India’s annual economic growth revised up to 6.4%

India’s Central Statistical Organisation has revised the country’s economic growth figure for the year ending March 31, 2000 to 6.4 percent from 5.9 percent a government statement said recently.

Gross domestic product (GDP) in fiscal 1999-2000 “is now estimated at 11.51 trillion rupees (264 billion dollars) as against 11.45 trillion rupees estimated earlier, showing a growth rate of 6.4 percent against the growth rate of 5.9 percent earlier,” the statement said.

The growth rate had been calculated over a GDP figure for 1998-99 of 10.81 trillion rupees.

The statement attributed the higher GDP growth rate of 6.4 percent to an over five percent growth in critical sectors such as manufacturing, electricity, construction, trade and hotels.

Finance Minister Yaswant Sinha has targeted an economic growth rate of between seven and eight percent for 2000/2001.

Non-transparency hits funds flow in power sector : CII

Despite the huge potential, domestic and foreign investments in the power sector has failed to pick up due to lack of a clear and transparent policy.

As per CII, policy guidelines for a project should be frozen from the date of awarding of the project and it is necessary that the policy amendments should only be applicable for prospective and not retrosprective projects.

Citing the recent Crisil escrow capacity audit of all states, CII has pointed out that total cumulative escrowable capacity of all the states estimated at 7500 mw projected a very grim picture.

CII has suggested that there should be concerted efforts to explore ways to augment the total escrow capacity. Alternative viable security packages should also be evolved in agreement with the various lending institutions.

“Mechanisms for lending, should be developed for projects that are not given escrow cover. The FIs’ role could be extended to give deferred payment guarantee (DPG) to such IPP projects. Also alternatives should be announced regarding augmentation of state escrow cover”, says CII release.

Other measures, according to CII, which need to be undertaken includes corporation and splitting of SEBs besides privatisation of unbundled corporate bodies, which can be considered at a later stage.

Moreover, there should be sustained commitment on the part of state governments/SEBs towards the reforms/restructuring exercise. Setting up SERCs should be done at the earliest to evolve transparent tariff frameworks for their respective states.

All consumers should be metered and subsidies, if any, should be allocated by the state governments to the SEBs. Levy user charges as far as possible.

CII also recommended the extension of benefits which were proposed for mega power projects under the revised mega power policy guidelines to other IPP projects.

Tax holiday benefits under section 80IA of the Income Tax Act, 1961 should be extended to transmission and/or distribution undertakings who take over networks from state electricity boards or other government entities and invest in their modernisation.

These undertakings should be included in the exemption provisions under section 10(23G) of the I-T Act. All generation projects should be developed only on the basis of the national fuel map of Central Electricity Authority (CEA).

The contractual agreements on power purchase and fuel supply should provide for proper risk sharing by the contracting parties and also provide for buyer and supplier performance guarantee.

Long-term funding should be made available through tapping the funding potential of insurance companies, provident and pension funds. Promote the concept of energy efficiency through early enactment of the energy conservation Bill 2000.

Bangladesh approves budget

The Bangladesh parliament recently approved the national budget for the fiscal year to June 2001, adopting a series of amendments aimed at boosting industrial investment, officials said.

The approval came when an appropriation bill piloted by Finance Minister Shah Kibria was adopted after nearly a month long debate on the 186.61 billion taka (3.59 billion US dollars) deficit budget, they said.

The amendments, aimed at attracting industrial investment, included an extension of the tax holiday facility up to 2005 for new industries and major reductions in import duties on industrial raw materials in the steel, aluminum and plastic sectors.

Pak traders protest against new tax drive

Pakistani riot police recently fired tear gas and for the second day fought running battles with crowds protesting against the military government’s new tax drive, police and witnesses said.

Shops and markets in this northern Pakistani city near the capital Islamabad were closed again as hundreds of protesters blocked roads with burning tyres and hurled rocks at police, witnesses said.

Police repeatedly charged the slogan chanting crowds with batons they said.

“A hid and seek game is continuing between police and protesters” as groups of demonstrators emerged from congested streets to attack police with stones, a police officer told AFP. Dozens of people were arrested.

Tension between the government and traders has been simmering since late May when military ruler General Pervez Musharraf launched a nationwide survey to document the black economy and rope in millions of tax evaders.