carrying on with rights violations in the name of development

Below is yet another shameful incident in India's fanaticism with doing developmental works based on completely wrong notions of development:





From: napmindia
Date: 27 April 2013 11:38
Subject: Action Alert: Repression in Narmada Canal Villages - Act Fast
To:

Date: 27^th April, 2013

A Public Servant Tells this to People in a Democracy.

Let Him Know What You Think About It. CALL, SMS Mob: 09425790303

“I have not come here for any dialogue with any of you (villagers) or the activists. Canal construction must be completed by 15th June, at any cost. The work will go on with police force, arresting your family, women and children as well if canal work is questioned.If any of you have problems, come to meet me at 10 p.m. or 2 p.m. in the mid-night at the police station. Contractors need not be worried about anything. Take my number, SDM’s number directly, if canal work is questioned. I am the law” Mr. Shriman Sahukla, Collector, District Badwani

Friends,

The events at Village Nandra, last month, must be fresh in your mind, where the farmers valiantly questioning the Omkareshwar canal work in violation of all environmental norms and rehabilitation

were arrested, false case foisted and forcible excavation undertaken, by destroying standing crop. Your support is once again urgently needed, this time by the adivasis and farmers from other villages including Mandil, Mundla, Khadkal (Rajpur Tehsil, Badwani Dist) and Malangaon, Karoli, Chhota Barda etc. (Tehsil Manavar, Dist. Dhar), who are facing the repression of the BJP-led Madhya Pradesh Govt, which is pushing ahead the canal work in violation of all norms on agricultural safeguards, environmental compliance and rehabilitation.

The Collector, Badwani with the BJP leaders and local MLA went to some of the adivasi villages Mandil, Mundla, in the Rajpur Tehsil yesterday (villages which MoEF Expert Committee had visited last year and issued recommendations), purportedly for inspection, but virtually had no meaningful dialogue with the poor adivasi-farmers and instead resorted to most vulgar abuse of the adivasis and unjustifiable threats given to the people and activists.

“I have not come here for any dialogue with any of you (villagers) or the activists. Canal construction must be completed by 15th June, at any cost. The work will go on with police force, arresting your family, women and children as well if canal work is questioned.If any of you have problems, come to meet me at 10 p.m. or 2 p.m. in the mid-night at the police station. Contractors need not be worried about anything. Take my number, SDM’s number directly, if canal work is questioned. I am the law” Mr. Shriman Sahukla, Collector, District Badwani

The Collector was in no mood to listen to any of the issues raised by the people and was only harping on canal construction at any cost. The issue is not just of canals, but the absolutely arrogant and repressive attitude of the Collector and the ‘people’s representatives, which is being questioned by the adivasis and farmers in the notified scheduled area.

The Collector in the presence of BJP leaders, contractors, enginners and NVDA officials virtually threatened the adivasis-farmers that no questioning of any sort with be tolerated. All this happened when the people were trying to tell them that while the canal has been dug many years ago, rest of the lands are also affected either by huge rubble deposited on un-acquired potions of land, severe water logging, 60% land oustees not provided alternative cultivable land etc. None of these issues were seriously heard or considered by the Collector and the politicians, including the local MLA,Mr. Devisingh Patel, who threatened the adivasis and insulted them, abusing them and the activist with most vulgar words, calling us ‘foreign agents! This situation of repression is similar in Malangaon, Karoli, Nandra and other villages and people are having to question this with the Expert Committee’s report in their hands.

This approach is despite the fact that even the most recent MoEF Expert Committee’s 2^nd Field Visit Report has concluded huge gaps in Narmada canal planning and work. The Expert Committee after visit to the villages in January, 2012 and February 2013 recommended that farmers who have faced impacts of muck disposal or destruction of un-acquired land must be compensated, 60% land oustees not provided alternative cultivable land, on-farm safeguard measures must be completed before canal work, canals should not be pushed in irrigated villages at a distance of 3 kms from Narmada etc. The Collctor and politicians did not care to listen to any of these.

The Expert Committee’s recommendation that the administration and NVDA must have dialogue with NBA and the farmers is being compleley flouted and the Collector himself has taken an extremely arrogant position that ‘no dialogue with NBA and the farmers’ will be tolerated. In this situation of complete repression and arrogance of the ruling party and the district / state administration, we request you to intervene most imemdiately since the excavation in complete disregard of all law and environmetal sagfegaurds may start anytime from today morning at Mandil and other villages.

DEMAND:

• Immediate implementation of all the recommendations of the MoEF Expert Monitoring Committee and execution of command area and farm safeguard measures before any canal construction and mitigation of health impacts.
• Annual compensation for muck disposal on un-acquired land, destruction of standing crop due to water logging and alternative land based rehabilitation to farmers losing more than 60% land
• Demand review of canals in irrigated villages and detailed consultation with farmers

who owns nse (national stock exchange)?

Here is a story I did, three months back, in the newspaper I work for, on the shareholders of NSE (National Stock Exchange of India):


Corporate shareholders of NSE tinker with their holdings

The largest stock exchange in the country in terms of value of trades, National Stock Exchange of India (NSE), was witness to three significant and interesting changes in its own shareholding in the one year period up to September 27. NSE has a paid-up equity capital of Rs 45 crore.

A Financial Chronicle Research Bureau analysis of NSE's shareholding from its statutory filings with the registrar of companies revealed that Wipro's chairman and managing director Azim H Premji transferred his entire personal 3 per cent stake in NSE to his private investment vehicle PremjiInvest's PI Opportunities Fund 1. This took place in December last year. PI Opportunities is the 12th-14th largest shareholder in NSE along with Morgan Stanley's MS Strategic (Mauritius) and hedge fund Tiger Global Five Holdings, each holding 3 per cent stake in the exchange.

The other major change took place in the form of Bajaj Holdings & Investments acquiring a 1.25 per cent stake in NSE with the selling shareholders being Fidelity India Mutual Fund's schemes, which parted with their entire collective 1.08 per cent stake in July this year, and Hero Motocorp which offloaded its entire 0.17 per cent stake in June this year. The price at which these stakes changed hands is not known.

In the 1-year period, the third largest shareholder in NSE, Infrastructure Development Finance Company (IDFC), pared its holding by 1.32 percentage points from 7.88 per cent to 6.56 per cent. IDFC, however, continued to be the third largest shareholder in NSE after Life Insurance Corporation of India and State Bank of India which held 10.51 per cent and 10.19 per cent stakes respectively.

The buyers of this 1.32 per cent stake were five of US-based foreign institutional investor (FII) Wellington Management Company's sub-accounts, Bay Pond, Wolf Creek, Kirykos, Ithan Creek and Quissett. These stake buy-outs took place in November last year but the price they paid IDFC for it is not known.

In the year before, between September 2010 and September 2011, Wellington's various sub-accounts had collectively acquired 0.93 per cent stake from Financial Technologies (India). Those purchases took place at a price of Rs 3,800 per share for a value of about Rs 160 crore. With the latest November acquisition of 1.32 per cent, Wellington's various sub-accounts now hold 2.25 per cent in the country's largest stock exchange.

There were no other stake changes during the 1-year period upto September this year. In all, there were 64 shareholder entities and funds holding shares in NSE.

Interestingly, some large shareholders in NSE also held relatively large stakes in its rival, Bombay Stock Exchange. The most prominent examples are that of LIC and SBI, which were the third and fourth largest shareholders in BSE as of August this year with a 4.84 per cent stake each.

(part 6) abuse of women/girls -- india's shame

{Parts 1 to 5 of this post series were posted in December last year (2012) and January this year (2013) -- part 1, part 2, part 3, part 4 and part 5}


Another case, an old case where a girl was sexually abused and raped in Kerala by several men in a period spanning several days, numbs the senses. In this case, a Congress party's very senior politician, PJ Kurien, is also alleged (by the girl) to be one of the crime-committers and a BJP party's senior politician, Arun Jaitley, was his lawyer when the matter reached the Supreme Court.

Here is an insightful analysis of the case I came across in a weekly newsmagzine:


http://www.openthemagazine.com/article/nation/17-years-of-solitude

23 February 2013

17 Years of Solitude

The psychological abyss that the Suryanelli rape victim and her family have been living in because she dared name PJ Kurien 

 

Shahina KK  

 

For the person known as the Suryanelli girl, this is the seventeenth year after she was kidnapped and gangraped by 42 men over a period of a month. Her family spends all its time praying—they are devout Christians. They have God, about the only thing they have, but she does not go to church. She does not go to the cinema. She does not participate in festivals. She does not go shopping. She does not go for marriage ceremonies. She does not even go to funerals. She gets on a bus in the morning every day, goes to the office and comes back home in the evening. She has 13 colleagues in office, some of them relatives of the accused in her case. The atmosphere is not friendly. “They openly show their hatred of me,” she says. On her way to office by bus, co-passengers stare at her and whisper to each other. “People sometimes call up others and show them ‘the rape story girl’,” she says.

+++

On 16 January 1996, she was reported missing from her remote village of Suryanelli in Idukki district. After 40 days, she turned up at the post office where her father worked. She later told her mother of her horrific experience. She had had an affair with a bus conductor, who used her photographs to blackmail her into going on a trip with him. She took the bus with him. He disappeared on the way, a part of the plan. She was then befriended and kidnapped by a woman, turned over to a man called SS Dharmarajan, who raped her and then took her all over Kerala. As many as 42 men raped her at different times. She was then sent back, 16 years old at the time.
When she reached home, there were wounds on her body and genitals. She couldn’t even walk properly. Two weeks later, she saw a newspaper photograph of PJ Kurien—then a Union minister and now deputy chairman of the Rajya Sabha— and recognised him as one of her rapists. She alleged that he had raped her at a government guest house in Idukki. The family’s complaint to the police that Kurien was one of the rapists gave the case a momentum beyond their comprehension, and set them on a road of horrors worse than those they had already known.
It was the year of both Assembly and Lok Sabha elections in Kerala. During the campaign, the CPM had made the rape an election issue to target the Congress and Kurien. Suddenly, newspapers like Malayalam Manorama that are close to the Congress changed their tone about the girl. Until then, they had been sympathetic to her. Now they started alluding and sometimes even directly referring to her ‘immoral track record’. She was accused of eloping with her boyfriend, though that was not the case. The family came under immense pressure to withdraw the charges. The police told them it would ruin the girl’s future and the family’s reputation. They were spurned by relatives, isolated by their social circle, but they refused to drop the case.
Kerala’s first ever special court to try a case of sexual assault was formed, and the trial began in 1999. The chargesheet accused 41 people of conspiracy, abduction and gangrape of a minor girl. PJ Kurien was not among them; the investigating team exonerated him, citing his alibis. In 2000, the court convicted 35 and sentenced them to terms ranging from four years to life. Four were let off; two, including the main accused Dharmarajan, were absconding. In January 2005, the High Court of Kerala acquitted all the 35 accused on appeal. Dharmarajan, who had been caught by the time, was sentenced to five years’ imprisonment, but not for rape. It was for dragging the girl into the ‘sex trade’. The High Court found that she had crossed 16 (she was 16 years and three months old when she was abducted), the age of consent for sex, and ruled that the prosecution had failed to prove the absence of consent.
Meanwhile, the girl had filed a petition in the Peerumedu magistrate court against Kurien being absolved by the investigating agency. The court found there was prima facie evidence against Kurien and asked him to face trial. He filed an appeal in the High Court. The litigation went on till 2007, when he was let off on grounds that all the 35 accused in the case had been acquitted. The Supreme Court approved the High Court’s judgment and dismissed the appeal filed by the girl. Kurien had the best of lawyers—Arun Jaitley, the BJP leader of Opposition in the Rajya Sabha, represented him in the Supreme Court.

+++

Eight long years have passed since the High Court acquitted the 35 accused. On 31 January 2013, the Supreme Court, expressing shock over the High Court judgment letting off the accused, ordered a retrial with a judgment to be made in six months. The case, which had been dormant, became a national issue following the girl’s fresh plea to the Supreme Court to also book Kurien in the case. Kurien’s alibis of 1996 have begun to unravel one by one. Recently a Malayalam news channel interviewed Dharmarajan, who is again absconding, and he told them he had led Kurien to the guest house.

+++

I first met the girl in 1999. When I met her last week, I was appalled to see that little had changed in her life. Rape victims do often make the journey from victim to survivor, but not this one.
Initially, the family had been staying in Suryanelli at quarters allotted to her mother, who was a nurse in a tea estate hospital. “When we were staying there, we had tremendous support from the estate labourers .We were safe. After her retirement, we shifted to our own house at Suryanelli. It was an isolated place. There were very few houses around. Domestic tourists would stop in front of our house to have a glimpse of the ‘Suryanelli girl’. People even used to come inside the house, unmindful of our shame and agony. For them, it was part of their picnic,” says her father, a retired government employee, now over 75.
After the High Court verdict, the family went away from Suryanelli. In 2006, they bought a house at Chingavanam in Kottayam. They chose this place because it was isolated. “When we came here, there were only one or two houses around. It was good for us, since we did not have to face anybody,” says the girl’s mother. But the shift did not help them rebuild their lives.
They stayed disconnected from everything and everyone even as new houses sprung up in their neighbourhood and people moved in over the span of a decade. They were anyway spurned by relatives, who were against their persisting with the legal battle. In 2000, the girl was given a job by the LDF government—a bottom grade employee in the sales tax department. What seemed like a lifeline then eventually became a trap. In February 2012, she was arrested for forgery and corruption over a two-year-old case. The police version is that she had failed to remit Rs 2.26 lakh and the corresponding ledger was found missing. Anila George, a lawyer who has been helping the girl all along, says it was a clear frame-up. “This case was actually closed in 2010. That office was notorious for corruption. She had remitted the money and entered it in the book, but curiously the book went missing. She was told there was no proof she had actually remitted the money. Her colleagues advised her to raise that amount and remit it as early as possible. Her family mortgaged the gold they had and did so. There was a departmental enquiry and three employees, including the girl, were given punishment transfers. Everybody was under the impression that the file had been closed after her transfer. Nobody, [not even] the girl and her family, had any clue that a secret enquiry was still on against her.”
The arrest was unexpected. She was waiting for the bus to go to office when the police came and picked her up. She was remanded, sent to jail and got bail only after a week. There were two more people involved in the same graft case, but only she was put in jail. Suja Soosan George, an office bearer of a CPM-backed cultural organisation, says, “It has to be noted that this case resurfaced when her appeal was listed in the Supreme Court.” She feels that it was a deliberate move to convey a message to the Supreme Court that this girl cannot be trusted. Character assassination all over again.”
There has been no local support for the family and their self-imposed exile is partly responsible for this. “I came to know that the Suryanelli girl is living in this locality only a couple of years ago,” says a local leader of AIDWA (All India Democratic Women’s Association). Local collectives like Kudumbasree are also not aware of her presence. Anita Sabu, a former panchayat member in the locality, agrees that there has been hardly any intervention to generate support for the family. “The people have an aversion to them. They all keep their distance,” she says. When the girl was languishing in jail last year, there was hardly any support from the employees’ union she was part of. “They turned their back on her. It was SUCI (Socialist Unity Centre of India) that helped the girl get bail,” says Anila George.
The 31 January Supreme Court verdict bears hope for the family. “I hope my daughter gets justice before I die,” says her father. Recently, television channel India Vision did a sting on Justice R Ba- santh who had delivered the High Court judgment letting off the 35 accused. He now practises in the Supreme Court. The sting caught him on camera saying, “She was a child prostitute. It was not rape. She used to misuse the money given by her father to remit the school fees. She was a child with a bad track record.”
He also said the Supreme Court judges had not read his judgment carefully, which could invite contempt-of-court action against him. But a careful reading of his judgment can only lead to the conclusion the Supreme Court reached. Because Justice Basanth’s judgment even links the girl’s childhood habit of wetting her bed to the rape. Her sister used to wash her clothes after she wet her bed. The judgment noted, ‘It shows that she had the tendency to make others responsible for all she does.’
While acquitting the rapists, the judges totally ignored the medical report, in itself telling evidence of the rapes and torture she had endured. The medical report is elaborately quoted in the judgment. Yet, the conclusion reached was that there was no evidence of resistance.
Paragraph #94 of the judgment says: ‘Vaginal examination was painful, vulva was oedematous. There was infection. There was purulent foul smelling discharge. PW73 (The doctor who examined her) says intra-uterine contraceptive device can also cause infection. In chief examination, he says that “she would have suffered severe pain during the sexual act if it had continued as stated by her during the period of infection”. In further cross, he says that, he examined vaginal wall and that he did not find it lacerated. He also agreed that during violent intercourse “laceration in vaginal wall occurs posterior”. In further cross-examination by the accused, he answered specific questions as follows:
“On the condition you had seen when PW3 (the girl) was examined by you, I put it to you that it is not possible to have sexual intercourse with PW3 (Question) It is possible provided force and intimidation is used (Answer).
If force is used, she would cry loudly (Question) Yes (Answer)”.
PW3 has no case that she had even wept while during the alleged rapes continuously, much less any loud cry. Even on the night of 24/2/96, there was, allegedly, rape on her. In spite of that no resistance mark was found on her body. According to PW73, the Doctor “there were no signs of evidence of resistance”. According to him, sign of resistance is the most common feature in a case of rape and as she was subjected to violent sexual intercourse “there can be signs of resistance”.
Thus, the medical evidence in this case also does not offer any specific and satisfactory probative corroboration to the testimony of PW3.’
This seems to be the convoluted logic—because her vagina was so badly infected, she would have to be in considerable pain during any sexual act, and she would weep from the pain. Because she didn’t weep and there were no signs of resistance, the sex must have been consensual.
Contrast this with the observation of advocate K Bhadrakumari, a practising lawyer in the Kerala High Court, who met the girl on the fourth day after her return: “There was swelling and inflammation all over her body. Her mother told me that pus and blood was flowing out of her vagina even after four days of her return. She was neither crying nor talking. She turned up frozen.”

indian government's obsession with curbing physical gold investments

India's finance minister, Chidambaram, in today's budget, reiterated his dismay at the widening current account deficit. Imports of gold, along with crude petroleum imports and coal imports, were touted to be the drivers of a ballooning import bill of the country.

My blog post of January 3, this year (2013), dwelled on the adverse effects of subsidising gold purchases. The link to that post is here -->    
http://natant.blogspot.in/2013/01/life-in-financial-markets-adverse.html

Early this month (February 2013) I contributed another editorial, in the newspaper I presently work for, on the issue of gold imports. This time, I wrote about RBI's effort to curb investments in physical gold. I believe it should be the government of India which should raise the import duty (customs tax) on gold and related products further (it is at an absurdly low rate even currently notwithstanding a recent marginal hike) and bring it at par with the average customs duty imposed on all non-gold imports. Additionally, it is not investments in gold which is a problem but the Indian culture of buying gold during marriages which is a problem. Much of that buying is through black money. The finance minister should get his Income Tax department to do far more than they are doing to tax those gold purchases.

Here is what I wrote in the editorial:


Who is more obsessed with gold?

RBI is desperate to curb gold imports so that rupee fall can be stemmed. But ad-hoc measures do not help in long term.

One only hopes that the central bank of our country is not feeling nostalgia over an old legislation called Gold Control Act, 1968, which was repealed in 1990. If RBI is indeed feeling so, it is for the wrong reasons and as a knee-jerk reaction to sustained weakening of the country's currency against the US dollar. With the alarming rise in the gap between exports and imports caused in part by rising imports of gold, and its consequent weakening impact on the Indian rupee. 

Alarm bells at RBI and other quarters have been ringing for the past several months. Now, a RBI working group has come out with its comprehensive report on issues related to gold imports and gold loans NBFCs (non-banking financial companies) in India. As expected, all its major recommendations have one objective -- prevent or deter further imports of gold into the country. But this single-point obsession of RBI has now begun to jar. Of course, reduced gold imports will curtail the existing high level of current account deficit, but RBI's most primary concern is that of stemming any further fall in the rupee. 

So, the question which needs to be asked whether, if global events change dramatically in the near future or medium term leading to an intense strengthening of the rupee, the various gold import-stemming products and ideas being hard sold now will be reversible. One, therefore, hopes RBI is not missing the wood for the trees. To the extent gold imports are aided on account of very low custom duty rate, even after it was recently hiked a little, there is a strong case to raise it the levels other imported goods face. 

Coming to the RBI working group's report, it began by stating that the basis of its central message was Indians’ obsession for large investment in physical gold. This could be half-truth because the obsession to acquire gold is there but it is not so much for investment purpose as for owning it in the form of jewellery for cultural reasons such as giving it in dowry during marriages and passing it down to future generations. It is also a form of holding black money. To the extent such acquisition is based on illegitimate or illegal grounds the objective is better served by a far better enforcement of the laws, including the taxation law, to deter future violators and bring to account existing ones. 

Going after investors in gold alone is not a smart thing to do. Investors, here and worldwide, include many who are vulnerable to wrong understanding of price movements. The price of gold has appreciated rapidly in the past few years and many investors tend to believe that this trend will go on forever, like they tend to do when equity markets are in the grips of bulls, and so they pump in more investments into it. Asset classes see cycles of bull and bear phases and gold is no exception. Even if gold is seen to be immune, at times, it is mainly on account of heavy instability in world economies and gold is seen to be a safe asset to hold. 

Why should RBI or anyone deny that freedom to an investor to hold what he perceives to be a safe asset regardless of whether his perception is sound or not? To be sure, some of the measures proposed by the RBI panel are progressive, regardless of RBI's motive. For instance, the proposal to allow banks to buy back gold coins is a step in the right direction. On a stand-alone basis, whatever progressive measures need to be taken with regard to gold-based acquisition, holding and financing should be taken and those specific recommendations of the panel should be adopted. 

But RBI needs to learn some lessons from the past. When the equity market was highly pumped up in 2007-08 thanks primarily to massive FII net inflows, the rupee had strengthened to such a level that RBI had pressurised Sebi to restrict the FII flows by banning participatory notes. At that time, exporters were getting hurt due to a strong rupee. The P-note ban was reversed later on. 

But can some of the not-so-progressive and desperate measures being mooted now to curb gold imports and stem net outflow of rupee be that easily reversible when the tide turns later? Ad-hocism by any financial regulator is never wise. 

understanding india's budget & its ingredients

During India's annual budgets of 2011 and 2012 I contributed for the newspaper I presently work for a primer on the country's budget and its various statements. Here is what I wrote in the primer last year (March, 2012):


Decoding India's budget

Here's a helping hand to make you understand the most important economic policy tool of the government in which we have a big stake

The elected governments at the Centre and the states run our country through the framing of laws and policies and their implementation. Money is inevitably required to do all this. The Union budget is, therefore, an annual exercise in financial planning and financial accounting by the central government (state governments have their own annual budgets). It is the government's most important economic policy tool.

Budget directly or indirectly affects the life of every citizen, including you and me. There is a lot at stake in the budget and to know how the country is being run is highly important on its own right. The budget is also important because as a taxpayer you are paying for services that the government  provides.

Budget matters to you if you are a bank depositor because your bank is investing at least 24 per cent of your deposits in government securities whose proceeds are used to run the government. Or you could be an investor in a debt scheme of a mutual fund which also invests a portion of its corpus directly in government securities or indirectly through investment in bank deposits. You get returns from these investments and you would like to see it maximised in a safe manner, not unlike to what you would as an investor when you invest in the shares of a listed company or the units of an equity fund.

As a consumer too you have a stake in the budget. The tax you pay on income, the service tax you pay on your lunch or dinner at a restaurant, the excise duty that is built into the retail price of consumer goods you buy, all these are parts of the most sought-after item by the government – revenue receipts.

It becomes imperative for you to know where this revenue is going and how it is being spent; and for that you have to look at the expenditure statements of the government.

To get a proper hang of revenue and expenditure as well as the government's strategy to manage them, or fiscal policy, you have to sift through budget documents. The budget follows a format similar to the one companies use in financial statements. They are segregated based on the provisions mandated by the Constitution. Budget documents of the past 15 financial years (FYs), from FY 1996-97 onwards, can be downloaded from the government's union budget website (http://indiabudget.nic.in).

An annual budget comprises different statements (see accompanying box). The government provides some help to understand them via explanatory notes and summary statements. Use the 'Budget at a Glance' document to quickly know the main items that use much of the government's expenditure and revenue. For instance, you can get a neat break-up of receipts into revenue and capital receipts and further into revenue from taxes and other categories.

If you want to dig deeper, the annual financial statement is a good place to start. It will tell you the names of funds that are used to collect and disburse money. The expenditure budget is another area of importance, which usually comes in two volumes. It not only gives you the latest year's details but also the trend over the past few years. For instance, it will tell you that a fairly large portion of government receipts is spent on defence forces and subsidies.

A subsidy is the money that is paid by the government to companies to reduce the cost of services or of producing goods so that their prices can be kept low. Fertiliser is highly subsidised in India. You can get a clear picture of various subsidies and their total by going through an annexure 'Details of subsidies included' in volume one of the expenditure budget.

Taxes are covered in an elaborate and separate document, the finance bill. To help understand it better, there is a separate document called 'Memorandum explaining the provisions in the finance bill'. A significant aspect of taxation that is important to everyone is the differential rates in indirect taxes such as excise and customs. Concessions are given in excise and customs to many industries and items, lowering the receipts of the government, which can be found in detail in the 'Revenue foregone statement'.

Government expenditure happens through ministries. As per the procedure specified in the Constitution, each ministry has to give a 'demand for grants', which is its expenditure estimate. In the end, it is important to note that all demand for grants, the finance bill and other budgetary statements have to be passed by the Lok Sabha. 

KEY BUDGET STATEMENTS & DOCUMENTS

 

Annual financial statement

Emanating from Article 112 of the Constitution of India , the AFS is nothing but the profit and loss account of three different Funds controlled by the government of India -- Consolidated Fund of India, Contingency Fund of India and Public Account of India. Interestingly, the receipts and expenditure are given separately for capital account, and revenue account, items.

Consolidated fund of India.

Article 266 of our Constitution describes it most articulately, "... with respect to the assignment of the whole or part of the net proceeds of certain taxes and duties to States, all revenues received by the Government of India, all loans raised by that Government by the issue of treasury bills, loans or ways and means advances and all moneys received by that Government in repayment of loans shall form one consolidated fund."

Contingency fund

An imprest placed at the disposal of the president to meet urgent un-foreseen expenditure pending authorisation from Parliament. The current corpus is Rs 500 crore.

Public account of India.

It is the expenditure and receipts statement of the corpus that the central government manages on behalf of the people akin to a fund manager of a mutual fund. Majority of the corpus comes from the small savings schemes launched by the government and the state provident funds.

Demand for grants.

It is an accounting of the utilisation and estimated requirement of the funds taken out of the Consolidated Fund of India by every ministry of the central government and is subject to approval of Lok Sabha.

Finance bill.

The term is misleading. Only taxation part is covered in the Finance Bill. It is one of the definitions of a Money Bill under Constitution's Article 110 (1) dealing with "imposition, abolition, remission, alteration or regulation of any tax". It covers direct taxes such as corporation tax and income tax and indirect taxes such as excise duties and customs duties.

Deficit.

There are three kinds of deficits -- revenue, fiscal and primary -- of which the first two are critical. Revenue deficit is the excess of revenue expenditure over revenue receipts. Fiscal deficit is the excess of total expenditure (revenue plus capital) over total receipts minus the capital receipt in the form of borrowings.

Revenue receipts and expenditure.

Revenue receipts are primary tax revenues coming from income tax, corporation tax, securities transaction tax, customs duties, union excise duties, service tax, etc. There is also a little bit of revenues coming from dividends from public sector companies and other areas such as interest received and grants. Examples of revenue expenditure are money spent on the running of the central government and its various ministries, money spent on operating and maintaining the vast military of the country, interest paid on government's borrowings from the RBI and others and money spent on other services provided by the government.

Capital receipts and expenditure.

Capital receipts are predominantly the loans taken by the central government from the market through the issue of government securities via the RBI. Capital expenditure includes the expenditure on all services which includes, among others, the cost of acquiring assets and cost of laying out new, or upgrading existing, infrastructure such as rail and road networks. Purchase of equipment for the Indian military is the largest capital expenditure.

Macroeconomic framework statement

Started from Budget 2005-06, this statement provides a nice glance at the economic performance of the country. In one place, you get to see the absolute value figures of GDP, money supply, imports, exports and foreign exchange reserves, as well as the average index figure (during April to December of the current financial year) of index of industrial production, wholesale price index and consumer price index. It also provides a summary financial picture of the government's finances that is otherwise also given in annual financial statement.

Revenue foregone statement.

It was first introduced in Budget 2006-07 as an annexure in the receipts budget. From the following year, it was given as a separate document. It brings into light the impact of reduced tax rates, exemptions, deductions, rebates, deferrals and credits that affect the receipts from tax.

Fiscal policy strategy statement.

Available from 2005-06 buget, it, according to government's own words, "outlines the strategic priorities of the Government in the fiscal area for the ensuing financial year" and "gives the rationale for any major deviation in key fiscal measures."

government of india's economic survey for 2012-13

Even as the India's finance minister presents the country's annual budget today, the Economic Survey for 2012-13 was released by the finance ministry yesterday (Wednesday, February 27, 2013).

I contributed an editorial yesterday for the newspaper I presently work for dwelling on the Economic Survey for 2012-13. Here is what I wrote in it:
 

Exuberant in troubled times

The government is being daft in its excessively optimistic growth projections for next year

  

This is a time when seasoned economists and analysts are convinced the various economy-related figures of the past one year point towards a floundering economy. So, if the current government gets very optimistic, and overtly at that too, about the immediate prospects of the domestic economy, as its Economic Survey for 2012-13 clearly seems to suggest, then it would have most likely broken into a exuberant jig had the economic growth indicator of gross domestic product for the current financial year been growing at a rate just a little more than the previous year's 6.2 per cent. 

But the fact remains that the government's advance estimate points to only a 5.0 per cent growth in GDP at factor cost 2004-05 prices. The hearty optimism of the government is seen in its GDP growth estimate of 6.1-6.7 per cent for the next financial year of 2013-14. Such a bounce back is not impossible but given the recent past track record of wide gaps between advance estimates and future actuals it can not be taken be casually accepted. 

One just has to look to last year's Economic Survey of 2011-12, where the government's advance estimate for GDP growth in 2011-12 was 6.9 per cent and estimated growth for 2012-13 was given as being between 7.35 per cent and 7.85 per cent. The first revised estimate for 2011-12 growth rate has turned out to be lower at 6.2 per cent and the new advance estimate of 5.0 per cent growth for 2012-13 is 2.35-2.85 percentage points below the earlier estimate. 

What makes it worse is that the Economic Survey for 2012-13 presented no real evidence for making its 2013-14 projection of 6.1-6.7 per cent growth rate except for stating assumptions such as normal monsoon, futher moderation in inflation and mild recovery of global economic growth.

The consequences flowing out of the post-2008 crisis period have tended to vex even the most experienced in the economists fraternity and cause them to make circulatory arguments. It is, therefore, not surprising to read, in the government's Economic Survey for 2012-13, that the fiscal stimulus given in the immediate aftermath of the 2008 financial crisis is a key factor behind the current economic slowdown. It says this boosted consumption so much that it led to strong inflation even as it also pumped up the GDP growth rates to 8.6 per cent and 9.3 per cent in 2009-10 and 2010-11 respectively, up from 6.7 per cent in 2008-09. Consequent monetary tightening measures by RBI (Reserve Bank of India) led to reduced consumption and reduced corporate and infrastructure consumption. 

Well, no one in the government or economist fraternity thought it fit to anticipate this during the 2009-11 two year period, basking as they were in the high growth rates. The interesting aspect in all this is that much of the stimulus package, particularly sharply-lowered excise tax rates, continues till date, and there is no satisfactory answer as to why this did not sustain the production growth rates as indicated by the GDP measure. Higher interest rates can not be sole factor behind reduced production nor was there anything stopping the government from stimulating investment in infrastructure to reduce the much-touted supply bottlenecks if it really wanted to provide a stimulus to the economy. 

There can never be an ad-hoc economy-pumping policy-driven measure which will not have its adverse side-effects. Going forward, in the much-needed efforts to revive economic growth, this lesson must not be lost and ad-hocism should be avoided. The Survey does, however, seem to recognise this when it boldly recommends reduction of fiscal deficit through slashing of subsidies on diesel and other similar measures. Today's budget presentation by the finance minister will provide more details of the government's handling of the economy and the next one year will be a challenging one for everyone concerned.

who owns bombay stock exchange (bse)?

Here is a story I did, 2-3 months back, in the newspaper I work for, on the shareholders of BSE (Bombay Stock Exchange):

Shapoorji Pallonji & Company picks stake in BSE

BSE saw minor but interesting changes in its shareholders in the period between June 2011 and August this year

Even as its proposed initial public offer has been in the offing for the past few years, BSE, or Bombay Stock Exchange as it was legally known as earlier, its non-broker shareholders are staying put. BSE is the second largest stock exchange in the country after the National Stock Exchange of India.

A FC Research Bureau analysis of BSE's shareholding structure, as available in the exchange's filings with the Registrar of Companies (RoC), revealed that while the list of shareholders had about 1,000 new faces with the number of shareholders climbing from 5,762 as of June 17 last year to 6,797 as of August 31 this year, the largest 23 shareholders who together continue to account for 53.92 per cent stake in the stock exchange, made absolutely no change in their holdings.

This effectively meant the dramatic rise in shareholder numbers took place in the 40-odd per cent holdings by over 6,700 shareholders, a vast majority of whom would be BSE's broker-members who were given shares in the exchange when the trust-run exchange converted itself into a corporate body a few years ago as per the Securities and Exchange Board of India's demutualisation norms for stock exchanges.

Beyond the largest 23 shareholders, the largest and the most interesting change was in the entry of construction major, Shapoorji Pallonji and Company, which took a 0.24 per cent stake in the period between June 2011 and August this year. While the price at which this stake was got and from which it was purchased was not immediately known, it made Shapoorji Pallonji the 24th largest shareholder in BSE.

The company's co-managing director, Cyrus Pallonji Mistry, was picked up recently by Ratan Tata to succeed him as the chairman of Tata Sons. Cyrus' elder brother, Shapoor Pallonji Mistry is the other co-managing director of the company which besides it recent stake purchase in BSE, had investments, at cost, in subsidiaries and non-subsidiary companies to the tune of Rs 1,105 crore at the end of March 2011 (up sharply from previous year's level of Rs 762 crore).

The only other significant change gleaned from RoC filings of BSE was the entry of more than one venture capital firms as stakeholders with an aggregate stake of 0.51 per cent in the stock exchange. One of them was clearly seen to be a Mumbai-based firm, A R Venture Funds Management, which had a 0.14 per cent stake as on August 31.

The largest shareholding in BSE continued to be held jointly by Singapore Exchange and Deutsche Borse who hold 4.92 per cent stake each in BSE. The other large shareholders include Life Insurance Corporation of India and State Bank of India (see table). 

Owning a stock exchange
These 24 largest shareholders owned 54 per cent of BSE
Singapore Exchange; Deutsche Boerse	4.92 each
LIC; State Bank of India	4.84 each
Argonaut Ventures	4.74
Quantum (M); Acacia Banyan Partners; Atticus Mauritius; Caldwell India Holdings	3.87 each
Bajaj Holdings & Inv.	2.90
Blue Star Investments	1.47
MSPL	1.16
Nadathur Estates	1.09
Isheta Realty; Bank of India; Central Bk. of India; Bennett, Coleman & Co; S. Gopalakrishnan	1.02 each
Caldwell Investment Management A/c Urbana Maur	0.76
Aditya Birla Pvt Eq Fund-1	0.51
Bang Equity Broking	0.38
Edelweiss Finance & Inv	0.29
Kotak Securities; Shapoorji Pallonji & Co	0.24 each
Others	46.11
Figures in per cent, represent stakes held in BSE as on August 31 2012

In the previous year-to-year period, a US-based private equity firm, Argonaut Ventures, had increased its stake in BSE from 2.54 per cent at May-end of  2010 to 4.75 per cent in mid-June of 2011. At that time, Argonaut Ventures was a Sebi-registered foreign institutional investor sub-account operating under main FII, US-based George Kaiser Family Foundation.

The other major change in that period involved Dubai Financial Group selling its entire 3.88 per cent stake to a George Soros Group hedge fund, Quantum (Mauritius), in August 2010, for a reported sum of $35 million (about Rs 163 crore at that time).

Some large shareholders in BSE also hold relatively large stakes in
its rival, NSE. LIC and SBI, for instance, were the largest two
shareholders in NSE as of September-end last year with respective
stakes of 10.51 per cent and 10.19 per cent. At that time, on NSE,
Quantum (Mauritius) held 0.86 per cent stake, MSPL along with it
Baldota brothers promoters held 0.94 per cent and S Gopalakrishnan
(then executive co-chairman of Infosys Technolgies) held a 0.38 per
cent stake.