The government is likely to restrict foreign trips of ministers and bureaucrats and bar meetings at five-star hotels as part of the austerity drive to keep the budget deficit in check.
According to sources, foreign travel may be allowed only when it is absolutely essential in national interest and that too in the economy class. Foreign travel for seminars and study tours which are being undertaken by ministers and senior officials could be banned as well. Air travel by senior officials within the country will also be confined to the economy class where necessary.
The austerity rules will also apply to public sector companies such as ONGC, Indian Oil, Bhel, Sail and NTPC that be instructed to restrict foreign travel and expenditure on hotels.
"The emphasis will be to rely more on video-conferencing and company guest houses for meetings to cut costs," a senior official said.
The government also plans to reduce expenditure under various heads by releasing money only when the previous funds allocated have been spent. This will reduce the amount of idle funds in the system which only add to the deficit as they have been sanctioned.
Expenditure under various non-plan schemes that are not considered crucial for economic development may be pruned as well.
The austerity drive would be divided into two parts. First, there would be a cut in establishment expenses, and then there could be some cut in the scheme-wise expenses as well, official sources said. The decision on the scheme-wise expenditure that can be reduced would be taken after consultation with various ministries, a finance ministry official said. Besides, purchases of new vehicles will be curtailed.
Finance Minister Pranab Mukherjee had announced in Parliament on Wednesday that the government would resort to unpopular austerity measures to deal with fiscal problems.
The government had introduced similar austerity measures in 2009 when the economy had slowed due to the economic meltdown. The finance ministry had asked various ministries and departments to cut non-plan expenditure by 10 per cent.
Such expenditure includes spending on publications, professional services, advertising and publicity, petrol and other office expenses.
However, senior official admit that these austerity measures will not cause any major reduction in the fiscal deficit which has soared due to the huge subsidy bill. "The idea is to send a message down the line that everyone has to contribute his bit to cut costs," a senior official remarked.
The subsidy on petroleum products is expected to touch `150,000 crore during the current fiscal while that on fertilisers in the region of `100,000 crore. Similarly, the food subsidy will also exceed `100,000 crore. The government's subsidy burden on food, fertiliser and petroleum products had shot up to `208,503 crore in 2011-12. The subsidy bill for these goods in the 2012-13 Budget has been pegged at a mere `179,554 crore. However, the prices of crude oil and fertilisers have shot up over the previous year and the subsidy bill is bound to increase. Similarly, the coverage of the food security net is also being widened. Fiscal deficit had ballooned to 5.9 per cent in 2011-12 and the government has budgeted to bring it down to 5.1 per cent in the current fiscal.
Unless, there are significant reforms in fuel and fertiliser pricing and targeted subsidy distribution schemes, the subsidy bill, which accounts for as much as 2.5 per cent of GDP, cannot come down. However, political compulsions of a government weakened by a spate of scams is preventing it from pushing ahead with the reforms.
After clocking a growth rate of nine per cent for two consecutive fiscal (2009-10 and 2010-11), the economic growth slowed to 6.9 per cent in 2011-12.
Mandan school board violates open meetings law - Bismarck Tribune
North Dakota Attorney General Wayne Stenehjem says the Mandan school board didn’t provide a public notice for one of its meetings.
The board has a separate finance committee. It takes public comment about the district’s future enrollment projections and the board’s plans for dealing with them.
In a legal opinion Friday, Stenehjem says the board should have provided public notice for a Jan. 10 meeting of the Finance Committee.
The committee includes two school board members. But seven of the board’s nine members showed up for the Jan. 10 meeting.
Stenehjem says the other board members said they appeared as “concerned citizens.”
But the attorney general says they spoke as board members, and he says public notice of the meeting should have been given.
India's forex reserve dropped by $1.37-billion - Newstrack India
Amid continuously depreciating Indian currency 'Rupee' as international currency 'Dollar', India's foreign exchange reserve (forex) dropped by US $1.37-billion, official data reflects it.
India's forex reserve that was in an adequate amount earlier before beginning the devaluation of Rupee had sharply slipped in two consecutive weeks by US$ 2.18-billion to US $291.80-billion, recorded on week ended May 11.
Foreign currency assets, the biggest component of the forex reserves kitty, fell by $1.33 billion to $257.85 billion during the week under review, according to the Reserve Bank of India's weekly statistical supplement.
The RBI did not provide any reasons for the change in foreign currency assets.
It said the assets expressed in US dollar terms included the effect of appreciation or depreciation of non-US currencies such as the pound sterling, euro and yen held in reserve.
However, the RBI is understood to have sold dollars from the reserves to curb the slide in the value of rupee.
The Indian rupee slumped to a new intra-day low of 54.91 against a dollar Friday. This was the third consecutive record low of rupee in the last three days. The rupee had hit a low of 54.60 against a dollar Thursday, surpassing previous day's record of 54.52.
The rupee also hit a new closing low of 54.49 against a dollar Wednesday and ended the week at 54.42.
The value of special drawing rights (SDRs) declined by $25.6 million to $4.43 billion, and India's reserves with the International Monetary Fund (IMF) fell by $16.7 million to $2.88 billion.
The value of gold reserves remained unchanged at $26.61 billion.
--With IANS Inputs--
Refugio Powers - 1UP.COM
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Rupee plunges to fresh low before RBI pulls it back - zeenews.india.com
Mumbai: The rupee on Friday gained 5 paise to close at 54.42 against the dollar with RBI's swift action pulling it back from near 55-levels touched in early trade amid strong capital outflows.At the Forex market, the domestic currency in early trade threatened to breach the 55-level as it slumped to 54.91, its fresh all-time low hit in the third straight session, as copious fund outflows continued amid Eurozone worries.
Dealers said strong dollar demand from importers, mainly oil refiners, on expectation of further rise in dollar on concerns caused rupee's fall.
However, RBI stepped in and stemmed the rupee's slide.
The central bank's Deputy Governor Subir Gokarn in Kolkata today also said RBI will continue to intervene and take administrative measures to protect the rupee, boosting the sentiments in favour of the rupee.
"The approach over the last few months have been a combination of intervention at times when we have felt it will help us stabilise, and some administrative action. This is the approach that will work now," said Gokarn on the sidelines of an event here.
Forex dealers also said that a sudden gush of dollar selling at the fag end by exporters amid recovery in local stocks aided the rupee recovery as the domestic unit touched a high of 54.40 before closing at 54.42. The currency has lost over 22 percent against the dollar in the past one year.
However, experts do not feel rupee's woes against the dollar are over for now as the Indian economy continues to battle with fiscal as well as budget deficits and Greece's possible exit from Eurozone keeps fundamentals intact in favour of the American currency.
"It is difficult to say whether rupee is consolidating at the current level or will fall further as RBI is watching the market," said Viral Shah, Head - Institutional Business, Geojit Comtrade.
The benchmark six-month forward dollar premium payable in October ended up at 154-156 paise from Thursday's close of 151-153 paise and far-forward contracts maturing in April also finished higher at 272-274 paise from 262-264 paise.
The RBI fixed the reference rate for the US dollar at 54.8755 and for euro at 69.4885.
The rupee improved further to 86.04 against the pound sterling from 86.24 previously while fell back to 69.16 per euro from 69.05. It dropped further against the Japanese yen to 68.58 per 100 yen from last close of 67.92.
PTI
Ministry to sell chunk of JT shares - Japan Times
The Finance Ministry will sell part of the government's stake in Japan Tobacco Inc. this year to raise more than ¥500 billion to finance reconstruction from the March 2011 earthquake and tsunami.
The ministry said Friday it expects to sell one-sixth of the tobacco company's outstanding shares in fiscal 2012 ending next March. The government, which now holds half of JT's outstanding shares, has decided to reduce the amount to a little more than one-third.
The government will first offer to sell the stock back to JT, which has expressed its intention to purchase at least around ¥200 billion worth, while the remainder will be sold on the market. The sale is expected to begin as early as the fall but could be delayed until fiscal 2013 depending on market conditions, officials said.
Forex reserves fall by $1.4b - Statesman
Sunday, May 20, 2012
Last Updated: 19 May 20:16 PM IST
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