“Any increase in prices does hurt some people. We have to take a long-term view. We cannot save people from inflation if we follow populist fiscal policies all along. Sooner or later, these populist policies, if persisted  with for a long time, will lead to erosion of the investment climate, our capacity to create new jobs, and our ability to invest in our flagship programs for the poor people. So, we  have to balance these factors,” Singh said in reply to several questions posed by the media, No doubt, the objections raised against fuel hike by Congress allies Trinamool Congress of Mamata Banerjee as well as DMK do not seem to be taken into consideration by the Prime Minister and would not therefore be giving into their pressure.

Singh feels that the hike would not in any way add to the already existing inflation. He said, “the increase in fuel prices, the direct effect on the wholesale price index will not be more than 0.4%. There will be some escalation but my hope is now that the rabi crop is coming in the market, prices which have caused a great degree of concern-of wheat, sugar oilseeds, pulses-will see some  moderation and that the economy has the capacity to absorb this hike in oil prices without setting in motion an inflationary spiral.”

The Prime Minister  has no doubt responded to the resolve of both the Trinamool Congress as well as DMK to escalate their protest in case it is not heeded.

Comment: It looks like one has to prepare oneself for hike in petrol prices. As it is, it costs much. Further increase would of course lead to an overall increase in other prices, including that of essential commodities. Those who would be most badly affected are those with static incomes as well as retired people and of course salaries. The rich and the business class perhaps may not be so badly affected as they are in position to generate more income or already have enough resources on hand. The common man and the middle class man are badly affected.

The Government presented this information in the session of the Lok Sabha. The Government claimed that the revenue that had foregone actually reflected as policy choices  and perhaps be viewed as subsidies towards preferred  tax-payers. In case certain types of export-related subsidies as well as exemptions worth Rs.37,970 crore are included, then the revenue that has been foregone would actually reach a whopping of Rs. 5,40,269 crore or say about 86% of what the actual tax collections is.

The corporate sector is no doubt benefiting. The sector gets a concession in corporate tax which is worth Rs. 79,554 crore, an increase of nearly about 20% over the last year.

The Government has raised prices in petro products from about 5% to 10%.  Of course it did not adopt the Economic Survey’s recommendation of lessening the custom tariff from 10% to 7.5%.

As far as agriculture is concerned, the focus of the Government has been to reduce the customs duty from 7.5% to about 5% on specified agricultural machinery such as paddy transplanter, laser land leveled, cotton picker, reaper-cum-binder, straw or fodder balers, sugarcane harvester etc.

Also complete exemption from the basic customs duty is being provided  for bio-polymer as well as bio-plastics that are used for manufacturing of bio-degradable based  agro films, nursery plantations as well as flower pots. Basic duty applied on long pepper is being brought down from 70% to 30% while Asafoetida ( heng) is reduced from about 70% to 20%.

Concessions have been given to the environmental-friendly items, spares as well as medical equipment. Gold as well silver will be costly with readymade garments, duty hikes, mobile phones as well as watches which have been exempted from extra of 4%. Also such exemption is being provided to carbon feedstock, paper scrap as well as waste paper.

The hike in fuel prices in the from of excise as well as customs duty would be the crude oil as well as petroleum products would cost more.

The middle class  income group would also face more problems as with the increase in petrol prices, there would be an overall increase in prices. Even the common man will face such problems.

The Union Finance Minister, Pranab Mukherjee presented the Budget.

As of now, reimbursement of medical expenses is up to Rs. 15,000 is of course tax-free. Any reimbursement more than that is considered to be as income and is therefore taxed. Also, transport allowances is also tax-free only up to Rs.800 a month. These exemption limits have been fixed about 10 to 15 years ago. The department of income tax is also now considering a sufficient increase to at least ensure that the inflation since that time is neutralized. In the past 10 years or perhaps more, the average commodity prices have nearly doubled.

Senior level tax consultant Subhash Lakhotia indicated that the exemption limit on reimbursement of medical was introduced from April 1,1999. In the last ten years, on account of general inflation as well as the high cost of medical treatment as well as medicines, the limit of Rs. 15,000 had become grossly inadequate. Executive director, KPMG tax consultancy firm Vikas  Vasal said the revision of the limit was no doubt overdue. The tax experts are of the view that present limit must be increased to Rs. 50,000. No revised figures were of course given by the Government.

Lakhotia highlighted another anomaly in the medical treatment provision. According to him in case an employer incurs a lot of expenditure on one’s travel as well as stay abroad of the respective employee for any medical treatment, then such expenditure is not considered a prerequisite. Such a facility will be available to only those who have a gross total income of that is below Rs. 2 lakhs.

Toyota is planning to recall its Corolla which happens to be the world’s most best selling car. There have been complaints of its power steering. This is obviously a great setback to the best selling car company.

The executive-in-charge of quality controls, Shinichi Sasaki said that the company was taken the complaints very seriously. An official of the National Highway Traffic Safety Administration said that an informal review would be conducted of the complaints in order to assess whether a complete investigation was required.

Of course the company also said that there were no issues with regard to the Corrolla sold in India. According to spokesman of the company,” The Indian operations do not have any issues and we have different suppliers here. He also said that sedan had been assembled in India itself and the suppliers were actually from the Asian region. “ The suppliers are from Thailand and Japan, and these do not have any issues.”

Toyota is one of the world’s renowned car and naturally it is a bit surprising that such incidents should occur. It has been a sturdy and well functioning car all these years and also very popular in many countries. In India also it is becoming popular.

The recall naturally has caused much setback to the company, although its standing in the market is definitely of high order. Such precautionary measures are essential in order for the company to maintain its standards. Worldwide, it is a highly rated company and its cars sell well in the international market.

The increase in the rate of price rise has no doubt breached the estimate of RBI to further tighten up the monetary measures at a time when the economy has been projected to grow even beyond 7.2 estimated by Central Statistical Organization.

It has been predicted that the inflation would touch 8.5 % by the present fiscal-end, the RBI is withdrawing about Rs. 36,000 crore from the banking system. Since there is a demand for partial withdrawal of the stimulus measures that have gathered much steam with the industrial growth which happens to be 16 month period high of 16.8 (December) and the economy being projected to grow around 7.2 %. The hike in inflation may pose a problem for the Government.

D.K.Joshi, principal economist says,” There is a tough balancing act for the finance minister in the Budget. If he withdraws stimulus then it would put pressure on inflation. However, withdrawing stimulus is necessary to reduce the fiscal deficit. Economists are of the view that the inflation will be in double digits by the end of the fiscal year.

Inflation is mostly related to food items and has not gone up as far as manufactured items are concred. Except for sugar, most of the manufactured were of course under control. Items such as edible oils, cement, iron as well as steel, metal alloys as well as products which are made of non-metallic mineral, wood, leather have definitely declined every year.

Comment: Inflation particularly with reference to food items has caused much misery to poor and even the middle-class income group find it difficult to meet both ends. Essential food items such as pulses, rice, wheat have increased tremendously which people require on a daily basis. As recession is still to get over and naturally the income of the people is not as high or some are even jobless and dependent upon their kith and kith for finances, inflation adds to their woes.

The manufacturing sector consists of about 80% of the output from the factory and has been expanded by 18.5% in December. The industry of consumer durables rose 46% and the output of capital goods went up by 38.8%. Mining output went up by about 9.5% in December as compared to 2.2% about a year ago. The electricity generation increased by about 5.4% as against 1.6%in the earlier corresponding period.

The Union Finance Minister, Pranab Mukherjee said that it was “quite encouraging”. “I do hope that the third quarter GDP figures will also be encouraging… It will get reflected in the overall GDP.”

Comment: This improvement in the arena of the industry is much encouraging after a bleak period during the recession. India is of course set to surge forward in the industrial sector, which would imply more investments and more employment as well. This indicates that the economy will definitely go upward. This is very encouraging for entrepreneurs.

India as per US predictions, has been considered to be a force to reckon with on the global economic scene along with China. This is definitely very encouraging for a country which was always treated as land of “snakes and charmers” by the Westerners and was never recognized as a country with tremendous potential.

India is now emerging as a nation that the West is looking up to. It obviously appears to have a bright future.

This withdrawal of the facility, which usually covers the first 2 years of the loan period, is being done as now the recession is slowly getting over, and incentives given during that period are being withdrawn. This is also keeping in tune with the Reserve Bank of India’s view that banks must not discriminate against older customers.

This was decided upon a meeting consisting of top bankers as part of RBI’s post-policy review meeting. The RBI of course in its communication did raise a question enquiring why the Indian Bank Association (IBA), which is umbrella body of the entire commercial banks that why the lower rates of interest could not apply to existing customers.

Most of the commercial banks have decided to withdraw the special loan facilities which happen to be as low as 8% which happen to be much below the prime lending rates (PLR). The first bank to decide upon such a move is the Union Bank of India. It has already informed all its branches.

The banks have obviously turned the suggestion of the Reserve Bank of India requesting them to extend the cheaper home loans to the customers already existing as the move would have impact upon their existing bottom line.

Comment: Recession was a time which caused much set back to industry all over and even the banks were not spared. Property rates became low and also investments were less. Banks began making special offers on home loans to encourage customers to invest in real estates. Now that the situation is improving, naturally these offers are being withdrawn.

Since July there has been an upward trend and the number of fliers has gone up to 445.1 lakh fliers in the year 2009, although during the first half there happened to be “double digit fall in percentage. For example, in the month of December last there was an increase of 33% rise with 44.8 lakh people flying within the country as against 33.7 lakhs in December 2008.

Kingfisher as well as Jet Airlines have of course been operating their respective fleet with their budget airlines. Market share of Indigo, Jet life as well as Spicejet, GoAir and JetLite was around 38.5%. This figure has certainly gone up to 55% or 60% or so. This figure is of course after one has added up to the combined share of Jet Konnect as well as Kingfisher Red which happens to be budget brands of main airlines.

According to the well known travel agent, low fare was the way to survive as well to go ahead. It is very surprising according to him that Air India decided not to have a low budget airline. Kingfisher lost out to Jet Airways last year, the latter being Naresh Goyal airline which in 2009 had a market share of 25.4% which has been followed by Vijaya Malaya’s Kingfisher with a market share of 23.9%. Air-India incidentally finished at 17.5% share placing it in third position.

Obviously situation is now improving in the Indian aviation sector. Number of fliers are increasing. During the recession the airlines received much setback. Many had cut costs and even tried to lay off their personnel. Now of course there is revival and the aviation sector is certainly showing an upward trend.

Based on CSO data, the income average of an Indian will be going up by 9% to about Rs. 43,749 during the year 2009-10 at present price level as compared to 13.3% that had registered in 2008-09.The per capita income happens to be an indicator of collective prosperity that happened to be Rs.40,141 in 2008-09

The growth rate was low in 2009-10 partly on account of poor exports which are outward shipments that add to the net national income. Imports of course reduced it. It is estimated that the export contribution towards the economy during the year 2009-10 is likely to fall to 18.6% from 23.5% in 2008-9.Although, the net national income had increased by 10.5% in 2009-10, the per capita income expanded by only 9%. This of course is mainly on account of the rise in population from about 1.15 billion to about 1.17 billion in 2009-10.

The higher growth rate will assist the Center in reducing its fiscal deficit as the GDP percentage although in actual terms remained the same.

As one expands the GDP at about 10.8% at what is the current price, the size of the Indian economy will turn out to be around Rs. 1,64,178 crore. In the previous budget, it was projected to be of the size at Rs. 58,56,569 crore.

Comment: The economic recession caused much setback to the Indian economy. The exports had fallen and there was unemployment. Now the situation is slowly improving. Investors are looking towards better days. Those thrown out of jobs are hoping to find jobs again. The recovery may be slow, but it definitely has raised hopes in the mind of many.

Recruitment companies from the Eastern as well as the Western Europe, Asia Pacific, Africa and Middle East as well as the whole of SAARC region are importing talent of various profiles as well as domains from India.

Africa, for example, is exploring Indian talent for the mining as well as the telecom sector. Canada, Singapore as well as the US are on the lookout for talent in the finance as well as the banking sector, semi-conductor as well as IT sector. Malaysia as well as Dubai are on the lookout for personnel for infrastructure as well as construction verticals. UAE’s gas as well as oil sectors have been hiring Indian executives as well as engineers.

Ashok Reddy, MD, Team Lease is of the view that there was no other market that offered such quality and diverse talent. “ Our talent pool comes with a proven record, of working in challenging as well as complex environment. They are capable of replicating this success wherever they are posted.

Nirupama V G MD, AdAstra says,” Look at the Philippines, it is facing severe shortage of senior execs in its BPO industry. We have already sourced many execs for the country. Australia is another market where there is a dearth of quantity talent across industry domains. Also, telecom is a new vertical for most of Africa and the country wants to hire from India.”

There are several hi-tech jobs that are vacant in companies located in France, Germany, Spain, Finland, Sweden, the Czech Republic as well as Switzerland. Once the economic recovery begins, then companies will start recruiting.

The European Union is introducing an immigration framework that is uniform.