Ad Here  
August
September
October
November
December
January
 
 
Skewed Economic Zones? Economy through the month After all, customer is the king Indian GST – Between extremes… Pool energy prices 1800 parties registered with EC – Less than 60 contest elections Star of the South MS Installed A tale of two Bihar babus In the horns of a dilemma The deluge and the several kindly souls INDIA keeps its date with destiny Land, land everywhere, but... Industry can’t get it from Mars, yet Technology and economic development should be linked BJP can now hasten its thrust for reforms Low profile moves Well-administered State You too T M Krishna? Public investments and welfare will surge Focus on southern TN... Outward ho What the big B should offer? Welcome rains for damaged roads... Need for radical RBI reform Policy Makers A dual GST that will protect prosperous states Welcome move to widen the tax net… Little surplus after salaries, subsidies and debt servicing Strategic planning the missing link Chennai Airport-Ready for a rapid take off... Tryst with GST PC please be our Santa Much ado about nothing When the examiner cheated... A blueprint for the future It’s raining funds for states. Really? South India’s 100 most valuable companies Two welcome measures from the chief minister... Babes In the wood-RBI North block has little clue to curb inflation A Fine division of responsibilities Welcome Measures. Work for 10X Change An eventful week with VVIPs of Delhi CSR, tech revolution and bank crisis Need plan over the long term planning Sowing seeds of hope Sardar Sarovar – the seventy year itch Ganesh’s mantras Truce at Kasturi Buildings Kudos to GIM organisers... Reform this licence to…kill Research for survival... Miles to go... If not Tamil Nadu, where else? Trail-blazing Tamil Nadu Wanted: decentralised financial system Focus on agriculture and human resources Cleansing Indian retail Why (not) abolish? Breaking news or breaking credibility? Better relations with UK... Rail-road Rajaraman Much can be done by us The Great Fall Sustainably developing manufacturing sector… Why throw baby with bath water? A gratifying record An eco-friendly commute in Mysuru Deming awardees galore! No groundnuts in groundnut oil! Healthy finances of the Chennai Corporation TN - so much to offer... They add lustre to Padma Awards A historic indirect tax reform Make way for Make in India... Babes In the wood-RBI North block has little clue to curb inflation Tax evaders’ get out of Jail-Free Card Weaving wealth of western Tamil Nadu How will it PAN OUT Oh my GOLD CAD and the emergency thereof Jobs - Lost, Changed or Gained
 
Land, land everywhere, but... Industry can’t get it from Mars, yet
The floor managers of the BJP had succeeded in passing seven out of the eight bills related to the ordinances promulgated earlier. This has brought about a lot of relief ending long drawn uncertainties and stagnation in several sectors. Particularly welcome are the acts relating to the increase in FDI limit for insurance from 26 per cent to 49 per cent and to coal and mines. But on the land acquisition bill opposition is strong. We see this is not rational.

The nationalisation of the coal mines, over three decades ago, vastly restricted tapping the potential of the massive reserves, leading to increased imports of costlier coal. After the Supreme Court ordered cancellation of licences to coal blocks there has been a huge increase in coal imports to feed power and steel plants. The three ports at Paradip, Krishnapatnam and Kamarajar on the east coast handled over 90 million tonnes of coal imports during the current year resulting in a huge outgo of foreign exchange. The opening up of coal mining to Indian and foreign private companies, not just for captive consumption but also for trading, through transparent bidding is a welcome, long pending reform.

The recent initiatives promising a handsome share to the states through much higher royalties and taxes have enthused mineral producing states to support the bills in the Rajya Sabha. This helped the NDA government get these bills passed despite strong opposition from the Congress and the left parties. Happily regional parties understand better the language of money! Exploration for coal and bauxite will receive much needed attention.

Similar reforms are also needed for the exploration of oil and natural gas. After a large fortuitous break in the 1970s, the country was not lucky with new discoveries. The big break promised at the KG Basin in 2009 when Reliance stepped up gas output to over 60 msmcmd was not sustained. With more attractive pricing, output from Reliance and other explorers, including ONGC, Cairn and GSPC, will help realise the potential of the KG Basin.


Land acquisition bill lapses

The only ordinance that could not be regularised is the one related to the land acquisition. The ordinance will lapse and will have to be re-issued. Congress has mobilised its forces; the party, supported in parallel by Anna Hazare’s and scores of other farmers’ associations,  is  determined to oppose this reform. In fact, the bill on this subject passed by the UPA II government was substantially the same as the one mooted by the NDA. The latter has also expressed its willingness to reconsider few changes in the new bill. But sensing the opportunity to get support from the large farming community, Congress, the DMK and other political parties have been stepping up opposition to the bill.  

    This is the irony of our country. Political parties, cutting across the spectrum, treat key legislations differently depending on which side of the table they sit in Parliament.

 

Over Rs 800,000 crore worth of projects stuck...

A major issue necessitating the bill relates to the humongous delays suffered in the clearance and implementation of hundreds of projects due to determined opposition by numerous pressure groups demanding better compensation and other terms. P Chidambaram as Finance Minister at the end of his term seemed to have realised the gravity of the problem. He expressed serious concern over Rs 700,000 crore of projects getting stuck for clearances of various types. There were differences over this issue among senior Congress ministers. The party was pulled in different directions by Chidambaram, Kamal Nath, and  Veerappa Moily on one side and Jairam Ramesh, Jayanthi Natarajan and a number of ministers from the coalition parties on the other, resulting in stagnation, huge escalation in costs and even the abandonment of several large projects.

Arun Jaitley as NDA II’s Finance Minister, estimated the value of projects getting stuck at over Rs 800,000 crore. Such delays had their bearing on investments, both foreign and domestic. The country witnessed the sad spectacle of large Indian corporates like the Tatas, Reliances, Birlas and Adanis spending handsome amounts on a variety of projects in foreign countries even while our own has been in crying need for such. The slowdown in investments, raging inflation, drop in savings rate, ballooning deficits and the compulsion to borrow more and more for balancing the budget had cumulatively depressed revenues and growth.


Negative/low growth of manufacturing...Like: in the budget for 2015-16, of the total revenue receipts estimated at Rs 11,41,575 crore, debt servicing alone is estimated to cost Rs 681,719 crore; in this interest payments on the humongous public debt of over Rs 40 lakh crore, is estimated at Rs 456,145 crore. The subsidies that accounted for Rs 71,431 crore in 2008-09, shot up to Rs 266,692 crore in 2014-15. There is a compulsion to borrow more: the budget estimates debt receipts for 2015-16 at Rs 463,355 crore.

The negative/low growth of the manufacturing sector in recent years and steep fall in revenue collections are the direct result of lack of investments. This in turn is traceable to the difficulties in the acquisition of land and its cost.

1 2 3 4 5 6
Author :
Reported On :
Sector :
Shoulder :
RELATED NEWS
ABOUT IE
IE, the business magazine from south was launched in 1968 and pioneered business journalism in south. Through the 45 years IE has been focusing on well-presented and well-researched articles. When giants in the industry stumbled to keep pace with the digital revolution, IE stayed affixed embracing technology.
Read more
 
PRIVACY POLICY
Economist Communications Ltd is committed to ensuring that your privacy is protected.
Read more
TERMS AND CONDITIONS
You agree that your use of this Website and the purchase of the magazine will be governed by these terms and conditions.
Read more
 
CONTACT US
S-15, Industrial Estate,
Guindy,
Chennai - 600 032.
PHONE: +91 44 22501236
EMAIL: indecom1968@gmail.com