Connect with us


I would not have approved of note ban: Bimal Jalan



Bimal Jalan-wefornews-min

New Delhi, Aug 9, 2017: Though demonetisation had some positives, former Reserve Bank of India (RBI) Governor Bimal Jalan says he would not have approved it had he been at the helm of the country’s central bank.

There is need to tackle the problem of black money at the root and see whether taxes are high, he feels.

“On balance, if a rupee has been guaranteed by the Government of India and issued by RBI, I should not demonetise it unless there is a crisis,” Jalan told IANS in an interview ahead of the release of his book ‘India: Priorities for the future’ on Wednesday.

Asked if there was a crisis that necessitated demonetisation, he emphatically said, “No.”

Similar was his reply when asked if he would have approved of demonetisation as RBI Governor.

Jalan, who had been Finance Secretary at the Centre, was the RBI Governor from 1997 to 2004.

“Demonetisation had a negative effect, but it also had a positive impact on savings, deposits, people’s investments, filing of more returns,” he said.

In policy making there are always two sides of the equation. Special deposit schemes were also there so that people can use them if they had black money, Jalan said.

“If the black money is being generated in real estate, we can do something about it. Go to the root of the problem. To my mind, for an ordinary citizen, demonetisation had a negative impact because he didn’t have cash. There are two sides again.

“We can take a balanced view, if we need to tackle black money, then we need to go through the source of black money — is it the high tax rates? If people are not paying authorities?” he said.

However, the disruption of demonetisation, which resulted in GDP falling to 6.1 per cent in the fourth quarter of 2016-17, would not impact the long-term growth of the country, he said.

“The economic growth of the country will pick up from the lows of 6.1. One-time impact of demonetisation will not affect growth. We have comparative advantage. We should be able to grow at a fast rate,” he said.

On criticism about jobless growth, he said it is valid if growth does not translate into more jobs and poverty alleviation.

“Whether it is 6.7 or 7.1, growth is not important. We need to have such a growth rate so that we can do what we need to do and the benefits percolate to the poor and lead to investment, alleviation of poverty, creation of jobs. Eight per cent growth is not worth (it) if the benefits are not percolating. We need to focus on essentials of economy,” he said.

Jalan, who also had a term in the Rajya Sabha as a nominated member, said revenues were increasing. “There is no need to change the income tax and Goods and Services Tax (GST) rates every year. GST is a major move. Despite hiccups, it is worth it. We don’t need to revise GST rates every year. That is the most fundamental part. Let us decide income tax, why can’t we have long-term rates,” he asked.

To a question if he was ok with a number of cesses being added to the income tax, he said, “No.”

On a suggestion in his new book about rationalising subsidies, Jalan appreciated the Direct Benefit Transfer (DBT) of subsidies and said that the subsidies should be consolidated to reduce administrative expenditure on them.

“Instead of having all different subsidies, we should have the ones for people below poverty line. Just give them direct subsidy. The government should have subsidy which is required for benefit of people up to certain limit. Instead of 73-74 subsidies, let’s see how many we can consolidate because that will reduce expenditure. What we need is a more efficient delivery system. DBT is one such step,” he said.

By Meghna Mittal and V.S. Chandrasekar


Market Review: Amid volatility equity indices rise for 5th straight week




Mumbai, June 23: Despite volatility and a broadly bearish momentum, the key Indian equity indices rose for the fifth consecutive week, although with marginal gains.

Value buying by investors, primarily in banking, healthcare and auto stocks on Friday helped the indices end higher than the previous week’s levels.

The gains in the week ended Friday, were limited by global trade war concerns due to imposition of tariffs and counter-tariffs internationally.

Index-wise, the barometer 30-scrip Sensitive Index (Sensex) of the BSE rose by 67.46 points or 0.19 per cent to close at 35,689.60 points on a weekly basis.

The wider Nifty50 of the NSE closed the week’s trade at 10,821.85 points — up 4.15 points or 0.04 per cent — from its previous close.

According to analysts, market breadth was negative in all the five trading sessions of the week.

“Markets ended the week with marginal gains after trading in a rangebound manner for a major part of the week. It was nevertheless the fifth consecutive week of gains for the Nifty50,” said Deepak Jasani, Head of Retail Research at HDFC Securities.

Shibani Kurian, Senior Vice President and Head of Equity Research at Kotak Mutual Fund told IANS: “Volatility in the market continued during the week ended June 22, 2018 amidst rhetoric of intensifying trade wars between the US and China and the possibility of imposition of further tariffs against imports from China.”

According to Equity99’s Senior Research Analyst, Rahul Sharma, stock specific actions were the flavor of the week, “wherein HDFC twins (HDFC, HDFC Bank) shimmered, gaining more than 2 per cent”.

Further, during the week all eyes were on the outcome of the Organisation of Petroleum Exporting Countries’ (OPEC) meet, said Prateek Jain, Director of Hem Securities. OPEC, was expected to decide on raising its oil production to cool down oil prices and eventually on Friday it announced an agreement to raise oil output by nearly one million barrels per day.

On the currency front, the rupee closed at 67.84 against the US dollar appreciating by 18 paise from its previous week’s close of 68.02 per greenback.

In terms of investments, provisional figures from the stock exchanges showed that foreign institutional investors sold scrip worth Rs 2,088.81 crore, while the domestic institutional investors purchased stocks worth Rs 4,720.76 crore during the week.

Figures from the National Securities Depository (NSDL) revealed that foreign portfolio investors (FPIs) divested equities worth Rs 4,528.63 crore, or $665.71 million, in the week ended on June 22.

Sectorally, the top gainers were the Bank Nifty, pharma and energy indices, while the top losers were metal, public sector banks and IT indices, Jasani told IANS.

The top weekly Sensex gainers were ICICI Bank (up 6.57 per cent at Rs 300.85); HDFC (up 3.86 per cent at Rs 1,902.40); HDFC Bank (up 2.52 per cent at Rs 2,081.80); Tata Motors (up 1.63 per cent at Rs 308.15); and Yes Bank (up 1.41 per cent at Rs 335.20 per share).

The major losers were Coal India (down 5 per cent at Rs 265.10); Vedanta (down 4.23 per cent at Rs 228.65); ONGC (down 3.63 per cent at Rs 159.45); Wipro (down 3.34 per cent at Rs 257.95); and Infosys (down 2.66 per cent at Rs 1,246.45 per share).


Continue Reading


Oil prices rally after OPEC meeting




Vienna, June 23 (IANS) Oil prices surged as investors were closely watching the Organization of the Petroleum Exporting Countries (OPEC) meeting.

The West Texas Intermediate for August delivery on Friday rose $3.04 to settle at $68.58 dollars a barrel on the New York Mercantile Exchange, while Brent crude for August delivery was up $2.50 to close at $75.55 a barrel on the London ICE Futures Exchange, Xinhua news agency reported.

The OPEC on Friday announced an agreement to raise oil output which, in accord with non-OPEC producers, had been reduced last year in order to boost prices that had been in free fall mainly due to a supply glut.

Following a ministerial meeting here of the 14-nation cartel, the statement released, however, did not provide any details of the production increases to be allocated among members.

Current OPEC Chairman, the UAE Energy Minister Suhail Mohamed Al Mazrouei, told reporters after the meeting that the increase agreed upon is “a little bit less than 1 million barrels” over OPEC’s current output.

OPEC and non-OPEC producers, including Russia, had put in place 1.2 million barrels per day (bpd) cut from January 2017, which helped boost crude prices go over $80 a barrel last month.

Continue Reading


Nepal, China to enhance cooperation under Belt & Road Initiative



Belt and Road initiative

Beijing, June 22 (IANS) Nepal and China have agreed to execute projects under the Belt and Road Initiative (BRI) to enhance connectivity that encompasses ports, roads, railways, aviation and communications within the overarching framework of Trans-Himalayan Multi-Dimensional Connectivity Network.

In a joint statement issued during the visit of Nepali Prime Minister K.P. Sharma Oli, the two sides agreed to take practical measures to promote cooperation in all fields mentioned in the MOUs that included conducting a feasibility study of Kerung-Kathmandu railway, reconstruction of two friendship fridges, protocol on the utilization of Tibetan highways for cargo transport and investment and cooperation on production capacity.

On the railway pact that aims to extend the Chinese railway network to Kathmandu, the joint statement said: “Nepal and China underscored it as the most significant initiative in the history of bilateral cooperation and believed that it would herald a new era of cross-border connectivity.

Other pacts reached during Oli’s visit from June 19-24 were setting up of a mechanism for facilitation on the implementation of China-Nepal Cooperation Programmes and Projects in the Himalayan nation, MOUs on strengthening cooperation between their Foreign Ministries, cooperation in fields of energy and human resource development.

Beijing and Kathmandu also agreed to work together in areas of economy, trade, investment, industrial capacity, post-disaster reconstruction and other mutually beneficial areas, according to the statement.

Another takeaway of the visit was an early finalization of the joint feasibility study on the China-Nepal Free Trade Agreement (FTA), establishing cross-border economic cooperation zones and an agreement on completing the post disaster recovery of two frontier inspection stations on Nepal-China border.

Beijing agreed to support the Chinese-funded banks for opening their branches in Nepal. It said that it was ready to negotiate the financing modalities of the projects on road, railway connectivity, hydropower and transmission lines, among others, proposed by Nepal.

The two sides will also boost cooperation between the law enforcement agencies on information exchanges, capacity building and training. They will negotiate the Treaty on Mutual Legal Assistance in Criminal Matters and Treaty on Extradition to fight against illegal border crossing and transnational crimes.

There will be more exchanges and cooperation between China and Nepal in areas of education, culture, tourism, media, think tanks, youth and people-to-people relations.

China said it will provide more government scholarships every year to Nepal, whereas Kathmandu said it will facilitate the teaching programme of volunteer Chinese language teachers.

“The two sides agreed to strengthen cooperation in the UN and other multilateral forums and to safeguard common interests of developing, least developed and landlocked developing countries in particular,” the joint statement added.

The two countries will also view and support each other’s participation in the regional cooperation process and enhance coordination and cooperation within the SCO, SAARC and other regional cooperation mechanisms within the agreed frameworks and guidelines.

Continue Reading

Most Popular