Rupee could be hit by Greek crisis: Government

Over 61% of Greeks voted "no" on Sunday, responding overwhelmingly to Prime Minister Alexis Tsipras' calls to reject a proposal by the country's creditors for more austerity in exchange for a financial bailout


The Indian government on Monday said it was closely monitoring the Greek situation and euro market movements after austerity proposals by creditors being rejeted in a referendum posed the possibility of the country's exit from the euro zone, while the rupee may be affected due to the outward flight of investment.
"In these situations what mostly happens is there is flight to dollars, to a safe haven. Rupee might also be affected by that. But nothing gets unusual at all so far," Chief Economic Advisor Arvind Subramanian told reporters here.
"This is a drama which is going to play out for some time. We are well protected in at least three ways. Our macro-economic situation is much more stable. We have reserves. We are an economy which is still a very attractive investment destination. So I think we are relatively well insulated," he said.
"As for the crisis itself, it is going to going to be long and prolonged," he added.
Over 61 percent of Greeks voted "no" on Sunday, responding overwhelmingly to Prime Minister Alexis Tsipras' calls to reject a proposal by the country's creditors for more austerity in exchange for a financial bailout.
On possible impact of the crisis on Indian economy, Subramanian said that as the crisis plays out, "financial markets are going to be volatile. Both the ECB (European Central Bank) and Fed (US Federal Reserve) will take this into account".
"We will have to see how the euro moves now. We are closely monitoring the Greek situation. There could be some reaction on the Fed rate hike," Finance Secretary Rajiv Mehrishi said.
He had last week expressed apprehension that if yields on euro bonds go up, it might impact inflows and outflows from India.
Indian industry feels that if a crisis developed for Europe due to Greece, India too could feel the tremors like the rest of the world.
"What is worrying is that the overall situation with regard to India's merchandise exports does not look promising this year and the troubles in Europe could only deteriorate the prospects," the Associated Chambers of Commerce and Industry of India (Assocham) said in a statement here.
"There is a need for RBI and the finance ministry to keep a close eye on the muddy global situation and its possible effect on India's capital flows and the currency movement," it added.
India's merchandise exports continued to decline for the second month this fiscal, down by over 20 percent at $22.35 billion in May from $27.99 billion in the same month of the previous year, official data showed last month.
The Federation of Indian Export Organisations (FIEO) has warned that the continuing decline in exports would result in layoffs, besides putting pressure on the current account deficit (CAD).
FIEO president S.C. Ralhan also agreed with RBI Governor Raghuram Rajan's recent remarks that the central banks globally were at risk of slipping into the kind of beggar-thy-neighbour strategies, leading to the Great Depression of the 1930s again.



Reforms & technology hold key to urban revamp
The government needs to surmount a number of tough challenges to successfully implement these schemes and realize their full potential
The three-pronged initiative of the NDA government through big ticket urban-focused investment schemes of Atal Mission for Rejuvenation & Urban Transformation (AMRUT), Smart Cities Mission & Housing for All with central funding of Rs.4 lakh crore ($63 billion), holds the promise of providing the much- needed fillip to real estate, housing and infrastructure and raise the living standard of people by creating world class cities and spaces.
But the government needs to surmount a number of tough challenges to successfully implement these schemes and realize their full potential.
As per the plan, under the Smart Cities Scheme, 100 cities will be developed, with each getting an annual central funding of Rs.100 crore each over the next five years. Under AMRUT, 500 cities and towns would be rejuvenated over next 10 years. And under Housing for All, two crore affordable houses will be built through slum rehabilitation with the help of private developers, housing for poor with credit- linked subsidy, housing projects with public and private sector and subsidy for individual house construction.
The enormity and challenge of urban revamp can be gauged from the urban population explosion. Every decade, we add one Brazil (181 million people). By 2020, about 123 million of additional urban population will be added. An estimated 600 million Indians will be living in cities by 2030, up from 290 million, as reported in the 2001 census. By 2025, 78 percent of India's urban population will be concentrated in 69 metros, putting severe pressure on already crumbling physical and social infrastructure.
Inefficient and faulty urban planning is resulting in massive consumption and wastage of precious water and energy resources and causing major sanitation and health problems due to increasing slums and poor waste disposal.
In this backdrop, Prime Minister Narendra Modi's initiatives assume significance, especially as the contribution of the built environment to the economy accounts for about 17.5 percent of GDP, as per 2010 statistics, and in view of industry and services growing faster than agriculture, people are moving from farms to urban areas.
That technology holds the key to government's initiatives aimed at urban rejuvenation, is amply demonstrated by a recent survey of 2,000 buildings in India done by Honeywell that emphasize on the need to invest more in smart building technologies as such smart building solutions can make facilities more connected and adaptive, reduce energy and operating costs and improve the safety and quality of life for occupants and users. 
Information & Communication Technologies (ICT) help make smart city's critical infra, components and utilities interactive and efficient. Through Intelligent Building Management Solutions, energy saving and lower maintenance costs can be achieved, at the same time prolonging the life of assets and reducing the carbon footprint. 
Last year, the government introduced draft Internet of Things(IOT) to create IOT- enabled smart cities eco system to ensure faster implementation to improve overall efficiency. CISCO has established IOT hub in Bangalore to help companies develop software application for deployment in upcoming 100 smart cities. IBM has prepared the Integrated Communication Technology (ICT) Master Plan for Dighi Port Industrial Area under DMIC.
Along with technology, crucial real estate reforms are necessary for the success of programmes aimed at urban revamp. Considering that in future, power will be increasingly generated from renewable resources, it is necessary that we move from a consumer- oriented generation model to one based on principles of smart power generation, smart power grids, smart storage and smart consumption. Keeping this in view, the government has converted the Solar Energy Corporation of India into a growth-oriented commercial company to generate and sell power and develop other sources of renewable energy. It has also revised the solar power generation target for 2022 from 20,000 mw to 100,000 ME.
In another progressive policy initiative, the government has approved 6.5 percent interest subsidy on housing loans with tenure up to 15 years for economically weaker sections and lower income groups. It is, however, questionable as to why real estate has been kept out of GST when fees and taxes account for as high as 35 percent of what the home buyer pays for a house. 
Similarly, with direct institutional support to the real estate sector from banks, HFCs, private equity and the like accounting for only 22 percent of total investment flow in the sector, reforms to increase capital flows are required.
There are other key challenges which need to be met before government's initiatives for urban revamp could be successfully implemented. There is funding challenge. Though the centre has earmarked liberal funding for the three initiatives , it will not be easy for the states and local urban bodies to arrange for additional large investment, considering their poor financial health.
It is also a big challenge to meet the huge gap in services under AMRUT scheme. Against the desired water supply of 135 litres per person per day, the urban population gets only about 69 litres. Besides, cities and towns are able to treat only five percent of total waste while sewerage treatment is merely threepercent. 
The situation on the power front is equally bad. Also, considering the scope and scale of urban development initiatives, there is a severe shortage of skilled professionals, with a demand-supply gap of 82-86 percent in the core professional group of civil engineers, architects and planners, not to talk of skilled labourers.
There is a huge challenge to make land available for massive urbanisation programme. On the technological front, the challenge will be to achieve economy of scale and their viability on mass scale.
And last but not the least, there is a challenge of smart governance at the local urban bodies level as there is a tremendous shortage of professionals. The challenge is to provide transparent and efficient governance at the municipalities' level.


No conclusive proof that mobile radiation is harmful: BSNL

The BSNL official said that regular audit of electromagnetic field levels from the mobile towers through TERM (Telecom Enforcement Resource Monitoring) cells of the DoT is being done to ensure that prescribed standards are implemented


There is no decisive data or evidence so far to show that radiations from mobile phones or towers have adverse health or environmental effects in India, a top BSNL official here said.
"There is no conclusive study, data or evidences about the bad health or ecological effects of radiations from mobile phones or towers in India," Bharat Sanchar Nigam Limited (BSNL) chief general manager (northeast circle one) D.P. Singh told reporters.
He said: "India's stringent measures against radiations from mobile phones or Base Tower Stations (BTS) are ten times more than the USA and European countries."
According to the officer, there are about 775,000 BTSs in the country and so far only about 90 cases have been found to be non-compliant by the department of telecommunication (DoT) and penalty has been imposed on the operators.
"A penalty of Rs.10 lakh has been imposed in each case on defaulting operators in case any BTS is found to be non-compliant," said Singh, who was earlier looking after the radiations related affairs in the DoT.
The BSNL official said that regular audit of electromagnetic field levels from the mobile towers through TERM (Telecom Enforcement Resource Monitoring) cells of the DoT is being done to ensure that prescribed standards are implemented.
Singh said that the World Health Organisation (WHO) has done a large number of studies over the past two decades to assess whether mobile phones and BTS pose potential health risk.
"A section of so-called experts and environmentalists to achieve their personal gain and business benefit are occasionally spreading exaggerated facts about radiations from mobile phone or towers based on some myth and falsehood," the BSNL CGM said.
"These experts and environmentalists without any conclusive study and facts sometimes say that sparrows and other birds are vanishing, affecting breeding or reproduction, and foods due to radiation from mobile phone or BTS," he added.
"Had this (radiations) been harmful, Europe and the US would have done away with it long ago. Here, people make occasional hullabaloo about the harm being done by mobile towers, but actually nothing like that happens."
The CGM said that the DoT has recently sanctioned Rs.5,336 crore for the improvement of mobile and internet services in the eight northeastern states.
He said the BSNL would set up several hundred Wi-Fi hotspots in northeastern states soon, besides improving machinery and quality of service in the region.



Narendra Doshi

2 years ago

Let it be known how many & which countries have radiation limits much stringnent than US & which countries of Europe are being referred. I am aware that there are several counries with much stringent stipulations due to long term potential health hazards. Let there be a equal opportunity playing with both sides having open ears and minds and work for a practical healthy solution.

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