World Bank predicts 5.6 % growth
A World Bank report, released recently, said that India’s GDP is likely to expand at 5.6 per cent this fiscal as reforms gain momentum and the growth is expected to accelerate as proposed measures such as the Goods and Services Tax (GST) will give a boost to the manufacturing sector. In the following years, the gross domestic product (GDP) growth is likely to rise further to 6.4 per cent and 7 per cent in 2015-16 and 2016-17, respectively.
Other important observations made:
- India’s growth is likely to accelerate towards its high long-run potential and implementation of the GST as well as dismantling of inter-State check posts can significantly improve the global competitiveness of Indian manufacturing firms. Implementing the GST will transform India into a common market, eliminate inefficient tax cascading, and go a long way in boosting the manufacturing sector.
- The transformational impact of reform, particularly if enhanced by a systematic dismantling of inter-State check posts, can dramatically boost competitiveness and help offset both domestic and external risks to the outlook.
- With economic reforms gaining momentum, long-term prospects for growth remain bright for India. To realise its full potential, India needs to continue making progress on its domestic reforms agenda and encourage investments. The government’s efforts at improving the performance of the manufacturing sector will lead to more jobs for young Indian women and men.
- The Growth has rebounded significantly due to a strong industrial recovery. Capital flows are back, signalling growing investor confidence as inflation has moderated from double digits, exchange rate has stabilised and financial sector stress has plateaued. Long-term growth potential in India remains high on favourable demographics, high savings and recent policy and efforts to improve skills and education.
- Improved growth prospects in the U.S. will support India s merchandise and services exports, while stronger remittance inflows and declining oil prices are expected to support domestic demand.
The projections may face risks from external shocks, such as financial market disruptions on the back of monetary policy changes in high income countries, slower global growth, higher oil prices, and adverse investor sentiment on geo-political tensions in the Middle East and Eastern Europe.
In the domestic front energy supply, fiscal pressures from weak revenue collection in short term can pose challenges. However, risks could be mitigated to a large extent by focusing on reforms that help the manufacturing sector.
Sources: The Hindu.
CCI directs CIL to desist from unfair business ways
In a directive against Coal India for abusing its dominant position, the Competition Commission of India asked the state-owned miner to cease and desist from unfair business practices.
Competition Commission of India is a body of the Government of India responsible for enforcing The Competition Act, 2002 throughout India and to prevent activities that have an adverse effect on competition in India. It was established on 14 October 2003. It became fully functional in May 2009.
The objectives of the Act are sought to be achieved through the Competition Commission of India (CCI).
CCI consists of a Chairperson and 6 Members appointed by the Central Government. It is the duty of the Commission to eliminate practices having adverse effect on competition, promote and sustain competition, protect the interests of consumers and ensure freedom of trade in the markets of India. The Commission is also required to give opinion on competition issues on a reference received from a statutory authority established under any law and to undertake competition advocacy, create public awareness and impart training on competition issues.
The Competition Act, 2002, as amended by the Competition (Amendment) Act, 2007, follows the philosophy of modern competition laws. The Act prohibits anti-competitive agreements, abuse of dominant position by enterprises and regulates combinations (acquisition, acquiring of control and Merger and acquisition), which causes or likely to cause an appreciable adverse effect on competition within India.
To achieve its objectives, the Competition Commission of India endeavours to do the following:
- Make the markets work for the benefit and welfare of consumers.
- Ensure fair and healthy competition in economic activities in the country for faster and inclusive growth and development of economy.
- Implement competition policies with an aim to effectuate the most efficient utilization of economic resources.
- Develop and nurture effective relations and interactions with sectoral regulators to ensure smooth alignment of sectoral regulatory laws in tandem with the competition law.
- Effectively carry out competition advocacy and spread the information on benefits of competition among all stakeholders to establish and nurture competition culture in Indian economy.
Sources: The Hindu, Wiki, http://www.cci.gov.in/.
Recently, a decision was taken by the Defence Minister relating to build six state-of-the-art submarines for the navy under Project 75I.
About Project 75I:
Under Project 75I India will purchase 6 next generation diesel submarines with Air Independent Propulsion System (AIP) technology for the Indian Navy by 2022.
Conventional diesel-electric submarines have to surface every few days to get oxygen to recharge their batteries. With AIP systems, they can stay submerged for much longer periods.
Project 75-I will have both vertical launched BrahMos for the sea & land targets and tube-launched torpedoes for anti-submarine warfare. The new Project 75-I submarines are huge in value, estimated at around $10 billion-plus, depending upon the offsets and transfer of technology (ToT). The defense offsets policy mandates a minimum investment of 30 per cent to be put back in a related defence industrial venture in India.
Acceptance of Necessity for acquisition of six submarines under Project-75(I) has been accorded by the Defence Acquisition Council in August 2010. The case is being progressed in accordance with the Defence Procurement Procedure.
The Indian navy requested information from firms who had independently designed and constructed a complete modern conventional submarine which is currently in service / undergoing sea trials. The submarine should be capable of operating in open ocean and littoral / shallow waters in dense environment and able to undertake following missions:-
- anti surface and anti submarine warfare.
- supporting operations ashore.
- ISR missions.
- special force and mining ops.
Sources: The Hindu, http://www.globalsecurity.org/.
Govt chalks out plans for massive solar power push
With Prime Minister asking the ministry of new and renewable energy (MNRE) to prepare an action plan by November first week, India is about to witness a massive scaling up of solar power capacity to 100,000 Mw.
The Bharatiya Janata Party’s election manifesto had promised a considerable push to clean energy.
The target is five times the target designated under the Jawaharlal Nehru National Solar Mission (JNNSM), one of the key programmes of the earlier United Progressive Alliance government. Large solar projects similar to coal-based ultra mega power projects, solar parks, micro grids and solar rooftops – all would be a part of the project.
The cost of gas-based power plants has gone up and with coal looking at fresh auctions; thermal power prices would also go up. The current price of solar power production is Rs 6.5 crore per Mw. So, with a viability gap funding (VGF) support of Rs 1 crore per Mw, solar is looking at parity with coal very soon. The government, though, would look at all possible models – VGF, power bundling, state support – according to size and type of project.
The ministry is also setting up a single-window clearance agency to promote investment in solar power.
Following the directions from the Minister of State for Coal, Power and Renewable Energy, the ministry of new and renewable energy is also approaching top 500 private companies and 50 public sector companies, to sign commitment for developing solar power and set a trend for the sector.
About Jawaharlal Nehru National Solar Mission:
The Jawaharlal Nehru National Solar Mission (also known as the National Solar Mission) is a major initiative of the Government of India and State Governments to promote ecologically sustainable growth while addressing India’s energy security challenges. It will also constitute a major contribution by India to the global effort to meet the challenges of climate change.
The Jawaharlal Nehru National Solar Mission was launched on the 11th January, 2010 by the Prime Minister. The Mission has set the ambitious target of deploying 20,000 MW of grid connected solar power by 2022 and is aimed at reducing the cost of solar power generation in the country through
- long term policy;
- large scale deployment goals;
- aggressive R&D; and
- Domestic production of critical raw materials, components and products, as a result to achieve grid tariff parity by 2022.
Mission will create an enabling policy framework to achieve this objective and make India a global leader in solar energy.
The objective of the National Solar Mission is to establish India as a global leader in solar energy, by creating the policy conditions for its diffusion across the country as quickly as possible. The immediate aim of the Mission is to focus on setting up an enabling environment for solar technology penetration in the country both at a centralized and decentralized level.
The Mission under the aegis of Ministry of New and Renewable Energy will adopt a 3-phase approach, spanning the remaining period of the 11th Plan and first year of the 12th Plan (up to 2012-13) as Phase 1, the remaining 4 years of the 12th Plan (2013–17) as Phase 2 and the 13th Plan (2017–22) as Phase 3. At the end of each plan, and mid-term during the 12th and 13th Plans, there will be an evaluation of progress, review of capacity and targets for subsequent phases, based on emerging cost and technology trends, both domestic and global. The aim would be to protect Government from subsidy exposure in case expected cost reduction does not materialize or is more rapid than expected.