India's import bill contracted for the first time in almost nine years during January 2009, led by crude oil and capital goods, which constitute nearly half the total imports.
A dip in petroleum product exports for the first time in the current fiscal has contributed to a 22 per cent decline in merchandise exports in January, commerce ministry data reveals.
Broad consensus is emerging within a Group of Ministers chaired by finance and external affairs minister Pranab Mukherjee on a proposal seeking comprehensive changes in the foreign direct investment policy. This includes scrapping automatic approval in sectors that have FDI limits and in which ownership or control is shifting to a foreign company, and a new definition for calculating indirect foreign equity.
For the first time since its inception in 2006, the Board of Approval on special economic zones in its next meeting in March will take up a proposal from a developer to merge these tax-free industrial enclaves for exports.
The government is planning to nominate full-time directors while inducting the remaining seven members in the reconstituted board of Satyam Computer Services Ltd, said a top corporate affairs ministry official. The ministry of Corporate Affairs (MCA), which got an interim order from the Company Law Board to supersede the existing board of the Hyderabad-based company, is planning to make the announcement within a week to ensure smooth functioning at Satyam.
The IIP rate had dipped by 0.4 per cent in November, for the first time since the new series for the IIP was introduced in financial year 1993-94, mainly due to poor performance of manufacturing, which has nearly 80 per cent weight in the index.
The government has already allowed reimbursement of service tax on about 19 services used by exporters while selling goods overseas. These include commission paid to foreign agents whose services are subscribed by exporters to book orders with overseas clients. However, a list of 16 services used by exporters is not reimbursed. These include service tax paid on bank charges, packaging services and travel agents' services.
Initial commerce ministry estimates suggest a 10 per cent contraction in exports in December. Coming after 12 and 9.9 per cent falls in October and November respectively, India is unlikely to meet the export target of $ 200 billion in the current fiscal. The last quarterly dip occurred in 2001, when exports were in the negative territory for six consecutive months ending December that year, data provided by the Reserve Bank of India and the commerce ministry showed.
Deficit-financed tax cuts could be a better option to revive the economy hit by global financial crisis as government spending is not effective due to leakages and delay in execution, economists feel.
Low commodity prices and a likely softening of interest rates have set the right business conditions, but the revival of demand - both in domestic and overseas markets - will be the key driver in 2009, experts said.
Interestingly, these recovery officers do not have the power to reduce the amount stated in the order issued by the presiding officer. The annual review was published "to point out irregularities or deficiencies which need the immediate attention of the Heads of Departments", S M Kumar, chief controller of accounts, said in the review for 2007-08.
Mumbai-based infrastructure conglomerate Essar group has withdrawn its plans to build a 1,125 hectare Special Economic Zone in Jamnagar because of the adverse economic environment, a commerce ministry official said. The proposal was to set up a 16-20-million-metric-tonne-a-year petrochemical refinery at an investment of Rs 15,000 crore, one of the largest SEZ proposals, according to information available on the company's website.
Secretaries' panel fails to arrive at a decision. Sources told Business Standard the commerce ministry felt that the delay would add to the cost for the government as more and more factories could shut shop.
The commerce ministry has written to its finance counterpart suggesting that domestic banks should share 50 per cent of losses arising out of derivative contracts that exporters have taken to protect against currency fluctuations.
Employment data are currently estimated once in five years through a sample survey by the National Sample Survey Organisation.
India is not convinced that the new texts on agriculture and non-agricultural market access released by the World Trade Organization last Saturday would lead to consensus among members, though some of its concerns have been addressed with caveats.
More than half the transactions under four of eight categories tracked under a scheme to reduce tax evasion lack a "valid" identification number issued by the Income-tax (I-T) Department.
The proposal will also include providing loans at below market rates to real estate developers. But the loan disbursed under this will come with a number of conditions like an upper ceiling on selling price of flats and individual homes.
The zones will be required to register themselves with www.sezindia.nic.in. Currently, developers have to send SEZ-related applications to the Department of Commerce, after which the inter-ministerial Board of Approval (BoA), headed by Commerce Secretary Gopal K Pillai, takes a call on them.
Indian economy is expected to grow between 7 and 7.4 per cent in the three months up to September 2008, as against 9.3 per cent in the year-ago quarter, five top economists of the country told Business Standard. The government is slated to release the quarterly numbers on Friday.
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