Nation
Maharashtra chief minister Prithviraj Chavan resigns

BJP has demanded President's Rule in the state that is all set to elect its new government next month

 

Maharashtra chief minister Prithviraj Chavan has resigned from his post. On Thursday, Nationalist Congress Party had withdrawn its support from the Congress-led government. The resignation from the chief minister during the election period may lead to imposing President's Rule in the state.

 

Chavan sent his resignation to Maharashtra governor Vidyasagar Rao. Earlier in the day, Bharatiya Janata Party (BJP) leader and the leader of opposition in Maharashtra Assembly, Eknath Khadse met Rao seeking to impose President's Rule. According to Khadse, following the withdrawal of support from NCP, the Congress government was in minority.

 

NCP leader and deputy chief minister Ajit Pawar while resigning on Thursday had said that his party is withdrawing support from the government.

 

The Election Commission has imposed model code of conduct in Maharashtra following the notification issued on 20th September for holding assembly elections. In such a condition, the incumbent government continues in caretaker capacity but it cannot take any policy decisions. However, if President's rule is imposed then the caretaker government loses all its executive powers, say media reports.

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Competition Commission orders fresh probe against Jaiprakash Associates

The CCI said it formed a 'prima facie opinion' that Jaiprakash Associates is in the dominant position in the residential market in Noida and Greater Noida and had violated fair trade norms

 

The Competition Commission of India (CCI) has ordered a fresh probe against Jaiprakash Associates for the company's alleged unfair business practices in imposing unreasonable conditions on buyers at one of its realty projects.

 

The latest investigation has been ordered by the CCI on a complaint filed by a buyer at the company's 'Kensington Park at Jaypee Greens' residential project at Noida in Uttar Pradesh.

 

The complaint alleged that the company was imposing certain anti-competitive clauses in its agreements for buyers.

 

The Commission noted that the allegations made in the complaint were similar to certain other cases against Jaiprakash Associates wherein the regulator has already ordered a probe by its Director General (DG).

 

CCI is presently probing Jaiprakash Associates in at least four other matters related to unfair trade practices in the real estate market.

 

After looking into the latest complaint, the said it formed "a prima facie opinion" that the company is in the dominant position in the residential market in Noida and Greater Noida and had violated fair trade norms.

 

"The Commission is of the prima facie opinion that there appears to be a case of contravention of...The (Competition) Act in the matter," CCI said in the order dated 24th September 24.

 

Accordingly, CCI has asked DG to investigate the matter.

 

The Commission has found that some of the clauses of the agreement "prima facie, appear to be unfair, one sided and loaded in favour of opposite party (Jaiprakash Associates)".

 

Along with Jaiprakash Associates, CCI has also ordered probe into "the role of the officials and persons who at the time of such contravention were in-charge of and responsible for the conduct of the business of the company".

 

While noting that there were other real estate players in the market in Noida region, the fair trade regulator said that "the land bank available with Jaypee Group is much higher than that available with any other developer".

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S&P ups India's outlook to 'stable' from 'negative'

India's improved political setting offers a conducive environment for reforms, which could boost growth prospects and improve fiscal management, the ratings agency while revising upwards the country's outlook

 

Ratings agency Standard & Poor's (S&P) on Friday raised its outlook on India to 'stable' from 'negative' with 'BBB-minus' rating reflecting its views that the country's improved political setting offers a conducive environment for reforms, which could boost growth prospects and improve fiscal management.

 

"The stable outlook for the next 24 months reflects our view that the new government has both the willingness and capacity to implement reforms necessary to restore some of India's lost growth potential, consolidate its fiscal accounts, and permit the Reserve Bank of India (RBI) to carry out effective monetary policy," S&P said in a release.

 

The ratings agency had cut India's rating to "negative" in April 2012, and that came to symbolise the plummeting investor confidence in India because of corruption cases and the lack of action by the then Congress-led government.

 

Talking about its ratings on India, S&P said, it reflects the country's strong external profile, combined with its democratic institutions and free press, both of which underpin policy stability and predictability. These strengths are balanced against the vulnerabilities stemming from the country's low per capita income and weak public finances.

 

India's external position is a key credit strength. The country has relatively little external debt and a much improved external liquidity position. S&P said, "We project that, at the fiscal year end of March 31, 2015, external debt net of external assets will be 6% of current account receipts (CARs). Central bank reserves well exceed public sector external debt, reflecting the public sector's ability to finance practically all of its borrowing requirement domestically. On a broader definition, India's net external liabilities are a low 49% of CARs based on our projections at the end of the current fiscal year in March 2015, and nearly half of gross external liabilities consist of inbound foreign direct investments."

 

According to the ratings agency, India's current account has improved in recent years after restrictions on gold imports and slower domestic investment demand. At the same time, the central bank rebuilt its foreign currency reserves to cover about 5.5 months of current account payments. Although we expect the current account deficit to widen from its current low of 1.8% of GDP (as of March 2014) as investment picks up, gross external financing needs are likely to remain at or below the sum of CARs plus usable reserves in the next two to three years, it added.

 

"India's well-entrenched democratic political system is another credit support," S&P said, adding, "that, along with the country's mature and stable institutions (including free press) and system of checks and balances, has afforded India a long period of stability. Although the paralysing effect of legislative gridlock can blunt government effectiveness, our outlook revision indicates that we believe the current government's strong mandate will enable it to implement many of its administrative, fiscal, and economic reforms."

 

"We expect the new administration to adhere to its stated fiscal consolidation program, even though we acknowledge that planned revenues may not fully materialize and subsidy cuts may be delayed. We expect improved fiscal performance in the medium term primarily from revenue-side improvements brought about by the planned introduction of a national goods and services tax (GST) and administrative efforts to expand the tax base. We project net general government debt to decline to below 60% of GDP by the year ending March 2018, and with it, general government interest rate expense to just under 20% of revenues. A faster pace of deficit and debt reduction is unlikely in our view. Hence, we believe fiscal and debt metrics are set to remain key rating constraints for some time," S&P added.

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COMMENTS

MG Warrier

2 years ago

A mainstream financial newspaper captioned today’s(September 27, 2014) editorial “Standard & Poor’s Upgrades Itself”. The international rating agencies will continue to follow ‘blow hot, blow cold’ approach to satisfy their masters. Allow me to recall my November 19, 2013 comment in response to a report:
“The international rating agencies were never kind to India. The ratings have always been guided by external parameters common for the sectors irrespective of strengths and weaknesses specific to countries rated. Of late, some agencies have started openly judging India’s ‘political climate’ as also commenting on structural aspects of institutions which have evolved based on the need for economic development.
High time rating agencies, or for that matter whosoever judges the performance of economies, changed their parameters to factor in the inherent strengths and weaknesses of nations. Countries like India with huge resources including human resources and much less consumption needs as compared to ‘developed’ countries and nations which are permanently dependent on outside markets for sustenance, while perennially building up capacities for unproductive purposes like war and space exploration using borrowed funds, are measured on the same scale.
Viewed in this context, time is opportune for India to think in terms of setting up a rating agency of international standard which will understand India and advise stakeholders about the health of domestic financial institutions and the financial institutions and governments abroad with which India has dealings. Agencies like Standard and Poor and Moody’s are doing their work within their limitation and even they would be benefited if an internationally acceptable rating agency comes into being in India.”

M G Warrier, Mumbai


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