Sunday, June 17, 2012

News & Views Today= 16TH, June, 2012 = PRANAB, the Presidential Candidate = Advance Tax Collections are up 10% = TATA MOTORS Sales Growing well = JAGAN Makes clean sweep in AP = GST on Petrol & Diesel

16TH, JUNE, 2012


Advance Tax Collections are up 10%




1.    NEWS :- Sri Pranab Mukherjee has been chosen by UPA as its Presidential Candidate.

VIEWS :- The 77 year old Pranabda is a respected Parliamentarian with long innings. He is well experienced in the country’s economic and social affairs. He has steered clear of controversies all his life – and is admired and respected by the Opposition Parties as well; the lone exception may be TMC. But then, TMC’s politics are yet to be understood by anyone outside TMC, or for that matter – outside Mamata Banerjee.

Who will be the next FM? The former RBI governor Shri C.Rangarajan has had enough experience at RBI and at PM’s office. Other names like Shri Jairam Ramesh are also in the guessing game. Whoever it is – will need to do a few things MUCH FASTER now – to pull the country out of recession. The New FM will also need to impress on the other Ministerial colleagues also to act fast on the economic agenda - as many of the economic decisions relate to their Ministries.

2.    NEWS : Advance Tax Collections are up 10% in first quarter for top 100 Companies.

VIEWS :-  For a long time, India Inc ceased to depend on Government Policies much. The private entrepreneurship in India is truly world class. This is being proved again and again. If only the Government takes some of the positive decisions that it needs to take, without confusion, India Inc can perform wonderfully. Government really has business to be in Business. But, if it is,, be it in Telecom, or oil or gas – it is time, Private entrepreneurs in the sector are totally freed of the shackles of Government companies and Government Decisions. Government can be a facilitator with its fiscal policies but more often, it is turning obstructionist. Government must avoid Negative decisions like the RETROSPECTIVE CHANGE OF ECONOMIC  and TAX LAWS, which has create huge TRUST DEFICIT about India being a dependable country with dependable tax laws. Likewise, in case of Airline sector, the huge tax burden on the sector – said to be around 300% compared to many other countries – is turning it into a sick Industry – and this needs to change FAST. Blaming Air India, KFA or Jet Airlines Managements is meaningless in such a context. Tax collections should expand based on high volumes – not on high killing rates.

Now, with S&P also joining the chorus and downgrading India (which is well earned by India in the last one year of policy paralysis) – India hopes that UPA will come up with some good, effective economic decisions in 2012-13. Even the FM has said so.

RBI must therefore come up with a GOOD, BOLD Rate Cut, signaling that it is all for  Growth of economy. I don’t think, there is any economist left, who now pleads against Rate cut, on the plea of Inflation. Inflation, especially FOOD INFLATION, demands supply side measures by the Food and Agri Ministries at Centre and states – not Rate Hike by RBI. And Manufacturing Index Growth is clearly dismal and slipping further. It has to grow VERY FAST now, even to catch up with earlier levels of growth – ruined by the failure of last several months. Capital Asset formation is at a stand still. So, it is hoped, RBI goes in strongly for Rate Cut. What the hon'ble FM has said now, this blog has been saying for over a year now.

3.    NEWS :- TATA MOTORS SALES ARE Growing well – especially JLR sales

VIEWS :-The EVOQUE is attracting reasonably good attention in China. China Market is Huge. So, we can expect EVOQUE sales in China to grow big and consistently too.

But, TATAs will also be expanding sales in other countries. With European Crisis coming down – and there are strong Indications of it now – the European sales must also grow in coming days. TATAs must make stronger bid to capture larger share in Indian Market, with their newly acquired technologies. What sells well in China must sell equally well in India.

4.     NEWS :- YSRP, the party of Sri Jagan Mohan Reddy has made a clean sweep of the By-elections to the AP state Assembly, by winning 15 out of the 18 seats.

VEIWS :- This was a Hugely predictable outcome. All congress campaigners, including the CM, Kiran Kumar Reddy were praising the economic achievements of Jagan’s father, the late Y.S. Raja Sekhar Reddy.

A few congress leaders were heard saying that – if only Jagan remained quiet within Congress for some time, he would have been CM. This claim renders all ongoing investigations and Charges  by CBI against Jagan suspect and ridiculous. And, it makes, Congress look like the real villain and  Jagan the real Hero, in filmy style.

And, therefore, 50% of the credit for Jagan’s victory goes to Congress.

Jagan, when outside CBI custody, was citing his father’s achievements and seeking vote. Then, his mother and sister –without much talking – did the same.

On the other side, Congress was also citing the same YSR’s achievements. It was obvious that YSR’s praise by both Congress and Jagan Reddy – had already sealed the fate of Congress – and transferred all of YSR’s votes to Jagan.

With many Ministers of the present Government in the dock over the charges of favouring Jagan Reddy with their decisions, there was no way, Congress could campaign effectively on this plank – of YSR’s achievements and win over Jagan Reddy.

There were no effective campaigners from any other Party, who could attract people’s attention and turn the charges and evidence against Jagan into votes in their favour.

It is a surprise that Congress really polled some good votes against Jagan – despite the most self-defeating campaign style.

One strongly suspects that caste and Religion too played out their crucial part – as it does everywhere in India and benefited Jagan Reddy.

As for the grave charges against Jagan, CBI is of course doing its Job well. But given the slow and tortuous movement of Justice system – no one can say when if and when the charges will be proved – or disproved. Jagan’s Money Machine has any way – got hold of the best Lawyers in the country for his defence.

5.    NEWS :- The empowered Committee of Finance Ministers (state) has presented a revised stand before the standing committee on Finance on GST. Nopw, they want Petrol, Diesel and GST to come under GST – but, want powers to impose additional non-creditable levies on Petrol, Diesel and liquor after they are brought under GST.

VIEWS :- inclusion of Petrol and Diesel under GST is good – but, having included under GST, if states are to tax them again, it loses all meaning and purpose. It is mindless levels of state levies on items like Petrol and Diesel – that are responsible for the virtual collapse of development-critical industries like Airlines sector.

There is a huge need at present to bring down both central and state levies on these products and make the prices of Petrol and diesel a little more reasonable in India.

Liquor is a different thing. Any amount of tax on it – if it can reduce a little drunkenness in India- is worthwhile. But then, leave it to be taxed by the states totally – and allow them to profit from DRUNKENNESS, to the extent they choose.

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