Rs.80,000 crore package for Jammu and Kashmir

Prime Minister Narendra Modi announced a Rs.80,000 crore package for Jammu & Kashmir, calling it a gift and just a beginning in terms of assistance for the state. “Delhi's treasury is for you and we will provide you more in the future,'' he said at a public meeting at the Sher-e-Kashmir stadium here.
Modi said the package was besides the Rs.35,000 crore granted for connecting Jammu with Srinagar through a railway link.
Modi vowed to carry forward former Prime Minister Atal Bihari Vajpayee's three point vision ­ Kashmiriyat (coexistence), jamhooriyat (democracy) and insaaniyat (humanity) ­ and underlined that India was incomplete without Kashmiriyat.
He skirted any reference to any political process even as CM Mufti Muhammad Sayeed and his ministers had created an impression that Modi would do a Vajpayee and invite separatists and Pakistan for talks. Instead, Modi said he does not need any analysis or advice on Kashmir and praised Kashmiris for showing faith in democracy by participating in parliamentary and state polls. “Now the chief minister wishes to conduct panchayat polls to give more power to people at the grassroots level,“ he said.
Former PM Atal Bihari Vajpayee had famously extended his hand of friendship to Pakistan when he addressed a meeting at the same venue in Srinagar in 2003.
Helicopters hovered over the cricket stadium while authorities suspended internet services as part of the security measures for the event, which was attended by around 40,000 people. PM Narendra Modi vowed to restore Kashmir's glory and said the state should become a must visit destination for tourists like it was in the past. “I love Kashmir and used to come here and stay here for days,'' he said, stressing production of quality saffron, pashmina and cricket bats.
He said he realised the pain and destruction the state had undergone due to last year's floods. “But the people of the state know ways to come out of this destruction and pain and they really came out of it.“
Modi praised the potential of Kashmiri youth and said they were making their mark in IAS, IPS and other services. He mentioned cricketer Parvez Rasool and wished the state produces more such players to bring laurels for the country . “I wish another international cricket match be played here like the one in 1983,“ Modi said.
He reiterated his slogan of `sab ka saath, sab ka vikas' and spoke about his 17 month rule, saying people were not thinking of India competing with China prior to it. “Now we are ahead of China in many areas,'' said Modi at the rally which was held amid tight security arrangements.
Separatists were put under house arrest after they announced a “million march“ near the public meeting venue. Independent legislator Engineer Rashid was detained after he held a protest march carrying black balloons and flags. Elsewhere in the Valley , a complete shutdown was observed to protest Modi's visit.
Earlier, Sayeed invoked Vajpayee and asked Modi to initiate dialogue with Pakistan. “Vajpayee's peace initiative ensured a decade-long thaw in India-Pakistan relations. Bade bhai ko chote bhai se milna hi hoga,“ Mufti said. Sayeed praised Modi's reference to Kashmiriyat and for following Vajpayee's vision on Kashmir.
Former chief minister Omar Abdullah criticised Modi's speech and said he too had repeated the “mistake of weighing the Kashmir issue in rupees and paisa“. Hitting out at the CM for drumbeating ahead of Modi's visit, he said, “People believed that he would address the political dimension of the Kashmir problem by inviting separatists and well as Pakistan for dialogue. There was nothing like that in Modi's speech.''

Somewhere in Maharashtra....

Swacch Cess levied

Mobile bills, eating out in AC restaurants, a visit to a spa, dry cleaning, coaching class fees--everything that attracts service tax is set to get more expensive from November 15 as the government imposes a 0.5% Swachh Bharat cess.
The levy , which was announced in the budget, will be used for meeting specific goals in PM Narendra Modi's ambitious sanitation and cleanliness programme, which includes building toilets across the country. Although finance minister Arun Jaitley had not announced the list of services that would face the latest cess, there were indications that the levy would be imposed on high end services such as five-star dining. But the government has opted for an across-the-board load on consumers. In the last budget, the government had increased the service tax rate from 12% to 14%, which is widely expected to increase once goods and services tax kicks in.
The government levies a slew of cesses and surcharges -ranging from the ones for education and health to those on petrol and diesel and petrol for highway construction -and the latest one will only add to the burden of consumers.These are over and above the taxes that individuals and companies pay in the form of income tax, corporation tax, customs duty on imported goods, central excise, service tax and state levies such as VAT.
While all central taxes are budgeted to fetch the government Rs.14.5 lakh crore in the current fiscal, cesses and surcharges add up to Rs.1.17 lakh crore, which is over 8% of all levies. A cess gives the Centre the freedom to spend the funds raised the way it wants to, instead of sharing 42% of the mop-up with the states as is the case with central taxes. Businesses are also mandated other spending, which the government is unable to undertake due to strained public finances, such as allocating 2% of their profit on corporate social responsibility projects.These are not provided for in the budget.
“Swachh Bharat cess is not another tax but a step towards involving each and every citizen in making contribution to Swachh Bharat... This will translate into a tax of 50 paisa only on every Rs.100 worth of taxable services. The proceeds from this cess will be exclusively used for Swachh Bharat initiatives,“ the official statement said.

India under Modi

Economix

Indians Are World's Most Confident Consumers Now

As China champions a transformation in its economy toward domestic demand, it could do with the type of sentiment burst that its biggest neighbour is now enjoying. Consumers in India -now the fastest-growing big economy -are the world's most confident, according to Nielsen. Surging personal wealth is pushing an unprecedented number of Indians to tour the globe, and companies are offering ever more exclusive attractions such as homes sold “by invitation only.“ Indians are also taking on more credit, helping to bolster spending power as the festival season approaches.
Higher consumption in a retail sector that accounts for about half the economy will help Prime Minister Narendra Modi get companies to invest more and create jobs for a burgeoning population. Spending could rise further following four interest rate cuts and a scheduled pay hike for state employees.
The continuing challenge of a global economic slowdown means it will take time to use up India's manufacturing slack -about 1.5 years until capacity utilisation reaches around 85%, Pant said, from 71.5% now. Price competition means it may take time for consumption gains to be reflected on corporate balance sheets, he added.Richer Indians, Cheaper fuel amid a global commodity slump and sliding inflation has left more cash in the hands of consumers. As average household incomes triple to $18,448 over the decade through 2020, India's retail sales will double from current levels to $1 trillion, the Boston Consulting Group estimated in a February report.
India's benchmark equity index rallied 27 percent in dollar terms last year following the election of the most stable government since 1984. That was one of the top five performances among more than 90 indexes tracked by Bloomberg. Rupee bonds have earned investors 11.4 percent over the past 12 months, the highest in Asia.
The number of rich Indians rose a world beating 26% in 2014, according to a report from Cap Gemini and RBC Wealth Management. They also borrow a lot -second only compared with their peers in the Netherlands -and among their baubles are homes in gated communities they can buy only if invited to.

Uday

The Cabinet has cleared an ambitious $7 billion debt-recast and reform package to revive loss-making state utilities, which have choked the power sector by imposing blackouts on customers and refusing to buy surplus electricity from power stations because of mismanagement, power theft and heavy losses.
States have been given strong incentives such as cheaper power and more coal if they adopt the scheme and take over 75% of the debt of ailing distribution companies (discoms), half of it in the current fiscal year and 25% next year. In these two years, the debt will not be added in calculating their fiscal deficit, the government said.States will issue bonds in the market or to the lenders, while the debt that is not taken over by the state will be converted into loans or bonds with interest rate not more than bank's base rate plus 0.1%, it said.
Analysts and private power producers said revival of discoms depended on regular tariff revision by regulators, but Power, Coal and Renewable Energy Minister Piyush Goyal rubbished this view and said consumers should not be asked to pay for inefficiency. “I congratulate the Indian (electricity) regulators that they have not allowed the distribution companies to burden the consumers with inefficiencies. I would like to clarify that the regulators have always been wrongly blamed ... The regulators have done the right job by not letting the distribution companies pass on high AT&C (transmission and commercial) losses and high interest rates to the consumers,“ he said.
The success of the discoms' package, called Ujwal Discom Assurance Yojna (Uday), is critical for India's ambitious clean energy programme to combat cli mate change, revival of stranded thermal projects, the health of banks that have lent Rs.4.3 lakh crore to discoms and Prime Minister Narendra Modi's vision to supply affordable 24x7 power to all. The package follows Goyal's initiatives to significantly increase coal output, provide fuel to stranded plants and increase the use of energy-efficient lights ­ measure that would fall flat if discoms are not revived.
“The weakest link in the value chain is distribution ... Financially stressed discoms are not able to supply adequate power at affordable rates, which hampers quality of life and overall economic growth and development. Efforts towards 100% village electrification, 24X7 power supply and clean energy cannot be achieved without performing discoms. Power outages also adversely affect national priorities like `Make in India' and `Digital India',“ a government statement said.
To encourage states to take the road to reforms, the Centre will give them additional funding on a priority basis through schemes such as the Deen Dayal Upadhyaya Gram Jyoti Yojna and Integrated Power Sector Development Fund.They will also get additional coal at notified prices and if possible cheaper power from state firms.