalition politicians, who will no doubt be heaping pressure on the RBI to react and react aggressively." An HSBC report referred to India as a gasping elephant.

Core sector data released on Thursday showed the new fiscal year had begun on a weak note, with output of the eight key infrastructure industries, which have a 38% weight in the gauge of industrial growth, rising only 2.2% in April.

Expenditure estimates showed private consumption growth had dropped marginally to 6.1% in the last quarter of 2011-12 from 6.4% in the previous quarter, though a 3.6% rise in investments during the January-March quarter after a 0.3% contraction in the previous quarter provided some hope.

Exports rose only 3.2% in April.

Growth Pulled Down Largely by Manufacturing

In recent days, Goldman Sachs, Morgan Stanley and Citi have downgraded their forecast for the Indian economy for the year ending March 31, 2013, to just above 6% from close to 8% not so long ago. Agriculture has grown at a modest 1.7% in the quarter.

Most economists blame policy paralysis rather than global headwinds, the favoured explanation of the finance ministry, for the economy's woes. Finance Minister Pranab Mukherjee, who many blame for the current economic mess and a disastrous budget for 2012-13 that dealt a body blow to an already fragile business sentiment, said the economy may have bottomed out but had nothing concrete to offer.

"These are disappointing figures in the context of our recent performance, but have to been seen in the light of overall global developments," he said, promising "necessary steps to address the imbalance on the fiscal front and on the current account" to check inflation, improve capital flows and spur growth, which he acknowledged was the "lowest in the contemporary period".

1 JUN, 2012, 01.53AM IST, ET BUREAU

Finance ministry for 10% cut in non-plan expenditure

http://economictimes.indiatimes.com/news/economy/finance/finance-ministry-for-10-cut-in-non-plan-expenditure/articleshow/13694821.cms

NEW DELHI: The finance ministry on Thursday announced a 10% cut in non-plan expenditure in the current fiscal as part of austerity measures aimed at containing its ballooning fiscal deficit.

The Centre is aiming to bring down its fiscal deficit to 5.1% of GDP in 2012-13, from 5.76% in the previous fiscal. It also hopes to cut its subsidy bill to below 2% of GDP this year.

The ministry has argued that there is tremendous pressure on government resources, which necessitates rationalisation and optimisation of resources.

The cut will not apply to interest payments, repayment of debt, defence capital expenditure, salaries, pensions and grants to states. The total non-plan expenditure is Rs 9.7 lakh crore, but after the exclusions the government could only save at most Rs 20,000 crore.

It also announced a ban on creation of new posts and on holding government functions in five-star hotels. The directive from the ministry's expenditure division to all ministries and department has also imposed curbs on foreign travel. It has also directed that the size of delegations and the duration of visits be kept to "absolute minimum". Re-appropriation proposals on this will not be approved.

"There will be a total ban on holding of meetings and conferences in five-star hotels...purchase of vehicles is banned until further orders," said an office memorandum issued by the ministry.

Earlier this month, Finance Minister Pranab Mukherjee had said in the Rajya Sabha that he would impose new austerity measures.

"I am going to issue some sort of austerity measures... whether people like it or not ... to convey a signal that we are responding to the situation," he had said.

The ministry has also cautioned that the rush of expenditure on procurement should be avoided during the last quarter of the fiscal and, in particular, the last month of the year "so as to ensure that all procedures are complied with and there is no infructuous or wasteful expenditure".

The memorandum says that funds should not be released without prior approval of the ministry to any entity, including state governments, which default in furnishing utilisation certificates for grants-in-aid released by the Central government.

Pranab Has Made Indian Economy Critically Sick

2012-05-27T19:31:00.003-07:00

21 JUN, 2012, 05.05AM IST, PTI

Policy paralysis: India 'condemning' millions to remain poor, says LN Mittal

http://economictimes.indiatimes.com/news/economy/policy/policy-paralysis-india-condemning-millions-to-remain-poor-says-ln-mittal/articleshow/14309341.cms

NEW YORK: Joining the likes of N R Narayana Murthyand Azim Premji to blame the Indian government for policy inaction, UK-based NRI billionaire L N Mittal has said the country is potentially condemning millions to remain in poverty by not helping industrialisation.

"Industrialisation is an important part of every major economy's development and by risking progress in this way, India is potentially condemning hundreds of millions to remain in poverty longer than previously anticipated," chairman and CEO of world's largest steel-maker ArcelorMittal said.

Addressing the World Steel Dynamics conference on Tuesday he said, "the Indian government must concentrate on smoothening the path for foreign investors ...there are understandable challenges in India relating to land acquisition and raw materials, but nevertheless the government must find a way to overcome these road-blocks more swiftly,"

ArcelorMittal is waiting for six years to implement its 30 billion projects mostly in Odisha and Jharkhand states, facing problems relating to land acquisition and regulatory issues.

Mittal made these comments at a time when global rating agencies like Fitch and Standard and Poor's have downgraded India's rating outlook. Wipro chief Azim Premji recently told global investment analysts that the country was leaderless and Infosys co-founder N R Narayana Murthy said India was in a sorry state of affairs.

Mittal said, "I hope that they are able to re-focus and return to the higher level of growth rates,".

While in the long run, the country enjoys considerable opportunities and requires enormous infrastructure investment, "... its economy is experiencing some quite serious challenge," he said.

28 MAY, 2012, 01.36AM IST, RUCHIRA ROY,ET BUREAU

Easing interest rates may not be an easy task for RBI

News item collected from Economic Times 28.05.2012

MUMBAI: Voices forecasting interest rate cuts by the Reserve Bank of India is getting feebler by the day. Indeed, there are odd ones calling for even a rate rise.

Slowing economic growth, rising prices, sliding currency and deteriorating government finances may possibly throw up a deadly cocktail - stagflation - a state of low growth and rising prices.

If the government takes a leaf out of oil companies' decision last week to raise petrol prices, and follows up with increasing diesel, cooking gas and kerosene prices, inflation rate may jump to double digits making talk of interest rate cut meaningless.

Even if economic growth rate falls to multi-year lows the Reserve Bank of India could not ease rates aggressively for fear of fueling inflation, one of the factors that has halted investments. The government does not have the fire power either to provide fiscal stimulus.

Complicating decision making is the growing imbalance in the financial system where deposits growth is at a 7-year low. RBI's sale of US dollars to arrest the Rupee slide is sucking out rupees from the system and inflation is eroding savings. Of course, a financial catastrophe if Greece exits the Euro zone could turn the argument in favour of series of rate cuts.

"Given the forex volatility and RBI interventions, liquidity has remained tight and government induced inflation pressure still remains high, so the RBI will have little room to cut rates immediately,'' says Madan Sabnavis, chief economist at Care Ratings.

Economists from Bank of America Merrill Lynch to Barclays have cut their expectations of interest rate cuts to about 75-100 basis points for the calendar from about 150 basis points. A basis point is 0.01 percentage point. Few are forecasting a repo rate cut when Governor Duvvuri Subbarao announces mid-quarter review of monetary policy on June 18, a day after Greece elections.

"I think the RBI will need to at least reverse the April rate cut in Q4 or even earlier in the July meeting because of inflationary pressures," says Jahangir Aziz, economist at JPMorgan Chase. "However, it is possible that the RBI is forced to raise rates earlier to defend the relentlessly depreciating currency." Subbarao in April surprised with a 50 basis points cut in repo rate, the rate at which RBI lends to banks, to 8%.

India has to go through a phase of painful adjustment after enjoying record growth due to market distorting policies that kept prices suppressed. The government has to curtail its expenditure to limit market borrowing that is crowding out private investment. People should cut consumption which they indulged in due to petroleum and power subsidies. Adjustments could happen with higher prices for both products, as well as money, i.e., interest rates.

"To the extent that these measures are towards correcting the fiscal deficit, RBI may not be greatly perturbed about their inflationary impact, since they would do the function of pruning demand,'' says Shubhada Rao, chief economist at Yes Bank. "Food inflation in April has also disappointed. It's not going to be easy for RBI to take their eyes off inflation.''

Poor management of the economy pushed current account deficit, the excess of imports over exports and fiscal deficit to record highs. Easy money for long and government splurge stoked demand in the past while policy paralysis stymied investments. Global investors are turning wary of India. The Indian Rupee has fallen nearly 25% since last July hurting importers and forcing the RBI to throw an estimated $25 billion since September to cushion the volatility.

Diesel, cooking gas cylinder and kerosene prices have to be raised by around 38%, 120% and 220% respectively to erase losses of oil marketing companies, says Nomura Securities. Banks reluctantly cut lending rates after the RBI cut repo rate last month since they face slow deposit growth and mounting bad loans. They are still borrowing an average of more than Rs 1 lakh crores from the RBI due to liquidity shortage. Even if the RBI cuts rates, banks wont be able to follow.

"Unless deposit growth revives to say, 16% by June from the current 13% levels, banks will not be able to cut lending rates to stem the slide in loan demand even if the RBI cuts,'' says Indranil Sen Gupta at Bank of America Merrill Lynch.

Deposits growth remains sluggish after more than two years of negative real interest rates.

Rising prices of goods and services could further reduce deposit growth rate since higher portion of income would be spent than saved.

Anand Rathi, a brokerage, expects the Wholesale Price Index to go past 10% by August from 7.23% in April. Although manufacturing, or the core price levels, are below the RBI's comfort level of 5%, there may be little scope for rate cuts since a diesel price increase will set off another round of manufacturing products price rise.
Apart from prices and currency, government's ability to stick to its borrowing target of 5.7 lakh crores and keeping the fiscal deficit target at 5.1% of the Gross Domestic Product is necessary.

http://economictimes.indiatimes.com/news/economy/indicators/easing-interest-rates-may-not-be-an-easy-task-for-rbi/articleshow/13577875.cms

27 MAY, 2012, 11.24AM IST, PTI

India's macro-economic situation has suddenly worsened: Assocham

http://economictimes.indiatimes.com/news/economy/indicators/indias-macro-economic-situation-has-suddenly-worsened-assocham/articleshow/13557225.cms

NEW DELHI: India may not be heading towards a balance of payment crisis, but its macro-economic situation is worsening by the day calling for urgent steps to ensure no further damage is done to the economy, a survey of leading economists and select industry leaders has pointed out.

Out of the 58 economists and CEOs covered under the Assocham poll in the last one week, as many as 53 said India's macro economic situation has suddenly worsened.

"India may not yet be heading towards a balance of payment crisis, but the macro-economic situation of the country is worsening by the day calling for almost emergent steps to ensure that no further damage is done to the economy," Assocham said.

It was a combination of flip-flop on domestic policies and the global uncertainties arising mainly from the troubled euro-zone which played a spoilsport for the Indian economy, it said.

"Breaking out of scams, one after the other, resorting to taxation policies which are perceived to be unfriendly to the global investors, political compulsions of the government in not pursuing the economic reforms are the major factors which have led to a worrying state of economy, which was booming till two years ago," it said.

Majority of the respondents said India's macro economic situation has suddenly worsened.

"The worst disaster is coming from a huge uncertainty on the rupee value and its free fall. Everybody out there in the business world is feeling shaky," the survey said.

Rupee has depreciated by over 13 per cent since early March and has even touched the low of Rs 56.38 last week.

It said that a whole lot of sectors like automobile, tourism, steel, oil, gems and jewellery, real estate are feeling the heat of rising dollar and weakening rupee.

"While cost of raw material imports has gone up significantly with rupee weakening, inflation is raising its ugly head and is adding to the nervousness among the industry, bankers and policy makers," it added.

This would be catastrophic and depress the demand in the manufacturing sector, the largest employment source after agriculture and services, it said.

However, the chamber hoped that RBI will take a balanced view when it reviews the credit policy next month.

RBI under Government Pressure

2012-05-06T16:43:00.004-07:00

RBI finally succumbs to market, Govt pressures

T.V. GOPALAKRISHNAN

May 6, 2012:

While announcing the policy in January 2010, the Governor, Reserve Bank of India, made an observation that “getting out of an expansionary policy is much more difficult than getting into it. It is like a Padma Vyuha in Mahabharatha –you know how to get in but not many people know how to get out.”

It seems the statement equally holds good when the issue of coming out of a contractionary policy comes up when an unfavourable macro-economic environment exists/persists as of late.

The RBI in its credit policy announced on April 17, 2012, gave a surprise by effecting a 50 basis point cut in its repo rate from 8.5 per cent to 8 per cent with immediate effect as against 0.25 per cent expected and speculated by the market.

Consequent to this, the reverse repo rate under the LAF, determined with a spread of 100 basis points below the repo rate, gets calibrated to 7.0 per cent. Similarly, the marginal standing facility (MSF) rate, which has a spread of 100 bps above the repo rate, stands adjusted to 9.0 per cent.

Further, in order to provide greater liquidity cushion, it has also been decided by the RBI to raise the borrowing limit of scheduled commercial banks under the MSF from one per cent to two per cent of their net demand and time liabilities (NDTL).

The market sentiments more than the macro-economic fundamentals seem to have influenced the RBI's credit policy can only be the explanation for such a sharp cut in the repo rate when all the macro economic factors without an exception are opposite to what the RBI would have wanted.

When the fiscal deficit, current account deficit, inflation level particularly consumer price index inflation, exchange rate, international price of oil and all other external and domestic factors which have a bearing on the FDI and FII investment in the economy are not favourable, the only reason for the RBI to have come out with a policy cut is to give the much needed boost to economic growth by improving the sentiments and confidence of the investing community.

Although, according to the RBI, the decision to ease the policy rate has been based on two broad considerations viz; the economy is clearly operating below its post-crisis trend and there is a decline in headline inflation from 9 per cent in January 2010 to below 7 per cent by March 2012 and non-food manufactured products inflation has dropped from a high of 8.4 per cent in November 2011 to 4.7 per cent in March 2012, actually coming below 5 per cent for the first time in two years, the reasons are not very convincing when the RBI itself admits that there is a need to guard against risks of demand-led inflationary pressures re-emerging.

The RBI had taken series of measures to contain inflation, but the inflation numbers have remained high and way ahead of the RBI's comfortable level fixed at 6 per cent.

The need to put up with an inflation at more than 6 per cent is getting an official recognition is the message that one gets from this policy announcement and this has been endorsed by none other than by the Finance Minister when he advised consumers ‘to learn to live with 6-7 per cent inflation' during his address in the annual CII conference held in New Delhi on the April 17, 2012.

The continued high level of inflation and poor growth of GDP are beyond the control of monetary policy measures alone have been well proved over a period and these monetary measures in the absence of supportive fiscal measures have adversely affected the growth trajectory as indicated by the declining trend observed in IIP and GDP growth.

Infrastructure bottlenecks and other supply related constraints also are other major concerns which do not get the required attention from the Government. The policy rates were revised upwards 13 times commencing from January 2010 and the CRR rates which were enhanced twice during 2010 were revised downwards in two instalments in January 2012 and March 2012 to contain inflation and address liquidity issues in the economy.

When the inflationary pressures continue to persist and upside risks are high in the RBI's own admission, the sharp reduction effected in the repo rate purely from a monetary point of view carries no conviction though it carries a message to the Government to initiate action both from the administrative and fiscal front to facilitate investment and production.

It also satisfies the demand of industry and market to reduce the policy rate as if interest element is a major component of the cost of production.

The policy projects GDP growth at 7.3 per cent which is reasonable and achievable despite the constraints.

The deposit growth projected at 16 per cent and non-food credit growth at 17 per cent compared to the past trend are very moderate and banks have to put in special efforts to attract more deposits and reduce the cost of funds.

The present approach of banks in purchasing short term deposits at high costs instead of mobilising deposits needs to undergo a change and banks should go in for long and durable deposits from a clientele consisting of real savers of money. This requires intensified financial and banking inclusion and introduction of customer-friendly savings and fixed deposits products.

The time has come for banks to considerably reduce the net interest margin by adjusting the rate of interest both on deposits and advances and improving drastically the quality of assets. The tendency on the part of banks to depend on borrowed funds particularly from the RBI to run their business has to be

curtailed.

The repo facility should not be a perennial source of funds to lend and invest.

The funds management particularly liquidity management of banks needs to be fine tuned and the cost of funds needs to be brought down to improve the NIM and reduce the lending rates.

Since the RBI, as is always the case, has come out boldly with the policy change as desired by the market and the Government, it is now the turn of investors, industrialists, bankers and the Government to do their bit to come to the rescue of the economy and meet the aspirations of the people.

What the economy urgently needs, is improved production and low inflation among other things cannot be lost sight of while clamouring for more concessions and reliefs.

(The author is a Consultant and the views expressed are personal).
http://www.thehindubusinessline.com/industry-and-economy/banking/article3390873.ece?homepage=true&ref=wl_home

Walmart in India

2011-11-25T19:45:00.000-08:00

Union Cabinet has decided to permit Foreign Direct Investment upto 51% in retail sector. When India got independence from Black rule of British in 1947, leaders of the country promised to make India self dependent , they told the Nation that they will use its own resources to build India strong and give Indians all comforts which they deserve for respectful living.

More than half a century has elapsed; Indian instead of becoming a self sufficient Nation has now become dependent on FDI for survival. Indian leaders go for foreign tours begging FDI in India in different sector. Perhaps Indian leaders has as per their comforts redefined Independence and self dependence.

Positive thinkers in political circle, leaders of UPA and great economist say that FDI in retail sector will create four million jobs; some over enthusiastic leaders in the government say that FDI in retail will create one crore new job opportunity and give enormous benefits to farmers. They do not talk of how many Indians will become unemployed when giant of retail sector like Walmart of USA or Tesco of Europe come in India. If Walmart and Tesco like companies can create millions of jobs, why not domestic companies in retail sector do the same thing.

Yes I also agree a few thousands of educated youth will get job in retail chain and get handsome salary too , a few corporate brokers will also get opportunity to earn considerable amount of brokerage but millions of poor and middle class families who survive on small scale retail business will be rendered workless and constrained to starve or become slave in the hands of English people, the same slavery which their forefathers had to adopt and practice under the colonial rule of British before we got freedom in 1947.

Rahul Gandhi asks loudly people of Uttar Pradesh, “How long you people will prefer going Mumbai for begging”. He does not think it fit to ask cabinet ministers and Doctor Manmohan Singh “How long India will survive on FDI and FII” .

He does not ask Chief Ministers of Congress Party led states, how long sons and daughters of their state will go to Bangalore or Hyderabad or Mumbai or Delhi for higher study and for attractive jobs. Lacs of educated youth from the state of Rajasthan, Maharashtra, Kerala, West Bengal, Harayana are working in IT sector in the state of Karnataka, Andhra Pradesh and also in foreign countries .

Stock Market in our country depends on FII and when FIIs start selling stock, the entire market bleeds and it is ultimately the weak Indians who become the victim and who have to suffer huge losses on their investment. Rahul Gandhi does not advise Manmohan Singh led government to make stock market self reliant and not depend upon foreigners.

Big corporate depends on External commercial Borrowings and their business depends on exports and imports. When other countries commit economic blunder, they economy collapses and ultimately India also become victim even if our country is headed by great economists. It is crystal clear our survival now depends less on our performance and less on our intrinsic values but more on foreign buyers and sellers,FDI and FII and the policies of the world.It will be correct to say that India is for FDI, by FDI and of FDI.

Our leaders are very much hopeful that if FDI is allowed in retail sector, millions of job will be created and poverty of Indian rural folks and farmers will be eliminated or at least help in reduction of poverty of India.

Here It is worthwhile to mention here that the Walmart which originated and prospered in USA failed to create considerable job opportunities in USA and Tesco which has its root in Europe failed to create even a lac job opportunity in Europe . USA is facing the problem of unemployment and passing through bad days. Financial crisis which erupted in USA and Europe in the year 2008 still persists.

Poverty level in USA has gone up. People of USA has left farming and have to depend on other countries for even vegetables , pulses, wheat ,rice and other cereals . People of USA have to depend on India and China even for packed food, junked food, cloth and goods of daily uses.

To open the eyes and ears of leaders of UPA government I submit hereunder the conclusion arrived at by an renowned economist Mr. Stephen M Ciccarella Jr. who is a professor in Cornell University - Department of Economics; Public Policy Institute of California .this is the abstract and finding arrived at by this great men after prolonged research on the life of US farmers, poverty in rural areas of USA before and after entry of Walmart retain chain in US market.

Abstract:
We estimate the effects of Wal-Mart stores on county-level retail employment and earnings, accounting for endogeneity of the location and timing of Wal-Mart openings that most likely biases the evidence against finding adverse effects of Wal-Mart stores. We address the endogeneity problem using a natural instrumental variables approach that arises from the geographic and time pattern of the opening of Wal-Mart stores, which slowly spread out from the first stores in Arkansas. The employment results indicate that a Wal-Mart store opening reduces county-level retail employment by about 150 workers, implying that each Wal-Mart worker replaces approximately 1.4 retail workers. This represents a 2.7 percent reduction in average retail employment. The payroll results indicate that Wal-Mart store openings lead to declines in county-level retail earnings of about $1.2 million, or 1.3 percent. Of course, these effects occurred against a backdrop of rising retail employment, and only imply lower retail employment growth than would have occurred absent the effects of Wal-Mart

If anyone is inclined to know more about poverty of USA, change in fate of farmers in USA after entry of companies like Wal-Mart, they should thoroughly read the book /article namely “Concentrated Poverty in America”

One may also use this link to have a fair view of the positive and negative impact on American economy , American retailers, farmers and Super Markets and American farmers and American society .
https://pantherfile.uwm.edu/sdrewian/www/Wal-MartAndLocalLaborMarkets.pdf

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=958704&http://www.google.co.in/url?sa=t&rct=j&q=wallmart%20poverty%20stefen%20ge%20goetz&source=web&cd=2&sqi=2&ved=0CCcQFjAB&url=http%3A%2F%2Fpapers.ssrn.com%2Fsol3%2FDelivery.cfm%3Fabstractid%3D958704&ei=10nQTqyJN87RrQectZC5DA&usg=AFQjCNHvmGt1xB2YoiBmuMHZv2j4hxFkJA&sig2=VC_ZImJW_sbp8yN3SPTOLw

Farmers in America and European countries have left farming and this is why agricultural production in these countries is gradually coming down and down.

Unemployment has become a headache for US administration and other developed countries.

By adopting FDI in retail India is going to invite a chain of problems, farmer may discard farming due to lesser realization of their products , existing retailers will be reduced to zero and local vendors will become slave in High profile retail chain sponsored by Foreign based Walmart and Tesco.

Ali Baba and Chalis Chor

2011-11-21T19:02:00.000-08:00

Great economists like Manmohan Singh , Montek, Chidmabram, Pranab are making one after other promise and prediction to control inflation, to check corruption, to control price rise , to help poor to control terrorists and naxals and so on. But they have invariably failed on all fronts. Stock market is falling like playing cards. Prices are flying higher and higher like free birds. Current account deficit and trade deficit is increasing fastly.

To add fuel to fire one after other central minister is booked to jail.

These politicians have one or two Rambans (panacea), they are quota for one caste or the other and the other is waiver of loan or sanction of subsidies which are announced just on the eve of general election. Again they may succeed in diverting the mind of common men from real problem. In fact they can do nothing but they themselves can grow richer and richer

As such wise and prudent person who is non political and who want to remain away from controversy do not want any more to comment on the statement of persons like Manmohan Singh, Chidambram, Pranab Mukherjee or Montek Singh Ahulwalia who are treated as the most talented high level economists but who have spoilt the economy of the country , who have blackened fate and future of 100 crore Indians just to help rich people grow richer and who have lost their mental balance and reasonable thinking in greed of wealth, wine and woman. Person like Anna or Ramdeo who raised the voice against the ailing system are now facing the music.

These great economists who are now in power can never solve the problem of inflation or price rise or erosion in currency value. They can never provide good governance and eliminate corruption from society.

It will not be wrong to say that this is a government headed by Alibaba and Chalis Chor.

This is why they simply make a turn or U turn, make a statement and hide in chamber. The greatest fun and the greatest tragedy is that great economist who are in power in Delhi are instead of strike at the root of all maladies are irrigating and promoting all those causes which contribute in escalation or price rise, corruption, inflation and all sins which give enormous pain to poor and enormous comfort to riches.

Policy of reformation have in fact deformed the shape of Indians, policy of privatization has enabled the greedy leaders to sell off the old properties ( PSUs created by ancestors) for current spending and the policy of globalization has given them a permanent excuse for all their sins and the excuse is global recession.

May I ask these experts and aforesaid great economists :

“What are the basic reasons of global recession and why has the same recurred even after giving a lot of stimulus packages after 2008 financial crisis? “

Will any leader in the country and outside the country accept the truth that advocates of reformations, privatization, liberalization and globalization have committed many faults and blunders in implementation of their policies , monitoring, regulation and in governance? They will have to accept the stimulus package they announced after 2008 crisis failed to cure the disease and were all ill-motivated.

Will any political experts and doctor in economics who pleaded unrestricted freedom to business community now admit that they failed to visualize the inherent weakness of freedom ?

Give 2 Minutes to Know Manmohan Singh

2011-11-08T17:05:00.000-08:00

Respected Manmohan Singh , Prime Minister of our country says, “Food inflation may be sign of growing prosperity”.

Manmohan Singh is surrounded by persons of top trade houses and top industrialists of the country. He lives in and around richest people of India and he interacts only with mostly rich people. He moves in foreign countries for attending various meeting , talks with wealthy ministers and guided by corrupt team of senior officers and hence he always come across signs of prosperity.

He has read in books various principles of economics and the result of various economic theories. He keeps his eyes and ears closed and act as per theory what he has read during his college life when the economic condition and global scene was entirely different.

Manmohan Singh is thus not aware of pathetic position of 100 crores Indians who live and die in poverty, who are moving from pillar to post in search of suitable employment and who cannot afford good house to live in and good schools and colleges where he can afford quality education.. He is not at all interested to realize the pain of poor and this is why he says that food inflation is sign of growing prosperity.

Government of Manmohan Singh may blame BJP, NDA or other opposition parties or state governments for the failure of central government in stopping price rise or in curbing corruption , may promise for uncalled for reservation quota for Muslims or Dalits, may waive loans of farmers to the tune of billions of rupees on the eve of general election, may torture Team Anna or Ramdeo and their followers but cannot change the perception of common men for long. Anger of common men against anti people attitude of the government is visible to all.

Manmohan Singh says that food inflation is the sign of growing prosperity. In our country, person earning Rs.32 and higher in a day is not poor as per guidelines issued by his government and hence he is right in saying that Indian mass is prosperous .

National advisory committee advises Sonia Gandhi that rise is petrol price will not have much impact on inflation and not affect or contribute in price rise. It further says that petrol is used by hardly 5% of Indian population. It means 95% of Indian population cannot afford Motor cycle or scooty and they do not need petrol. This is why Manmohan Singh justifies hike is petrol price and he is further ready to accelerate price rise and inflation by deregulation of price of diesel in line with petrol deregulation so that prosperity of India my go up and up. Three salute to Doctor MS for his vast knowledge in Economics.

I am a layman, however i would like to suggest learned MS to impose tax on water and there is no doubt that price rise will be more steep and food inflation will go higher and higher symbolizing prosperity growth of the country and at last his reputation will go from global level to other planets too.

Theory without practice is impotent and practice without theory is blind.
Leaders like Manmohan Singh, Chidambram, Pranab Mukherjee and Montek Singh Ahulwalia may possess a good number of valued degrees in Economic and political science, but they have miserably failed in using economic principles and political ideologies for the betterment of common men and for overall development and equitable growth of the country.

Manmohan Singh may be clean and honest and simple too but he as head of the government has failed to stop corruption of his ministers.

There may be many reputed advocates in the cabinet of Manmohan Singh, but they have completely failed to ensure quick and affordable justice to all.

There may many wise men in the government ruling the country, but they have not performed well to provide affordable education to children of poor and middle class families. Congress Party could promise a lot of public welfare scheme but during last fifty years of their rule they could not ensure safe water , quality health care centers and adequate electricity in all part of the country.

Policies of reformation, privatization, liberalization and globalization adopted by Manmohan Singh led government may have given benefits to a few hundred rich trade houses but failed to protect the interest of common men.

Leaders of ruling UPA led by Congress Party may have experience of four to five decades in ruling the country but they have completely failed to ensure good governance and corruption free departments and failed to mitigate the hardship common men are facing in their day to day life.

GDP growth of India may be comparable with China and may be higher than that of USA, UK, Japan, Germany and many other developed countries. But the government led by Manmohan Singh has completely failed to provide comfortable and respectful living for common men.

Price rise and pain of inflation is beyond control of the government. Manmohan Singh has given conflicting and confusing statement many times during last three four years on the issue of price rise but failed to convince aggrieved common men. Sometime he says that he has got no magic stick which can stop price rise and some other time he says that he says that price rise represents prosperity of Indians.

He says that his government has been taking appropriate steps to contain price rise and have been making one after promises to control price rise, giving one after other dates by which prices of goods will start coming down.RBI has taken a lot of monetary steps, revised interest rate 13 to 14 times and amended policies frequently to control price rise and inflation but failed to achieve the goal.
I am however hundred percent sure that person like Manmohan Singh cannot control price rise because instead of striking at root cause of price rise and inflation they are providing all ingredients needed for speedy growth of root causes of price rise and inflation. The causes which results in price rise and inflation are in view of Manmohan Singh are contributors of growth and development and also help in survival of his government.

What is justification for giving subsidy, interest concession, providing free land or low cost land to big exporters, top industrialist when our government thinks it unwise and undesirable to give tax concession on prices of petrol to give relief to common men?

They may think that diesel is used by only poor and by farmers or by only bus operators, not at all by rich people? They are totally mistaken and misguided. Bitter truth is that diesel and domestic gas cylinders are used by rich business men in their diesel car and for their hotel, businesses, and industries and so on. Government may think that poor only uses kerosene oil? But the bitter truth is that kerosene is mostly used in adulteration by petrol or diesel distributors in nexus with oil producing and oil distributing companies.

Secondly when government is weak, why is government providing high class food to MPs at nominal and negligible cost and bearing the entire cost from government exchequer?

Why all PSUs provide subsidized goods including gas , coal, food, houses to their employees.?

When government says that it has freed petrol price to be decided by market dynamics, why not the same government is withdrawing all facilities extended to exporters, importers, industrialists, traders, service providers and leaving them to survive on market dynamics?

Why all bitter laws are meant for poor and downtrodden only. It hardly matters much if a few facilities are snatched from rich class people to share the same with common men.

Unfortunately Government decides and regularly regulates bus fare, auto fare, taxi fare, coolie charges but not having any control on higher and higher profit ratio loaded on each goods by their producers and sellers.
Government of India under the leadership of Manmohan Singh introduced policies of liberalization, privatization and globalization in the year 1991 and since then pathetic position of common men have gone from bad to worse and the difference between rich and poor have widened to a dangerous level.
Number of poor has trebled i.e. from 35 crores to 105 crores and number of rich has also trebled from 5 crores to 15 crores.

Unregulated and unwarranted freedom to business houses, to rich people and to high profile politicians has resulted in globalization or protest, globalization of revolt. A few lacs of Politicians, a few lacs of officers and a few crores of businessmen have accumulated all wealth in their fold and poor common men are left crying and crying only. It is poor who are later termed as downtrodden and destitute.

Even banks which were nationalized by Indira Gandhi to serve common men from local money lenders and to extend loan to common men at subsidized rate are now engaged in serving only rich people. High value loans processed in a day or two and sanctioned at low interest rate whereas low value projects are referred to NGO or Micro Finance Institutes which charges unbearable interest rate and where even months are wasted in processing and sanctioning of loan.. Higher the deposit, higher is the rte offered by banks, For low value deposits, even savings deposits: banks offer lower rate than rate which is offered to rich people for bulk deposit.
Lastly I dare ask a question to all,

How long 105 crore poor people support anti poor policies of Manmohan Singh and his government?”

I am unhappy to observe that members of Team Anna, Ramdeo Baba and his followers are giving unwarranted reaction / response on the barking of one Dog let loose willfully by ruling party to weaken movements launched by various forum and organization against their misdeeds, against corruption, against black money and against unprecedented price rise.

It is unfortunate that One Dog is barking all the time on all issues and against all right thinking people and diverting the mind of all media men and India loving citizen from burning national issues to totally irrelevant and non Issues. I condemn media men who try to focus the mind of views on non Issues and dilute the intensity of movement launched against black money, corruption, price rise etc.

I appeal to all who are supporters of fight against corruption and black money and those who are followers of Team Anna and Ramdeo or Guru Ravi Shankar should avoid responding on statement made by barking Dog. Rather I appeal to member of all these forums to shed their personal differences and personal ego and come together to fight against the corrupt system jointly. Please do not common against each other to become victim of ruling party which is bent upon ruling the country by adopting the policy of “Divide and Rule”

If ruling party can peep into past of Ramdeo Baba and member of Team Anna to puncture their movement , why not members of Team Anna and Ramdeo Baba spread all over the country discover the evil works and crime committed by important members of ruling party silently and expose them.

We should stop fighting in past and try to involve in healthy discussion on current issues. Everyone is Khira Chor, it does not mean that Hira chor should be exonerated from his guilt and doors of courts and that of police station should be closed for all.
“Chori upar Sina Chori” is possible by ruling party only because we are divided on various points like caste, community, region, religion and personal egos as mentioned above.
Ravan ka Badh karna hai to Ram aur Ram ki Sena ko chalaki se yudh karna hoga.

Issues of National Concern

2011-10-19T18:49:00.001-07:00

After killing of Indira Gandhi on 31st of Oct 1984, riot against Sikhs erupted in more than 100 towns in the country and police remained silent spectator for about 10 days and allowed properties of Sikh to be looted, families of Sikhs to be killed and so on. Who gave such instruction to the then officials in police department that they kept calm and allowed injustice to continue?
May Congress Party introspect?
Congress party always blames Modi for Gujrat riot but willfully avoids questions on Godhra incident of burning a train coach.
Why?

Delhi police and central government ordered CBI inquiry against Ramdeo and his associate Bal Krishna.
Can UP or Delhi government order CBI inquiry against the person who tried to hurl shoes on Arvind Kejriwal and against persons who attacked on Prashant Bhusan and his supporters?

When ministers of cabinet headed by Manmohan Singh are made accused in charge sheet submitted by CBI and in rejoinder/ defense submitted by CBI in Supreme Court and when ministers of Manmohan Singh's cabinet are put in jail , will Manmohan Singh and Chidambram will also be held responsible and guilty in 2G scam by Supreme Court and will CBI pray for sending MS and PC also to jail?

Opponents of Indira Gandhi or Nehruji used to be eliminated by the supporters of the then rulers.
Is Congress Party following the same practice and trying to remove those who are posing threat to their chair?

Will anyone try to know and let others know on progress made by UPA government on investigation and punitive action taken report related to various terror attacks occurred during last 10 or 15 years?
Will anyone tell the country when Pragya Sadhwi get justice?

Government takes action against auto drivers, coolies, bus owners, for realization of unreasonable fare.
Can present government take action against businessmen and industrialists who are earning exorbitant profits and causing prices of all essential goods to rise month after month?
Why not government regulates college fees charged at Engineering, medical and MBA colleges?
If fees are reasonable from point of view of ruling party, will they ensure at least quality of teaching in such colleges which commensurate with fees charged?

Government hospitals are not providing medical services to the satisfaction of patients and caretakers.
Will government ever take action against guilty doctors, take action against doctors who prescribe unwarranted pathological tests for patients only to earn commission from Pathological labs and punish suppliers of unscrupulous medicines?
Contractors are not doing construction work as per job order. Road quality is poor, bridges collapse in few years, government houses and office buildings are in dilapidated condition.
Will government ever punish such contractors as well as politicians who protect such mischievous contractors?

Black money is parked in foreign banks. How this money reaches foreign banks is a big question.
Will government punish such importers who by inflating import bill first remitted black money abroad and now by inflated export bill repatriating their ill earned black money into our country in fear of government action in response to Ramdeo and Team Anna movement?

As of now Anna is most popular, his team is getting respect and recognition. Voice against Congress Party and UPA is spreading in every nook and corner of the country.
There is a proverb "Strike the iron while it is hot”.

1. Will leaders of opposition parties shed their personal ego and come together to fight unitedly against UPA in forthcoming election to teach UPA a lesson by ousting Manmohan Singh government?

2. Will BJP leaders exhibit unity among their leaders and stop so called fight for the post of PM if they really are inclined to fight against corruption?

3. Will media stop debate on silly points who will be next PM? Or whether Anna is probable candidate for the post of President? Or whether Modi is crazy for post of PM? etc

Will media focus on national issues like price rise, unemployment, exploitation of working class, corruption, threat from naxals and extremists, terrorism sponsored from foreign countries, unsafe Indian borders, use of fake educational certificates, circulation of fake notes, fake drugs, fake colleges, disadvantages of unrestricted freedom given to private sector, globalization of poverty due to wrong policies of globalization and stop focusing on news related to road accident, rape, murders etc.

How to stop price rise

2011-10-15T19:39:00.000-07:00

RBI head Mr. Suba Rao or Mr. Manmohan Singh or Mr. Pranab Mukherjee or Mr. Chidambram or Mr. Montek Ahluwalia or the Manmohan team as a whole have totally failed in stopping relentless price rise during last five years and still they can do nothing to control price rise or to control inflation until they change their mindset, they change their policy framework , their style of governance and their habit of accusing BJP , NDA or state government for their failure.

Monetary measure undertaken by RBI after 2008 global recession were uncalled for and unwarranted, and now after the economy has already caused huge damage to the society and the economy of the country, the monetary steps taken by RBI and the government are absolutely inadequate to stop rising trend in prices and to control inflation . Entire efforts to control inflation will definitely and undoubtedly prove ineffective until they honestly and sincerely take corrective steps against rich businessmen who are exploiting poor consumers and who are merely serving the interest of politicians to serve their vested interest.

Freedom without restriction has caused enormous damage to the society and the economy during last two decades and this is why Mr. Manmohan Singh has been making promise after promise and extending time after time to control rising prices and to keep inflation within limit.

Entire world is suffering due to globalization and privatization. 85 countries of world including USA protested on 15th of October against policies of their government which are blindly supporting and acting for the benefit of rich class.

Profit making is beyond the control of present UPA government led by Doctor Economist Manmohan Singh and neither does the government want to regulate profit ratio of top trade houses or industrialists. Political class flourishes on the fund given by top businessmen of the country and hence they cannot imagine of taking any punitive action against exploitation perpetuated by top ranked rich people.

Incomes of common men and salaried class rise hardly at the rate of 2 to 3% per year whereas prices of all essential goods rises 20 to 30% per year. Due to this mismatch , most of Indian families are unable to afford essential goods and good education for their children and pressure of pain caused by this mismatch is slowly and consistently creating anger among poor and middle class people against the ruling government..

Capacity of 95% of Indians is coming down year after year in affording livelihood and it has become difficult for common men to spend peaceful and normal life. On the contrary wealth of top 500 rich houses has multiplied many times and reached to greater and greater height year after year. 95% of GDP and wealth of the country is in the hands of top 500 to 1000 houses. Living style of top 5% of population has become a thorn in the eye of bottom 95%of population.

Gap between rich and poor has widened to intolerable extent and this is why national unrest is growing day and day, year after year throughout the country. India is facing economic crisis because it adopted the policies of reformation without the strict provisions of regulation, control and punitive action. Government completely failed to ensure equal and judicious distribution of GDP growth said to have been achieved by government due to policies of reformation.

Results expected boon from the policies of globalization and privatization instead of becoming boon for common men have become curse for the society and for the nation as a whole only due to persons like Manmohan Singh and his team named above who were and who are said to be pioneer and front runner in implementation of policies of liberalization and privatization in the world. It is undoubtedly true that wealth of top politicians and officers along with top ranked businessmen houses have grown hundreds of times during the regime of Mr. Manmohan Singh.

To add fuel to fire, the level and volume of corruption has broken all records during the regime of Manmohan Singh and now the corrupt team of his ministers and politicians backing Manmohan Singh are frequently and consistently trying to change the agenda of common men and that of Team Anna by criticizing wrongly or rightly BJP and RSS. Government does not want to talk on national issues like price rise, unemployment, threat from naxalism and terrorism, rising corruption, lack of governance but only engaged in playing blame game with opposition parties.

Unfortunately the fourth pillar of democracy, Media is also not doing justice with the burning issues of the nation. Points of debate initiated by media are normally irrelevant and illogical such as “Anna will or will not the candidate for the post of President”, “Advani is in the race of PM’s post or not”, dispute between Advani and Modi, Team Anna is backed by RSS or not , growing differences between Pranab and Chidambaram, Manmohan Singh is remote controlled by Sonia or not ,dalits are exploited or not, quota is adequate or not, name of the state or a district should be changed or not etc.

Due to biased attitude of media men, national issues are usually ignored and sacrificed on the altar of TRP of TV channels and issues which divide the society and weaken the nation are highlighted again and again to increase TRP of TV.

I demand a Parliamentary Canteen in all villages for Poor

2011-09-20T21:13:00.000-07:00

If you earn Rs32/ per day , you are not poor as per definition of poor given in Supreme Court by Government led by Economist Prime Minister. You should however request learned Manmohan Singh to allow you and your family to eat and stay in Parliament.

Because rate of various food items is such that Rs.32/ per day will look enough.See below the rate chart of Parliament.

चाय = 1 रूपया प्रति चाय

सूप = 5.50 रुपये

दाल = 1.50 रूपया

शाकाहारी थाली (जिसमे दाल, सब्जी 4 चपाती चावल/पुलाव, दही, सलाद ) =
> 12.50 रुपये

मांसाहारी थाली = 22 रुपये
>
दही चावल = 11 रुपये
>
शाकाहारी पुलाव = 8 रुपये
>
चिकेन बिरयानी = 34 रुपये
>
फिश कर्री और चावल = 13 रुपये
>
राजमा चावल = 7 रुपये
>
टमाटर चावल = 7 रुपये
>
फिश करी = 17 रुपये
>
चिकन करी = 20 .50 रुपये
>
चिकन मसाला = 24 .50 रुपये
>
बटर चिकन = 27 रुपये
>
चपाती = 1 रूपया प्रति चपाती
>
एक पलते चावल = 2 रुपये
>
डोसा = 4 रुपये
>
खीर = 5.50 रुपये प्रति कटोरी
>
फ्रूट केक = 9 .50 रुपये
>
फ्रूट सलाद = 7 रुपये
>
यह वास्तविक मूल्य सूची है
>
ऊपर बताई गई सारी मदें ” गरीब लोगों “केवल और केवल के लिए है जो

कि भारत के संसद की केन्टीन में ही उपलब्ध है.

और इन

गरीब लोगों की तनख्वाह 80,000 रुपये प्रति माह ह

इसके अलावा इन्हें बोनस के रूप में भारी से

भारी घोटाले करके अरबों - खरबों रुपये हडपने की खुल्ली छूट है .

और ये सारा का सारा पैसा पब्लिक की जेब से जाता है

जिसे हम और आप टैक्स के रूप में चुकातेहै

Result of Stimulous Package and Reformatory policies

2011-08-24T19:57:00.000-07:00

Government of India in the year 2008 and 2009 announced numerous stimulus packages to salvage not only banks but also the Indian economy as a whole from crisis erupted in foreign countries. Unfortunately after lapse of three years and huge stimulus packages the country is facing the same crisis as it faced in the year 2008 and before.
It is astonishing and mysterious too that public sector banks in general used to offer higher and higher rate of Interest to attract corporate deposit , bulk deposit and government deposit in their fold upto 2010 and on the contrary they were ready to finance at sub BPLR rate to corporate . Banks were booking higher and higher profit before 2008 and upto 2010 and showing lower and lower Net NPA and Gross NPA inspite of offering higher deposit rates and lower lending rates.
But during last one year or so when RBI has resorted to rate hikes 12 times and when banks are forced to accept base rate to avoid sub PLR lending, almost all banks have raised BPLR and Base rate to their peak level and on the contrary they have stopped almost completely offering higher rate of interest on deposits to corporate, government departments and cash rich PSUs.. Surprising during last four quarters, profit of most of the banks have either come down or started falling quarter after quarter despite the fact that lending rate is increased abnormally and deposit rate increase is stopped and controlled to a great extent.

What mystery and magic lies behind this is beyond my comprehension, but I am very much confident that the dirty game of bankers will be exposed only when thorough investigation is carried out and some of CMDs and EDs and some of CAs are booked to task who are carrying out fraudulent activities just similar to what Raju carried out in Satyam Computers.

Asset quality in public sector banks have been going from bad to worse for last several years, and it is not a new phenomenon. Unfortunately or fortunately management of all banks have been manipulating the figures year after year in close nexus with team of auditors and officials of Reserve Bank of India and that of Banking Division in Ministry of Finance to conceal bad assets. They have put pressure on field official in branches and taught not to improve the quality and take strong initiative to recover the money from bad borrowers but taught only various tactics to conceal bad assets to reduce provisioning towards bad assets as per RBI guidelines.

At corporate level top officials of banks including CMD and ED have used various false and fake pleas such as global recession, interest rate hikes, bad monsoons, natural calamities etc to give various reliefs to bad borrowers instead of tightening the screws to trap bad officials and bad borrowers. Top management of bank management have never diagnosed the real causes of bad assets whenever it is found to increase due to some reason or the other. Clever bank management do not want to take action against erring official, corrupt sanctioning official because they themselves are part of dirty game of bad lending. This is why bank management have wrongly but willfully and invariably pleaded that if action is taking against credit officers and top executives , credit growth will immensely suffer and they will not be in a position to achieve the target set by Finance Minister.

After complete introduction of Core Banking Solution (CBS) in banks, Reserve bank of India advised banks to calculate bad assets called as Non Performing assets (NPA) on common terminology using advanced technology and not manually . Banks are slowing getting pressure to assess their quality of assets through automated system taking advantage of CBS technology. Since management of banks find now difficult to conceal bad assets under CBS oriented NPA assessment system, total of bad assets is now being exposed in Balance sheet and it has reached a level of 3% of total advances.

It is to be noted here that NPA percentage is still more than what it has been revealed during last few quarters. Still banks have not declared their entire NPA and after taking RBI hidden consent. Of course they are gradually exposing their bad assets and this is why quantum of bad assets has not jumped to highest position in one time but it is rising quarter after quarter. Officials of RBI, top management of each PSB and official of Ministry of Finance all know very well that actual quantum of bad assets in government banks is far more than 5% of total advances. In more than 25% of three year old branches gross NPA is more than 25% of total advances. There are many such branches where gross NPA is even more than 50% of total advances.

Clever bank management are trying their best to show minimum percentage of gross NPA by either manipulating the system secretly or by resorting to fresh lending by opening new branches and resorting to fresh bulk lending to big corporate, to real estate sector and to mutual funds so that total advances in banks increases which in turn reduces percentage of Gross NPA compared to Total Advances. But this story will not help for longer period until there is adequate improvement in quality and moral integrity of credit sanctioning authority , honesty in promotion processes in banks ,improvement in legal machineries which may help in recovery from willful defaulters , tightening of screws on Chartered Accountants , Valuers and official of rating agencies and change in attitude of politicians. Bank management has to increase number of staff in branches, reduce staff at administrative offices and award honest officers by stopping and punishing corrupt officers who were rising in their career through unfair ways and means. Till now bank management has not tried to cure the real disease and at the same time government of India have also not improved the quality of legal system and not tried to inculcate good culture in politicians who are using bank loan to enhance their personal wealth and to increase their vote banks.

It is very sad that all the time when proportion of bad assets increases in banks , management of banks accuse global recession, interest rate hike, bad monsoon, natural calamities etc but not punish the real culprit. It is remarkable here that when most of top official have occupied the top post and come through bad routes and when they have themselves created and accumulated bad assets in their banks they are not in a position to punish the real culprit and hence they are searching always some weak scapegoat , some lame excuses and pleading some irrelevant reasons before MOF for deteriorating quality of bad assets in banks.

Million dollar questions is “Who will bell the cat when even officials in RBI and MOF are equally weak and guilty”. System is not corrupt but corruption has become the system in banks. Not only banks but all other government departments including judiciary are also victim of same disease.

It is therefore not surprising that public demand led by Anna for strong Lokpal Bill is gaining momentum month after month, day after day and none can stop this. Government can torture Anna, Ramdeo and their followers but cannot stop public revolt without punishing corrupt officials and corrupt politicians.

http://m.economictimes.com/PDAET/articleshow/9713575.cms
http://www.financialexpress.com/news/Banks-fear-NPA-spike-as-growth-slows/835775/
http://businesstoday.intoday.in/story/rbi-bank-asset-quality/1/17358.html

Top 20 Nations with Highest Debt causes Global Crisis

2011-08-11T18:14:00.000-07:00

http://callforjustice.in/entries/finance/top-20-nations-with-highest-debts
20 nations with the highest debt
Are the world's superpowers really rich? Well, not really. . .
The trillions of dollars borrowed to build the country's infrastructure and industry have turned into mounting debts. This in turn has tarnished their reputation as the world's economic powerhouses.
The world's biggest economy, the United States and many European nations are struggling with rising debt.
Once the envy of the world, these nations are now posing a threat to the world economy, being on the verge of enormous defaults.
Find out more about the economies that have the highest debt in the world...
1. United States
Debt: $14.590 trillion (9 August 2011)
Per capita debt: $46,929
Debt as in percentage of GDP: 94%
The United States has the world's highest external debt at a whopping $14.590 trillion.
The US public debt burden has become unsustainable and its debt and deficit ratio will remain high for a long period unless the government cuts down spending effectively.
The economic crisis in US began with the subprime mortgage crisis. Following this, the US economy fell into a recession in 2008. Flawed policies allowed lenders to offer loans to subprime borrowers without considering the risk of future default.
External debt (or foreign debt) is that part of the total debt in a country that is owed to creditors outside the country. The debtors can be the government, corporations or private households.
2. United Kingdom

Debt: $8.981 trillion
Per capita debt: $144,338
Debt as in percentage of GDP: 400
Britain's economy has also plunged into deep crisis. The budget deficit has risen to more than 156 billion pounds.
The manufacturing output fell by 0.4 per cent in June from the previous month as there is a drastic fall in domestic demand. The country GDP is expected to fall further.

3. Germany
Debt: $4.713 trillion
Per capita debt: $57,755
Debt as in percentage of GDP: 142
Germany which bounced back from the 2008 recession has largely remained immune to the crisis.
However, the US downgrade and mounting debt on other Euro zone nations could hit its coffers as well.
Germany already bears the burden of the 120 billion euros of the euro bailout fund's 440 billion euros. Germany's budget deficit is 2.3 per cent of gross domestic product.
4. France
Debt: $4.698 trillion
Per capita debt: $74,619
Debt as in percentage of GDP: 182
A crisis is imminent in France as its budget deficit is 6 per cent of gross domestic product.

5. The Netherlands
Debt: $3.733
Per capita debt: 225,814
Debt as in percentage of GDP: 471
The global financial crisis has hit The Netherlands badly. The Dutch economy entered recession in the fourth quarter of 2008.
In 2009, however, the GDP growth slipped by 3.9 per cent. The economy recovered slowly in 2010. In the third quarter the economy grew by 1.8 per cent.
The nationalisation of banks has dented the state's finances.

6. Japan

Debt: $2.441 trillion
Per capita debt: $19,148
Debt as in percentage of GDP: 45
The devastating earthquake and tsunami has pushed the Japanese economy into a grave crisis.
Japan's high rate of growth has also been hit with massive bank loan defaults.

7. Ireland
Debt: $2.253 trillion
Per capita debt: $503,914
Debt as in percentage of GDP: 103
Ireland faced a recession in September 2008, followed by a rise unemployment. Ireland was the first state in the Eurozone to enter recession.
8. Norway

Debt: $2.232 trillion
Per capita debt: $454,768
Debt as in percentage of GDP: 538
Norway escaped largely unhurt from the economic crisis. Unlike other debt-ridden nations, Norway is not a member of the Eurozone. It has its own currency, the Norwegian krone.
9. Italy
Debt: $2.223 trillion
Per capita debt: $36,841
Debt as in percentage of GDP: 108
Italy's economy has seen one of the lowest growth rates in the world. A very high public debt highlights the fact the country cannot repay back its debt. The country lacks the resources to accelerate growth.

10. Spain
Debt: $2.166 trillion
Per capita debt: $47,069
Debt as in percentage of GDP: 154
In Spain, long term loans, realty sector crash and bankruptcy of major companies, rise in unemployment at 13.9 per cent in February 2009 escalated the crisis.
11. Luxembourg
Debt: $1.892 trillion
Per capita debt: $3,759,174
Debt as in percentage of GDP: 3,443
Luxembourg has experienced a severe recession after the global financial crisis.
Luxembourg, being a financial nerve centre was badly affected b the recession. The pace of growth slowed down and unemployment increased.

12. Belgium
Debt: 1.241 trillion
Per capita debt: $113,603
Debt as in percentage of GDP: 266
Belgium is in deep crisis after market traders pushed the cost of insuring the country's debt to record highs.

13. Switzerland
Debt: $1.200 trillion
Per capita debt: $154,063
Debt as in percentage of GDP: 229
Many of the European nations living beyond their means by borrowing huge funds are struggling to streamline the economy. Swiss banks that suffered from the financial crisis were bailed out.

14. Australia

Debt: $1.169 trillion
Per capita debt: $52,596
Debt as in percentage of GDP: 95
The Australian economy's slow performance resulted in a sharp fall in the Australian dollar.
Australia's real GDP growth will be 2 per cent this calendar year and 3.5 per cent next year.

15. Canada

Debt: $1.009 trillion
Per capita debt: $29,625
Debt as in percentage of GDP: 64
Though battered by the 2008 global financial crisis, the Canadian economy has emerged as one of the strongest advanced economies in the world.

16. Sweden
Debt: $853.30 billion
Per capita debt: $91,487
Debt as in percentage of GDP: 187
Sweden went through a bad spell between 1990 and 1993. Its GDP went down by 5 per cent and unemployment rose to record highs. The real estate boom also crashed adding to its economic woes.

17. Austria
Debt: $755 billion
Per capita debt: $90,128
Debt as in percentage of GDP: 200
Austria's economic growth received a jolt with the global financial crisis in 2007-2008.
Falling domestic employment, fall in spending by households and enterprises pushes the economy into crisis.
18. Denmark
Debt: $559.50 billion
Per capita debt: $101,084
Debt as in percentage of GDP: 180
Denmark's economic woes started in 2007 with the crash of the housing sector. Housing prices dropped in 2008-09.
The global financial crisis further hit its prospects. In 2010, Denmark saw a slight recovery.

19. Greece
Debt: $532.90
Per capita debt: $47,636
Debt as in percentage of GDP: 174
Greece is going through its worst years. Uncontrolled spending and cheap lending has seen its debt levels zoom to scary heights.
Also, the failure to implement financial reforms has resulted in losses of $413.6 billion, much larger than the country's economy.
Greece and Ireland have the highest poverty rate in the 15-member EU, while Sweden has the lowest at 9 per cent.

20. Portugal
Debt: $497.80
Per capita debt: $46,795
Debt as in percentage of GDP: 217
Portugal's economy has posted an average annual growth of less than 1 percent over the past 10 years.
The country faces a huge foreign debt owning to reckless spending without generating any returns. Portugal is set to introduce austerity measures including tax hikes and pay cuts.

CMD Bank Union India

2010-12-27T16:43:00.000-08:00

Chartered Accountants in India are mostly working as brokers of tax officials and bankers. It is CAs who manage tax evasion from tax authorities or bank finance from banks. Raju was the greatest fool who disclosed his fraud in Satyam Computers, otherwise none of CA could catch the culprit. Almost all CAs are simply selling their signatures to business community, busy in negotiating with tax officials and bank officials

Lawyers in India in general are working as brokers and middlemen for judges working in various courts. Officers, secretaries working in various state level secretariats or in secretariat attached of various ministries and Parliament of India are working in general as agent and broker for ministers. Politicians of various political parties who are effective and master in manipulations are working as agents for various MLAs and MPs. District level political leaders are flatterer of state level leader of a political party and state level leaders works as yes-men of central level leaders. In common terminology they are called as lobbyist or flatterer or managers or chamchas but for all practical purposes they are actual fate makers.

It is caucus of these flatterers who surrounds powerful leaders in all offices, banks, Income tax offices, secretariats and at all places where powerful persons are sitting. It is these flatterers known as Godfathers who manage transfer, posting and promotion of staff who works as per whims and fancies of lobbyists. It is these lobbyist or game players who manage transfer of honest workers who hinders their corrupt path to remotest place, to critical place or to a place where he or she becomes ineffective in all fields of his life. It is these lobbyist who manage torture to good workers who create impediments and it is they who manage even killing of such hard core honest performers. It is these lobbyists who can make or mar a government for their self interest.

Neera Radia is not alone working as lobbyist in corporate world but there are hundreds and thousands of such lobbyists active in practically in all offices. Even top ranked DGM, GM, AGM.CM in a Public Sector bank has to approach one or the other lobbyist to get fastest promotion and cream posting. General Managers have to contact lobbyist sitting in RBI and Minister of Finance for getting the post of ED and CMD of a bank. Retired politicians have to contact top leaders to become director in a PSU and so on so forth. One has to invariably contact a lobbyist for getting his work done easily quickly and with minimum possible expenses.

In eighties one great lobbyist namely Harshad Mehta was caught in bank scam .But in this age of reformation there are hundreds of person working like Harshad Mehta and manipulating Stock Market as per their sweet will and SEBI is silent spectator of all mishappenings till it assumes the form of a scam or scandal.

In such an environment it does not look astonishing and unexpected incident when one say that Reddy brothers succeeded in tax evasion of Rs.80.00 crores in mining in Karnataka or Mr. Raja OR Madhu Koda or Mr. Kalamadi or any such corrupt officer could accumulate wealth worth hundreds of crores of rupees.

In fact most of the government officers and ministers are busy in making money some way or the other. Even media men are indulged in such corrupt game in their own style. This is the picture of Indian democracy where rich is growing richer and poor are becoming poorer. Lobbyist can approach all powerful centers whereas common men are fear of accessing any office where he can expect his work done or where he can knock the door to get justice.

It is ridiculous to know that RBI has asked details from bankers who sanctioned finance to companies currently under investigation by CBI to punish the culprit top ranked bankers who financed to telecom companies by taking bribe. It is nothing but a reluctant surgical operation undertaken by RBI and not body scan of banks which should be undertaken by RBI to stop corrupt practices prevailing in the banks where top ranked officials like General Managers are caught taking bribe for lending.

Scam of value of hundreds and thousands of crore rupees cannot take place without the support of hundreds and thousands of persons in the system. Few cases of scams and corruptions which are exposed in public by media are not aberration of the system but exposure takes place only when there is dispute in sharing of bribe money among corrupt officials or when bribe giver remains unsatisfied even after payment of bribe. Exposure of scam takes place when desired work is hampered even after payment of bribe to ministers and officers due to change of guard or change of powerful lobby or change in policy due to some reason or the other. Otherwise it is the corrupt system which has been developed by politicians and rulers of the country since independence.
28th December 2010

2010-10-10T16:29:00.000-07:00

Do you know a Bank of flatterers, sycophants, yes-men and money makers?

Do you know a Bank where most of top executives are accused of corruption, where officers are promoted, posted and transferred as per whims of big bosses and where seniority is meaningless, merit is useless, only godfather is counted?

Where old officers are shunted away and humiliated whereas young but incapable are being given better scale and better posting?

Do you know a bank where goof officers do not to be promoted, do not take part in promotion process, do not want to take initiative, and do not put his knowledge, innovative ideas into action?

Do you know a bank where art of making career and leading a comfortable life is to praise bosses, union leaders, give golden gifts to bosses and union leaders, earn money through illegal means and share the same with bosses and leaders?

Do not bother if accounts becomes NPA, you should know how to rephase them, restructure them, hide them from system driven NPA or ultimately write off them or compromise with borrowers - that too if you get some incentive from bank as well as customers. You need not worry for action even if commit fraud or indulge in corrupt practices, provided you have some God father in higher management or in Union domain. On the contrary you are not safe even if you are dry honest, late sitter, loyal to bank and hard worker if you do not know how to keep your boss happy.

In brief, do you know a bank where manipulation is the backbone for survival and flattery is career maker?
Do you know Bank Where Good officers are afraid of sanctioning credit and bad officers are going up and up by making bad advances? A bank where experienced, knowledgeable, talented officers are kept away from mainstream and deprived of promotion because they do not support lending to bad businessmen and they only make sincere efforts for recovery from NPA borrowers even if their action hurts some or the other executives.

In a bank where Executives are those who know how to keep higher bosses happy , who are expert in keeping RBI people happy and who are well versed in concocting attractive report to please bosses in Banking Division , Ministry of Finance.
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Do you know a bank where loan are disbursed and waived only if one has good liasoning with big bosses and big union leaders?

CA s are purchased and gifted to put their signature blindly as CAs normally desire. There are many types of NPA, declared, hidden, system driven, EAS, SMA, restructured standard etc. Latest strategy is to sell NPA to ARC. Notwithstanding this or that, hidden NPA is likely to explode sooner or later.

Who will after all cure the system where all are birds of the same feather in bank or in RBI or in Ministry?

Who will verify and assess he assets of big bosses?

Bosses know the art of making clerks and innocent officers as scapegoat for all of their misdeeds; they use phones and verbal instructions for ill motivated works. When clerks or junior officers commit mistakes, when fraud or robbery takes place in a branch, Manager is held accountable and punished. But when most of the BM indulges in malpractices, Regional heads are not booked to severe task. So bosses need not worry.
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After all Time will expose the reality of such bank and its executives, ED and CMD. Let us wait for result of Half year ended and half year to come. Last quarter result exposed Indian Bank. Future will expose some other bank. I do not know when RBI will open the eyes.

The problem is that everyone in the government is accustomed to accepting shoddy work, corruption and reign of injustice perpetuated by gang of flatterers. As a matter of fact evil doers are in all government offices; the huge malady lies in not only one or two banks, but in all departments where government is having direct or indirect control.

I am astonished that efforts are being made to give a hike in the salary of those officers who are executives of banks and who are solely responsible for the mess they have created in bank. These corrupt executive already got preferred treatment in last Bipartite Settlement. Only quality of these executives is that they speak good English and use polished language to influence their bosses.

Regulation or Deregulation

2010-09-08T20:20:00.000-07:00

Reformation in Banking has brought about some changes in banking policies. Deregulation of Interest is one of such prominent changes which have come into force (except savings deposits) after 1991. And deregulation is still in focus as regards interest payable on savings deposits.

In post reformation era, Banks offer higher rate of interest to bulk depositors for short period and pay lower rates of interest on deposits made by retail depositors even if they keep it for long period. Normally banks define deposits as retail deposit when the amount is less than fifteen lacs rupees and say it bulk deposit when the amount is in hundreds of crores or at least more than five or ten crores.

It means higher the amount of deposits; the higher is the rate of interest on such deposits. In brief banks now a day want increase in business, by hook or by crook and which is possible only with the deposits from giant businessmen. Banks in fact do not give much importance to small depositors; say poor or middle class savers.

Similarly banks offer the lowest rate of interest on lending to big traders, corporate, builders, industrialists any kind of rich businessmen or professionals who avail advances in hundreds of crores from. Banks used to extend sub PLR rates on such lending to rich people before base rate regime. Total volume of sub PLR lending constitutes not less 70% of total lending made by banks. After the introduction of system of Base rate from 01.07.2010 banks offer base rate which ranges from 6.5 to 8.5% to such rich clients. Banks have devised shortest procedure for such large lending which can be sanctioned and disbursed in the minimum time period say even hours or a few days.

On the contrary, small traders and professionals who avails finance from a few thousands to a few crores of rupees from banks have to pay higher rate of interest ranging from 12 to 15 % on advances they avail. It is obvious banks prefer big clients in banks and ready to offer all concessions to them whereas they try to get rid of small borrowers by charging hem higher rate of interest and delaying even the process of sanction , documentation and disbursement to all possible extent.

Not only this, banks also offer huge concession to rich businessmen. Rich people do not have to pay for issue of cheque book, for account statement, on cash deposits, on cash payment, for purchase of Demand draft or for remittance to other banks or other branches under RTGS or NEFT system. On the contrary small depositors and middle class businessmen and professionals have to pay for all such transactions.

In short we can say that after the introduction of liberalization, privatization and globalization in the framework of reformation banks give preferred treatment to rich people and sub-standard treatment to poor.

In the name of reformation, not only small customers have to suffer, even employees working in he banks have to suffer. Employees have to work at least for 10 o 12 hours a day whereas it was fixed 6.5 to 7 hours before 1991 when new era in banking started. Employees cannot get sanction of leave in easy way. Business of banks has increased more than fifty times after 1991 but manpower in none of PSU banks have seen increase during the same period.

Inspite of sharp increase in volume of non banking business there is negligible rise in number of employees in any government owned public sector bank. It is only private banks which have increased volume by increasing manpower in their branches. And this is one of the various reasons that even quality of assets in public sector banks has suffered huge erosion during last 25 years.

Of course banks are able to decrease Net NPA Ratio or Gross NPA Ratio of bank with the help of sharp rise in total advances through bulk lending at sub PLR rates to giant clients. Efforts of banks during reformation era are directed to increase total advances to decrease net NPA or Gross NPA percentage and in his way banks need not bother for sharply and dangerously increasing quantum of bad advances in all banks.

In brief banks are earning profit either by exploitation of staff or by interest rate management or by loading all charges on small and middle class servicemen, professionals and businessmen. It is remarkable to mention here that banks are not in a position to pay pension to its own retired employees.

Even Chartered Accountants are managed in manipulation of balance sheets and in management of prudential norms or classification of assets and that for income recognition norms prevailing in banks during reformation era. Rating agencies are even managed o portray excellent picture of the bank.

One cannot predict America type sub PLR crisis in India in immediate future but one can safely say that banks are no more accessible, affordable, comfortable and beneficial to common men. Even unemployed youth do not find any charm in getting the job in a bank.

This is the effect of reformation in banks introduced by great economist and greatest reformer like Manmohan Singh; beloved, clean, honest, hounourable and respectable prime minister of India.

Time has come to assess and compare the utility and benefits of deregulation and freedom to banks for common men. Time has come to make a comparative analysis of GDP growth, Industrial growth, agricultural growth, pleasure of majority of Indian people and overall need of India during three periods, namely pre nationalization, post nationalization and pre reformation and finally post reformation period. Time has come to decide whether regulation of banks is more suitable to India or deregulation put into effect by RBI and Government of India to compete with developed nations of the world.

Danendra Jain
09.09.2010
dkjain49709@rediffmail.com

Manmohan Singh suitable or not

2010-08-20T16:03:00.000-07:00

Honourable Manmohan Singh Prime Minister of India is too simple to take any effective step as Late Indira Gandhhi or Late Jawaharlal Nehru took. Nehru ji involved himself in India’s fight against British rule and gave us freedom.Indira Gandhi nationalized banks to make it accessible in remote villages, taught a lesson to Pakistan and helped Bangladesh in becoming a new Independent nation .She ruled India for 17 years and left many indelible marks on India’s history.Mr. Vajpayee in his short tenure of PM did a lot of thing. He launched the Himalayan task of building pacca road from Kashmir to Kanya Kumari, gave a better administration and good governance to a great extent. Even Morarji Desai took a bold step of introducing total prohibition in India. More emphatically , price rise was not so much painful to common men under their tenure as it appears today and difference between poor and rich was not as wide as it is today. Even GDP growth as focused by Dr. Manmohan Singh was in no way lesser and negligible during their tenure. Growth was well distributed at least better distributed and wide spread among Indians and on India’s territory. India’s image was shining in International forum in the past too as it is proclaimed today by current rulers.

What has Mr. Manmohan Singh done during last six years for common men? He talks of GDP, he talks of relief to corporate, he talks of corruption, he talks of judicial, educational or labour reform but common men are still victim of mal administration, rampant corruption and extortion from politicians, criminals, naxals and local musclemen. Poverty of common men has increased rather under his leadership. He could not introduce desired toughness in the administration to check rising prices, he failed to reduce corrupt practices or expedite judicial process or to make essential goods and services like medical care and education affordable for common men. He could not bring about improvement in standard and quality in work done in government offices and work done through contractors. Manmohan Singh has hypnotized Indians by his undisputed, simple image and honest stature. But the prime question is whether India is safe, whether Indians at least downtrodden, poor, middle class are happier and whether the growth reflected is wide pervasive in the hands of such a simple person.

Our clean PM has confused Indians on all fronts. Kashmir has been boiling with anger and burning in agitation for last so many years in general and for last here months in particular but Mr. Manmohan Singh is preaching sermons to Kashmiris to maintain peace and Indian government has been talking of talks for last 60 years to resolve the issue. Now Pakistani infiltrators or Indian extremists have threatened Jammu Sikhs to either become Muslim or leave Kashmir. Our simple PM advised to keep patience, but how long?

Naxals have grown dangerously stronger during his tenure of last six years and spread throughout the country but he and his men are talking of dialogue with naxals. Lacs of naxals and terrorist (two sides of same coin) are hiding in India, causing frequent attacks, killings innocents, extorting money from rich traders and servicemen and damaging valuable properties. Can police catch them when they are unable to find out missing 61 trucks loaded with detonators? A naxal or a terrorist can be trapped only when some one becomes Bibhishan in his own camp and become informer of police. Bitter truth is that even local police officials and administrative bosses are not only afraid of naxals but also give them ‘dadagiri tax’ as demanded by naxals.Only silver lining in his government is that the Home Minister Mr. Chidambaram is doing his best for the country as per his best knowledge. Unfortunately he too is criticized by his own party men and Mr. Manmohan Singh is unable to control them.

Obviously person like Manmohan Singh is too weak and too much clean hearted to control big country like India. He may be an economist but he is definitely not a good administrator and neither a good politician. Even on economic front I can say that he is not as successful as common men expected from a man of his stature. Performance of many states like Gujrat, Bihar, and Chattishgarh has improved to a great extent and better than that of overall India so far as GDP growth and pleasure of common men is concerned.

Can anyone imagine that India will be free of corrupt people when entire government is made of corrupt persons with added quality of but flattery? A corrupt person is trapped or caught only when he becomes dishonest in sharing his ill earning money with his juniors or seniors as per their expectations or when his own colleague, local media person or local musclemen become his enemy. CBI or CID or Vigilance is seldom taking any proactive step to stop spread of disease. On the contrary all regulating, controlling, preventive and monitoring agencies have become puppet in the hands of Ministers and top officials . Flattery and yesmanism has grown unabated.

Can an Indian get relief from price rise or corruption or terrorism or naxalism under his leadership when central government and state governments are busy in mutual blame game and mutual mud slinging and politicians of rival parties are busy in playing kabaddi on irrelevant points?Can India be ever a disciplined and orderly state when Parliament and state assemblies are used for playing free hand fighting, and spending time in settling their scores related to Inter party rivalry?

Nehru and Indira built castles of progress by establishing hundreds of Public Sector Undertakings and did a lot for welfare of poor. The main motto of Late Indira Gandhi behind nationalization of banks was to make banks accessible to poor.Rajiv Gandhi tried to make PSU stronger and added new technology introduced Television and brought telecom revolution in India. Now in the name of reformation, UPA government under the guidance of Sonia Gandhi and learned Prime Minister Mr. Manmohan Singh is selling one after other PSUs partially or fully in the name of disinvestment. Is selling of ancestral property the prime achievement of our learned PM Mr. Manmohan Singh?

Property of ancestors is sold by son and grandson to survive when the son and grandson are not able to earn at their own or not capable to manage the accumulated property of their forefathers. "Ghar bech kar or sona bech kar gujara karte hai bekar log."Present government is lucky enough to get so much inherited property without making much effort. But how long this selling of old property in the name of disinvestment will be able to cope with growing demand of the growing family of growing India is a million dollar question and which needs to be answered by wise person like Manmohan Singh. How long government will meet the annual spending through selling and disinvestment of PSUs.

I do not suggest curtailment of expenses or reduction in spending on development, but I firmly believe that government should establish hundreds of new PSUs to create more and more real employment opportunity and achieve real growth in GDP. Government should try to make the existing PSU more effective and profitable, rather than selling it. I am of firm view that the government cannot imagine of welfare of poor or permanent relief to suffering poor through only distribution of subsidy, old age pension, waiver of loan or carrying out controversial and corruption ridden NREGA.

Mr. Manmohan Singh has to first make his house clean and effective. Criminals have to be treated as criminals and real patriots, real performers and really talented persons have to be awarded. Otherwise he will continue to curse past or NDA or monsoon or global recession or inadequacy of laws or in competency of inherited system for current and consistently prevailing national critical issues of price rise, corruption, naxalism , terrorism and more particularly judicial inertness.

Dkjain49709@rediffmail.com
21.08.2010

MP must get increase in salary

2010-08-16T20:25:00.001-07:00

http://blogs.bigadda.com/dan2967698/

Salary of MPs must be revised upwards and they should be made accountable and punishable for non performance as other salary class persons are. Otherwise they will continue to cheat voters as usually they do after their election, they will continue to eat major share of development fund through their flatterers and contractors who are allotted government work. Low salary is only an excuse for their non performance. They are in fact getting huge money in the form of allowances, fares, fees and other reimbursement.

Salary of teachers working in government run schools and colleges has been made very much attractive, still very few teachers teach properly and adequately in schools and colleges. Tuition is their life line.

Salary of clerks and officers working in government offices have gone up to a great extent in last few years, but people of India in general are not happy with working style of government Babus and very much agitated over large scale corruption prevailing in all offices. In facet none of files budges an inch without payment of extra money. Recent hue and cry by TV media over corruption in Commonwealth Games is not astonishing.

I therefore do not object even ten fold rise in salaries of MPs but I want that they should honestly think for welfare of India and Indian citizen keeping apart their party identity and use precious time of Parliament in debate and discussion and not indulge in mutual mud slinging or mutual blame game .They should show consensus on National issues as they show consensus on proposal related to their salary hike. They should also try to realize the pain of crores of Indians still earning less than Rs.20000/ in a year.

I also see no justification in stopping reasonable salary hike only because most of MPs are indulged in corrupt practices. Rather I am of strong opinion that harsh and quickest punitive action as per law must be taken against all those who are resorting to illegal means to earn money.

I would like to stress here to punish first those ministers and top officials who use phones and verbal instructions and without leaving any proof earn huge money. Such people put pressure on contractors, junior officers and executing agencies or give whimsical posting and promotions to their flatterers or even change law books to favour their yes-men. Unfortunately top officials who promote and irrigate unhealthy and corrupt culture always are acquitted from controlling authorities and even judicial system.
Dkjain49709@rediffmail.com
17.08.2010

Bank management use court to continue their reign of Injustice

It is the most disheartening and sad story of Indian judicial system that courts are used in general and in practice not to get justice but to perpetuate reign of injustice. Courts seldom award punishment to guilty person in time but spend so much time in the process of judgment that the victim is either extinguished or the very purpose of filing a case is defeated or loses physical, mental and financial energy to such a pitiable extent that the case filed for justice is ultimately left unattended and become useless and endless. Even the veteran criminals get relief once the police files case in any court. It is very easy to prolong the judicial process as per whims and fancies of the criminal and at least till all witnesses or all plaintiffs are finished or become ineffective.

IBA and bank management along with Union Leaders of same feather have jointly decided this usual occurring judicial delay to perpetuate reign of injustice and to execute their wrongful and arbitrary agreement (9th Bipartite Settlement). They understand very well that Justice delayed is justice denied and hence they have decided to use this tool to cheat their own colleagues who supported and made them person of such high status. Stabbing in the back has become their diplomacy, exhibit their culture and reveal their intention.
This is not astonishing in India at least where Member of Parliament and member of state Assemblies behave more or less in the say way after they are elected by clean hearted and innocent voters of this country. It is in India that after 25 years of sad accident Curative petition in filed by CBI in Bhopal Gas leak related Anderson extradition case and CBI files another chargesheet after 25 years of Sikh Riot against Mr.. Sajjan Kumar. Lalu’s Chara Ghotala case has punished a few low level clerks but actual guilty reached the top level and he became Railway Minister of the country and his illiterate wife became Chief Minister of Bihar. There are in fact lacs of cases pending for disposal in various Indian courts for more than a decade, even more than two or three decades in many cases. This is India sir.

In our bank also, several union leaders and officers supporting bad acts of bosses will become what you or I cannot dream.

In banking industry also, several cases related to injustice in promotions, posting, termination, pension, salary fixation etc are languishing in courts for years together and by the time case will be decided the victim will be extinguished and the culprit will be leading post retirement life or died. There are many executives, AGM,DGM,GM,ED and CMD who are holding post even after accused of corruption and irregular lending or unethical loan waivers.Even in the current writ in Madras High court, same story is going to be repeated.

But in all circumstances we have not to discard or dilute our fight against injustice and I am particularly always in your support and in support of all who courageously move against ill motivated and unjustified action of bank management.