Despite a stronger agricultural growth than what was estimated earlier, the economy is expected to grow about 8% during the current fiscal as there are serious concerns, PMEAC chairman C Rangarajan said
New Delhi: Prime Minister’s Economic Advisory Council (PMEAC) chairman C Rangarajan on Thursday said the government is likely to miss the fiscal deficit target of 4.6% for the current fiscal as growth is expected to moderate, reports PTI.
“In the current year, the budgeted fiscal deficit is 4.6% (of GDP). It is going to be difficult to achieve this. All the numbers do not gel well,” he said, while delivering lecture at golden jubilee celebration of Indian Economic Service here.
“But I think it should be one of efforts to ensure that fiscal deficit is in the lines of what was estimated,” he said.
The economic growth was earlier estimated at 8.2% for the current fiscal.
Despite a stronger agricultural growth than what was estimated earlier, he said the economy is expected to grow about 8% during the current fiscal as there are serious concerns.
“Therefore, taking all these factors into account, I believe the growth rate of the economy can be close to 8% per annum,” he said.
He said the potential growth rate of Indian economy is 9% given the saving and investment rate.
Highlighting the challenges, Mr Rangaranjan said, “I believe there are short-term concerns and medium-term constraints which will come in the way of achieving 9% growth.”
There are three short-term constraints—one is inflation, the second is balance of payment and the third area is fiscal consolidation.
On rate of price rise, he said, “I believe even if inflation is triggered by supply side constraint monetary policy has important role to play.”
When food inflation persists for some time then it gets generalised, he said, “In fact today the non-food manufacturing index exceed 7.5%. Therefore, we should be using monetary policy to tame inflationary expectations,” he added.
Defending the number of rate hikes effected by the Reserve Bank of India (RBI), he said, “We should use monetary policy in way that demand preference is brought down.”
Since March 2010, the central bank has raised policy rate 12 times to tame inflation.
On the Current Account Deficit (CAD), he said, “I don't think that by taking both imports and exports of goods and services taken together we might exceed 2.5% of gross domestic product (GDP) of the CAD this year.”
So far, financing of CAD has not been a problem, Mr Rangarajan said, adding, “The approach paper of 12th Five Year Plan and our own calculation indicates that we will have CAD of 2.5% of GDP.”
At present, there is no problem in financing CAD of 2.5%, he said, adding, “So long we continue to maintain a healthy growth rate and so long as fiscal deficit continue to remain at reasonable control, there should be no problem in attracting capital flow.”
But, he said, capital flows by very nature are very volatile. It is influenced by both domestic and international factors. It is also affected by push factor and as well pull factor. So, therefore, we need to moderate our dependence on the financing of CAD through capital flows.
On the borrowings, he said, “I think the effort of the government will be to retain the fiscal deficit at the budgeted level and I do not expect the borrowing programme of the government of India as of now to exceed what was originally estimated.”
The issue came up after Planning Commission reportedly expressed concerns that UIDAI is departing from set government procedures and suggested a re-look into its structures
New Delhi: Unique Identification Development Authority of India (UIDAI) chief Nandan Nilekani today asserted that the authority set up for issuing national identity cards was working under the powers delegated by the prime minister, reports PTI.
"My powers have been delegated by the prime minister," UIDAI chairman Mr Nilekani said when asked whether the authority was on a collision course with the Planning Commission.
"We are an attached office of the Planning Commission and by series of government orders, several authorities have been delegated to us," he said.
The issue came up after Planning Commission reportedly expressed concerns that UIDAI is departing from set government procedures and suggested a re-look into its structures.
The Commission reportedly in a communication to the finance ministry said UIDAI has not got any of its financial proposal examined by the panel's secretary or financial adviser.
The Plan panel had also suggested to the finance ministry that a full time financial adviser be deputed in the authority.
Explaining further, Mr Nilekani said: "(director general of UIDAI) Ram Sewak Sharma's powers are delegated by the deputy chairman, Planning Commission. The powers of financial adviser K Ganga (of UIDAI) have been delegated by the expenditure secretary.'
"We are working within the powers granted to us. If somebody feels that power should be different, then that is a different matter," he pointed out.
On transparency issue, Mr Nilekani said: "We follow every government process and procurement procedures to the key. We set the highest standards of transparency and integrity in our operations."
"We are working in the government system. We have tight financial controls. Everything is on our website," Mr Nilekani added.
When asked whether there were any problems related to availability of funds, he said: "We are quite happy with finances. We have absolutely no issues. We are authorised to enroll 200 million people and beyond that the Cabinet will take a decision."
About using iris scan for issuing the unique identity number, Mr Nilekani said it is a closed issue because the decision was taken one-and-a-half years ago.
"Iris scan is absolutely imperative. People who work in the fields or other manual labour, the likelihood of their finger prints eroding is there. The cost of an iris scan is marginal at about Rs5 per person and Rs500 crore for entire project," he added.
The accused cited constitutional provisions and a Supreme Court order in the case that the bail applications could be entertained only after the trial court frames charges. They said the court, which was to pronounce its order on framing of charges on 15th September, should now go ahead and decide the applicability of charges invoked earlier by the CBI
New Delhi: Jailed former telecom minister A Raja and 13 others today told a Delhi court to separately deal with the Central Bureau of Investigation's (CBI) fresh plea to invoke additional charge of criminal breach of trust against them to enable them to seek bail in the second generation (2G) spectrum allocation scam, reports PTI.
"The fresh application of the CBI of framing a charge of criminal breach of trust should be treated separately. There is no harm if the issue of section 409 of IPC is dealt later on," Mr Raja told special CBI judge OP Saini.
Mr Raja along with his personal secretary RK Chandolia, former telecom secretary Siddharth Behura is in jail since their arrest on 2nd February this year in the case. Rest of the 11 accused were arrested subsequently.
The accused cited constitutional provisions and a Supreme Court order in the case that the bail applications could be entertained only after the trial court frames charges.
They said the court, which was to pronounce its order on framing of charges on 15th September, should now go ahead and decide the applicability of charges invoked earlier by the CBI.
The fresh plea of CBI to invoke section 409 (criminal breach of trust) of the IPC, which provides for life term as maximum punishment, be dealt with separately so that their bail pleas could be moved as they are in jail for over six months.
The oral submissions by accused Shahid Usman Balwa that arguments on the fresh application would take another two months irked the special CBI judge.
"Till now, I was keeping my mouth shut. Do not compel me to open my mouth. Why it would take two months to advance arguments on this one charge?" the judge asked.
The DMK leader said the CBI had moved the fresh plea for framing another charge without bringing new facts.
Shortly after the court concluded hearing arguments on a report of the ministry of law and justice, all the 14 accused rose from their seats and told the judge to hear the CBI's fresh plea separately.
Mr Balwa supported Mr Raja's submission saying, "Arguments on section 420 (cheating) of IPC continued for over a month and this new charge would also take another two-three months as the whole charge sheet would be read again."
The visibly agitated judge asked the accused to raise such issues either in their replies or through lawyers.
"You people are reading same material again and again.
Wait for tomorrow and file your (accused) reply on the new charge. Say whatever you want to say in your reply and not now. Why you are in a hurry? Go back," the judge said.
Mr Balwa said that it was a fundamental right of an accused to express his views.
"It is our fundamental right to express what we want to say. We are not on bail. We are in jail and it would not affect prosecution's case, if the issue on invoking new section is dealt later on," he said.
The agency has sought framing of additional charge of criminal breach of trust against Mr Raja, Mr Chandolia and Mr Behura.
It also sought to try rest 14 accused, Ms Kanimozhi and Shahid Balwa, under the same penal provision by making them a party to criminal conspiracy hatched by Mr Raja and two other public servants. It would also make others liable to face the same jail term if held guilty.
The penal provisions under which the accused have been charged so far provided for seven years jail term as the maximum sentence if found guilty.