The Prime Minister, Narendra Modi, has written a blog on the completion of his Government`s first month in office. He said "The support and affection of the people has been overwhelming and inspires us to work even harder." "Every decision we took has been guided solely by national interest," he added.
The Prime Minister wrote: "26th of June is an important date for me. It marks the completion of one month of our journey to fulfil the aspirations of the people. This day is also another landmark day, when in 1975 I witnessed an important phase that taught me the significance of a vibrant democracy. 26th June was the day when the Emergency started, having been imposed an evening earlier."
Following is the full text of the Prime Minister's blog:
A few thoughts as we complete a month in office
Today our Government completes a month in office. The support and affection of the people has been overwhelming and this inspires us to work even harder.
67 years of previous governments is nothing compared to 1 month, but I do want to say that in the last month, our entire team has devoted every single moment for the welfare of the people. Every decision we took has been guided solely by national interest.
When we took over a month ago, I kept thinking that I am new to this place and some people believed that I would take at least a year or even two to learn the intricacies of the working of the Central Government. Fortunately, a month later that thought does not exist any longer in my mind. My confidence and determination has increased tremendously and I credit a substantial part of this to the collective experience and wisdom of my ministerial colleagues and also to my experiences as a four time Chief Minister. The affection of the people and support from officials has also added to this confidence in large measure...Read More
Iraq Crisis: What does an increase of $ 10/barrel mean for us?
The unrest in Iraq threatens to aggravate oil supply shocks in a market already faced with disruptions owing to domestic turmoil in other petro countries viz. Libya and Nigeria. Concerns of potential lower oil supplies from key producer Iraq has pushed up global crude oil prices to 9 month highs in a short span of a week since the crisis erupted. As the unrest in Iraq rages, the risk of a spill over of the turmoil into neighbouring petro states has emerged, deepening fears of potential oil supply losses and concerns of long-term supplies from these regions. Given Indias vulnerability to a rise in global crude oil prices, considering that almost 75-80% of our consumption is met through imports, the sudden and rather steep rise in the same has the potential to dislodge the envisaged economic recovery of the country in the current fiscal.
It has the potential to: - Widen the CAD and put pressure on exchange rate - Hamper the fiscal consolidation intent of the government - Increase inflation at a time when the news of a sub-normal monsoon has put pressure on food prices - Delay any action on interest rates by the RBI. All these possibilities could come in the way of the revival of economic growth in the country which is expected given the early moves made by the government to reinvigorate the economy and put investment on a fast track. In the context of the escalating violence in key oil producer Iraq, the prevailing fundamentals of the oil markets and implications for oil import dependant India has been looked into here...Read More
Cabinet defers gas price hike decision for 3 months
The Cabinet Committee for Economic Affairs decided to defer the gas price hike by 3 months, Oil Minister Dharmendra Pradhan reportedly said.
Report stated that the cabinet has decided that there is need for more consultation on gas price hike.
Earlier Pradhan and Finance Minister Arun Jaitley had met Prime Minister Narendra Modi to explore ways to revise gas prices.
Some rollback in rail fare hike
The circular for revision of passenger fares issued by Ministry of Railways that was to come into effect from 25.6.2014 had among other things made a change in the way the fare for monthly season tickets (MSTs) was to be calculated. In the existing system, the MST is 17-15 times the value of a single journey ticket for the same distance slab whereas the circular indicated that MSR fare would be now equivalent to 30 single journey fare for the same distance slab. Inclusive of the 10% fare hike and 4.2% FAC, the new MST fares ranged 1.7 times to 3.5 times of the old MST fare.
Despite the fact that MSTs are highly subsidized, Ministry of Railway has now decided to modify the fair revision circular and hence a decision has been taken to increase the cost of existing MST fare by only 14.2% inclusive of FAC, i.e., the Monthly Season Tickets for both suburban and non-suburban shall now be charged at 14.2% over the existing rates rounded off as per extant instructions. Further in the second class ordinary suburban single journey fares, it was noticed that upto a distance of 80 kms, there was increase in 3 of the slabs only and because of rounding off, the increase was coming to more than 14.2%. A view was therefore taken to avoid any hike in fares upto a distance of 80 kms. Thus there is no change in fare for second class suburban travelers for a distance upto 80 kms. In view of the above modifications, the revised fares in the unreserved segment shall come into force from 28.6.2014. However, for reserved segment, the revised fares shall come into effect from 25.6.2014 as notified earlier...Read More
ICRAs expectations from the upcoming budget
Early decision on gas price revision is imperative as without which the upstream companies with gas discoveries in deepwater fields, may not be in a position to develop the fields as they are unviable at the current prices. In absence of more field developments, gas deficit scenario could further worsen putting several end users and lenders at risk. The upstream sector has also been affected by long approval process and unpredictable policies, which have stymied the pace of exploration and development, besides scaring away the investors. Early decision on "Cost Recovery Model" Vs "Revenue Sharing Model" and Uniform Licensing Policy would also be required to attract the risk capital in the sector. In the downstream oil sector, deregulation process initiated through monthly diesel price revision, should be carried to its logical conclusion so that diesel under recoveries are fully passed on. Moreover, price revision on LPG and SKO could also help in limiting the overall under recoveries.
As regards upstream companies, a predictable and equitable formula for under recovery sharing could enable them to generate enough cash required for their core operations, which are capital intensive besides being riskier. Timely payment of subsidy to the OMCs could help them improve the liquidity position, besides lowering the interest cost on short term loans, which are to their account. Instead of carrying forward certain subsidy to the next fiscal, adequate provisioning of fuel subsidy in the respective fiscal years would also help the cause of the industry besides sending the right signals to the financial investors. Other long pending demands of the industry include declared goods status on Natural Gas & ATF so that VAT burden is low & uniform across consumers, review of income tax holiday sunset clause for Greenfield refineries which expired by March12, clarity on Sec 80 IB deductions for both Oil and Gas instead of only for oil and CENVAT credit for the upstream companies on account of service tax paid on input services, which should merit attention of the Government...Read More
Microfinance growth rebounds with stronger building blocks: CRISIL
The loan portfolio of Indias microfinance sector is set to grow at a compounded annual rate of 35%, to reach Rs. 450 billion by end-March 2016. Unlike in the period prior to the Andhra Pradesh crisis, the microfinance institutions (MFIs) current growth phase is more resilient, supported by stronger building blocks and a rebound in stakeholder confidence. But to sustain the current pace of growth, MFIs will have to raise equity. To do so, they will need to address challenges associated with low promoter shareholdings and a near-term decline in profitability. In addition, improved geographical spread of assets has raised stakeholder confidence and improved funding availability. No state now accounts for more than 20% of loans from the MFIs, down from 35% at the time of the crisis. Over the past three years, MFIs have raised Rs. 20 billion as equity, and Rs. 240 billion as additional funds from banks. Notably, bank funding to the MFIs is eligible for priority sector lending status. However, the MFIs dependence on bank loans, specifically from the top five banks, is expected to remain high over the medium term. The MFIs are adequately capitalised for their current scale of operations. However, three years of rapid growth have skewed the sectors gearing to 5.4 times, from around 3 times in the past. A CRISIL analysis indicates that the MFIs need to raise equity of at least Rs. 18 billion over the next two years to maintain growth momentum and gearing at current levels...Read More
Post elections; is it a good time to buy real estate in India?
The last decade has been a roller-coaster ride for the real estate industry in India. Consumers have been on tenterhooks, hoping for reductions in property and mortgage rates. And the wait has been long. Adding to the situation was the world economic collapse, apart from the policy paralysis. Earning potential was affected and job stability was also a concern. The general sentiment was thus quite negative to take on the long term liability of a home loan. It forced many buyers to postpone their decision to invest.
The developer community too has been facing problems like the multiple-window approach for approvals for development. This is especially so for the Ministry of Environment & Forest and Aviation, that can take anywhere between 18 to 40 months, escalating project costs and cost of borrowed funds. Dipping property rates clubbed with freebies also failed to lure the buyers, resulting in an increased inventory or in some cases undeveloped/delayed projects for the developers...Read More
Love Thy Neighbor: Nawaz Sharifs visit to India
India Pakistan relations have always been mired with in various controversies, which have been preventing the friendly relations with our neighbor, who in popular perception is seen as an enemy. It is due to this that while all the members of SAARC countries have been invited, the one to draw maximum popular attention has been the coming of Nawaz Sharif, the Prime Minister of Pakistan. In a deft move Indias the then Prime Minister designate sent an invite to all the heads of SAARC countries for his swearing in ceremony, (16 May 2014)which was held with great pomp and show. Nawaz Sharif faced lots of obstacles in accepting this invitation. His family, his daughter included, tweeted and called for acceptance of the invite, she argued as to why India and Pakistan are living in a hostile situation like North and South Korea, why cant they live like the countries of European Union. She was actually echoing the sentiments of most of the Pakistanis who want the strengthening of democracy in Pakistan and good relations with India; she articulated the aspirations of Pakistans majority for whom peace with India is synonymous with the path of good democracy and development. In my own visit to Pakistan a couple of years ago I was overwhelmed with expression of longings of Pakistanis for friendship with India. This also gets reflected in their warm gestures in welcoming you, and showering the best of hospitality on you. The major obstacles in Pakistan to the peace with India come from the strong army and the Mullah alliance. This time also as the Modi invite was in the pipe line the terrorist attack took place on Indian Consulate in Afghanistan, in Herat. The Hafiz Sayeeds of Pakistan raised their eyebrows and dished out the usual threats. One also recalls that the horrific terrorist attack on Mumbai on 26/11 2008 took place when the process of peace between India and Pakistan was to pick up. The correlation between the steps of Indo-Pak peace process and attacks of terror, in which the hand of terrorist groups, who have their support from the some army quarters is unmistakable...Read More
Antibiotics: A treasure to protect
Antibiotics, which have saved so many human lives, are now in grave danger. Bacterial resistance to antibiotics is ever-increasing. It is estimated that this resistance, largely due to the amount of antibiotics used, is now responsible for more than 25,000 deaths in Europe, and 23,000 in the USA every year. Yet the consumption rate of antibiotics is ever-increasing in most countries. Furthermore, very few new antibiotics have come onto the market in the past few years, and very few are expected to in the near future. This dire shortage of effective antibiotics is therefore a major public health issue. Urgent action is needed to try to safeguard antibiotics which are currently effective, as well as to try to find new ones.Without immediate and collaborative action, some infections are quickly going to become impossible to treat, and some procedures (transplants, treatment which lowers immunity, major surgery, etc.) will become too risky to undertake. Some nosocomial and urban infections are already linked to multi-resistant bacteria, and thus treatment being unsuccessful...Read More
Rent or buy beyond financial issues
On most occasions, analysts argue about the choice of going on rent to buying a house. These analysts have their own set of assumptions about interest rates, rental yields, opportunity costs, and inflation in property prices. Their decisions also change with the change in the variables in their set of assumptions. While these are the discussion and thinking points of a few informed individuals, there is a considerable bunch of individuals which give importance to certain other set of variables. These are: how much home loan you would require if you plan to buy a house? Are you eligible for a home loan? Do you have a good CIBIL score? Does your credit report point out to some default in past transactions? Can you afford to pay your equated monthly installment (EMI) through your existing cash flow? These questions are valid and they do play an important role in your decision about going on rent or buying a house. Interestingly, with changing demographics of cities, rising real estate prices and scarcer employment opportunities due to stiff competition, there are some factors that are crucial than aforementioned variables...Read More
India accounts for 40% of worlds 60 million child marriages
Dasra, Indias leading strategic philanthropy foundation released a report on "Marry me later: Preventing Child Marriage and Early Pregnancy in India". The report provides an analysis of the seemingly intractable problem of child marriage in India and evidence of how it is affecting millions of girls. The report also highlights preventive steps and solutions that are being implemented on the ground by non-profit organizations. According to the report, India accounts for 40% of the worlds 60 million child marriages, which is the highest share globally. Close to half of India's girls are married before the age of 18, and one in five is married even before she turns 15. The report also found that adolescent girls are twice as likely to die in childbirth as compared to women in their twenties and children of young mothers are 50% more likely to die than those born to mothers aged 20-29 years. At one level while girls are deprived of good health and well-being, the nation stands challenged on losing US$7.7bn a year due to loss of productivity, mainly because of adolescent pregnancies...Read More
Should one invest in fixed deposits
Fixed Deposits or FDs have been extremely popular among most Indian investors. Labeled as one of the safest, simple, risk free instrument that offer fixed returns, for a fixed period, most investors rush to invest in this instrument. There are two major of fixed deposits available today, Corporate FDs floated by corporates and Bank FDs issued by banks. Bank FDs can be issued by public or private banks. Of late, banks have also started offering variants in fixed deposits such as flexi deposits, overdraft FDs and floating rate FDs. Says Rahul Parikh, Head Aditya Birla Money MyUniverse (ABMMU), "Nowadays banks have started offering flexi deposits to help individuals balance their returns and liquidity needs."
Flexi FDs can help you when you require more funds than what you have in your savings account. In such a situation, your bank will withdraw the excess amount required by you, from your flexi FD, and deposit the same into your savings account. Overdraft facility on FDs can be availed by linking it to your savings or current account. An overdraft facility behaves like a loan. Banks usually allow you to take up to 75% of the FD amount as loan and will charge an interest on the overdraft or the loan, which is usually 2% more than the FD rate. Rates on Floating rate term deposits (FRTDs), are not fixed. They move in tandem with the reference rate, which is periodically reset, every three months. The interest is paid on quarterly basis and the interest rate, too, changes every quarter based on the average of treasury bill rates. Ideally, this kind of FD works well for financially literate investors who can take a call on interest rates and inflation...Read More
72% Indian employers focus on health and productivity to grow
Indian employers focus on health and productivity (H&P) is growing and is the highest in the Asia Pacific region according to the Staying@Work Survey Report, conducted by global professional services company Towers Watson. A massive 96% companies in India feel that H&P played a moderate to essential role in their organizations health strategy and 3 in every 4 Indian employers expect the focus on H&P to grow in the next two years. Leading the Asia Pacific markets, almost half (44%) of the Indian companies plan to put in place a health and wellbeing strategy within the next couple of years, while 48% already have one in place. Commenting on the findings, Anuradha Sriram, Director Benefits, Towers Watson, India said "It is extremely encouraging to find Indian companies place greater focus on health and wellness. But to translate this focus into tangible improvement in employee wellbeing and productivity and thereby financial performance, companies must identify effective programs rather than copying popular ones and strive towards evolving a robust health and wellness strategy instead of implementing a number of tactical initiatives"...Read More
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