Developing Asia’s growth to slow down this year: ADB

Inflation-hit South Asia will see its economies expand 7.2% this year-with inflation forecast to hit 9.1%-while the region's India-led growth would hit 7.7% in 2012, a study by the ADB said

Hong Kong: Asia's developing economies will post slower-than-expected growth this year and in 2012 as key trading partners reduce orders amid worries about the global economy, reports PTI.

The Asian Development Bank (ADB) study said the region's economies would expand 7.5% this year, down from its 7.8% forecast in April while 2012 would see 7.5% growth, down from 7.7%.

Slower demand in the US and Europe "continues to cast a cloud over the region," said the Manila-based bank, adding that export growth in leading economies, including trade powerhouse China, had slowed 'substantially'.

"At the same time, strong domestic consumption and expanding intra-regional trade are helping to underpin still solid growth levels (in developing Asia)," said Changyong Rhee, the bank's chief economist.

"Since the onset of the global recovery, the growth in exports to (China) from several Asian economies has been stronger than their exports to the rest of the world."

The share of regional trade among Asia's largest economies increased to 47% in the first half of 2011, up from 42% in 2007, the report said.

The bank also warned that rising prices "remain a threat to many economies" with developing Asia's inflation rate expected to average 5.8% this year, up from 5.3% forecast in April, it added.

Regional inflation should then cool to 4.6% in 2012 as commodity prices fall "but central banks will still need to keep a close watch and may need to take remedial action", the ADB said.

Concerns about hot money flooding the region have eased as capital flows slowed in recent months, but there was a risk of an upsurge when advanced economies bounce back and debt markets settle, the report said.

"Capital has so far been flowing into the region at a manageable pace, but global economic uncertainty means policy makers should be prepared for greater volatility in capital flows," the report said.

The bank also warned that policymakers would have to focus on the region's demographic landscape with young populations "growing older very rapidly, which will put many economies under pressure" in the coming decades.

The bank's report looked at 44 jurisdictions stretching from the former Soviet states of Central Asia to some Pacific islands, but excluded developed countries such as Japan, Australia and New Zealand.

East Asia-including Hong Kong, China, South Korea, and Taiwan-remains the key economic driver for developing Asia, the report said, with growth forecast at 8.1% this year. That would fall to 8% in 2012 as China's economic engine slows, it added.

Inflation-hit South Asia will see its economies expand 7.2% this year-with inflation forecast to hit 9.1%-while the region's India-led growth would hit 7.7% in 2012, it said.


Fight against corruption: This government is divorced from political reality

Recently a group of ministers proposed three major measures to deal with corruption. But the government missed out on making a noise about this

The Manmohan Singh government has lost touch with both types of PR: public relations and political reality, both of which are inextricably intertwined in the face of the challenge thrown by Anna Hazare and the millions who follow him.

The government has decided on three strong anti-graft measures which will make life a lot more difficult for corrupt bureaucrats and ministers. But the way the announcements have been made is more like a cat mewing in the dark than a lion roaring in the full light of day.

Take this news agency story, for instance. It says that a group of ministers (GoM) headed by Pranab Mukherjee has proposed that the discretionary powers of ministers and bureaucrats in procurement of goods and equipment for the government—from rice to the purchase of aircraft—will either be shelved or severely curtailed.

Every year, government procurement by the Centre, down to the panchayat level, is an unbelievable Rs11 lakh crore.

The GoM is convinced that abuse of discretionary powers is the major reason for corruption. It decided to quickly draft a national policy on procurement and a law to fix accountability. India is one of the few countries which does not have a national policy in this regard. Both the national policy and the law will be placed in parliament during the winter session.

The draft law has the following features:
> All procurements should be after competition between suppliers.
> All states and union territories should have a "Transparency in Procurement Act" stipulating the methodology for procurement, identify authorities for procurement decisions and a mechanism to look into irregularities.
> The criteria for evaluation of bids will be laid down before the auction process begins, which cannot be changed under any circumstances.
> Procurement wings will do market research to arrive at reasonableness of the suppliers' bids.
Only officials with proven integrity should be involved in the procurement process.
> Payments to suppliers to be settled promptly.

According to another report, the same GoM has proposed that bureaucrats face a 10% loss of pension for minor cases of corruption and a 20% cut for major infringements that lead to compulsory retirement from service.
Cases of public servants accused of graft will be put on the fast track and disciplinary action decided within a year of a complaint being received.

Expectedly, the GoM was constituted soon after Congress president Sonia Gandhi called for measures to check corruption at the party's plenary session at Burari, in Delhi, in November 2010. Not much happened until Anna Hazare turned up with his Lokpal Bill and was supported by millions.

The third major anti-corruption measure proposed by the government is a new policy for allocation of 2G spectrum. The draft law says that for commercial use the government shall follow fair, transparent, equitable, non-discriminatory, market-based competitive assignment which may include (but is not limited to) methods such as auction, tender, bidding. The newspaper report said the methods followed will be like the transparent auction for 3G/BWA which yielded over Rs1 lakh crore to the exchequer in mid-2010.

These are three vital methods of reducing corruption by huge amounts. And how are they announced to the public? Through driblets in different newspapers which underplayed them.

The government has a vast Press Information Bureau. The prime minister has an information advisor. But even a rookie reporter would have handled it a lot better.

He would have clubbed these three decisions and called a press conference at Vigyan Bhavan, the biggest auditorium in Delhi. He would have lined up Sonia Gandhi, Manmohan Singh and the entire Cabinet on the dais and gone to town, touting these as the biggest, most fantastic response to the demands of millions of people that corruption be eradicated. (No mention of Anna Hazare). But we have a weak, confused government which doesn't know its shoulder from its elbow.

(R Vijayaraghavan has been a professional journalist for more than four decades, specialising in finance, business and politics. He conceived and helped to launch Business Line, the financial daily of The Hindu group. He can be contacted at [email protected].)



Ramesh Kapadia

6 years ago

Corruption is a cancerous disease to eradicate from the grassroot level it requires a very strong will power which unfortunately is lacking in the present government

Shadi Katyal

6 years ago

It is not a new problem as it has been multiplying every year.It is well known that PSU like STC,MMT^C,SAIL etc are all on the take. Why does GOI either close them or sell them as being PSU these have become the hindrance to the development. The nation pays for their graft with higher prices.
The second issue is the amendment of the clauses in the Constitution which protects all the Govt employees and nothing has been talked about it.
Lok Pal Bill is a way of awakening but it cannot rule over the Constitution and Courts as well as Parliament.
The UPA govt has failed to gauge the pulse of the public and thus Hazare and his group is popular but will it end the corruption, one doubts.Why as it is now part of our daily life. from policeman to peon to top.
Inorder to facilitate we all pay bribes one way or other and yet we are the first one to shout against.
Can we Indians stop paying the Chai paani and any other kind of Bakhshees???We must first stand firm before anything will change.

Dr VaibhavDhoka

6 years ago

The issue of corruption can be tackled in simple procedure.Those applying for government job must compulsorily be asked to submit his family assets and asset declaration be assessed every two years which can be checked from his earnings.Any disparity should be dealt firmly .


nagesh kini

In Reply to Dr VaibhavDhoka 6 years ago

What happens when Vilsarao and other ministers simply don't respond. They are not covered by the coalition dharma. others simply understate values. Doe it make the procedure 'simpler' in any way?


In Reply to Dr VaibhavDhoka 6 years ago

i know certain cases, where those who'r in Govt.
i.e. Investigative Agency, de hv INCOME far beyond, their known sources of INCOME & complaints hv been 'lodged', but 'no' action taken.
The 'intentions' at d out-set, should b to free from 'malafide', only then there can b 'Clean-Drive' ......
Chandra ......


6 years ago

There are different kinds of corruption, and political corruption is only one of them. Black money stored in tax havens have to be dealt with differently from domestic corruption.
A signal against corruption would be a quick demonetization of high value currency notes of Rs.1000/- There is no excuse for high-value transactions like real estate to be done in cash when a safer alternative is through banks.


Adi Daruwalla

In Reply to rprtr 6 years ago

That way what will happen is that there will be volumes and volumes produced on classifications of corruption, and then it will start getting compartmentalized and will be dealt within silo's.
Can't we just simply tackle the human greed that has reached disproportinate grounds.


6 years ago

I think you missed the point. Think about it - this government suffers from a huge trust deficit - and deservingly so. Do you really think these "proposed" measures be actually converted to law? If a brouhaha is created around these proposed measures, guess what, the Congress goons will be *actually* forced to implement them due to public pressure. Which is not what they desire.


6 years ago

When the GOM headed by the FM makes such lofty recommendations where is the stumbling block in announcing the policy and implementing it? Looks like a case of GOM (not God) proposes and Govt. deposes!
At least lets hope the Congress List said to be approved by Rahul has weeded out of all criminal and corrupt elements. This is testn fof the GOP.

Dr Vaibhav Dhoka

6 years ago

Corruption has become inseparable part of government procedure and most of population has accepted it as they are so much engaged in day to day earning and this has come as a boon to government official as their misdeeds(CORRUPTION) continue unabated .

chandra shekhar

6 years ago

We'r missing a POINT here & that is ACTION .....!
i would wish ANNA to IMPLEMENT, to what HE deplores .....!!
Who so ever is in POWER, they need to be STRENGTHEN, irrespective of Party-Lines .....!!!
We can't 'mix-up' ANNA's contribution
with GOI's responsibilities, de r entirely
different .....!!!!
We have a HABIT of taking Extreme
Position n never think of "balancing" inbetween ....!!!!!


Chandra ......

Adi Daruwalla

6 years ago

Greater the position of power, the greater is the responsibility,
and the greater the responsibility, the greater is the accountability. Thats whats happening at the centre (N. Delhi) but its all hotch potch, need scotch brite and acid to clean it and the 2nd list is out by Wiki so where is the assignment of whos done what and the judgements and sentences that need to be passed.

Shibaji Dash

6 years ago

Mr. Vijayraghvan's comments are very well intended. But as has been since pointed out by many in the print and tele media, the Govt or those who actually control its working , are too obsessed with everything other than governance.No point in advising people who are so self absorbed. Their arrogance may or may not be concealed. They are least concerned with what the columnists write or what debate goes on in the tele media. Terminal illness ?

Narendra Doshi

6 years ago

Shri Vijayaraghavan,
Well said. Is the present government NOT having guts to publicize what they intend to do? Well they want to say in darkness and do not really mean to do anything constructive. They may not want to read the common people of India but they may be forced to accept the common people's verdict when the appropriate time comes, soon.

Headline inflation close to double digits at 9.78% in August

This is the ninth consecutive month when headline inflation has been above the 9% mark. The jump in inflation to close to double digits is likely to put pressure on the RBI to continue with its policy of monetary tightening

New Delhi: Headline inflation inched closer to the double-digit mark in August, rising to 9.78% on the back of soaring prices of food and manufactured products, which may prompt the Reserve Bank of India (RBI) to continue with its monetary tightening policy, reports PTI.

Overall inflation, as measured by the Wholesale Price Index (WPI), stood at 9.22% in July while the rate of price rise stood at 8.87% in August 2010.

As per data released by the government today, the overall inflation figure for June this year has been revised upward to 9.51% from the provisional estimate of 9.44%.

On an annual basis, food items became 9.62% more expensive during the month under review. Onions grew 45.29% costlier, while fruit prices were up 22.82% and the rates for potatoes rose by 12.53%.

Overall, vegetable prices witnessed 11.80% inflation during August 2011.

Inflation in overall primary articles, which have a share of over 20% in the WPI basket, stood at 12.58% in the month under review.

Non-food primary articles, which include fibres, oil seeds and minerals, became dearer by 17.75%.

Prices of manufactured products, which have a weight of around 65% in the WPI basket, went up by 7.79% year-on-year in August.

Inflation in manufactured products has been steadily rising since February this year, when it crossed the 6% mark.

Among manufactured items, edible oil became dearer by 12.94%, tobacco product prices rose by 13.17%, cotton textiles grew 16.86% more expensive and wood and wood products were 9.72% costlier year-on-year.

In addition, iron and semis grew dearer by over 20%, while prices of basic metal alloys rose by 11.56% during August 2011.

Inflation in the fuel and power segment stood at 12.84% year-on-year in the month under review, as per the index.

This is the ninth consecutive month when headline inflation has been above the 9% mark.

The jump in inflation to close to double digits is likely to put pressure on the RBI to continue with its policy of monetary tightening, according to experts.

The apex bank has already hiked key policy rates 11 times since March 2010, to tame inflation. The bank's next mid-quarterly policy review is scheduled for 16th September.

India Inc has said the string of rate hikes, which have raised the cost of borrowing, have acted as a dampener to fresh investment and hindered growth.

Industrial production plunged to a 21-month low of 3.3% in July. Meanwhile, economic growth during the April-June period stood at 7.7%, the slowest expansion rate in the past six quarters.

Both the government and the RBI have projected headline inflation to remain elevated till the third half of the current fiscal, mainly on account of pressure from international commodity prices.


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