Railways Budget today
New Delhi: Railway Minister Lalu Prasad Yadav will present the budget for the railways in the Parliament today. The minister has said that every Indian citizen has been given attention in the Budget. The Planning Commission has indicated a hike in the budgetary support to the tune of Rs 1,500 crore while Railways is poised to earn Rs1,500 crore in excess of the budgetary target.

Indian Railways operates nearly 14,000 trains and carries more than 13 million passengers every day. But saddled with huge losses the rail system has little money to invest in improving safety and infrastructure.

As a result, Railways have been advised to go for market borrowings, reduce cross subsidy on passenger fares and impose a cess to raise additional resources for its modernisation programmes in the budget.

The Cabinet Committee on Economic Affairs has also cleared five more projects for the Railways, which would be announced by the Railway Minister during his budget presentation.

The Opposition NDA plans to boycott the budget over the tainted ministers issue.
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Afghan President Karzai invites investments
New Delhi: Afghanistan President Hamid Karzai has invited further participation from Indian business sector in areas like education, healthcare, construction and financial services.

"I am happy to note today that we have a number of Indian companies now working in Aghanistan," Karzai said at a FICCI-CII business meet on Thursday.

"I am also happy that the Government of India, together with your efforts, are doing work for the benefit of the Afghan people in vast areas like education, health, road building," he added. Inviting more investments into the country, the Afghan President, who is on a three day visit said, that investment opportunities and infrastructure was much better now.

He however expressed dissatisfaction over the bilateral trade figure of $180 million saying it was "miserably low" and called for initiatives from the industry to raise it to $ 2 billion.
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Iran to attract $500 mn investment from Indian companies
Mumbai: Iran expects Indian companies to invest about $500 million in small and medium sector in the Gulf country over the next five years, especially in steel, agro chemicals, machine tools and textiles.

Large companies including L&T, Reliance, Essar and Ispat have shown an interest in investing in Iran, F. Entezari, Chairman, Iran Chambers of Commerce, Industries and Mines, said here.

Essar Steel plans to set up a Rs600-crore project in Iran while Ispat plans to set up a 1-million tonne steel plant, Entezari told reporters.

Representatives of Iranian companies met their Indian counterparts here on Thursday to pitch for higher investments and sign agreements for investing in Qeshem Island, a free trade zone three times the size of Bahrain, that has been developed for small and medium sized industries. Investments in Qeshem Island, where there are no visa restrictions, will be guaranteed by the Iranian Government, Entazari said.
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Economic Survey: Reforms essential for better investment climate
New Delhi: The Economic Survey has called for enhancing the recent buoyancy in investment and exports to leverage higher growth in the economy with success in this regard depending on "how vigorously reforms are pursued to improve the investment climate and augment infrastructure".

The Survey, tabled in Parliament on Friday by the Finance Minister, P. Chidambaram, unequivocally states that "sustaining the reform process in tax and expenditure regimes is a sine quo non for achieving the targets" set under legislative remit.

"The tax base needs to be widened through increase in the share of services in tax revenues, removal of exemptions that do not conform to the established principles of tax policy, and an enforcement mechanism that is non-discretionary, transparent and effective." Progress towards aligning customs duties to Asean levels, which helped improving competitiveness of the economy and fuelled export growth, needs to continue.

The Survey also made a strong case to revisit the issue of FDI sectoral cap in coal mining, insurance, real estate and retail trade.

Stating the need to sustaining expenditure reforms through containing unproductive expenditure, the Survey said: "The way forward is in fulfilling the National Common Minimum Programme (NCMP) objective of targeting subsidies sharply at the poor, carrying on with pension reforms, maintaining a benign interest regime through lower Government borrowings, effecting a shift in the composition of expenditure in favour of Plan capital expenditure, and reforms in public service delivery."

Growth performance of the Indian economy during 2003-04 and 2004-05 shows "a possible ratcheting up of the trend rate of growth of the economy, from around six per cent to about seven per cent per year."
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Economic Survey: FDI policy needs review
New Delhi: The Economic Survey has asked the government to review its foreign direct investment (FDI) policy. It has made a strong case for revisiting the issues of caps in sectors like coal, mining, insurance and retail trade.

"FDI in retail can not only organise a significant part of the largely unorganised domestic retailing but can also invite established global brands into Indian market, thereby creating greater outlets for sourcing and marketing Indian products," the survey said.

Concerned over the mismatch between short term portfolio investment as represented by FIIs and a long-term investment in terms of FDI, it said constraints impeding higher FDI inflows need to be identified.

"India's capital account in recent years has gained far more strength from short-term FDI flows. This necessitates revisiting FDI policy and identifying constraints impeding higher FDI inflows. Procedural simplifications like removal of anomalies from Press Note 18 are likely to encourage much greater FDI inflows," the survey said.

Portfolio inflows in first half of 2004-05 at $15.4 billion were much higher than $9.3 billion in same period pervious year.
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Industry associations hail Economic Survey
New Delhi: Apex industry associations have welcomed the Economic Survey's emphasis on reforms, increasing investments in agriculture, public-private partnership in infrastructure development and labour laws.

"The stress on reform of labour laws is heartening. The Survey has noted that labour laws in competing economies like China and Latin American countries are much more aligned to the requirements of a globalised industry than Indian laws," FICCI President Onkar Kanwar said.

It hailed the survey's overall thrust on giving a fillip to infrastructure sectors, boost trade and higher resource mobilisation.

The stress on investment in infrastructure, for agriculture growth, raising FDI in retail, coal mining and insurance sectors and setting up of regulatory frameworks for core infrastructure sectors would play critical role in pushing up the GDP growth rate, the chamber said.
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Economic Survey: Pension liabilities burdensome
New Delhi: The Government's efforts to bring about a new pension structure in the backdrop of mounting pension liabilities of the Centre and the States have been strongly backed by the Economic Survey.

"The pressure of pensions on Central and State finances is becoming increasingly burdensome," the Survey said. It pointed out that the total pension outgo for Central Government employees increased from Rs2,138 crore in 1990-91 to Rs15,367 crore in 2003-04.

The rise has been equally sharp for States.

"The annual average increase in pension outgo for States during the late 1990s was 27 per cent. Pension expenditure of States as a proportion of revenue receipts rose from 5.4 per cent in 1990-91 to more than 10 per cent in 2000-01," the Survey said.
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Economic Survey: Tax system must be simplified
New Delhi: The present tax system, for both direct and indirect taxes, needs to be further simplified and streamlined, the Economic Survey has said.

It has also held that higher tax revenues have to be realised not through increasing tax rates, but through innovative changes in policies, procedures, laws and dispute settlement mechanism that would help overcome the problems associated with the present complex system.

The Survey has also noted that the adherence to fiscal responsibility and budget management targets critically hinges upon the success in raising the tax-gross domestic product ratio.
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