The International Monetary Fund says India will clock growth of 8.4 per cent in the coming year.
The Reserve Bank of India's observation that developmental expenditure in better-off states like Gujarat, Maharashtra and Goa is declining as a percentage of gross state domestic product (GSDP), whereas such expenditure is rising in underdeveloped states like Bihar and Jharkhand, has invited criticism from analysts.
Gems and jewellery exports may have risen over 20 per cent so far this fiscal, but the rising rupee has cost 150,000 diamond workers their jobs in the last one year, the head of the Gems and Jewellery Export Promotion Council, Sanjay Kothari, said.
Even as the engineering goods sector, which has the largest share in the country's export basket, registered an export growth of 22 per cent (dollar terms) in the April-July period of this year, a recent study has revealed that the volume of exports has gone down in majority of the products manufactured by the sector, leading to job losses.
Government funds spent on productive asset creation through programmes and schemes are termed "Plan" expenditure, while "non-Plan" is a generic term that refers to all expenditure (including establishment and maintenance activities) of the government not included in the Plan.
A relatively slow performance by the industrial sector and a high base effect may slow down gross domestic product (GDP) growth in the second quarter (July-September) of fiscal 2007-08 to below 9 per cent, feel analysts.
The proposed India-Thailand free trade agreement (FTA) will have to wait for some more time to become operational, as there has been no headway in negotiations on the India-Asean treaty on free trading of goods.
Experts say this is a landmark deal that tackles a long-pending issue and will boost Russian investment in India's energy, minerals and defence sectors. The debt, accumulated over several years till April 15, 2007, is parked with the Reserve Bank of India. Explaining the agreement, Indian officials said a Russian company planning to invest in India would deposit rouble funds equivalent to their proposed investment with the Russian central bank.
In order to provide greater leeway to central government departments and ministries to finalise centrally-funded projects, the Department of Expenditure under the finance ministry has increased the financial limits of projects requiring approval from various cost-approving bodies.
Faced with huge cost overruns due to a delay in building the rural roads under Bharat Nirman, the Planning Commission is now looking at alternative ways to fund the ambitious rural development project of the United Progressive Alliance (UPA) government.The rural road project, christened the Pradhan Mantri Gram Sadak Yojana (PMGSY), has seen tardy performance on the target of constructing 146,185 km of rural roads by 2009.
Some new sectors in which the commerce ministry has proposed to allow foreign direct investment (FDI) are credit information companies and commodity exchanges. The ministry is in favour of allowing up to 49 per cent FDI proposed in both these sectors. In proposing to open up the commodity sector, the ministry has said that FII investment be limited to 24 per cent, with a condition that a foreign investor cannot hold more than 10 per cent equity in the investing companies
As foreign fund flows have lifted the rupee to record highs against the dollar, the commerce ministry has started telling exporters to prepare for the Indian currency rising further to 38 against the dollar by December. The strong rupee is already hurting India's exporters, with companies cutting jobs and scaling back expansions. A further appreciation may have even worse consequences for sectors like textile, infotech and automobile.
The Ministry of Statistics and Programme Implementation (MOSPI) is in talks with the Department of Posts to take the help of its staff in collecting sample data for the proposed Consumer Price Index for Rural India (CPI-R). The data for the index would be collected from 1,000 villages, Chief Statistician of India Pronab Sen said on the sidelines of a national seminar on the results of the 61st round of the National Sample Survey.
The finance ministry has opposed the proposed airport at Greater Noida, and has instead favoured upgrading infrastructure at Delhi airport, which it says makes more economic sense. This has come as a shot in the arm for the GMR group, the private sector developer of Delhi airport, which has been opposing another airport so close to the existing one.
Analysts point out that exporters outside SEZs enjoy Cenvat credit against service tax paid on a host of services subscribed to while engaging in export-related activities. In addition, the department of revenue recently permitted service tax exemption on seven services used by exporters.
The Sixth Pay Commission is likely to significantly raise basic salaries for an estimated 4.5 million central government employees. The recommendations are expected to be submitted in January, a few months ahead of schedule, and the award is likely to come into effect from January 2006.
The Department of Commerce is preparing guidelines for setting up single-window clearance systems in states for special economic zones (SEZs). he move comes after a recent review by the department, in which it was found that the SEZ developers were facing problems in getting approvals in many states.
Since the SEZ Act was notified in February 2006, 22 SEZs have been up and running. In the last financial year (2006-07), these SEZs collectively exported goods worth Rs 33,000 crore (Rs 330 billion) , roughly 6 per cent of India's total exports of Rs 5,71,641 crore (Rs 5716.41 billion). Officials also pointed out that 52,000 people have found employment in the new SEZs set up after 2005.
Officers of the elite Indian Administrative Service (IAS) want their pay scales to be determined on the basis of prevailing market rates. However, they are not ready to give up the substantial perks they enjoy, like palatial bungalows in city centres, number of attendants, guards, drivers and other assorted facilities.
The sixth central Pay Commission is examining the feasibility of introducing performance-linked salaries for government employees. The commission has constituted a study group headed by Indian Institute of Management, Ahmedabad Professor Biju Varkkey to develop a model on these lines.The study group has submitted interim reports and is expected to send its final report soon.
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