Trade and development report update: April 2024
The report forecasts global economic growth to 2.6% in 2024, barely above the 2.5% threshold commonly associated with a recessionary phase. The report says the prevailing focus on inflation overshadows
Economic Development
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91.43-crore deficit Budget for Madhya Pradesh
A bag full of surprises: Madhya Pradesh Finance Minister Raghavji arrives at the Vidhan Sabha in Bhopal to present the State Budget on Wednesday. Finance Minister Raghavji on Wednesday presented in the State Assembly the Madhya Pradesh Budget for 2008-09 with a budgetary deficit of Rs.91.43 crore. The Minister announced a reduction in entry tax on raw material inputs for textile industry and removal of entry tax on sponge iron and iron scrap for induction furnace. He also announced a reduction in VAT on diesel from 26 per cent to 25 per cent. Mr. Raghavji went on to announce pension and medical facilities to those detained under the dreaded MISA (Maintenance of Internal Security Act) during the infamous Emergency. Those who served six months or more behind bars would get Rs.6,000 per month as "Loknayak Jayaprakash Samman Nidhi' (monthly pension) while there would be a pension of Rs.3,000 for those jailed for more than three months but less than six months. One of the major budgetary announcements was that wheat would be available to each BPL family at the rate of Rs.3 per kg and rice at Rs.4.50 per kg . The budget for 2008-09 has a revenue surplus of Rs.2839.78 crore and the fiscal deficit for year is estimated at Rs.4741.00 crore, which is 3 per cent of the GSDP. The Finance Minister told media persons later that one of the important goals was to focus attention on gender budgeting to ensure equality for women, economic empowerment and women's participation in developmental schemes covered by 21 State departments. The Budget provides Rs.1371.47 crore for Energy, Rs.1656 crore for construction of roads and Rs.484 crore for road maintenance. The Finance Minister incorporated the Chief Minister's recent announcements at a Kisan Mahapanchayat here and told the House that there would be budgetary provision for a bonus of Rs.100 per quintal of wheat procured by government agencies for the public distribution system, reduction in rate of interest from 7 per cent to 5 per cent on short-term agriculture loans, relief in payment of old outstanding electricity bills, and increase in the rate of grant from 10 per cent to 30 per cent on drip/sprinkler irrigation. Mr. Raghavji said that additional irrigation capacity for 4.80 lakh hectare had been created in last four-year period and for the next fiscal, there would be a provision of Rs.1815.57 crore for irrigation purpose. He said colleges of excellence would be set up in each of the 38 backward districts. He also told the House that 254 girls' hostels would be constructed and 448 middle schools would be upgraded to the high school level. The Government would also be launching several scholarships for students belonging to the weaker sections, he added. The Finance Minister told the House that there was provision of Rs.566.88 crore (State share) for creation of employment in rural areas, Rs.100 crore for the District Poverty Initiative Programme Phase-II and Rs.93.23 crore for Rural Livelihood Project. He said the State employees would get dearness allowance and dearness relief at the rate of 4 per cent from this coming April 1 onward.
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Govt likely to use 1897 Act to denotify Goa SEZs
A 111-year-old law is one of the key options the government could invoke to handle the challenges arising out of the possible denotification of three Special Economic Zones (SEZs) in Goa. Last week, the inter-ministerial Board of Approvals had recommended starting talks with the Goa government on denotifying the three SEZs following strong local protests in Goa last year, creating a precedent that is being closely watched by potential investors in India and abroad. This is because the process of denotification itself is complex and could be long-drawn. The SEZ Act, 2005, does not have specific provisions for denotification. The Act, however, has provisions empowering the central government to issue policy directions to the Board of Approvals (under subsections 5 and 6 of Section 9). This power is derived from the General Clauses Act of 1897, an umbrella law covering all Acts and government notifications passed by the Centre. Section 21 of this Act empowers the government to add, amend, vary or rescind sections in notifications, orders, rules or bylaws issued by it. This means the central government is, on reading the two laws together, empowered to override the SEZ Act to account for measures like denotification. The other two denotification routes are amendment of the SEZ Act through Parliament and through a presidential ordinance. The latter has been ruled out since Parliament is in session and there is nothing to stop the developers of the three SEZs from going to court if the government waits for the session to end. An amendment of the SEZ Act will not only need approval from the commerce ministry, but also may provoke political opposition from the Congress itself. For this reason, the government is unlikely to follow this route. There are, however, some aspects of the denotification that the government cannot escape
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How to hedge against a slowdown
Let's be clear at the outset
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For an integrated urban-rural policy
TALK of the 2008-09 budget as a
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Basic education from cess pool
THE burden of financing basic education is directly on the tax payer through the 2% education cess. Indications are that for the next financial year (2008-09), the cess will account for a sizeable portion of the Rs 21,100 crore allocated for Sarva Shiksha Abhiyan and the mid-day meal programme. For 2007-08, the cess accounted for 57.7% (Rs 10, 393 crore) of the Rs 17,995.02 crore dedicated for these two programmes. So even as allocations in the Budget for these programmes increase, the gross budgetary support provided for the programmes has been on the decline. The 2% education cess was levied in the Budget 2004-05, ostensibly to ensure that more money flowed into the basic education segment as promised in the UPA government's common minimum programme. The education cess is levied on all central taxes, such as corporate tax, income tax, service tax, custom duty. It is not that the government isn't committed to providing basic education
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CII welcomes Rajasthan Budget
The Confederation of Indian Industry (CII)-Rajasthan Council has welcomed the emphasis laid by the 2008-09 State Budget, presented on Monday, on development of infrastructure, saying it would ensure delivery of goods and services of a high standard and meet public aspirations. CII Rajasthan chairman R.K. Poddar said here on Tuesday that the State Government had agreed to some of the recommendations made by CII in its pre-Budget memorandum and taken steps to reduce the time involved in the value added tax (VAT) refunds and provided for annual self-assessment and exemption to employers using e-filing from submitting audit reports. Mr. Poddar said the Budget had taken care of social sectors such as health, nutrition, drinking water and education and would speed up economic growth of the State. Other important announcements included those on skill development projects, electrification of all villages by the year 2009 and reduction of VAT on marble and finished Kota stone from 12.5 per cent to four per cent. CII Panel on Economic Affairs convenor Kishore Khaitan pointed out that the reduction in tax on aviation spirit from 28 per cent to 4 per cent and entertainment tax from 35 per cent to 30 per cent would lead to high revenue earnings for the State Exchequer.
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Haryana Annual Plan fixed at 6,650 crore
Chief Minister Bhupinder Singh Hooda with Planning Commission Deputy Chairman Montek Singh Ahluwalia in New Delhi on Monday. Haryana's Annual Plan for 2008-09 was pegged at Rs.6,650 crore at a meeting here on Monday between Planning Commission Deputy Chairman Montek Singh Ahluwalia and Chief Minister Bhupinder Singh Hooda. The Plan outlay includes a one-time additional Central assistance component of Rs.100 crore for the priority projects of the State. Commenting on Haryana's performance, Dr. Ahluwalia noted that the State had been recording an excellent growth rate with its overall performance much above expectations. During the Tenth Plan period it achieved a growth of 9 per cent against the target of 7.9 per cent. Accordingly, the Commission has fixed an ambitious target of 11 per cent growth during the Eleventh Plan. The State's per capita income, he said, was also much above the national average. While appreciating the efforts being made in improving the State's human development index, the Commission drew the Government's attention to the need to bridge the gaps. On fiscal performance, Dr. Ahluwalia commended the Hooda Government for reducing the fiscal deficit within the FRBM targets and transforming it in to a revenue-surplus State. Briefing the Commission on the State Government's development strategy, the Chief Minister pointed out that apart from additional resource mobilisation measures, efforts were on to further improve the social sector performance. A number of initiatives, he said, had been taken to benefit those who had not fully realised the fruits of development. He said a luxury tax was being levied on premium hotel and banquet halls and stamp duty rates for registration of sale of properties had been rationalised. To improve the quality of education, compulsory computer training is being introduced in secondary schools and
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Developers of Goa SEZs get Centre's notices
The Goa Government had asked the Centre to scrap all SEZs in the state, after several public protest. Even though the cloud of uncertainty lingering over Special Economic Zones in Goa will take some more time to clear, the SEZ Board of Approvals that met on Monday decided to issue showcause notices to the developers of 12 zones that had already received in-principle and formal approvals from the Board. The Goa Government had asked the Centre to scrap all SEZs in the state, after several public protests rocked the state recently. While approved SEZ developers will be asked why their projects shouldn't be scrapped in the light of the concerns raised by the state Government, the three SEZs in the state already notified by the Centre will remain in limbo a tad longer. The Commerce Ministry had asked the Law Ministry to advise whether the SEZ Act, 2005, gave any provision to cancel notified zones. "While the Law Ministry has said it is possible to cancel notified zones, compensation will have to be worked out for developers if their notifications are withdrawn,' an official said. The Centre is still hoping to salvage the three notified zones that include a pharma SEZ being set up by Cipla. "The Union Government will separately initiate discussions with the Goa Government on the fate of three already notified SEZs,' said Commerce Secretary and head of the Board of Approvals, G K Pillai after the Board's meeting. Meanwhile, of the 17 SEZ proposals before the Board on Monday, 10 have been granted formal approval, including two SEZs each in Tamil Nadu and Rajasthan. Three of the SEZs cleared are in IT sector
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India Some Aspects of Economic and Social Development
The book carries contributions by eminent social scientists on some very important topics relating to India's economic and social development.
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TN's first industrial policy out
Chief Minister M Karunanidhi on Friday released the much-awaited State policy for the micro, small and medium industries (MSMI), aimed at a multi-pronged approach for the growth of industries. Minister for Rural and Small Industries Pongalur N Palanisamy told journalists at the Secretariat that such a policy was formulated for the first time in the State. He said the incentives announced in the policy would be given to the industrial units which had taken effective steps to set up their units on or after August 1, 2006 and commenced commercial production on or after February 22, 2008. Establishment of multistoreyed flatted industrial estates for micro industries, creation of a rehabilitation fund for sick enterprises, reservation of up to 20 per cent of land in all SIPCOT estates for MSMI and up to 30 per cent of area for micro industries in SIDCO estates are some of the key measures. The main would be on enhancing competitiveness and scalable capacity of MSMI besides encouraging agrobased industries for increasing value addition and giving better income to the farmers, he said. The policy also aims at a sustained annual growth rate of over 10 per cent for MSMI and to promote 10 lakh direct and indirect employment opportunities during the Eleventh Plan period. Salient features of the policy Setting up of multi-storeyed flatted industrial estates for micro industries Creation of Technology Development Fund Setting up of rehabilitation fund for sick enterprises Establishment of industrial clusters and mini tool rooms under public-private partnership mode Help for creating centres of excellence and technology business incubators Export policy being evolved to encourage export of micro, small and medium (MSMI) industries Subsidy schemes for agro-based industries set up in 385 blocks 15 per cent special capital subsidy for 10 thrust sector industries 50 per cent subsidy on cost of filing a patent application and trade mark registration 50 per cent rebate on stamp duty and registration charges for MSMI in backward areas Subsidy schemes for micro industries set up anywhere in Tamil Nadu