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Union Finance Minister P Chidambaram’s estimate for India’s 2014-15 food subsidy bill of Rs 1,15,000 crore in the interim budget is more than twice of India’s Poverty Gap, or the cost of pushing all households above the poverty line if cash transfers were used instead. The Poverty Gap for India, as per the latest NSSO Consumption Expenditure Survey data available (for the year 2011-12) is Rs. 55,744 crore. A highly-placed government official explained the reason behind the food subsidy substantially exceeding the poverty gap: “The Food Corporation of India (FCI) does incur huge costs on holding procured food grains and it can be argued that there is tremendous potential for its operations to be more efficient”. “The point is not that the food subsidy should be discontinued but to see if limited resources are being used efficiently for targeting poverty effectively.” The Finance Ministry has in fact capped reimbursements to the FCI from the fis...

Stating that the forthcoming elections will delay the reform process and hurt growth, international rating agency Moody’s on Monday said it expects growth to pick up to only 5.5 per cent in FY’15. “We expect GDP growth to remain weak at 5.5 per cent in FY’15 as the elections will delay reforms needed to revive growth,” it said in a note. Growth has been below the trend for much of FY’14 and the government’s official estimate pegs it at 4.9 per cent, a bit higher than 4.5 per cent achieved in FY’13. Elections are scheduled for April-May. It said interest rates will continue to remain high and hence the rupee will continue to be volatile, making it difficult for importers and exporters. The agency also gave a negative outlook for non-financial corporates in 2014 on weak economy, political uncertainty and effects of the US Fed’s tapering. “Lower economic growth, volatile exchange rates, rising borrowing costs and slow economi...

Reserve Bank of India Governor Raghuram Rajan on Monday said the central bank’s focus is to bring down inflation to boost investor confidence. Mr Rajan also expressed hope that a stable government after the Lok Sabha elections will continue the broad fiscal policies of the current regime and India may finally get the Goods and Services Tax (GST), an ambitious indirect tax reform measure. “My belief is that we should be focused on getting our fundamentals right and that has been our focus ever since the summer of last year. One of the main aspects of our fundamentals is the inflation rate. “If investors have a sense that inflation rate is going to come down, both domestic and international investors, they would be more prepared to take a bet on the rupee and that is essentially what we are focused on,” Mr Rajan said in an interview to CNBC. After the US Federal Reserve indicated in May last year that it would taper its monetary stimulus, the rupee depreciated ...

Days after the interim budget, there have been question marks over the accuracy of its key numbers. For instance, the fiscal deficit numbers, both for the current year (2013-14) and the next year (2014-15) at 4.6 per cent and 4.1 per cent, respectively, are, in the eyes of rating agencies and brokerages suspect. Fiscal consolidation might well take place this year, in fact, the deficit is expected to be even better than the “red line: of 4.8 per cent (of GDP) which the Finance Minister had promised will not be breached. The scepticism is on two counts: (a) that a fair bit of window dressing — subsidies getting rolled over into next year and taking credit for dividends that would normally accrue next year — have improved public finance for this year but correspondingly made the task of the next finance minister that much more difficult, (b) more substantial is the criticism that the deficit has been pegged down by cutting down on productive capital expenditure even whi...

The Union Labour Ministry has set up a committee to monitor the implementation of recommendations made by the Justice G.R. Majithia wage board for newspaper employees that were upheld by the Supreme Court on February 7. A senior Ministry official told The Hindu that copies of the notifications had already been sent to the labour departments of State/Union Territory governments and they were asked to monitor their implementation by appointing tripartite committees (consisting of representatives of the labour department, employers and employees).

Italian Premier Matteo Renzi won a crucial confidence vote in Parliament on his brand new government early on Tuesday, managing at least for now to tamp down anger from among his own Democrats. The vote in the Senate came hours after he argued that he could get his country back to work while the last three premiers failed. Mr. Renzi, at 39, Italy’s youngest premier, was sworn into office on Saturday along with an unusually young Cabinet, with many of the Ministers newcomers to national government. The Senate voted 169-139 to confirm Mr. Renzi’s broad coalition, which ranges from his centre-left Democrats to centre-right forces formerly loyal to ex-premier Silvio Berlusconi. Mr. Renzi needed at least 155 votes to clinch the victory, one of two mandatory confidence votes. The second vote, in the Chamber of Deputies, was expected later on Tuesday. Mr. Renzi’s coalition has a comfortable majority in the lower chamber. But he had a closer call in the Senate, where his ...

China on Monday asserted that it had never waged a war to occupy "an inch of land of other countries", days after BJP's Prime Ministerial candidate Narendra Modi slammed the Communist giant for its "expansionist mindset". "You mentioned expansionism by the Chinese side. I believe all of you can see that China has never waged a war of aggression to occupy an inch of land of other countries," Chinese Foreign Ministry spokesperson Hua Chunying told reporters while responding to questions on Modi's remarks. "We always reiterate that we take real actions to commit through the peaceful development path" and are committed to good neighbourliness and cooperative relations, she said. "There has never been any armed clashes in border areas over the years. So there is very strong evidence that we have the capability to maintain peace there. This is very good for the future development of the bilateral relations," she said, highlighting ...

The UK plans to significantly increase visa fees to plug a 50 million pound gap in its budget, a move that can hit Prime Minister David Cameron's efforts to boost student and business visits from countries like India. The proposal for an across-the-board rise in UK visa fees is contained in a letter from a Home Office official circulated in the corridors of power here, The Times reported today. According to the newspaper, the UK visa fees hike move is aimed at plugging a 50-million pound hole in the Home Office budget and could mean a hike in visa fees by 4 per cent, more than double the rate of inflation. The move could put the Home Office in a direct clash with Prime Minister David Cameron's efforts to boost student and business visits to Britain from countries like India and China. Cameron has already announced premium fast-track visa services for elite travellers from these two fast developing countries as part of his trade drive. The move comes weeks after Home Secret...

Expressing concern over the “growing attacks and unsubstantiated charges” leveled against the media by political leaders and public figures dissatisfied with the coverage of their activities or with criticism, and to keep public discourse civil and within reasonable bounds. “It is distressing to find a person like Gen V K Singh using the term ‘presstitutes’ to describe journalists who wrote a story on the movement of army units causing concern to the government, a statement unbecoming of a former chief of the Indian army,” the guild said in a statement. “It is equally disquieting to find Arvind Kejriwal attributing corrupt motives to the media that were critical of him and charging media with being pressured into ignoring him without coming up with specific details or material to substantiate such charges,” the guild added. Reacting to The Indian Express report quoting the then director general of military operations A K Choudhary that...

Delhi's Akshardham Temple and Pune's Army cantonment area were on top of Indian Mujahideen's (IM) target list, the NIA has said in its chargesheet filed against its co-founder Yasin Bhatkal and his three aides. In its second charge sheet, the NIA said that according to data retrieved from the laptops recovered from Bhatkal and his aide Asadullah Akhtar, members of the IM were carrying out reconnaissance of these places. "The files named as... are the photographs of Kirkee area in Pune (Army cantonment) which was sent by Riyaz Bhatkal to accused Asadullah Akhtar through Internet in order to carry out a reconnaissance during the month of January/February 2012 while Waqas and he were staying in the hideout located at Loni, near Loni Medical college in Ahmednagar district in Maharashtra," the NIA said. It further said, "files named as ... are the photographs of Akshardham temple in Delhi. Investigation revealed that accused Md Ahmed Siddibapa (Yasin Bhatkal) w...