Posts Tagged ‘GDP growth rate’

Rising Food Prices Burden the Poor

Hello Friends here we come up with the Latest Agri Commodities updates from various parts of the country.

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Rising Food Prices Burden the Poor

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Rising prices burden the poor:

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Rising prices of essential commodities coupled with wage deflation and increasing joblessness are pushing the poor households in India to a point of distress.

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Cosmetic measures of the government are unable to address the situation.

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The government of the day is harping upon the idea that an annual GDP growth rate in the range of 7% to 9% would be able to address the situation.

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The country has already experienced a GDP growth rate of 7.9% in the second quarter of the current fiscal 2009-10, but the situation has not improved.

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This is enough to prove that the GDP growth rate alone would not solve the problem.

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Government’s heavy dose of fiscal stimulus can give a big push to the corporate performance and post a good industrial growth which has already been possible in the second quarter of the current fiscal year.

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In Other major Commodities Updates we have information regarding dip in sugar output and regarding centre’s direction to state govts to rationalise taxes on food items in order to check price rise.

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Sugar Output dips 2 lakh tonne:

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India produced 7.84 million tonne (78.4 lakh tonne) sugar till January 15 in the current season (October-September), lower by 2 lakh tonne compared to the output in the same period last year, industry body Indian Sugar Mills Association (ISMA) said.

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ISMA attributed the fall in output to sluggish supply of the cane in Uttar Pradesh, the second largest sugar producing state.

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Centre to ask state govts to rationalise taxes on food items to check price rise:

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The central government is expected to strongly emphasize on states the need to rationalize their tax structure on food grains and sugar to bring down price of essential commodities at the forthcoming meeting of state chief ministers later this week.

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Prime Minister Manmohan Singh will hold the review meeting on food prices with state chief ministers.

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According to official sources, agriculture minister Sharad Pawar is also expected to list the steps taken by the central government including :

extension of deadline for white and raw sugar, extra allocations of wheat and rice over normal PDS supplies—announced after the meeting of cabinet committee on prices last month.

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KEY FEATURES OF BUDGET 2009-2010

UNION BUDGET 2009-2010

CHALLENGES

To lead economy to high GDP growth rate of 9 per cent per annum at the earliest

• To deepen and broaden the agenda for inclusive development to improve delivery mechanisms of the government.

OVERVIEW OF THE ECONOMY

• Growth rate of Gross Domestic Product dipped from an average of over 9 per cent in the previous three fiscal

years to 6.7 per cent during 2008-09.

• Whole sale price index rose to nearly 13 per cent in August, 2008 and had an equally sharp fall to zero per

cent in March, 2009.

• The structure of India’s economy changed over the last ten years with contribution of the services sector to

GDP at well over 50 per cent and share of merchandise trade doubling to 38.9 per cent of GDP in 2008-09.

• Recognising economic recovery and growth as co-operative effort of the Central and State Governments,meeting with Finance Ministers of States held as part of preparation of the Budget. This is intended to become an annual feature.

Highlights of Union Budget 2009-10

* Govt plans to bring back economy to high growth of 9%

* GDP growth dipped to 6.7% in FY’09

* FM to make pre-budget talks with state FMs annual affair

* Fiscal deficit up from 2.7% to 6.8% of GDP

* Return to fiscal prudence at the earliest

* ‘Aam admi’ is focus of all programmes and schemes

* IT exemption limit raised; Rs 15,000 for Sr.citizens

* Limit raised by Rs 10,000 for tax payers, including women

* 10% surcharge on personal income tax scrapped

* Fringe Benefit Tax abolished

* No change in corporate tax

* Defence gets Rs 1,41,703 cr, up 34%

* Total fiscal stimulus in 2008-09 amounts to Rs 1,86,000 cr

* IIFCL to evolve mechanism for increased funding of infra

* IIFCL to re-finance commercial bank loans up to 60 per cent in critical projects through PPP to tune of Rs 1,00,000 cr

* Allocations for highways being stepped up by 23 per cent

* Funds for housing, amenities for urban poor up Rs 3,973 cr

* Funds for JN Urban Renewal Mission up 87% to Rs 12,887 cr

* Assistance for storm-water drainage project up by Rs 300 cr

* Farm credit target up at Rs 3,25,000 cr from Rs 2,87,000 cr

* Interest rates incentive to farmers to repay loans on time

* Additional Rs 1,000 crore for accelerated irrigation scheme

* Export Credit Guarantee scheme extended till March 2010

* 2% interest subvention (IS) scheme extended till March 2010

* IS scheme to cover 7 job-oriented sectors, including textile, handicrafts and handlooms.

* Commodity Transaction Tax abolished

* New pension system trust exempted from STT; DDT

* Minimum Alternate Tax hiked to 15% from 10%

* Tax holiday on petro sector extended to natural gas.

* 100% tax deduction on political donation * Stimulus for print media for another six months

* Fertiliser subsidy to be nutrient-based, not price

* Expert Grp to form viable pricing for imported petro goods

* Banks and insurance firms to remain in public sector

* Rs 100 cr one-time grant to expand banks in unbanked areas

* Govt committed to provide Rs 100 a day as wages under NREGA

* Allocation of Rs 39,100 cr to be made for NREGA

* NREGA coverage increased to 4.74 crore households in FY’09

* Work National Food Security scheme has begun

* Allocation for Bharat Nirman being raised by 45 per cent

* Rs 2,000 cr rural housing fund under National Housing bank

* Mission for female literacy with focus on minorities, SC/ST

* 50% of all rural women to be brought into SHG programmes

* Full interest subsidy for students in select institutions

* Five lakh students to benefit

* Modernisation of national exployment exchanges

* Action for social security to unorganised sector workers

* New pension benefits for 12 lakh jawans and JCOs from July

* One lakh dwelling units for paramilitary forces personnel

* Unique Identification Card to citizens in 12-18 months

* Provision of Rs 120 crore for UIC project

* Rs 2,113 crore allocated for IITs and new IITs

* Rs 3472 cr for Commonwealth Games from Rs 2112 cr

* Customs, excise and service tax base rates unchanged

* For Indira Awas Yojana, allocation increased 63%

* IT returns to be made simpler

* 8 missions being launched under Plan on climate change

* Allocation for market development assistance scheme up 148%

* Allocation for Rural Health Mission raised by Rs 257 cr above interim budget

* Rs 500 cr for rehabilitation of Sri Lankan Tamils

* Rs 1,000 cr for infrastructure in cyclone-hit area in WB

* Total expenditure crosses Rs 10 lakh cr for first time

* Share of direct taxes in revenue increased to 56% in FY’09

However, the failure of Finance Minister Pranab Mukherjee’s Budget in slashing securities transaction tax, the status quo when it came to short-term capital gains tax, no substantial increase in exemption level for calculating personal income tax and no complete tax exemption on interest income earned by senior citizens was a huge letdown.

I would rate this Budget at 5 on a scale of 1 to 10.