"I don't think that our economy is sinking. There is a temporary slowdown," Montek Singh Ahluwalia, deputy chairman of the Planning Commission said. However, he added that if the world economy is facing some difficulty, then India would get affected
New Delhi: The economy will grow by 8.2% in 2011-12, slower than the previous fiscal but it is not 'sinking' despite global headwinds, reports PTI quoting Planning Commission deputy chairman Montek Singh Ahluwalia.
He said though the economy is facing headwinds, "I don't think that our economy is sinking. There is a temporary slowdown."
However, he said if the world economy is facing some difficulty, then India would get affected.
"We will grow at 8.2% this fiscal. It will be worse than 2010-11 but 8.2% is very high growth rate...I think, yes there is slight slowdown, I don't think it is permanent slowdown. In the next year 2012-13 why should we not go back to over 8.5% plus economic growth," he said.
As for inflation, Mr Ahluwalia admitted that it is a sticky affair. "I think at the end of the year, inflation will be lower. This time inflation was more difficult to control," he said yesterday.
Under impact of high interest rates, factory output fell to 5.6% in May this year from 8.5% in the same month last year, as the manufacturing and mining sectors fared poorly.
While finance minister Pranab Mukherjee had pegged economic growth for the current fiscal at around 9% in his budget speech, the government and the Reserve Bank of India (RBI) both subsequently lowered their projections.
The central bank has hiked key policy rates 11 times since March 2010 to curb demand and tame inflation. In its recent quarterly review on Tuesday, RBI hiked its short term borrowing and lending rates by half a percentage point.
Nifty may continue to remain weak
The market was range-bound and the indices stayed below yesterday's close through the entire trading session today. The Nifty's intra-day high and closing levels were the lowest over the past 24 days till today. Today's fall was on large volumes. The Nifty is currently trading below the 50-day moving average of 5,520. We expect the Nifty to remain weak over the next few days.
The domestic market opened weak on global cues as the RBI's surprisingly high rate hike on Tuesday continued to weigh on sentiments. The Nifty opened 54 points lower at 5,492 and the 30-share BSE Sensex resumed at 18,301, down 131 points from its previous close. Reliance Industries, State Bank of India and HDFC led the losses as financials, realty, auto and oil & gas stocks were on the sellers' radar.
The indices made insignificant highs early on, as the Nifty touched 5,512 and the BSE Sensex moved to 18,328. The indices traded sideways for a major part of the session as other stocks like Jaiprakash Associates, Sterlite Industries and Hindalco were also under selling pressure. ITC was the exception, gaining over 2% following the announcement of 25% rise in quarterly earnings.
Volatility associated with the expiry of the July futures and options (F&O) contract was also evident. There was a little recovery on the release of food inflation data for the week ended 16th July that was marginally lower at 7.33%, as compared to 7.58% in the previous week. But this did not give enough momentum to lift the indices into the green.
While the Nifty registered its intra-day low of 5,476 in the mid-morning session, the Sensex touched its low at 18,189 in late trade. The indices closed in the red for a third consecutive day with the Nifty losing 59 points to end at 5,488 and the Sensex ended the day at 18,210, down 223 points, extending its losses to 3.5% over the three days.
The advance-decline ratio on the National Stock Exchange (NSE) was 461:1233.
The broader indices suffered too. The BSE Mid-cap index declined 0.88% and the BSE Small-cap index tanked 0.93%.
The BSE Fast Moving Consumer Goods index (up 0.95%) was the lone sectoral gainer. But while ITC gained, the other FMCG major Hindustan Unilever dropped nearly one per cent on concerns about slackening volume growth and leaner margins. BSE Metal (down 2.47%), BSE Realty (down 1.80%), BSE Oil & Gas (down 1.63%), BSE IT (down 1.62%) and BSE Bankex (down 1.43%) were also negative.
ITC (up 2.61%), BHEL (up 1.20%), Hero Honda (up 1.10%), Bajaj Auto (up 0.56%) and Bharti Airtel (up 0.26%) were the major gainers on the Sensex. The main losers on the index were Jaiprakash Associates (down 3.46%), Reliance Infrastructure (down 2.95%), Hindalco Industries, Sterlite Industries (down 2.92% each) and HDFC Bank (down 2.84%).
The top Nifty gainers were ITC (up 2.79%), ACC (up 2.62%), Ranbaxy (up 1.95%), Grasim Industries (up 1.55%) and Ambuja Cement (up 1.45%). The key losers on the index were Reliance Infra (down 4.37%), JP Associates (down 4.22%), IDFC (down 3.14%), Reliance Capital (down 3.12%) and Jindal Steel (down 3.05%).
Food inflation fell to its lowest level in 20 months at 7.33% for the week ended 16th July as compared to 7.58% in the previous week. The decline could also be attributed to the high rate of 18.56% in the corresponding period a year ago, a phenomenon dubbed the 'high base effect' in economic parlance. The latest figure is the lowest since separate data for food inflation was first released in November 2009.
The debt ceiling imbroglio in the US resulted in the Asian pack settling lower for the third day. The Chinese government's move to prohibit banks renewing loans to local financing vehicles contributed to the decline in financial stocks in mainland China.
The Shanghai Composite declined 0.54%, the Jakarta Composite fell 0.68%, the KLSE Composite slipped 0.40%, the Nikkei 225 sank 1.45%, the Straits Times shed 0.12%, the Seoul Composite was down 0.85% and the Taiwan Weighted lost 0.57%. Bucking the trend, the Hang Seng was a touch (0.13%) higher today.
Back home, foreign institutional investors were net buyers of shares worth Rs64.66 crore on Wednesday. Domestic institutional investors were also net buyers, pumping in Rs409.34 crore.
Pharma major Strides Arcolab today said it has received the US health regulator's nod to market Acarbose tablets, an anti-diabetic drug, in the American market. The company has received approval from the US Food and Drug Administration (USFDA) for marketing of Acarbose tablets in strengths of 25mg, 50 mg and 100 mg in the US market.
According to March 2011 IMS data, the size of the US market for Acarbose tablets is around $21 million. Strides Arcolab ended 0.89% lower at Rs373 on the NSE.
Retail chain Shoppers Stop plans to invest up to Rs400 crore to expand its presence in the country with new stores across formats over the next four years. The company, which presently has a presence in 19 cities, plans to have a presence in 25 cities in the next three years. The stock fell 4.85% to Rs412.95 on the NSE.
Gold finance company Muthoot Finance today said it will raise up to Rs1,000 crore through the issue of debentures. The company is in the process of issuing non-convertible debentures (NCDs) of Rs 1,000 face value each and has filed a draft prospectus with the stock exchanges for the same. The scrip closed at Rs186.95, down 0.13%.
The bill, which has included some of the provisions of the Jan Lokpal Bill proposed by Team Anna Hazare, gives permission to Lokpal to probe any Union minister or officials of Group A and above without any sanction
New Delhi: Three months after the civil society initiated a movement, the Union Cabinet today approved the Lokpal Bill keeping the office of prime minister outside its purview during his term in office and also excluded higher judiciary and conduct of MPs inside Parliament, reports PTI.
The bill, which has included some of the provisions of the Jan Lokpal Bill proposed by Team Anna Hazare, gives permission to Lokpal to probe any Union minister or officials of Group A and above without any sanction.
At the meeting, prime minister Manmohan Singh insisted that his office be included in the legislation, but the Cabinet decided otherwise, information and broadcasting minister Ambika Soni told reporters after the meeting.
She said the prime minister was heard with ‘great respect’ but the ministers discussed the ‘pitfalls’ of such a proposal including its possible adverse effect on the stability of a government and creation of uncertainty.
The bill will be introduced in Parliament in the first two days of the Monsoon session beginning 1st August.
The Lokpal consisting of chairperson and eight members, half of them judicial, will have its own prosecution and investigation wing with officers and staff necessary to carry out its functions.
While the chairperson would be a sitting or retired chief justice of India, the members would include former or sitting judges of Supreme Court or chief justices of the high court, law minister Salman Khurshid, who was also present with Ms Soni and minister of state in PMO V Narayanasamy, said.
Persons with ‘impeccable integrity’, with 25 years of experience in administration who has dealt with corruption and vigilance, would also form part of the Lokpal, he said.
The institution would inquire into allegations of corruption in respect of the prime minister ‘only after he demits office’.
Besides, it would also take up corruption matters allegedly involving ministers, MPs, Group ‘A” officers and others equivalent to this grade in any body, board, authority, corporation, trust, society or autonomous body set up by an Act of Parliament.
The Lokpal would not require sanction or approval under Section 197 of the Code of Criminal Procedure, 1973 or Section 19 of the Prevention of Corruption Act, 1988, in cases where prosecution is proposed.
The Lokpal will also have powers to attach the property of corrupt public servants acquired through corrupt means.
Claiming credit for bringing in the much-debated legislation, Ms Soni said the issue was part of the manifestos of the Congress party and the UPA-I government as was the Right to Information and the rural employment guarantee scheme.
“With this, another major commitment is being fulfilled,” she said
The time limitation of a corruption case would be seven years from the date it is registered, Mr Khurshid said, adding that there was no time-bar so far as Prevention of Corruption Act was concerned.
“This is a special and important provision that has been made. It would ensure accountability and transparency and will not adversely affect” governance and administration.
“We don't want to give people unlimited protection, neither do we want to throw them to the wolves,” he said.
To questions on the selection of the Lokpal, the law minister said a nine-member selection panel, headed by the prime minister, would be created. It would include, among others, the speaker, the leaders of opposition of Rajya Sabha and Lok Sabha, one minister and eminent jurists.
Lokpal, which would have a five-year tenure, would not have the power to prosecute. It would recommend prosecution to the Supreme Court, he said.
Regarding accountability in judiciary, Mr Khurshid said the judicial standards and accountability bill was already before the standing committee and the government expected to table it in the House in this session itself.
The issue of accountability in judiciary has to be dealt with separately keeping in mind the autonomy of judiciary, the minister said.
Legislations on protection of whistleblowers and Chief Vigilance Commission would also be tabled in the Monsoon Session, he said.
Asked how would a Lokpal be removed or impeach, Mr Narayanswamy said it would be done by the President on a reference to the Supreme Court.
To questions on a section of the civil society rejecting the bill approved today, Mr Khurshid said there were several points in the government bill which were as suggestions made by Team Anna Hazare, with Mr Narayanswamy saying these were accepted as they were ‘good for the nation’.
“But I am surprised that they don’t recognise the good work they have done themselves, but criticise us,” Mr Khurshid said, adding that 34 of the 40 principles suggested by them were accepted.
Asked why their draft was also not placed before the Cabinet, he said “all members knew what they wanted. What we presented (to the Cabinet) was the government draft.” The law minister also lamented the ‘way in which they (Hazare and others) ended their relations with us’.
To questions, Mr Khurshid said some ‘fine-tuning’ of the draft bill was done in consultation with some opposition leaders like BJP leader Arun Jaitley. Several civil society organisations and many individuals also ‘agreed with us’.