Wholesale Price Indices for Primary Articles and Fuel & Power in India (Base: 2004-05 = 100) Review for the week ended 18th December, 2010 (27 Agarhay...
Emphasizes Need to Increase Investment in Infrastructure and Improvement in Education and Health of People to Make Growth Process More Inclusive and S...
Foreign direct investment recommendations prompt ministerial approval pathway, enabling significant infrastructure-sector inflows and project-level approvals. The Foreign Investment Promotion Board (FIPB) processed inbound foreign direct investment (FDI) proposals under the government route, held multiple meetings, received several hundred proposals, and recommended a majority of qualifying proposals to the Finance Minister and Cabinet Committee on Economic Affairs for final approval, with recommended approvals concentrated in the infrastructure sector while some proposals were rejected and others remained pending.
Wholesale Price Index rise signals higher primary articles and fuel and power inflation pressures this week. Wholesale Price Index for week ending 18 December 2010 shows Primary Articles (weight 20.12%) rose to 189.7 with weekly increase ~1.0% and point to point inflation 17.24%, driven by Food Articles (poultry, condiments & spices, fruits & vegetables) and Non Food Articles (raw silk, flowers, raw rubber). Fuel & Power (weight 14.91%) rose to 150.7 with weekly increase ~0.8% and point to point inflation 11.63%, reflecting higher prices of petrol, aviation turbine fuel, light diesel oil and refinery products; annexure tabulates subgroup index movements and build up measures.
Industrial production index growth moderates in November as core sectors show mixed performance and provisional revisions. The Index of Six Core Industries (26.7% weight in the IIP) showed provisional lower growth in November 2010 compared with November 2009, but a modestly stronger April-November 2010-11 year to date performance. Sectoral outcomes were mixed: crude oil and finished steel improved, electricity grew modestly, while petroleum refinery and coal weakened month on month, and cement fell sharply in the month. Data are provisional and revised as source data were updated.
Labour law amendments strengthen worker compensation, social security expansion and expedited dispute resolution measures. Legislative amendments to central labour statutes enhanced worker protection and procedural mechanisms: the Workmen's Compensation Act was recast as the Employees' Compensation Act with increased compensation, uncapped medical reimbursement and expedited disposal; the Payment of Gratuity Act's scope and ceiling were raised; the Employees' State Insurance and Plantations Labour Acts were amended to improve healthcare and occupational safety for formal and unorganised workers; and the Industrial Disputes Act was amended to clarify governmental responsibility, raise supervisory coverage thresholds, expand tribunal access and strengthen grievance and execution powers.
Wheat sowing progress shows increased area this season; cropwise rabi area comparisons indicate shifts in cropping patterns. Wheat sowing has advanced with reported year on year increase in area sown, and the release provides contemporaneous cropwise area comparisons for rice, jowar, maize, total coarse cereals, total pulses, and total oilseeds to monitor shifts in rabi cropping patterns.
Excise duty exemption continuation permits eligible units to modify production while preserving the original exemption period. Notification Nos. 49/2003-CE and 50/2003-CE grant a full excise duty exemption to eligible industrial units for a ten-year period from commencement of commercial production, provided they are new or substantially expanded and commence production on or before the cut-off date. Eligible units may add or modify plant and machinery and commence manufacture of new goods after the cut-off date during the exemption period without losing the exemption, but such changes do not extend or reset the fixed ten-year exemption period.
National Board for MSME under MSMED Act prioritises cluster development and mandates time bound action on sectoral issues The Board's statutory advisory role under the Micro, Small and Medium Enterprises Development framework replaces the former non statutory body, with membership spanning industry associations, women enterprises, trade unions, States, Central Ministries and financial institutions; its eighth meeting prioritized the Micro and Small Enterprises-Cluster Development Programme and operational issues such as IT adoption, multi purpose clusters, raw material availability and access to credit, and the Ministry committed to time bound action on raised issues.
Exemption for rail transport of goods extended to continue duty relief for specified rail carriage and container services. Exemption for transport of goods by rail and in rail containers has been extended by notifications issued on 21 December 2010, maintaining duty relief for specified rail carriage activities and deferring an amendment to the rail-transport notification so that exemption treatment for those transportation services continues under the existing exemption regime.
Civil fraud liability for auditors: prosecutors prepare charges against accounting firm over Lehman risk concealment. Prosecutors are preparing civil fraud allegations against an accounting firm for allegedly enabling Lehman Brothers to misstate its financial condition by allowing transactions that reduced reported risk; the action, part of a broader probe into balance-sheet debt removals to mask exposure, may seek fines and other penalties and could be filed imminently though an out of court settlement remains possible.
Tax collection targets remain achievable as government reports resilient revenue growth and rising direct tax collections. Tax collection targets remain within reach as government officials report sustained revenue momentum in both direct and indirect tax streams, citing resilient economic growth and year-on-year increases in net direct tax receipts that have surpassed the midpoint of the annual target.
Foreign direct investment falls sharply in October, marking a significant decline in monthly and yearly inflows. Foreign direct investment inflows declined in October 2010 by about forty per cent to USD 1.4 billion year on year, with cumulative April-October 2010-11 inflows of USD 12.40 billion representing a circa 29.7 per cent drop from the comparable prior year period; the World Bank projected FDI recovery for developing countries, including India.
Corporate governance: ethics, engaged boards and self regulation needed to safeguard stakeholders and ensure inclusive growth. The text stresses that sustainable recovery requires increased investment in infrastructure, education and health, supported by timely policies and governance mechanisms. It emphasises that the quality of governance, manager ethics and engaged independent directors-rather than mere regulatory compliance-determine business sustainability. Related party transactions can pose risks when private interests compromise corporate decisions affecting non controlling shareholders and other stakeholders, so self-regulation, ethical brakes and stakeholder-balanced conduct must complement legal frameworks.
Housing for all: private developers urged to ensure affordability and integrity in development and marketing. The Finance Minister prioritises housing for all and urban renewal, stressing private sector responsibility to supplement government efforts by delivering affordable, well designed housing while adopting strong ethical practices and greater integrity in development, construction and marketing. He links these obligations to national urban programmes and urges industry investment in skills through a Construction Sector Skill Council to address workforce constraints and support scalable infrastructure and housing delivery.
Wholesale price inflation for primary articles and fuel & power rose week-on-week, driven by food, minerals and fuel price increases. Weekly wholesale price movements for Primary Articles and Fuel & Power show modest week-on-week increases and sustained elevated year on year inflation, with Primary Articles rising marginally driven by food subgroup increases and Minerals up on crude petroleum, while Fuel & Power rose on higher prices for various petroleum products, with the release detailing point to point annual inflation rates and build up measures.
Closure of HUF Public Provident Fund accounts mandated; balances refunded after loan interest adjustments. HUF Public Provident Fund accounts opened before 13 May 2005 must be closed after fifteen years from the end of the year of initial subscription, with the entire balance refunded after adjusting for any interest due on loans taken against the account; accounts where the fifteen year period had already elapsed are to be closed at the end of the applicable current year with refund subject to the same loan interest adjustments.
Audit as partner: CAG emphasises identifying weak delivery links and recommending measures to strengthen governance and social programs. The document asserts the audit institution's role extends beyond mere fault finding to partnering government departments in locating weak links in delivery channels, recommending measures to strengthen them, and supporting conceptualisation, design and implementation of social sector projects to enable mid-course corrections and improve governance.
Good corporate governance urged for CPSEs, with board empowerment and an expanded MoU performance framework to boost competitiveness. Continued adherence to good corporate governance and sensitivity to social obligations is urged for CPSEs, with government empowerment of boards and a policy framework providing operational freedom to operate on commercial lines. The Memorandum of Understanding system, described as an effective performance management tool, has been extended to all CPSEs and made more objective to monitor and incentivize outcomes, linking governance reforms and board empowerment to enhanced productivity and competitiveness.
Wholesale Price Index rise signals persistent inflationary pressure despite month on month easing in the annual rate. Wholesale Price Index for All Commodities (base 2004-05=100) rose modestly, producing an annual inflation rate that eased from the prior month but remained elevated. Primary Articles and Fuel groups contributed to the increase with divergent movements within food and non food subgroups, while Manufactured Products showed mixed sectoral performance with gains in food, textiles and rubber products offset by declines in wood and certain metal subgroups.
Foreign direct investment approvals: multiple sectoral equity infusions and entry conditions following FIPB recommendations. FIPB recommended Government approval for eight foreign direct investment proposals spanning fund unit purchases, IPO-based foreign equity induction, new joint-venture formation, equity infusion into a crane-related finance company (subject to a specified Consolidated FDI Policy paragraph), issuance of convertible warrants for CATV equipment manufacture, foreign participation in defence production, increased foreign equity in courier/logistics, and adding infrastructure provider activity in telecommunications; one approved telecom proposal involved no fresh inflow.
Foreign direct investment recovery expected as flows to developing countries increase and concentrate in middle income economies. Foreign direct investment into developing countries is projected to recover with a notable increase in net FDI inflows in 2010 over 2009; however, these inflows remain overwhelmingly concentrated in middle income economies, with the BRIC group together absorbing about half of the developing country total.
Foreign Investment Promotion Board (FIPB), which is mandated to consider and recommend proposals relating to Foreign Direct Investment (FDI) under the government route in terms of extant FDI policy held 14 meetings during the calendar year, including its 162nd meeting today.
During the year, FIPB received 387 proposals for consideration, of which 212 proposals entailing FDI inflow of ` 23700 crore (approx) were recommended for approval by the Finance Minister/Cabinet Committee on Economic Affairs. While 77 proposals were rejected, others are at various stages of consideration.
Some of the major proposals which were recommended for approval by FIPB during the year included M/s India Infrastructure Development Fund Ltd., M/s Enam India Infrastructure Fund Limited., M/s Oman Refineries Limited. and M/s AES India Holdings, indicating a healthy FDI inflow into the infrastructure sector.
Foreign direct investment recommendations prompt ministerial approval pathway, enabling significant infrastructure-sector inflows and project-level approvals.
The Foreign Investment Promotion Board (FIPB) processed inbound foreign direct investment (FDI) proposals under the government route, held multiple meetings, received several hundred proposals, and recommended a majority of qualifying proposals to the Finance Minister and Cabinet Committee on Economic Affairs for final approval, with recommended approvals concentrated in the infrastructure sector while some proposals were rejected and others remained pending.
Note: It is a system-generated summary and is for quick reference only.
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