Thursday, 7 June 2012

Act on multiple fronts and set ambitious targets to boost the economy through involvement of private sector , the Prime minister sets the Road Map for Economic Ethnic Cleansing!

Act on multiple fronts and set ambitious targets to boost the economy through involvement of private sector , the Prime minister sets the Road Map for Economic Ethnic Cleansing!
Troubled Galaxy destroyed Dreams- chapter 782

Palash Biswas

Act on multiple fronts and set ambitious targets to boost the economy through involvement of private sector , the Prime minister sets the Road Map for Economic Ethnic Cleansing!he Prime Minister, Dr Manmohan Singh, and the Planning Commission Deputy Chairman, Mr Montek Singh Ahluwalia, finalise the infrastructure target in New Delhi on Wednesday. Manmohan Singh today outlined the government's agenda for pushing the infrastructure sector projects with specific targets for 2012-13 to take the GDP growth rate to 9 per cent at a high-level inter-ministerial meeting chaired by him.However,Union Railway Minister Mukul Roy skipped the meeting of key economic ministers called by Prime Minister Manmohan Singh to review their performance.

Meanwhile,the issue of Planning Commission spending Rs. 35 lakh on two toilets today galvanised the opposition parties into attacking the government for talking about austerity and engaging in such "wasteful" expenditure while Congress said public money should be used carefully. The stink over renovation of two toilets in the Planning Commission at a huge cost raged across the political spectrum today but its Deputy Chairman Montek Singh Ahluwalia sought to fend criticism saying the expenditure was on blocks of toilets meant for all. Political parties including the ruling Congress attacked the expenditure of Rs 35 lakh on two toilets but the Planning Commission itself came up with a press release terming it as routine maintenance and upgradation work. To call it a a wasteful expenditure was unfortunate.

On the other hand,The Insurance Bill is back on the table, the finance ministry is considering a hike in FDI cap in the insurance sector to 49%, reports Aakansha Sethi of CNBC-TV18.

In the past, the Insurance Bill had been sent to the Cabinet and no decision was taken because at that time the finance minister had said that 26% is already allowed and hence it makes sense if FDI is invited to take it up to 49%. Now, the finance ministry has made necessary changes in the Insurance Bill and it will be resent to the Cabinet.

In fact, in the Pension Bill too the FDI cap has been kept at 49% as the government wants to keep both of them inline. After taking the approval of the Cabinet then the Bill will be introduced in the Parliament. This will be a huge defining change for both the insurance and pension sector if 49% FDI is allowed and it will be greeted with big thumbs up from the corporate sector.

Ahluwalia, who had earlier faced criticism over expenditure on his foreign trips, told reporters that expenditure of Rs 35 Lakh is not on two toilets but it is really a "major modernisation of toilet blocks in the Planning Commission which is a 50 year old building".

"When we needed to renovate it, we were told that both plumbing and pipes, not of individual toilet, but entire toilet block needed to be replaced...electricty work had to be replaced", he said.

Ahluwalia said this is part of the Planning Commission's renovation and upgradation program in which renovation of all the public toilets has to be done in two years.

On the issue of access control system in the toilets, Ahluwalia said, it was for the ladies toilets because of security issues but later it was felt that it was not right and the project was dropped.

The BSE benchmark Sensex shot up more than 300 points in afternoon trade to trade at one-week high. The NSE benchmark Nifty climbed above the 4950 level, though there was somewhat profit booking.

The 30-share BSE benchmark rose 304.02 points or 1.90% to 16,324.66 and the 50-share NSE benchmark was up 93.10 points or 1.91% at 4,956.40. The broader markets gained more than 1%.

Private sector lender HDFC Bank jumped 2.5% while its rivals State Bank of India and ICICI Bank were up nearly 2%.

Software services exporters Tata Consultancy Services and Wipro gained more than 2%; Infosys was up nearly 1%.

Shares of country's largest commercial vehicle maker Tata Motors surged 5% on short covering as it had fallen 20% in last five out of six sessions.

Top two-wheeler manufacturer Hero Motocorp too rose 5%. FMCG majors ITC and HUL shot up nearly 4% and 3%, respectively.

Among metals stocks, Tata Steel, Sterlite Industries, Jindal Steel and Hindalco Industries jumped 2.5-3.5%.

Cement producer Ambuja Cements bounced back, rising close to 4%.

However, shares of Cipla, BPCL, Grasim, Ranbaxy Labs, Dr Reddy's Labs and Bharti Airtel caught in bear's grip, falling 0.2-0.7%.

Shree Cements was the most active stock on BSE, rising 3.65%. Its trading volumes increased 342% to 1,19,474 shares as compared to its 5-day average of 27,042 shares.

The Trinamool Congress MP said that he could not attend the meeting as he was stuck with the campaigning of for the by-elections in Mathura. He further said that the Prime Minister was already informed about his absence.

Notably, the Union Railway Minister has been accused of compromising on the safety and service by taking populist measures such as fare hike rollback.

Meanwhile, addressing the meeting, the Prime Minister said that the need was to create "an atmosphere which is conducive to investment and to removing any bottlenecks to growth", expressing happiness over detailed exercise undertaken for finalising targets.

"We are aware that we have to act on multiple fronts to achieve this and we will indeed do all that is required of us…all of us would agree that development of infrastructure would always be an integral part of any strategy for fast economic development," said the Prime Minister.
Referring to the recent dip in the growth rate, the Prime Minister said, "We will return to 9% growth trajectory soon."

He further said that the challenge was to work together to achieve the targets, urging the ministers to "go the extra mile in implementing what we have planned".

The Prime Minister also emphasised on the need of involving private sectors through public-private partnership.

In a visible step to end the policy paralysis of the government, the Prime Minister on Wednesday called a meeting of key economic ministers to review their performance.

During the meeting, the ministers for Coal, Shipping, Railways, Civil Aviation and Power presented their proposals. The Prime Minister is also believed to have presented a blueprint and deadline to bring the economy back on track at the meeting.

Bogged down by scams, high inflation, rising crude oil prices, eurozone crisis and lack of initiatives to boost the domestic market, the Indian economy has lost its sheen and grew by just 5.3% in the last quarter.

The meeting assumes significance as it came just days after a crucial Congress Working Committee meeting, wherein the government was asked to take tough decisions and stick to them. It was also mentioned at the meeting that the Congress must not appear to be bowed down by the pressure of the allies.

It also must be noted that no major decisions concerning the ministries were taken in the Union Budget, following which the government was slammed for policy paralysis.

Here's a look at the issues pertaining to different ministries, which are believed to have been taken up during the meeting chaired by the Prime Minister.

Coal Ministry: Under Coal Minister Sriprakash Jaiswal's tenure, coal productivity has stagnated. The power companies have been complaining of lack of coal supply for their power units.

Civil Aviation Ministry: The ministry has seen a prolonged and spiraling crisis in Air India and there has also been dithering over foreign investment in airlines. The air fares have even increased by 80 to 100 per cent since Ajit Singh took over.

Shipping Ministry: Under minister G K Vasan, the capacity addition has stagnated and the port development offtake has been slow.
Transport Ministry: Surface transport minister CP Joshi is accused of inertia with 21 projects under his ministry incomplete. His critics charge him with concentrating too much on his home state of Rajasthan.

Facing resistance to various key reform programmes, Prime Minister Manmohan Singh today said "bottleneck" needed to be removed to reverse the present situation and revive India's growth story as the nation had run into "more turbulent weather". Battling perception of policy paralysis, Prime Minister Manmohan Singh today set an investment target of at least Rs 2 lakh crore for core sector projects in the current fiscal in a bid to revert back to 9 per cent economic growth. Taking stock of the infrastructure-related ministries at a meeting, he said there was need to act on multiple fronts and set ambitious targets to boost the economy through involvement of private sector too.

Holding a brainstorming session with his infrastructure ministers, he said after achieving remarkably high growth rate over the past 8 years India is "now running into more turbulent weather".

"In these difficult times, we must do everything possible to revive investment and business sentiment, both public and private.

"We must work to create an atmosphere which is conducive to investment and to removing any bottlenecks to growth," he told a meeting attended by ministers and officials of Power, Roads, Shipping, Civil Aviation and Coal besides Planning Commission Deputy Chairman Montek Singh Ahluwalia.

At the meeting ambitious targets were set for investments in ports and aviation sectors, power generation, coal production and railway freight carriage for 2012-13 which Singh said where achievable. He said he was encouraged by ministers' commitment to meeting these targets.

He said as the government was committed to taking measures to reverse the present situation and revive India's growth story.

"The global economic is passing through difficult times. This has affected us. It is therefore imperative to take measures to give a boost to our economy.

"The government is not only aware of the challenges but is committed to taking the necessary measures to reverse the situation and revive India's growth story. These will turnaround India and take it back to a growth path of 9 per cent," he said.

At the meeting, higher targets were set for investments in ports and aviation sectors, power generation, coal production and railway freight carriage for the current financial year.

For the Ports sector, a target of Rs 35,000 crore investment was set for 2012-13, up from Rs 16,585 crore last fiscal.

A target of Rs 8,798 crore was set for aviation sector through PPP mode for 2012-13, an increase from Rs 4,877 crore last fiscal.

It was decided that two new aviation hubs would be created to make India a major transit point.

"We must work to create an atmosphere which is conducive to investment and to removing any bottlenecks to growth. We, as a government, are committed to taking the necessary measures to reverse the present situation and revive India's growth story," Singh told the meeting attended by ministers of power, roads, shipping, civil aviation and coal.

Railway minister Mukul Roy did not attend the meeting. Underlining the pressing need for action, the Prime Minister said, after achieving high growth rate in past eight years, "we are now running into more turbulent weather".

His comments assume significance as a number of reform programmes like FDI in multi-brand retail and aviation and pension sector liberalisation are stuck because of opposition from UPA constituents like Trinamool Congress.

Noting that over $ one trillion would be required in the infrastructure sectors in the next five years, the Prime Minister said the government alone could not invest such huge amount and it was important to involve private sector.

Talking about challenges, Singh said a "flight (of investment) to safety" was taking place globally as international economy was passing through difficult times with Eurozone being the cause of concern all around.

"Then there has been a persistent problem of rising international petroleum and commodity prices in the last few years. Domestically, rising demand, along with supply side bottlenecks have contributed to inflationary pressures," he said, adding "these constitute formidable economic challenge".

With the new targets being set in the infrastructure sectors, the Prime Minister said these are "ambitious and impressive", showing a "significant scale-up over the earlier performances".

The targets would be monitored on quarterly basis. Referring to the civil aviation sector, Singh said work will be awarded on three greenfield airports at Navi Mumbai, Goa and Kannur and new international airports at Lucknow, Varanasi, Coimbatore, Trichy and Gaya.

Also, two new airline hubs will be created at Delhi and Chennai in the current fiscal, "making us a destination as well as a transit point", he said.

The meeting decided that work on Itanagar airport would be commenced with a total investment of Rs 2100 crores by Airport Authority of India.

By the end of next month, additional PPP projects would be finalized for 10-12 existing airports and for 10-12 greenfield airports. These would be awarded during the year.

PPP in airport operations would be explored.

For the ports sector, a target for the year 2012-13 will consist of 42 projects valued at Rs 14,500 crores and a capacity of 244 million tonnes, which is three times higher than that achieved last year.

Two projects for new major ports -- East Coast ( Andhra Pradesh) and West Bengal -- will be taken up during the year with an investment of Rs 20,500 crore and capacity of 116 million tonnes.

The total capacity to be awarded this year will be 360 million tonnes with an investment of Rs 35,000 crores.

In the roads sector, 9,500 kms will be awarded, which is 18.7% increase over last year.

Besides, 4,360 kms of roads will be awarded for maintenance under the OMT (Operate, Maintain, Transfer) system for the first time.

In the railways sector, Dedicated Freight Corridor under PPP mode for the Sonnagar-Dankuni stretch will be awarded in 2012-13. Also an Elevated Rail Corridor in Mumbai will be awarded at a total investment of Rs 20,000 crore.

The concessions for two locomotive manufacturing units at Madhepura and Marhowra will be awarded and redevelopment of 4-5 stations would be done through PPP mode.

A proposal for a High Speed Corridor (Bullet Train) between Mumbai and Ahmedabad will be finalised.

In the power sector, a target of 17,957 MW was set for the current fiscal, including 2,000 MW from Kudankulam atomic power project which is to be commissioned soon after being stuck because of opposition from locals.

For the coal sector, it was decided that Coal India Limited will despatch 470 million tonnes to all sectors, an increase of 8.8%.

Of this, it will dispatch 347 million tonnes of coal to the power sector in 2012-13 against 312 million tonnes despatched last year, which is an increase of 11.2%.


related stories
Montek defends expenditure of Rs. 35 lakh for toilet renovation
Plan panel spending on toilets creates a stink
Planning Commission says those earning above Rs. 32 per day are rich. And it has gone ahead and spent Rs. 35 lakh on two toilets. The Prime Minister heads the Planning Commission which is today filled with people who have only read about poverty in textbooks," BJP spokesperson Shahnawaz Hussain said.
BJP wanted to know what happened to all the announcements made by the government to its ministers to engage in cost-cutting and austerity as the GDP growth has hit a nine-year low of 5.3%.

"Farmers are committing suicides due to debts here. Such wasteful expenditure should stop," Hussain said.

JD(U) spokesperson Shivanand Tiwari asked why so much money was spent on two "exclusive" toilets meant only for some senior officials when the government has taken a decision on not holding programmes in five-star hotels, to restrict foreign trips and advised travelling economy class.

"In between all this, we hear this news that Rs. 35 lakh has been spent on two toilets which cannot be used by everybody," he said.

Congress also sought to know details of this expenditure.

"Government funds needed to be spent carefully as it is public money. As far as the question of the two toilets, we do not have information. You better ask the Planning Commission", party spokesman Rashid Alvi told reporters.

Union minister Ambika Soni said the government is all for austerity and this figure of Rs. 35 lakh appears incredible.

"For us, austerity is an important issue. You have seen the Prime Minister and the Finance Minister emphasise on it.... I cannot believe such an escalated amount can be spent on just two toilets. It doesn't seem credible," Soni said, adding perhaps the expenditure was on more than renovation and involved more than two toilets.

The Planning Commission issued a statement saying these toilets are not for private use but for the public. Moreover, the money was spent not on just two toilets but a block which can be used by ten people at a time.

The plan panel has been facing flak after it was reported on the basis of an RTI reply that it has spent a whopping Rs. 35 lakh for renovation of two toilets.

The Commission has termed the expenditure as routine maintenance and upgradation work and said it was "unfortunate" to call it a wasteful expenditure.

"While the amount of Rs. 30 lakh being mentioned is correct, an impression is being created that this has been spent on two toilets. This is totally false because these toilet blocks have multiple seats in addition to separate facility for differently-abled. Each of these blocks can be simultaneously used by approximately ten people", a statement from the Commission said.

The Finance Minister, Mr Pranab Mukherjee, will review with public sector banks the flow of credit to various sectors of the economy. He is slated to meet the chief executives of all the public sector banks in New Delhi on June 12. This meeting, the first of its kind this year, comes at a time when the non-performing assets of banks have gone up significantly, mainly due to the weak economic environment.

In 2011, Mr Mukherjee had meetings with the Chief Ministers of the western, southern and eastern zones to discuss banking-related issues.

He had used the occasion to urge State governments to expedite clearances for various projects for which banks had sanctioned loans.

Unlocking resources

Mr Mukherjee has asked debt recovery tribunals to suggest ways to unlock resources of banks that are stuck as non-performing assets.

Addressing the first conference of chairpersons of Debt Recovery Appellate Tribunals and the presiding officers of Debt Recovery Tribunals on Wednesday, he expressed concern over the large pendency of cases in the tribunals.

As many as 67,000 cases involving Rs 136-lakh crore are pending before tribunals at the end of March 2012.