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

NEWS & VIEWS TODAY

16TH, JUNE, 2012

PRANAB THE PRESIDENTIAL CANDIDATE

Advance Tax Collections are up 10%

TATA MOTORS SALES ARE GROWING WELL

JAGAN MAKES CLEAN SWEEP OF AP BY-ELECTIONS

GST  ON  PETROL, DIESEL AND LIQUOR

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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NEWS & VIEWS TODAY=13TH, JUNE, 2012 = INDUSTRIAL GROWTH AT STAND STILL = GOVT NEEDS REBOOT, SAY NRN & PREMJI = SUNDARAM FASTENERS SET TO GROW FURTHER = VENUS REMEDIES GETS US PATENT = SBI EXPECTS CRR CUT BY 1% = FM EXPRESSES CONCERN OVER BAD LOANS OF SBI,CBI,UCO

NEWS & VIEWS TODAY

13TH, JUNE, 2012

INDUSTRIAL GROWTH AT STAND STILL IN APRIL

GOVT NEEDS REBOOT – SAY NRN & PREMJI

SUNDARAM FASTENERS SET TO GROW FURTHER

VENUS REMEDIES GETS US PATENT

SBI EXPECTS CRR CUT BY 1%

FM EXPRESSES CONCERN OVER BAD LOANS OF SBI,CBI,UCO

1.    NEWS :- INDUSTRIAL OUTPUT GROWTH is virtually at stand still, indicated by the April figures.FM says, he is disappointed. Production of capital Goods contracted 16.3% in April, the second successive month of decline.

VIEWS :- While Industrial output growth reflects current sluggishness, contraction of capital Goods production reflects future slow down prospects. Government and RBI have to do a LOT to stop this downhill run. This blog has suggested a 3% Rate cut and sticks to it. Last year, RBI had enhanced Rates much beyond this level – whose results, combined with Government’s policy Paralysis – is what we are witnessing now. These can be reversed. But, firm, strong measures are needed.

2.    NEWS :- GOVT NEEDS a reboot, say Murthy and Premji

VIEWS :- These views are widespread. Government is not making efforts to move with enabling legislation – by making peace with opposition, Team ANNA+RamDevji combine etc. Instead, it is always in a fighting and retributive mood. 

If Team Anna is swaying towards Politics, it is largely the fault of the Government, which did not make any serious attempts to pass the Lok Pal Bill. If they are criticizing the Government, please look at the people within Congress who start the words of war first from congress’ side. And, why lodge so many cases the moment some one  criticizes? Even Industry is unwilling to talk, even when suffering.

But when Industry captains like NRN Murthy, Premji and Naresh Goel have spoken this way- the good thing that Government can do is – to invite them, discuss with them, and see their point of view. Government must act in overall public interest – but in recent past, it has been blindly following measures to enhance immediate revenues, even if it kills the Industries and growth.

India must encourage rational, issue based criticism much, much more than at present. Yes. Individual based criticism must come down. But, if Individual is responsible for corruption, black money etc there seems to be no other way.

The lack of adequate consumer organizations in sectors like Telecom and Airlines ( and possibly railways, roadways etc ) is highlighted in current imbroglio. Their voice is never audible at all.

3.    NEWS :- SUNDARAM FASTENERS SET TO GROW FURTHER :-The company is upgrading its technology well and is expecting Growth to come – well in coming days.

VIEWS :- Even with sluggish domestic Auto market conditions expected in FY 2013, Sundaram Fasteners can do well, especially in its Export Market of US, which has grown by 50%. If Government does perform better in FY 2013 as FM says, it will be a great story for Sundaram. The increase in Petrol / Diesel prices when international prices go up – and then, not decreasing them, when they go down – is a dampener at the moment. But, things could improve. Hope, FM stays as FM – to implement his promises.

4.    NEWS :- VENUS REMEDIES GETS US PATENT :- The company has received a PatenT from US Patent office for an anti-biotic product that targets drug resistant infections.

VIEWS :- Venus Remedies has been bagging Patents from different countries regularly. It is graduating into a Great innovator and all that it needs to do now – is to commercialize its drugs with the same efficiency. It seems to have Great future.   

5.    NEWS :- SBI EXPECTS CRR CUT BY 1%.

VIEWS :- SBI Hopes for CRR Rate cut by 1% is good. But, its view that Rate cut is more symbolic and not very substantial is not correct. If it was more symbolic, why did RBI raise them so high every month last year? Rate cut reduces the COST OF CAPITAL for all Industries – and thereby enhances Return on capital and that is what matters right now.  Capital Goods Production is falling by a huge percentage. Therefore, Rate cut of sufficient magnitude is a Must now. Even the FM has expressed his hopes for it. Yes. CRR cut also is a good addition to Rate cut – but not an alternative to it.

6.    NEWS :- FM EXPRESSES CONCERN OVER BAD LOANS –especially at SBI,CBI, UCO;

VIEWS :- It is good that FM has expressed concern. It is necessary that the Big Banks look at the total Industry perspective when they look at Bad loans of the individual companies. They must report on Industries / Individual companies which have Negative outlook to Government, with what they feel as suitable measures to keep them in good health. A stitch in time saves Nine.

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NEWS & VIEWS TODAY = 12th, JUNE, 2012 = S&P WARNS OF DOWNGRADE = TELECOM & AIRLINES INDUSTRIES NEED IMMEDIATE REMEDIAL STEPS = FM SAYS- TURNAROUND THIS YEAR

NEWS & VIEWS TODAY

12th, JUNE, 2012

S&P WARNS OF DOWNGRADE

TELECOM & AIRLINES INDUSTRIES

NEED IMMEDIATE REMEDIAL STEPS

FM SAYS - TURNAROUND THIS YEAR

RBI MUST GO FOR GOOD RATE CUT

1.    NEWS :- When S&P talks, Nations listen. S&P presents FACTS and its considered opinions. But, it is not always in a hurry. It takes time, watches and then puts on record its perceptions and its ratings. And that is happening. S&P is to downgrade INDIA to BBB- with Negative outlook, while all other BRIC countries retain their BBB Stable outlook and china has a AA- with stable outlook.

VIEWS :- Indian Governments – both Central and States – are unwilling to follow sound governmental ethics and that is resulting in Indian economy hurtling downwards month after month. The Centre’s UNPRODUCTIVE SCHEMES like NREGS are more than matched by many states, which give huge doles, even when they have no money for any worthwhile capital expenditure, which only can build the states in the long term. 

There is no adequate willingness to infuse productivity into this otherwise imaginative scheme. By all means, reach out to the poor, but make them BUILD something good - for themselves and for the nation. Money should never be a dole or charity.

Populism reaches ridiculous heights in many states – and the lack of economic education among people and the consequent lack of realization – that these populist schemes are destroying the state – make the people elated about the populist schemes. This is unfortunate. 

There is no worthwhile criticism of these schemes. And, if someone does criticize, the governments use their Party muscle in all sorts of unfair ways. Governments at  centre and states are turning to undemocratic means to gag criticism. Look at the way the centre tried to slap cases against all members of Team Anna and Ram Devji – after their absolutely peaceful protest against corruption and Black Money. Look at the way Mamata  Banarjee tried to brand simple questioners as CPM, Naxalites etc in an open TV show. This sort of intolerance does not augur well for democracy.

Centre had a golden opportunity to get the Lok Pal Bill passed and walk away with credits. Even now, it is so. It must only withdraw all cases, stop its Digvijay singhs from initiating wars of words frequently, and go ahead with passing of Lok Pal bill with some understanding and give and take with at least the BJP. Heavens will not fall to the ground if BJP’s views are accommodated in Lok Pal Bill. 

Bills like Land acquisition Bill – with Pro Landowner clauses can be introduced and passed in a day or two – but, it is not even being introduced. And, the Pro land owner mindset is missing. You will deprive some one of his livelihood – and do not want to compensate him adequately? Why? Industry can bear the cost. After all, land cost is a small fraction of the total land cost. And, it is better to get it quick without future hassles rather than too cheap.

Ditto with Telecom tangle. Government’s thinking is likely to kill the industry ( and the telecom consumers) with astronomical licence fees – simply being unable to answer the CAG. Even here, there is no willingness to consult SC and CAG and place before them Government’s own views and consumers’ interests. 

Also, there is no willingness to consult the Opposition. Why? And, the point of wonder is – there is NO SIGNIFICANT REPRESENTATIVE OF CONSUMER INTEREST IN TELECOM! No one sees anybody representing consumers – before the Supreme Court, before Government, before TRAI, before DOT and in the Media! Absolutely surprising. 

Ditto with Airlines Industry. This blog has always maintained that reducing the taxes by at least 50 % is the key to salvage the industry. Now, Jet Airlines Chief Naresh Goyal says just the same thing. He says “ in fact, Indian fares are 200-300%,higher compared with world’s other carriers, let alone the Chinese”, and he says India is the only country to impose service tax on Airlines. The taxation is India is much higher than in China and many other countries. Air India, King fisher, Jet and all other Indian Airlines can be in good health, if only Government reduces taxes of all kinds – on the Airlines Industry. 

Even the Air Port and other ground level support charges are ridiculously High in many Indian Air Ports. The IATA chief, Tony Tyler has heavily criticized India for having trebled airport charges – with a 346% increase in Delhi. And “Delhi Airport has to pay 46% of its revenues to Government. This is neither in the interest of the Airlines nor of the Airport”, the IATA chief has said. This is so at all Air Ports. The Air Port should make revenues from VOLUMES – not from dwindling numbers of INDIVIDUALS. It is unwise. Ditto goes for Governments.

The Government must take a comprehensive look at all these points and make corrections. The idea should not be MAXIMUM REVENUE  for Government, but maximum number of Indians travelling by Air. If this is ensured, revenues will flow in automatically.

The trouble with Industry bodies in India is – they too don’t talk openly till it is too late. 

And that has a lot to do – with Government’s mindset – of not tolerating criticism.  Criticism is Good – if you listen to it. Bill Gates is famous for his sane words on this.

The need for consumer bodies is more than highlighted for each of these Industries.

The Finance Minister says – Turn around this year. He has listed a few factors, the first being Rate cut. One wishes, RBI does go for a GOOD RATE CUT to spur growth, as FM says optimistically.  RBI acted so fast in enhancing Rates every month  last year– like never before since Independence perhaps. Now, it is slow to bring Rates down in the same speed - when growth is getting pulled down drastically every month. A good 3% Rate cut would propel growth upwards fast.

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