RBI governor says conscious price rise is hurting poor; aims to control price rise without disrupting growth
Sambalpur (Orissa): Reserve Bank of India governor D Subbarao has said that it can change policy stance at any time to rein in inflation based on the macro-economic situation. "Notwithstanding (the) scheduled quarterly and mid-quarterly reviews, we reserve the right to alter our policy stance at any time to respond to the evolving macro-economic situation," the governor said at the convocation function of Sambalpur University on Thursday.
The governor's remark is significant, as it coincides with the statement by the prime minister in Parliament yesterday that tackling inflation is the top priority of the government. Food inflation in India is among the highest in Asia and it accelerated slightly mid-February despite projections that price rises would ease, reports PTI.
Dr Manmohan Singh said inflation had become a problem in the past year and a half and he promised to take measures that would bring overall inflation down to 7% by the end of next month. "Food inflation has also been a cause of concern. But recently, the situation has improved and I expect the situation to improve further," the prime minister said.
The RBI governor reflected the worry of the government saying, "We are deeply conscious that inflation is a regressive tax that hurts the poor the most as their earnings are not protected against rising prices." Dr Subbarao admitted that "the tension that we need to manage is that economic growth requires that we maintain a low interest rate regime, whereas inflation management warrants that we raise interest rates."
Towards managing this growth-inflation dynamics, the RBI has raised policy interest rates seven times since March last year, he said. At the same time, the RBI governor said, "We are sensitive to the need for supporting growth, as economic growth is a necessary condition for poverty reduction."
On capital inflows, Dr Subbarao said, "The liquidity infusion policy of the US Fed, popularly known as quantitative easing, has triggered larger capital flows to emerging market economies (EMEs)." This has in turn put upward pressure on EME exchange rates eroding their export competitiveness and pushing up asset prices. EMEs had to adjust their macro-economic policies to manage the implications of these flows, he said.
Mr Shourie, who was telecom minister in the Vajpayee government, said he will assist the CBI in whatever way possible and will also submit a 50-page document giving details about broad questions like on first-come- first-serve basis policy that are appearing in the media
New Delhi: Former telecom minister Arun Shourie today appeared before the Central Bureau Investigation (CBI) in connection with the second generation (2G) case and said the real issue involved kickbacks and not the policy pursued for spectrum allocation, reports PTI.
Before he went into the CBI headquarters where he was called for questioning, he said the government was trying to divert the attention from "real issues" by coming up with "rubbish arguments".
Mr Shourie, who was telecom minister in the Vajpayee government, said he will assist the CBI in whatever way possible and will also submit a 50-page document giving details about broad questions like on first-come- first-serve basis policy that are appearing in the media.
"It is a very interesting point (fist-come-first-serve-basis). It is a red herring shown to the public. The issue is that (former telecom minister) A Raja made money irrespective of whether it was a first-come-first- serve policy or not. That is why he was shown the door. He was put in jail.
"The issue is money being made in allocation of spectrum. Even more important was his (Mr Raja's) supervisors did not take action. They were sleeping. This is the issue."
Mr Shourie said to "divert the attention from this issue, government has come out with first-come-first-serve-basis argument."
Mr Shourie has appeared before the CBI for questioning in connection with the agency's probe into possible criminal aspects in the telecom policy since 2001.
Mr Shourie had held the telecom portfolio between January 2003 and May 2004 in the NDA regime.
According to the CBI, nearly 50 licences were given out then on a first-come-first-serve basis and Bharti, Vodafone and Idea were among the beneficiaries of the policy.
Mr Shourie said, "I was given the ministry in 2003. In 2001 guidelines, policy of first-come-first-serve basis was very clear. The arguments of this government are all rubbish."
The former telecom minister also lambasted Shivraj Patil Committee's report, saying these "signatures for hire" (referring to Mr Patil) did not see the documents themselves.
He said government has succeeded from diverting the attention from the real issue.
"While the media is busy covering visits of industrialists and corporates to the CBI, the Prime Minister's name is out, (DMK leader) M Karunanidhi's name is out. Names of other Congress members are out," he said.
Mr Shourie, however, praised the CBI saying it was a competent organisation if given a free hand.
He said as per his information, the CBI has spoken to the whistleblower who had given the inputs about the scam.
People in India and China received over $3 billion each and together accounted for about 20% of the total for those 10 countries, according to data from the Congressional report titled "Migrant's Remittances and Related Economic Flows"
Washington: India received $3.2 billion in private remittances from the United States in 2009, almost the same as China, reports PTI quoting a new Congressional report.
In 2009, 10 countries accounted for over $32 billion, or about 40% of net private remittances and related flows from the United States, said the Congressional Budget Office in its report, "Migrant's Remittances and Related Economic Flows."
People in Mexico received about $20 billion, the largest single share by far, about 61% of the total receipts for the 10 countries.
"People in India and China received over $3 billion each and together accounted for about 20% of the total for those 10 countries," said the 28-page report.
"Between 2000 and 2009, net private remittances and related flows to those 10 countries grew by an average of 7% per year (not adjusted for inflation)," it said.
"Such transfers to people in India experienced double-digit growth over the period, rising from $1.1 billion in 2000 to $3.2 billion in 2009, an average increase of 13% per year," the report said.
Transfers to people in China rose from $1.5 billion in 2000 to $3.2 billion in 2009, an average increase of 9% per year.
Such transfers to Canada were erratic over the period; they rose from $0.5 billion in 2000 to $2.2 billion in 2009, but net outflows from Canada occurred in some of the intervening years.
Although a substantial share of net private remittances and related flows went to 10 countries-Mexico, China, India, Canada, Korea, Brazil, Netherlands, Luxembourg, Taiwan and Japan-other countries experienced faster growth in such transfers over the past decade, the report said.
The Bureau of Economic Analysis (BEA) estimates that migrants' remittances totalled about $48 billion in 2009-nearly 70% more than official development assistance provided by the US government.
Nearly $38 billion of that amount was personal transfers by foreign-born residents in the United States to households abroad.
The rest, about $11 billion, reflected the compensation of employees who were in the United States for less than a year. Some of that compensation, however, was spent in the United States.