5 Stories for Today(1) Pranab offers little on inflation &corruption in Union Budget
(2) Post-Davis, 30 US spies halt covert operation, flee Pakistan
(3) Jam hits the Big Blue in India
(4) Madoff: I made a lot of money for victims
(5) Union Budget: Fiscal Deficit for FY’11 at 5.1%
(1) Pranab offers little on inflation &corruption in Union Budget
Finance minister Pranab Mukherjee on Monday presented to Parliament India's budget for the coming financial year beginning in April.
Following are the highlights of the budget:
Standard rate of excise duty held at 10 percent; no change in CENVAT rates
Personal income tax exemption limit raised to Rs 180,000 from Rs 160,000 for individual tax payers.
For senior citizens, the qualifying age reduced to 60 years and exemption limit raised to Rs 2.50 lakh.
Citizens over 80 years to have exemption limit of Rs 5 lakh
To reduce surcharge on domestic companies to 5 percent from 7.5 percent.
A new revised income tax return form 'Sugam' to be introduced for small tax papers.
To raise minimum alternate tax to 18.5 percent from 18 percent
Direct tax proposals to cause 115 billion rupees in revenue loss
Service tax rate kept at 10 percent
Customs and excise proposals to result in net revenue gain of 73 billion rupees
Iron ore export duty raised to 20 percent
Nominal one per cent central excise duty on 130 items entering the tax net. Basic food and fuel and precious stones, gold and silver jewellery will be exempted.
Peak rate of customs duty maintained at 10 per cent in view of the global economic situation.
Basic customs duty on agricultural machinery reduced to 4.5 per cent from 5 per cent.
Service tax widened to cover hotel accommodation above Rs 1,000 per day, A/C restaurants serving liquor, some category of hospitals, diagnostic tests.
Service tax on air travel increased by Rs 50 for domestic travel and Rs 250 for international travel in economy class. On higher classes, it will be ten per cent flat.
Electronic filing of TDS returns at source stabilised; simplified forms to be introduced for small taxpayers.
Works of art exempt from customs when imported for exhibition in state-run institutions; this now extended to private institutions.
SUBSIDIES * Subsidy bill in 2011-12 seen at 1.44 trillion rupees
Food subsidy bill in 2011-12 seen at 605.7 billion rupees
Revised food subsidy bill for 2010-11 at 606 billion rupees
Fertiliser subsidy bill in 2011-12 seen at 500 billion rupees
Revised fertiliser subsidy bill for 2010-11 at 550 billion rupees
Petroleum subsidy bill in 2011-12 seen at 236.4 billion rupees
Revised petroleum subsidy bill in 2010-11 at 384 billion rupees
State-run oil retailers to be provided with 200 billion rupee cash subsidy in 2011-12
Fiscal deficit seen at 5.1 percent of GDP in 2010-11
Fiscal deficit seen at 4.6 percent of GDP in 2011-12
Fiscal deficit seen at 3.5 percent of GDP in 2013-14
Total expenditure in 2011-12 seen at 12.58 trillion rupees
Plan expenditure seen at 4.41 trillion rupees in 2011-12, up 18.3 percent
Gross tax receipts seen at 9.32 trillion rupees in 2011-12
Non-tax revenue seen at 1.25 trillion rupees in 2011-12
Corporate tax receipts seen at 3.6 trillion rupees in 2011-12
Tax-to-GDP ratio seen at 10.4 percent in 2011-12; seen at 10.8 percent in 2012-13
Customs revenue seen at 1.52 trillion rupees in 2011-12
Factory gate duties seen at 1.64 trillion rupees in 2011-12
Service tax receipts seen at 820 billion rupees in 2011-12
Revenue gain from indirect tax proposals seen at 113 billion rupees in 2011-12
Service tax proposals to result in net revenue gain of 40 billion rupees in 2011-12
GROWTH, INFLATION EXPECTATIONS
Economy expected to grow at 9 percent in 2012, plus or minus 0.25 percent
Inflation seen lower in the financial year 2011-12 DISINVESTMENT
Disinvestment in 2011-12 seen at 400 billion rupees
Government committed to retaining 51 percent stake in public sector enterprises.
Net market borrowing for 2011-12 seen at 3.43 trillion rupees, down from 3.45 trillion rupees in 2010-11
Gross market borrowing for 2011-12 seen at 4.17 trillion rupees
Revised gross market borrowing for 2010-11 at 4.47 trillion rupees
To create infrastructure debt funds
FDI policy being liberalised.
To boost infrastructure development with tax-free bonds of 300 billion rupees
Food security bill to be introduced this year
To permit SEBI registered mutual funds to access subscriptions from foreign investments
Raised foreign institutional investor limit in 5-year corporate bonds for investment in infrastructure by $20 billion
Setting up independent debt management office; Public debt bill to be introduced in parliament soon
Bills on insurance, pension funds, banking to be introduced.
Constitution Amendment Bill for introduction of GST regime in this session.
New Companies Bill to be introduced in current session
To allocate more than 1.64 trillion rupees to defence sector in 2011-12 (11% hike in defence allocation)
Corpus of rural infrastructure development fund raised to 180 billion rupees in 2011-12
To provide 201.5 billion rupees capital infusion in state-run banks in 2011-12
To allocate 520.5 billion rupees for the education sector. Rs.21,000 crore for Sarva Shiksha Abhiyan.
To raise health sector allocation to 267.6 billion rupees (20% hike in health budget )
Rs.500 crore more for national skill development fund.
Rs.54 crore each for AMU (Aligarh Muslim University) centres at Murshidabad and Mallapuram.
Rs.58,000 crore for Bharat Nirman; increase of Rs.10,000 crore.
Mahatma Gandhi National Rural Employment Guarantee Scheme wage rates linked to consumer price index; will rise from existing Rs.100 per day.
Increased outlay on social sector schemes. (Social sector allocation up by 17%)
Infrastructure critical for development; 23 percent higher allocation in 2011-12. ( Rs 2,14,000 cr allocated for infrastructure sector)
AGRICULTURE ( Farm loans at 4 per cent)
Removal of supply bottlenecks in the food sector will be in focus in 2011-12
Agriculture growth key to development: Green Revolution waiting to happen in eastern region.
To raise target of credit flow to agriculture sector to 4.75 trillion rupees
Gives 3 percent interest subsidy to farmers in 2011-12
Cold storage chains to be given infrastructure status
Capitalisation of National Bank for Agriculture and Rural Development (NABARD) of 30 billion rupees in a phased manner
To provide 3 billion rupees for 60,000 hectares under palm oil plantation
Actively considering new fertiliser policy for urea
Food storage capacity to be augmented - 15 more mega food parks to be set up in 2011-12; of 30 sanctioned in previous fiscal, 15 set up.
Comprehensive policy on further developing PPP (public-private-partnership) model.
Farmers need access to affordable credit.
Moving to improve nutritional security.
Necessary to accelerate production of fodder.
ON THE STATE OF THE ECONOMY
"Fiscal consolidation has been impressive. This year has also seen significant progress in those critical institutional reforms that will pave the way for double digit growth in the near future."
"At times the biggest reforms are not the ones that make headlines, but the ones concerned with details of governance which affect the everyday life of aam aadmi (common man). In preparing this year's budget, I have been deeply conscious of this fact."
Food inflation remains a concern
Current account deficit situation poses some concern
Must ensure that private investment is sustained
"The economy has shown remarkable resilience."
Setting tone for newer, vibrant economy.
Economy back to pre-crisis trajectory.
Development needs to be more inclusive.
"Certain events in the past few months may have created an impression of drift in governance and a gap in public accountability ... such an impression is misplaced."
Corruption is a problem, must fight it collectively
Govt to move towards direct transfer of cash subsidy for kerosene, LPG and fertilisers.
Financial Sector Legislative Reforms Commission, to be headed by former Supreme Court judge B Srikrishna, to complete its work in 24 months; to overhaul financial regulations.
Five-fold strategy against black money; 13 new double taxation avoidance agreements; foreign tax division of CTBT strengthened; strength of Enforcement Directorate increased three-fold.
Bill to be introduced to review Indian Stamp Act.
New coins carrying new rupee symbol to be issued.
Anganwadi workers salary raised from Rs.1,500 to Rs.3,000.
Mortgage risk guarantee fund to be created for economically weaker sections.
Housing loan limit for priority sector lending raised to Rs.25 lakh.
(2) Post-Davis, 30 US spies halt covert mission, flee Pakistan
At least 30 suspected covert US operatives have suspended their activities in Pakistan and 12 have left the country following the arrest of CIA contractor Raymond Davis late last month, a media report said on Monday.
In the wake of Davis' arrest in Lahore on January 27 for gunning down two men, Pakistan's intelligence agencies began scrutinising records of Americans living in the country and discovered "several discrepancies".
This caused "many suspected US operatives to maintain a low profile and others to leave the country" , the Express Tribune newspaper quoted its sources as saying.
The foreign ministry says there are 851 Americans with diplomatic immunity in Pakistan , of whom 297 are not working in a diplomatic capacity . Interior ministry sources said that the number of US non-diplomats is 414.
The majority of these "special Americans", as the interior ministry refers to them, are concentrated in Islamabad, while others live in Karachi, Lahore and Peshawar.
Interior ministry records state most of the "special Americans" live in upscale neighbourhoods in Islamabad and Lahore, with smaller presences in Karachi and Peshawar , the report said.
Most of these Americans are "suspected of being operatives of US intelligence agencies who are on covert missions in Pakistan" and report to the US Joint Special Operations Command, according to the sources.
(3) Jam hits the Big Blue in India
Over three days in the past week, close to 19,000 employees of IBM India participated in what the company calls a 'jam'. A jam is like a massively parallel conference. You could also think of it like intense Facebook-ing over some really serious subjects. Employees post views and suggestions on the company's intranet on issues ranging from their careers to possible innovations and how to take IBM forward. These posts are discussed and debated. The company will eventually sift through the entire discussion, identify matters of concern, valuable suggestions and innovative ideas, and use those to redesign practices and policies, and to create new business ventures for IBM.
Many forward-looking companies are beginning to involve employees in framing their vision and practices -- to give them a sense that they are being listened to, and because of the growing recognition that great business ideas can often come from the employees. But this task gets complicated as company size grows. While town halls are common in IT companies, they can't involve very many people in one go. And people tend to be reluctant to stand up and make a point; they would much rather jot it down. That's where the IBM jam works. In India, where IBM has over a lakh of employees, technology in the form of a powerful intranet – that even provides for searches, alerts and auto-tracking of important issues – is being leveraged to democratize' the company. "It's town halls, employee surveys and suggestion schemes all rolled into one," says Chandrasekhar Sripada, head of HR in IBM India. And it removes the physical limitation of time that's there in, say, town hall meetings. You can post at a time of your convenience.
To ensure discussions do not become chaotic, there are hosts/facilitators and subject matter experts who steer and summarize discussions. "But it's completely non-hierarchical," says Susan Jain, VP of marketing & communications at IBM India. Anyone, she says, can open a theme.
So, which issues drew the most participation? If you thought it would be personal career problems and complaints about company indifference, well, that was No. 2. The highest response was in the area of building a smarter nation', and one issue in this category posed by IBM India country head Shanker Annaswamy drew over 500 responses.
"Shows IBMers are rising above themselves," says Chandrasekhar, with a laugh. Then, on a more serious note, he points out that employees feel many of India's problems could be solved with technology. "They see it being done overseas, in areas like transport and utilities, and believe it can be done here too," he says.
IBM started the jam concept globally in 2001. It chose its centennial year to conduct the first India-specific jam. It's turned out to have the maximum participation in a mini (country-specific) jam in the history of IBM. At the company's India leadership meeting next month, the jam discussions will be analysed. And then would come Chandrasekhar and Jain's real challenge. "Our credibility to do the next jam depends on our ability to implement the outcome of this jam and communicate it to people," says Chandrasekhar.
To encourage participation in the Centennial Jam, a great deal of pre-event publicity was done, and 'jam jockeys' were employed to go around IBM's facilities to get people to participate and hand out prizes to those that were adjudged to have made the most valuable suggestions on a day.
(4) Madoff: I made a lot of money for victims
Bernard Madoff, in prison for the biggest pyramid scheme fraud in Wall Street history, says that in reality he made a lot of people rich and that he suffered alone.
In a lengthy telephone interview from prison to New York Magazine, the man described across the United States as a monster, says he is misunderstood -- and that some of his biggest victims were themselves to blame.
"All of my friends, all of, most of my clients, the individual clients, are not net losers. I made a lot of money for them. I was making 20 percent returns for them," Madoff, 72, said.
"It was the people who came in very late in the game that, that, that got hurt. So, did I make a lot of money for people? Yeah. I made a lot of money for people."
According to Madoff, whose 150-year sentence is likely to see him die behind bars, nearly all the losses from the collapse of his scheme were only related to fake profits. "I'm confident that when all this is finished, very few people, if any, will lose their principal," he said.
In the revealing interview, which apparently consists almost entirely of Madoff speaking, the one-time Wall Street star says that rich clients knew something was wrong with the huge returns he was giving, but that they were too greedy to question the numbers.
"I wouldn't give them any facts, like how much volume I was doing. I was not willing to have them come up and do the due diligence that they wanted. I absolutely refused to do it. I said, 'You don't like it, take your money out,' which of course they never did."
Madoff apparently expresses little or no sorrow for the thousands of people believed to have been ripped off in his multi-billion-dollar Ponzi scheme, in which he took new investors' capital to pay phony returns to existing clients. The pain, he suggests, is all his, since he claims to have kept the secret of his complex fraud entirely to himself, not telling even his wife Ruth.
"It was a nightmare for me, yes, of course, only for me," he said. Ruth, he said, "feels sorry for me to a certain extent, you know, because she realizes, you know, I'm not a horrible person."
His two sons Andrew and Mark renounced him after his arrest and Mark committed suicide in New York last year.
He says that by 2002 he understood he had dug a financial hole that he could never escape and that keeping his scheme going was his only option. He says that he also tried to persuade clients and small investors to take their money and quit while they still could -- only without ever telling them why.
"They wouldn't take it back," Madoff said, complaining of "abuse" from clients who thought he was unfairly pushing them out of his investment fund, while not realizing the motive for his advice.
The ageing super-fraud apparently called the New York Magazine in an attempt to rehabilitate his reputation, although it was unlikely to convince anyone.
New York Magazine reported that he sees a prison psychiatrist and that he has been told he is not the sociopath many allege him to be.
"I'm not the kind of person I'm being portrayed as," he told the magazine.
(5) Union Budget: Fiscal Deficit for FY’11 at 5.1%
Led by higher than expected non-tax revenue like auction of 3G spectrum, finance minister Pranab Mukherjee today pegged the fiscal deficit at 5.1 per cent for the current financial year, and further reduced the estimates to 4.6 per cent for 2011-12. Mukherjee said the revenues from 3G and Broadband Wireless Access (BWA) spectrum auction (that garnered Rs 1.08 lakh crore) has helped government reduce the fiscal deficit for the current fiscal, from 5.5 per cent estimated earlier.
"Due to the higher than anticipated non-tax revenue from 3 G spectrum auction... I have brought down the fiscal deficit from 5.5 per cent to 5.1 per cent of the GDP for 2010-11," Mukherjee said in his 2011-12 Budget speech.
"During the course of 2010-11, I had the opportunity to bring in improvement in fiscal balance", he said.
"For the year 2011-12 I have kept it (fiscal deficit) at 4.6 per cent of GDP which improve upon my own target of 2011-12 indicated in the fiscal roadmap presented in the last budget," Mukherjee said.
The pre-budget Economic Survey Survey tabled in Parliament last week had pegged the fiscal deficit for the current fiscal at 4.8 per cent.
India's fiscal deficit had ballooned to 6.3 per cent of the GDP in 2009-10 in view of stimulus spending worth billions of dollars to combat global financial meltdown.
In the medium term fiscal policy, Mukherjee pegged the rolling target of fiscal deficit at 4.1 per cent for 2012-13, and 3.5 per cent for 2013-14.
In his Budget speech, Mukherjee pegged the revenue deficit for the current fiscal and 2011-12 at 2.3 per cent and 1.8 per cent respectively.
The government had in 2010 mobilised Rs 1.08 lakh crore from auctioning of spectrum for 3G and broadband wireless access (BWA) services.
Besides, it also followed the path of consolidation during April-December of 2010-11, as it partially withdrew the sops given to the industry in 2008 and 2009.
Stimulus package provided by the government at the time of financial meltdown helped India to grow by 6.8 per cent in 2008-09, and by 8 per cent in 2009-10.