Amidst civil society seeking an anti-graft ombudsman in Lokpal, the pre-Budget Economic Survey has warned that the fear of a large and cumbersome anti-corruption bureaucracy can be detrimental to risk taking and may hamper legitimate activities in public institutions
New Delhi: Calling for ruthless crackdown on corruption, the government's pre-Budget Economic Survey however warned that a large and cumbersome anti-corruption bureaucracy could impact decision-making process, reports PTI.
"While we need to ruthlessly crack down on corruption, it must, at the same time, be recognised that the fear of a large and cumbersome anti-corruption bureaucracy can be detrimental to risk taking and may hamper legitimate activities in public institutions," said the Economic Survey 2011-12, which was tabled in Parliament on Thursday.
Citing a research paper by A Banerjee, S Cole and E Duflo on the Indian banking sector, it noted that the fear of prosecution for corruption resulted in reduced lending in an affected branch of a public sector banks as well as in neighbouring branches for around two years.
"In essence, smart policy design needs to be distinguished from mere procedural tightening and bureaucratic expansion, since the latter, if not properly thought out, can increase inefficiencies and wastage in public expenditure and service delivery," the document said.
The observation comes amidst civil society seeking an anti-graft ombudsman, Lokpal, covering all central and state government employees, judiciary and having investigating and prosecution powers.
The Congress-led UPA government had been against a single body idea as it feels it would need a huge workforce.
Again citing a research paper by O Bandiera and A Prat titled 'Active and Passive Waste in Government Spending: Evidence from Policy Experiment', the survey said that corruption and poor governance have been major problems in many countries.
Pranab Mukherjee is expected to raise the income tax exemption limit to at least Rs2 lakh and may also marginally raise the slabs in other tax brackets of 10%, 20% and 30%.
New Delhi: Taxpayers will be looking forward to some relief from Finance Minister Pranab Mukherjee who is expected to raise the income tax exemption limit to at least Rs2 lakh in his budget proposals to be unveiled in the Lok Sabha on Friday, reports PTI.
The Minister may also marginally raise the slabs in other tax brackets of 10%, 20% and 30%. The Direct Taxes Code (DTC) Bill has also made a mention of it.
The DTC, which will replace the Income Tax 1961, however, will only come into force from 2013-14 and the Minister may make a formal announcement on it in his budget speech.
The Standing Committee of Parliament that has scrutinised the DTC Bill has already submitted its report to the Lok Sabha Speaker.
Although the Committee had suggested raising the tax exemption limit to Rs3 lakh, it is unlikely that Mr Mukherjee will agree to it in view of the need to contain fiscal deficit.
With limited space for give aways, the Budget is likely to balance populism with some tough measures to check tax evasion and generation of black money.
However, in view of reverses in the recently concluded state assembly elections, Mr Mukherjee may go slow on economic reforms like foreign direct investment (FDI) in multi-brand retail and further opening of the insurance sector to foreign investment.
There could be some bad news for prospective car buyers as government may hike duties on luxury items to raise resources.
The biggest challenge before Mr Mukherjee would be to arrest decline in economic growth which is expected to touch a three year low of 6.9% in the current fiscal, down from 8.4% in the two previous years.
Further, the government is likely to set disinvestment target for the next fiscal at Rs30,000 crore.
A close of the Nifty below 5,300 and may see selling pressure accelerate. A close below 5,170 would be bearish
A status quo by the Reserve Bank in its quarterly policy review resulted in the market snapping its four-day gaining streak and closing in the negative. We may now see the Nifty moving sideways with a negative bias. The index may now move in the range of 5,170 and 5,400. Any close of the index below 5,170 may see the benchmark would be bearish. The National Stock Exchange NSE saw a lower volume of 77.30 crore shares.
Snapping its four-day rally, the domestic market opened flat on cautiousness ahead of the Reserve Bank of India’s (RBI) mid-quarter policy review. The political drama that unfolded after railway minister Dinesh Trivedi announced a hike in rail fares in his budget speech yesterday also weighed on the sentiments. The Nifty opened one point lower at 5,463 and the Sensex started the day at 17,917, down two points from its previous close.
The opening figure of the Nifty was also its intraday high while the Sensex hit the day’s high a short while later with the index touching 17,918. The market traded sideways till around 11.00am, but witnessed a sharp drop as the central bank, in its policy review, decided to keep key rates unchanged.
The Nifty dipped below the 5,400 level by losing 65 points to 5,398 points following the announcement of the RBI’s policy statement. Similarly, the Sensex fell further by 194 points to trade at 17,726 at 11.30 am. All the sectoral indices, led by banking and consumer durables, were trading in the negative zone.
The sentiments continued to remain week as trade progressed. The indices fell to their day’s lows in the post-noon session with the Nifty falling to 5,362 and the Sensex going down to 17,623.
The market closed near the lows with the Nifty falling 83 points to 5,381 and the Sensex tumbled 243 points to settle at 17,676.
The advance-decline ratio on the NSE was negative at 474:1255.
Among the broader indices, the BSE Mid-cap index tanked 1.39% and the BSE Small-cap index declined 0.97%.
With the exception of the BSE IT index (up 0.09%), all other sectoral indices settled lower. The top losers were BSE Consumer Durables (down 3.66%); BSE Realty (down 2.66%); BSE Bankex (down 2.60%); BSE Capital Goods (down 2.04%) and BSE PSU (down 1.97%).
Hindustan Unilever (up 1.80%); Wipro (up 1.43%); NTPC (up 1.13%); TCS (up 0.72%) and Sun Pharma (up 0.38%) were the top gainers on the Sensex. The losers were led by DLF (down 4.76%); BHEL (down 3.37%); HDFC Bank (down 3.05%); ICICI Bank (down 2.47%) and ONGC (down 2.45%).
The top performers on the Nifty were HUL (up 1.99%); Wipro (up 1.16%); NTPC (up 0.90%); TCS (up 0.89%) and Sun Pharma (up 0.47%). The main laggards were Reliance Communications (down 5.30%); DLF (down 5.08%); IDFC (down 4.62%); BHEL (down 3.52%); HDFC Bank (down 3.46%).
Markets in Asia closed mostly lower following a report that China’s foreign direct investment (FDI) fell to $7.7 billion in February, down 0.9% on an annual basis. The Japanese market gained on the back of a weaker yen, which boosted exporters. The Chinese benchmark settled to a three-week low after the government said that it would curb any rise in property prices.
The Shanghai Composite declined 0.73%; the Jakarta Composite declined 0.35%; the Straits Times shed 0.02%; the Seoul Composite fell by 0.06% and the Taiwan Weighted lost 0.04%. On the other hand, the Hang Seng gained 0.21%; the KLSE Composite rose 0.23% and the Nikkei 225 surged 0.72%. At the time of writing, two of the three key markets in Europe were in the green and the US stock futures were trading in the positive.
Back home, foreign institutional investors were net buyers of stocks totalling Rs1,659.28 crore on Wednesday while domestic institutional investors were net sellers of shares aggregating Rs857.11 crore.
SKS Microfinance, the country’s only listed microfinance entity, today said it plans to raise around Rs200 crore through securitisation from two different banks. Under the pool securitisation, bundling micro loans made to borrowers like micro-entrepreneurs are sold to investors such as banks to raise funds. SKS Microfinance closed at Rs141 on the NSE, up 3.79% over its previous close.
Shasun Pharmaceuticals has concluded the sale of its Velachery property for a gross consideration of Rs29 crore. The company has taken this step pursuant to shareholders' approval in July 2011. The stock gained 1% to close at Rs86.25 on the NSE.
Ambuja Cements is likely to invest around Rs1,800 crore by December 2013 to expand its production capacity. It intends to fund the project through internal accruals, as it had surplus cash of Rs7,700 crore as of December last year. The stock lost 0.96% to close at Rs165.75 on the NSE.