The government's idea to get people to voluntarily forgo their LPG subsidy as an exercise in "nation building" has raised peoples' hackles. The SMS from oil companies says, "Want to join Nation Building? It's simple - just give up LPG subsidy." Now if only the minister or the prime minister had said, "I am giving up my LPG subsidy. Join me in nation building"
The Union Government wants me to forgo my subsidy of around Rs500 per LPG cylinder. And it thinks that if I ignore the SMS, it will ‘expose’ the ‘rich’ who want to hang on to benefits meant for the poor. If all of us filthy rich people who save fortunes due to this subsidy on cooking gas decide to give it up, it will add up to a princely sum of Rs3,500 crore. Mr Narendra Modi, thank you. I have no guilt in enjoying this subsidy. In fact, I get a small vicarious pleasure in getting something back from a system that has only taken from me all my life. Why is it that the system favours those who are parasitical to the extreme?
Given the noise about the Gujarat model, I thought that the age of meritocracy had to come. Alas, the Modi government seems to be bent on pushing honest citizens against the wall. Encouraging parasites to thrive through subsidies is surely not the way Gujarat has reached where it has, but the message this time is all wrong. If the Modi government is serious about the “Gujarat model”, we should actually see all subsidies being banished and that there are rewards for honesty and merit.
The government’s estimate of ‘under recoveries' on LPG is around Rs450 per cylinder and a direct contribution by the government of around Rs23 per cylinder. So at worst, the ‘subsidy’ on LPG is around Rs500 per cylinder. (Source of above nos). The government could easily remove the subsidy on LPG cylinders and provide cash subsidy to the poor. In fact, the whole business of ‘under recoveries’ on petroleum products is a sleight of hand, if one takes in to account the taxes on petroleum products imposed by the central and the state governments.
We have read about Members of Parliament (MPs) ordering hundreds of cylinders. Why not have the MPs come forward and forgo a few of their perks first in the interest of 'nation building'? Instead, even while the government wants us to forgo the LPG subsidy, we have television channels reporting how MPs are demanding special perks for themselves at airports.
The fiscal deficit of the government for the current year is Rs5.31 lakh crore. If all the subsidy on LPG to the ‘rich’ were removed, it would perhaps reduce the deficit by Rs3,500 crore. So the government is attempting an emotional blackmail whose impact will be more negative than positive. Unless of course, the wise Finance Minister, Arun Jaitley, can cook up 35 more social impact schemes of Rs100 crore each.
The other thing I fail to understand is, why successive governments only keep milking honest taxpayers? If someone who pays no taxes, gets free electricity, free food and a subsidised gas cylinder, he is doing it at my expense. I am being penalised not because of my circumstances but because of my efficiency. And I spend more- so I also contribute more by way of indirect taxes. There is no stream of income or expenditure of a salaried tax payer, that escapes taxation.
The exhortation to give up the LPG subsidy is coming from a government in which the parliamentarians earn tax-free salaries and perquisites which are likely to shame a corporate CEO. Further, MPs get a pension for just being voted in once. It is neither fair nor equitable. I am sure that the freebies given to parliamentarians, including spends on their security, families, housing and what not, easily exceed Rs3,500 crore. During election time, the filing of returns showed eye-popping numbers as income and wealth for so many politicians! When the government does not do anything to limit its own executives, it has no right to tell me to tighten my belt.
As a tax payer, I contribute to the nation building. It is the tax payer who helps build the infrastructure that the subsidy eating citizen enjoys. Yes, I am being bloody minded, but it is the politicians who are coaxing this reaction from me. We all know that the problem of this beloved country is the burden of too many people. Why does the government not link subsidies to the smallness of a family and help solve a problem at its root rather than do something impulsive that only irks the taxpayer?
And there are so many who get away: Agricultural income is tax free. No issues with that, but when politicians and businessmen start claiming crores of rupees under this head, the objective has been lost. Fix these leakages first, before attacking the belaboured and salaried tax payer. As a consumer, I am paying high prices for agriculture produce. Fix the profiteer first, instead of parroting that the farmer does not benefit. When there are so many fires to be doused, why is the government creating a new one?
CBI arrested six people including the CMD of Syndicate Bank, SK Jain, for allegedly taking a bribe of Rs50 lakh, say media reports
The Central Bureau of Investigation (CBI) has registered a case of alleged bribery of Rs50 lakh against six people including Sudhir Kumar (SK) Jain, chairman and managing director of Syndicate Bank.
The allegations are related with Jain allegedly asking for a bribe to extend credit facilities to certain companies. According to initial reports, CBI also carried out raids at 20 places in four cities — Bangalore, Bhopal, Mumbai and Delhi. It has recovered a bribe amount of Rs50 lakh.
Searches, so far, have led to recovery of several asset papers and incriminating documents. The agency said further investigation is on.
Jain assumed charge as CMD of Syndicate Bank on 8 July 2013. Before becoming the CMD, he was executive director of Bank of Baroda.
In a statement on behalf of the All India Bank Employees' Association (AIBEA), General Secretary C H Venkatachalam has hit out at corruption among high-ranking officials in banks. “Earlier, way back in the 90s, one CMD of UCO Bank was arrested for his involvement in the Harshad Mehta Scam and he was jailed. There have been cases coming up now and then and many cases get hushed up,” he said.
The statement goes on to note that, cases of high level officials at the State Bank of India and the United Bank of India were either hushed up or buried. This is especially problematic when you consider that ordinary employees of these banks suffer swift action for much less serious misdeeds and misdemeanours.
“It is high time that the Government should frame a set of rules and conduct regulations applicable to the EDs and CMDs of the Banks,” he said. Venkatachalam goes on to add that, “In a context where Banks are facing huge bad loans, the accountability for the same at the top should be ensured.”
Nifty has a strong support around 7,450
We had mentioned in last week’s closing report (25 July 2014) that, if the NSE's CNX Nifty is not able to close above 7,840 by Tuesday, the indices will head towards 7,600.
During the week that ended on 1st August, Nifty closed at 7,603 after hitting a weekly low of 7,594. The S&P BSE 30-share Sensex closed the week at 25,480.84 (down 646 points or 2.47%), while the NSE’s 50-share CNX Nifty closed 188 points or 2.41% down.
We expect the market to move sideways over the next week. The first support for Nifty is at around 7,535-7,575. The second support is at around 7,450.
On Monday, after a range bound beginning, Nifty suddenly weakened and plunged lower and closed at its lowest close in five days. Nifty closed at 7,749 (down 42 points or 0.54%). India's measures for raising the investment limit for foreign institutional investors in government bonds is a positive for the country's credit profile, since it will help stabilise domestic interest and currency rates, Moody's Investors Service said on Monday. Moody's rates India at a "Baa3" rating, the lowest investment-grade rating, and a "stable" outlook.
India's stock markets remained closed on Tuesday for Ramzan Eid.
Wednesday was the only day during the week when the indices managed to close in the green. Nifty closed at 7,791 (up 43 points or 0.55%). US gave out mixed data on Tuesday. The Conference Board's consumer confidence index rose to 90.9, the highest reading since October 2007. Residential real-estate prices advanced 9.3% in the 12 months ended May, the slowest pace in more than a year, according to the S&P/Case-Shiller index of property values in 20 cities.
Nifty again resumed its downward journey on Thursday, closing at 7,721 (down 70 points or 0.90%). The global rating agency Fitch Ratings, retained the 'BBB-' sovereign rating - the lowest investment grade - for India and also said a revision will depend on the government's efforts to usher in bold reforms. The agency has also retained a 'stable' outlook for the country's ratings.
Weakness in the European market and selling by foreign investors in the domestic market, played negatively on market sentiments on Friday. On Thursday, the foreign investors were net sellers of Rs1,654.86 crore equities, their highest sales since 21 June 2013. Nifty closed at 7,603 (down 119 points or 1.54%), this was the highest percentage loss since 8 July 2014. HSBC India Purchasing Managers' Index reached a 17-month peak of 53 in July, up from 51.5 in June.
India's fiscal deficit target for the current fiscal year is "daunting", finance minister Arun Jaitley said on Friday. The month of June 2014 recorded a fiscal deficit of Rs57,022 crore, against a fiscal deficit of Rs1.27 lakh crore in May 2014.
For this week, among the other indices on the NSE, the top two performers were Consumption (0.16%) and MNC (0.14%), while the worst two performers were Infrastructure (4%) and Energy (4%).
Among the Nifty stocks, the top five stocks for the week were Bharti Airtel (7%); Hindustan Unilever (4%); Bank of Baroda (4%); Punjab National Bank (3%) and Lupin (3%). The top five losers were Larsen & Toubro (11%); Jindal Steel & Power (6%); Tata Power (6%); NTPC (6%) and Coal India (5%).
Of the 1,438 companies on the NSE, 427 companies closed in the green, 984 companies closed in the red, while 27 companies closed flat.
Out of the 27 main sectors tracked by Moneylife, the top five and the bottom five sectors for this week were: