Archive for ‘India alert’

28/02/2015

What the Budget Means for Regular Indians – India Real Time – WSJ

The Modi government’s budget offered some sops for middle-class tax payers and a series of steps aimed at boosting social security for the country’s poor.

Tax Breaks on Health Insurance, Travel: Individuals will be allowed to deduct up to 25,000 rupees ($400) annually in health-insurance premiums from their taxes. That is an increase from the current 15,000-rupee deduction. For people 60 years or older, the deduction will be 30,000 rupees.

Mr. Jaitley also proposed increasing the amount of transportation expenses individuals can deduct to 1,600 rupees a month, up from 800 rupees a month now.

Pension Deduction: Individuals can now claim an additional tax deduction of up to 50,000 rupees ($800) if they put the money in the government’s New Pension Scheme. “This will enable India to become a pensioned society instead of a pensionless society,” said Mr. Jaitley.

Social Security programs: In a bid to provide a social safety net, Mr. Jaitley said the state will provide accidental death insurance of 200,000 rupees for a premium of just one rupee a month. State insurers will also offer policies covering natural and accidental death for 330 rupees a year.

Though available to all, the relatively small size of the insurance cover implies these will likely be used mostly by the poor.

The government will also encourage individuals to set up pension accounts under a new program. For individuals who open such an account by Dec. 31, the government will match individual contributions up to 1,000 rupees a year, for five years.

Tax-Free bonds:  Mr. Jaitley plans to allow government agencies and others to issue tax-free infrastructure bonds to fund roads, railways and irrigation. Details weren’t disclosed but typically interest on such bonds is tax free.

Service Tax: Now for the bad news: your restaurant and phone bills will soon go up, because the government will raise the service tax to 14% from 12.4%. Individuals indirectly pay this tax on a wide range of services, including on insurance premiums, hotel bills and electricity bills.

Gold Bonds: Since Indians won’t give up their love for gold, Mr. Jaitley tried to come up with ways to at least get it out of people’s homes and into banks. He introduced a plan that he said would make it easier for people keep gold in a bank, earn interest on it and borrow against it.

Mr. Jaitley also proposed a “Sovereign Gold Bond” that would act as an alternate to owning physical gold. These bonds would have a fixed rate of interest and “be redeemable in cash in terms of the face value of the gold,” he said.

Unaccounted-for Money: Mr. Jaitley said the government would introduce more stringent requirements for people to declare assets held overseas and make it harder for people to buy real-estate with cash in an effort to tax evasion.

via What the Budget Means for Regular Indians – India Real Time – WSJ.

27/02/2015

Mufti-Modi meeting clears decks for BJP-PDP government in J&K – The Hindu

Decks were cleared for the first ever formation of a BJP-PDP coalition government in Jammu and Kashmir following a “historic” meeting between Prime Minister Narendra Modi and PDP chief Mufti Mohammed Sayeed where the two leaders gave their approval for a common minimum programme (CMP) for governance. The swearing-in will be on March 1.

PDP patron Mufti Mohammed Sayeed and Prime Minister Narendra Modi during their meeting in New Delhi on Friday. Photo: PIB

Clearly the PDP expects the NDA government to resume dialogue process with Pakistan and Hurriyat leaders as Mr. Sayeed emphasised, after the meeting, the need to engage with Islamabad. The government, he said, must take off from where former Prime Minister Atal Bihari Vajpayee left when he had extended a hand of friendship to the then Pakistan leadership. “History has given us another chance. We want to repeat history.’’

“It was a war of nerves,” he admitted to a questioner when asked about the BJP and the PDP reconciling two extreme ideologies but added that “common ground has been found” and both sides were “flexible”.

Repeating the BJP slogan of sab ka saath sab ka vikas, he said, the Prime Minister has won the mandate of the people of the country and has full legitimacy to decide on this alliance and adding that “this had to be done’”.

“We will now give a healing touch to the State,” he said.

via Mufti-Modi meeting clears decks for BJP-PDP government in J&K – The Hindu.

27/02/2015

India in sweet spot of lower deficits, more growth – Economic Survey | Reuters

India can increase investment to drive economic growth without borrowing more, a key government report said on Friday, in an indication that Finance Minister Arun Jaitley will stick to debt targets in his maiden full-year budget on Saturday.

Labourers work at the site of a monorail project in Mumbai February 27, 2015. REUTERS-Shailesh Andrade

The Economic Survey, the basis for Jaitley’s budget for the fiscal year starting April 1, forecast growth of 8.1 percent to 8.5 percent under new calculations that make India the world’s most dynamic big economy. The forecast marks an acceleration from growth of 7.4 percent in the current fiscal year.

“India has reached a sweet spot and … there is a scope for Big Bang reforms now,” the report said, adding the country was on course to hit double-digit growth rates.

Indian stocks rallied, with the benchmark Sensex gaining 1.7 percent, on hopes that Jaitley would deliver a business-friendly budget.

At first glance the growth outlook appears impressive. But it follows a big overhaul of India’s economic data, which previously showed the economy struggling to recover from its longest growth slowdown in a generation.

Other indicators of India’s economy are not as rosy as GDP data suggests. Earnings of the country’s top 100 companies shrank by 6 percent in the last quarter, private investment and consumer demand are weak and merchandise exports are falling.

The author of the report, economic adviser Arvind Subramanian, even said he was “puzzled” by the new GDP figures and played down suggestions that India’s $2 trillion economy was on a roll.

“India’s economy is still recovering, and not surging,” Subramanian told a news conference.

Prime Minister Narendra Modi won a landslide general election victory last May, capitalising on dissatisfaction among Indians over their economic lot and promising ‘better days’ of more jobs, investment and growth.

The report by Subramanian, a renowned development economist lured away from a Washington think tank by Modi, suggested the economy was now building momentum.

That, above all, reflects a near halving in international prices of oil, India’s biggest import.

As a result, the report predicts the current account deficit will be below 1 percent of GDP in 2015/16, a far cry from a figure of 4.7 percent in 2012/13 that preceded a currency crisis in India.

via India in sweet spot of lower deficits, more growth – Economic Survey | Reuters.

26/02/2015

To Combat Crowds, India’s McDonald’s Now Lets Diners Order at the Table – India Real Time – WSJ

Tired of having to elbow your way through pushy crowds to get your fast-food fix? McDonald’s MCD +3.87% in India has a solution for you: Skip the long lines and order a Maharaja Mac from your table.

The more than 350 McDonald’s outlets in India each get about 4,000 customers a day on average. That’s twice the number of customers that come to the average Mickey D branches in the rest of the world. As part of an experiment in crowd control, one franchisee has started allowing burger fans to order and pay through roaming cashiers who take orders and payments on Wi-Fi enabled tablets and credit-card machines.

The queue-quelling technology is already being tested at the McDonald’s at Mumbai’s Phoenix Mills mall. It will be rolled out in 200 more branches this year, said Amit Jatia, who runs most of the McDonald’s in India.

“India is changing,” he said. “You have to keep evolving with the changing needs of the consumer.”

Mr. Jatia’s Hardcastle Restaurants runs 202 McDonald’s outlets in western and southern India, while another group controls 166 restaurants in northern and eastern India.

via To Combat Crowds, India’s McDonald’s Now Lets Diners Order at the Table – India Real Time – WSJ.

25/02/2015

Delhi’s AAP Provides More Free Water and Power to the People – India Real Time – WSJ

Once again, Delhi’s Aam Aadmi Party, has opened up a big bag full of freebies.

Eleven days after being sworn into power again, Delhi’s new government has taken a big step forward in delivering on its promise to make power and water more affordable.

The beneficiaries of the electricity rate cut: households consuming less than 400 units of electricity. Starting next month, electricity tariffs will be cut in half for this section of consumers, Manish Sisodia, Delhi’s deputy chief minister, said Wednesday.

More than 90% of consumers in the capital- more than 3.5 million families- fall in this bracket, he said. The state government will set aside 700 million rupees, or about $113 million, to pay for the power handout.  For the full, new fiscal year starting in April, the Delhi government estimates the cost of the subsidy will be around $230 million.

In Delhi, one of the world’s biggest megacities, power generation and distribution lies in the hands of both the state government and private companies. It taps neighboring states for most of its power as it only produces about 20% of the electricity it consumes.

via Delhi’s AAP Provides More Free Water and Power to the People – India Real Time – WSJ.

25/02/2015

India to embark on rail investment splurge thanks to cheap oil | Reuters

India’s decrepit state-run train services stand to receive at least a 25 percent boost in investment to over $9 billion, funded solely by falling fuel costs, according to officials familiar with a railway budget set to be unveiled on Thursday.

A worker cleans a railway track at a railway station in Kolkata October 2, 2014. REUTERS/Rupak De Chowdhuri/Files

The world’s fourth largest rail network could get even more if Prime Minister Narendra Modi makes it a priority, as China did during its rapid economic growth over the past two decades.

There are high hopes that his nine-month-old government will plough money into investment in infrastructure needed to haul the economy out of a rut when it presents its first annual federal budget on Saturday.

The separate rail budget – a relic of the country’s British colonial past – could show how far Modi’s India is prepared to drive investment in a vital transport sector.

“The fall in diesel prices and a pick-up in freight earnings have given us a golden chance to raise investments,” said one government official.

Falling oil prices have saved billions of dollars in subsidy spending across the economy, but Finance Minister Arun Jaitley is under pressure to prevent the fiscal deficit from busting a target of 3.6 percent of gross domestic product.

Railway Minister Suresh Prabhu, according to the officials, has factored in savings from

via India to embark on rail investment splurge thanks to cheap oil | Reuters.

24/02/2015

Modi’s bid to ease land for companies could impact reforms | Reuters

A bid by Prime Minister Narendra Modi to make it easier for businesses to buy farm land for infrastructure and industry has sparked a backlash that could stymie his efforts to get reforms through a parliament session that began on Monday.

Labourers work along the construction site of a road at Ghilot in Rajasthan, October 1, 2014.  REUTERS/Adnan Abidi/Files

While the change is aimed at unlocking hundreds of billions of dollars worth of projects, which have been stuck for want of land, opposition parties and rights activists say it discriminates against farmers.

“We will protest and fight the government on this issue inside and outside parliament,” Ghulam Nabi Azad, a senior leader of the opposition Congress party, told the Indian Express.

Modi issued an ordinance in December to exempt projects in defence, rural electrification, rural housing and industrial corridors from provisions of a law enacted by the previous Congress party government that mandated the consent of 80 percent of affected landowners for any deal.

He had also ended the need for companies to conduct a social impact study of such projects, which would involve public hearings and, industry executives fear, drag on for years.

The ordinance is a temporary order and needs the approval of both houses of parliament to come into force. It will lapse if parliament does not ratify it this session.

via Modi’s bid to ease land for companies could impact reforms | Reuters.

24/02/2015

Retail dilemma in India – nice malls are few and far between | Reuters

A severe shortage of attractive malls has made setting up shop in India easier said than done, crimping expansion plans for both foreign retailers such as Lacoste and domestic giants like department store chain Shoppers Stop (SHOP.NS).

A private security guard stands guard inside the premises of the MGF mall in New Delhi February 23, 2015.  REUTERS/Adnan Abidi

India’s searing heat, heavy traffic and cluttered pavements make malls the most popular option for urban middle class consumers looking for a day out. But many centres – despite having been built in the last decade – are struggling to draw shoppers or retailers because of poor design or because they are difficult to manage.

P.S. Puri, CEO of MGF Mall Management, which runs MGF Metropolitan, knows this all too well. Located in a posh district in the south of New Delhi, security guards and sales staff outnumbered shoppers last Tuesday evening in what was once a bustling mall.

It has restaurants but lacks popular attractions like a food court and a cinema. The sale of shop ownership piecemeal has made management difficult and now only one quarter of the space is occupied by fashion retailers – about the same amount that is vacant.

via Retail dilemma in India – nice malls are few and far between | Reuters.

22/02/2015

Modi bets on GM crops for second green revolution | Reuters

On a fenced plot not far from Prime Minister Narendra Modi‘s home, a field of mustard is in full yellow bloom, representing his government’s reversal of an effective ban on field trials of genetically modified (GM) food crops.

A scientist points to a patch of genetically modified (GM) rapeseed crop under trial in New Delhi February 13, 2015. REUTERS-Anindito Mukherjee

The GM mustard planted in the half-acre field in the grounds of the Indian Agricultural Research Institute in New Delhi is in the final stage of trials before the variety is allowed to be sold commercially, and that could come within two years, scientists associated with the project say.

India placed a moratorium on GM aubergine in 2010 fearing the effect on food safety and biodiversity. Field trials of other GM crops were not formally halted, but the regulatory system was brought to a deadlock.

But allowing GM crops is critical to Modi’s goal of boosting dismal farm productivity in India, where urbanisation is devouring arable land and population growth will mean there are 1.5 billion mouths to feed by 2030 – more even than China.

via Modi bets on GM crops for second green revolution | Reuters.

22/02/2015

China protests Modi’s visit to disputed border region | Reuters

China said on Friday it had lodged an official protest against Prime Minister Narendra Modi‘s visit to a border region claimed by both countries.

China disputes the entire territory of Arunachal Pradesh, calling it south Tibet. Its historic town Tawang, a key site for Tibetan Buddhism, was briefly occupied by Chinese forces during a 1962 war.

“The Chinese government has never recognized the so-called ‘Arunachal Pradesh’,” a statement on the Chinese Foreign Ministry‘s website said on Friday.

It said Modi’s visit was “not conducive to the overall development of bilateral relations”.

Modi visited Arunachal Pradesh on Friday to inaugurate the opening of a train line and power station. He did not mention China but pledged billions of dollars of investment to develop infrastructure in the region.

“I assure you that you will witness more development in the state in the next five years than it has seen in the last 28 years,” Modi said, addressing a huge crowd.

Faster transport links and exploitation of Arunachal Pradesh’s hydro-electric potential are the keys to fighting poverty and bringing about rapid development in the frontier state, he said.

In January, China objected to statements by Japan’s foreign ministry supporting India’s claim to the region.

A visit by U.S. President Barack Obama to India in January was widely seen as a sign Modi is moving closer to the United States, to offset rising Chinese influence in Asia and, in particular, intensifying activity by the Chinese navy in the Indian Ocean.

via China protests Modi’s visit to disputed border region | Reuters.

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