Supplementary demands for Rs.5,063 crore introduced in LS
New Delhi: The first batch of supplementary demands for grants for the current fiscal, involving 56 grants and one appropriation, with a net cash outgo amounting to Rs5,063.06 crore has been introduced in the Lok Sabha by the Union Finance Minister, P. Chidambaram.

Though the overall authorisation amounted to Rs38,621.77 crore, the proposals involving net cash outgo aggregated Rs5,063.06 crore as the gross additional expenditure was matched by savings of the ministries and departments concerned or by enhanced recoveries/receipts aggregating Rs33,558.23 crore.

Earlier in the Mid-Year Review of the Economy it was stated that the supplementary demands for grants, separately being introduced today, are not likely to increase the fiscal deficit and the revenue deficit as matching savings in expenditure in normal course are expected to neutralise their effect.
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Indian exports up 25.92 per cent
New Delhi: Exports from India went up 25.91 per cent year-on-year in November this year to $6.09 billion, pushing up growth in first eight months of this fiscal to 24.02 per cent translating into exports of $46.3 billion.

The imports during April-November 2004 also showed a robust growth of 34.4 per cent to $64.2 billion, thus increasing the trade deficit to $17.8 billion from $10.3 billion in the same period last fiscal.

In November imports grew 43.12 per cent year-on-year to $9 billion. During the month the trade deficit increased to $2.9 billion from $1.4 billion in the same month last year.
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FM:'Slippages' in revenue deficit target likely
New Delhi: The Finance Ministry has admitted that there could be 'some slippage' in meeting the revenue deficit target for the current fiscal.

For 2004-05, the Centre's revenue deficit has been budgeted at Rs76,171 crore or 2.5 per cent of the country's gross domestic product (GDP), which is substantially below the corresponding revised figures of Rs99,860 crore and 3.6 per cent for the previous fiscal.

The Finance Ministry has said in its Mid-Year Review statement, tabled in Parliament, that while it may not be possible to reduce the revenue deficit by 1.1 percentage points of GDP this fiscal as envisaged, the Centre would, however, be able to meet the minimum 0.5 percentage points annual reduction prescribed under the Fiscal Responsibility and Budget Management (FRBM) Rules.

Under the FRBM Act and the National Common Minimum Programme of the ruling dispensation, the Centre is committed to elimination of the revenue deficit by 2008-09. Accordingly, it has planned a fiscal correction path that is `front-loaded', i.e., envisaging huge reductions in revenue deficit in the initial years, beyond the prescribed minimum of 0.5 percentage points every year.

The revenue deficit of Rs59,951 crore during April-September was 78.7 per cent of the budget estimate for 2004-05, which is considerably in excess of the 45 per cent benchmark set under the FRBM Rules. The main reason for this, the Review has said, was that the Centre's overall tax revenues have gone up by only 20 per cent during the first half, against the 25 per cent growth assumed in the Budget.

On the expenditure front, the Centre has been able to reduce its outgo on subsidies from Rs26,439 crore during April-September 2003 to Rs21,995 crore. This has been due to a decline in food subsidy, brought about by lower grain stocks and consequent reduction in carrying cost.
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India Inc. welcomes mid-year economic review
New Delhi: Terming the Mid-term Review of the Economy a "realistic appraisal", leading industry associations on Monday extended a cautious welcome to it with some saying that a lower six per cent growth was a cause of concern.

"It indicates that the economy overall is in good shape, that we could expect a decent GDP growth. Secondly it highlights some of the issues we need to be conscious of — the issue of fiscal deficit, the importance of addressing the issue of subsidy," Confederation of Indian Industry said.

PHDCCI said the six per cent growth rate is indeed a cause of some concern about the well being of the economy.

Supporting the Finance Minister P Chidambaram, Assocham said it has already made its estimated projection for the GDP growth of the economy at 6.5 per cent by the end of 2004-05. Assocham President Mahandra K Sanghi said the economy is showing positive signals for attracting investments as the government is working very hard to replace the stringent laws with moderate ones.
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FICCI signs action plan with Thai body
New Delhi: The Federation of Indian Chambers of Commerce & Industry (FICCI) and the Federation of Thai Industries (FTI) have signed an action plan which seeks to deepen cooperation through the Thai-South Asia Business Forum and cash in on opportunities arising out of the Indo-Thai Free Trade Agreement (FTA). The FICCI President, Y.K. Modi, and FTI, Vice-Chairman, Plengsakdi Prakaspesat, inked the action plan.

Both FICCI and FTI have resolved to overcome and, if possible, eliminate the barriers in the way of development of economic cooperation under the FTA and exchange information on FTA, foreign legislation, external trade, trade policy, custom tariff and banking.

The two organisations have also decided to cooperate closely in the promotion of the professional training and education relating to international trade for the benefit of FICCI and FTI member companies, and assist and coordinate participation in the trade fairs, and goodwill, purchasing and selling missions to Thailand and India, organised by them.

Earlier, the Thai Vice Minister of Commerce, Dr Parnpree Bahiddha Nukara, told captains of the industry from the two countries that the completion of the Indo-Thai free trade area would help facilitate and spur BIMST-EC (Bangladesh, India, Myanmar, Sri Lanka and Thailand - Economic Cooperation) free trade talks.
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Chennai and Hyderabad may replace Bangalore as IT hub
Hyderabad: Hyderabad and Chennai could possibly replace Bangalore and Mumbai as favoured destinations for IT outsourcing by the year 2010, according to a Gartner analysis of Indian cities.

In a report entitled 'IT outsourcing to India - Analysis of cities', Gartner has categorised and evaluated cities into four tiers based on factors such as infrastructure, skills availability, skills retention, access, cost of living, political support and interestingly quality of life.

The drivers for these cities for their success would be improved infrastructure, overall skills availability, good quality educational institutions and active political support. The improved infrastructure in Hyderabad has enabled the city to top the ratings in the infrastructure category. However, the issue relating to attrition needs to be tackled.

For instance, Pune, which ranked lowest in infrastructure support, would need significant investment to be on par with Mumbai or Bangalore or even Chennai and Hyderabad.

While Bangalore, Mumbai and New Delhi have been classified under Tier 1, Chennai, Hyderabad, Pune, Noida, Gurgaon and Navi Mumbai have been put in Tier 1-1, and Kolkata, Mangalore, Mohali, Chandigarh, Bhopal are in Tier 2 and some others in Tier 3. The study maintained that Hyderabad, Chennai and Pune are at vantage point and are better placed to scale up the infrastructure.
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