The low numbers in February were on account of slippages in performance of capital goods and basic goods sector, though consumer goods sector continued to post good results
New Delhi: The government today said it expects the country's industrial output growth to remain low in March, continuing the trend of the previous few months, but looked forward to a sharp recovery in factory output numbers during April, reports PTI.
"Our expectation is that the next month (March) will not be a good month. So there is one more difficult month ahead for us which is the month of March... We will see no growth in the industrial sector. But I do expect a big turnaround in the month of April," chief economic advisor Kaushik Basu told reporters here.
He said "a big rebound" is expected in the April numbers, the results for which will be out in June.
Mr Basu's comment came following release of the latest data which showed the factory output, measured in terms of the Index of Industrial Production (IIP), dipping to 3.6% in February as against 15.1% in the same month of last year.
Poor performance of manufacturing and mining sectors pulled down the industrial growth rate in February.
During the April-February period of the 2010-11 fiscal, industrial growth slowed to 7.8%, from 10% in the same period of the previous financial year.
The government also revised the IIP for January to 3.95% from the earlier estimate of 3.7%.
These figures follow similar kind of low growth in factory output witnessed in November 2010 when it rose by 2.7% and December (2.53%).
The last major jump in industrial production happened in October last year when it expanded by 11.29%.
Experts have attributed the low growth in factory output to high base and slowdown in investments.
However, senior officials, including Planning Commission deputy chairman Montek Singh Ahluwalia, said the low industrial growth would be compensated by record farm output and help the economy achieve the projected gross domestic product (GDP) growth of over 8.5% for 2010-11.
The low numbers in February were on account of slippages in performance of capital goods and basic goods sector, though consumer goods sector continued to post good results.
Capital goods contracted by 18.4%. The sector had expanded by a robust growth of 46.7% in February 2010. In February, manufacturing growth plummeted to 3.5% from 16.1% during the same period a year ago.
Overall consumer goods reported a rise of 11.1% as against 6.3% in February last year.
Mining growth also plummeted to 0.6% in the month under review from 11% in the comparable month of 2010. Electricity generation output rose by 6.7% in February, compared to 7.3% growth in the same month last year.
According to an RTI query, the government is dragging its feet on payments on the plea that the affairs of the Commonwealth Games are under a criminal probe
Diplomatic envoys from seven European countries and Australia have sent a second reminder to the Union sports and finance ministry, asking for payment of dues to foreign companies who contributed to the success of the Commonwealth Games. However, despite promising to pay after receiving the first letter in January, the government is apparently dragging its feet on the excuse that the affairs of the Games are under a criminal probe that has not been completed.
The European diplomats representing the UK, Belgium, France, Germany, Italy, the Netherlands and Switzerland and one from Australia, have written in a joint letter dated 16th February 2011, to youth affairs and sports minister Ajay Maken, that the government's silence is damaging India's reputation and raises questions about the country's commitment to fulfil contractual obligations. This was revealed in response to a query, by activist Subhas Agrawal, under the Right to Information Act.
"Four months after the event finished, nearly 20 companies from our countries still await full payment against contracts entered into in good faith. These companies made a substantial contribution to the success of the Games, bringing world-class skills and capabilities to India. The combined amount owed to these companies is close to US $70 million. As you will appreciate, this has caused considerable financial difficulty for all, placing some in a critical position," the diplomats stated. Mr Agrawal has also received a list of 18 companies and the amounts due to them.
The diplomats also alleged that many of their companies have still not received clearances from the Reserve Bank of India and the Central Board of Excise and Customs for unloading shipments containing essential equipment for business. As a result, they are finding it difficult to fulfil their obligations to other sports events like the Asian Football Cup in Doha.
"Each of us has lent support to these in their attempts to resolve these issues amicably and in a low-key manner. The companies and our interventions have unfortunately proved insufficient," they said. "Your welcome initiative to ensure that outstanding payments would be made by the OC (Organising Committee) within 10 days has not broken the deadlock and the deadline has passed. DDA (Delhi Development Authority) and PB (Prasar Bharati) have also not met all of their financial commitments to some of our companies."
The matter of pending dues first came to light when the British High Commissioner wrote to the Union finance minister, complaining about the irregularity in payments to the British broadcasting company SIS Live. The embarrassing exposure led the government to state on 31st January that all payments would be settled soon. However, nothing has been done yet and the payments continue to be withheld, citing the ongoing probe into the Commonwealth Games affairs.
Sindhushree Khullar, secretary in the ministry of youth affairs and sports, has written to foreign secretary Nirupama Rao asking for advice. According to the status report sent to Ms Rao, in most cases the payments have been withheld due to the ongoing probe by the Central Bureau of Investigation. It said data about other deals was being collected and processed and that administrative hurdles continued to delay payments.
The diplomats are not convinced. "It is encouraging that discussions between the Organising Committee and some of the affected companies continue. But we are concerned that these discussions have been taking place for months without a satisfactory resolution," the letter stated.
"We have mutual interest in ensuring that India continues to attract the levels of trade and investment to sustain levels of growth that realises the country's economic potential. The long delay in settling these matters is damaging India's national reputation, including as a host of major sporting events, denting the confidence of foreign business and raising doubts about the enforcement of contracts," they said in the letter.
The proposed new biometric PAN cards would bear the I-T assessee's fingerprints (two from each hand) and the face. It is expected that the first such cards could be issued by late this year
New Delhi: The government has decided to issue biometric Permanent Account Number (PAN) cards to taxpayers across the country to weed out the problem of duplicate and fake ones, reports PTI.
The decision was taken recently by the finance ministry and it comes in the wake of a Comptroller and Auditor General (CAG) report that asked the Income Tax (I-T) department to ensure that a single taxpayer is not issued multiple cards.
The proposed new biometric PAN cards would bear the I-T assessee's fingerprints (two from each hand) and the face.
There could be an option to existing PAN card holders to opt for the biometric cards, but it may not be mandatory, a senior I-T official said.
The finance ministry and the I-T department had put on hold the biometric PAN card project last year to avoid duplication with the Unique Identification (UID) numbers to be issued by Nandan Nilekani's Unique Identity Authority of India (UIDAI).
"The biometric PAN card project is on again. The step will be very important when it comes to stopping the misuse of this vital identity document," top sources in the finance ministry said.
The biometric PAN card was proposed by the then finance minister P Chidambaram in 2006 to counter the problem of duplicate PAN cards which were uncovered during I-T searches and raids by police and other enforcement agencies.
The CAG report for 2010-11 on direct taxes, tabled in Parliament recently, has revealed that 958 lakh (95.8 million) PANs were issued up to March 2010 but I-T returns filed in the last fiscal were only 340.9 lakh (34.09 million).
The gap between PAN holders and the number of returns filed was 617.1 lakh (61.7 million), the CAG has said.
Suggesting the Central Board of Direct Taxes (CBDT) to identify the reasons for the gap and use the information to enhance the assessee base, the CAG has said it may be due to issuance of multiple PAN cards and death of some PAN card holders.
"The (I-T) department needs to put in place appropriate controls to weed out the duplicate PANs and also update the position in respect of deceased assessees," the report has said.
The plan has been set rolling for issuance of biometric PAN cards, according to sources. It is expected that the first such cards could be issued by late this year, they said.
While PAN is a 10-digit alphanumeric number allotted by the I-T department to taxpayers, biometrics uses biological method to identify physical features of an individual.