Although, the government has increased excise duty on petrol by Rs2.25 a litre and on diesel by Re1, it will not affect retail prices
The Indian government on Tuesday raised excise duty on petrol and diesel by Rs2.25 and Re1 a litre, respectively. However, consumers will be spared from the price hike.
The move, which comes amid declining prices of crude oil in the international market, will boost government revenue and help it contain the fiscal deficit.
The revised excise duty on petrol and diesel came into effect from Tuesday, official sources said.
The move will have no impact on retail prices of petrol and diesel, they said.
This is the second hike in excise duty in three weeks. On 12th November the government had raised the excise duty by Rs1.50 per litre on both petrol and diesel but that did not have any impact on the retail prices.
In view of the declining prices of crude, oil marketing companies had on Monday cut petrol prices by 91 paise a litre, the seventh reduction since August, and on diesel by 84 paise per litre, the third straight cut.
It is not clear, at the moment, if the e-auction procedure will be adopted and whether priority will be given to actual steel producers
The Central Empowered Committee (CEC), set up by the Supreme Court had conducted a survey of the mining areas in Karnataka and has given various suggestions to the government. The CEC, in its report to the Supreme Court had identified 51 mines with maximum illegalities in three districts of Bellary, Chitradurga and Tumakuru.
In the first Cabinet meeting of the Congress government, headed by Chief Minister Siddaramaiah, at Kalaburagi, on Friday, decided to submit a proposal to the Supreme Court, through the CEC, to auction 15 "C" category mines in the above districts.
The state government may be able to auction six mines between December 2014 and January 2015, subject to the approval of the apex court. The remaining nine mines would be taken up for auction during April-May 2015.
It is not clear at the moment whether the e-auction procedure will be adopted in this case and whether priority will be given to actual steel producers.
At the same time, the Cabinet also approved Rs2,000 crore to take up restoration of ecology and environment in the three districts mentioned before, as these were affected by the illegal mining activities. Here again, the proposal would be submitted to the Supreme Court for approval before implementation. It is hoped that the apex court will also give suitable direction in this regard.
It is reported that the responsibility for carrying out the implementation programme is likely to be entrusted to Karnataka Mining Restoration Corporation. The proposal is to strengthen the infrastructure such as transport, communication network, environment and forests, drinking water system, education, skill training and agricultural related activities. In doing so, priority will be given to Scheduled Castes and Tribes communities.
It is hoped that the related clearance formalities, land lease etc., issuance of permits for carrying out the mining operations etc. will be handled by all concerned expeditiously.
(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council.
His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)
While keeping key rates unchanged, the RBI Governor has said if current inflation momentum and changes in inflationary expectations continue, and fiscal developments are encouraging, a change in the monetary policy stance is likely early next year
The Reserve Bank of India (RBI), in its fifth bi-monthly credit policy review on Tuesday has kept repo, reverse repo, cash reserve ratio (CRR) and bank rate unchanged.
With no change in key policy rates, the repo rate (the rate at which the RBI lends money to banks) remains at 8%. Similarly reverse repo rate (the rate at which the RBI borrows from banks), CRR, and bank rate remains at 7%, 4.00% and 9%, respectively.
In a statement, RBI Governor Dr Raghuram Rajan said, “There is still some uncertainty about the evolution of base effects in inflation, the strength of the on-going disinflationary impulses, the pace of change of the public’s inflationary expectations, as well as the success of the government’s efforts to hit deficit targets. A change in the monetary policy stance at the current juncture is premature. However, if the current inflation momentum and changes in inflationary expectations continue, and fiscal developments are encouraging, a change in the monetary policy stance is likely early next year, including outside the policy review cycle.”
Commenting on the policy, Arundhati Bhattacharya, chairperson of State bank of India, said, “The RBI assertion of a possible change in monetary policy stance next year is a clear vindication and acknowledgement of a benign inflation regime. In fact, by advancing the inflation target of 6% to March 2015, RBI has now set out a clear message of the reversal of the rate cycle, sooner than later. With oil prices at historic lows, a stable exchange rate and strong capital inflows, the feel good factor is here to stay.”
According to the central bank, while activity appears to have lost some momentum in Q2, probably extending into Q3, conditions congenial for a turnaround – the softening of inflation; easing of commodity prices and input costs; comfortable liquidity conditions; and rising business confidence as well as purchasing activity – are gathering. "These conditions could enable a pick-up in Q4 if coordinated policy efforts fructify in dispelling the drag on the economy emanating from structural constraints. A durable revival of investment demand continues to be held back by infrastructural constraints and lack of assured supply of key inputs, in particular coal, power, land and minerals. The success of ongoing government actions in these areas will be key to reviving growth and offsetting downside risks emanating from agriculture – in view of weaker-than-expected rabi sowing – and exports – given the sluggishness in external demand. Anticipating such success, the central estimate of projected growth for 2014-15 has been retained at 5.5 per cent, with a gradual pick-up in momentum through 2015-16 on the assumption of a normal monsoon and no adverse supply/financial shocks,” the RBI governor added.
Although the RBI did not move today, Nomura said it believes the rates markets will take the outcome and the clearly dovish guidance positively. "We are more sanguine on the inflation outlook relative to the RBI’s target of 6% by January 2016. Lower rural wages and the lagged impact of a negative output gap should keep CPI inflation around 5.5% in 2015, in our view. Given the RBI’s focus on fiscal developments as an initial condition, it is likely to watch the budget at end-February closely. As such, we expect no change at the next policy meeting either on 3rd February and a possible cut in April compared to our earlier expectation of rate cuts starting in June. All said, we continue to expect a total of 50bp of cuts in 2015, with rates remaining on hold thereafter," it added.
The reverse repo rate under the liquidity adjustment facility (LAF) will remain unchanged at 7%, and the marginal standing facility (MSF) rate and the bank rate at 9%.
Reverse Repo Rate...........7%
The sixth bi-monthly monetary policy statement is scheduled on Tuesday, 3 February 2015.