Back to the crazy world of Banking & Economics

Its been a pretty long time, i was here in this space, and the last two months were pretty interesting with EU & US threatening the world, more than China ( with its exports and dollar reserves ).. Though my passionate venture(www.launchpadonline.in), takes all my energy and attention, would still love to post my views here. from now on will be on full throttle.. after all, Uncle Sam & the once great European masters,gives very few opportunities to talk about..

Social Sector & Fertilizer

Having interacted with a leader of a fertilizer plant, it’s not a rosy situation to run a fertilizer plant.. the industry is dependent on the governments and babu’s.. because, till today, the situation is worse and not encouraging.. the fertlizer company will purchase all the raw materials, involve resources and produce fertilizers and will sell them at a subsidized price , as directed by government. but the problem is the working capital.. the government will not give the subsidy in advance/during production.. only after few dragging months , post sale, the government will clear the bill.. most of the time, they say, its a charity running a fertilizer plant.. with measures of passing the subsidy directly to the farmers and more incentives to start a fertilizer plant, hope, its getting revived…

budget measures:

•Capital investments in Fertilizers to be considered as Infra spending & Extension of investment linked deductions for businesses investing in fertilizers

•Nutrient based subsidy to be extended to Urea

•Direct transfer of subsidy to farmers( BPL)

HRD & Social Justice:

one of the highest spent sectors in the budget.. the most noble aim- to improve the living condition of the civilized society ; but most of the scandals and looting happens in this sector .. as usual , a slew of measures… ( donno, whether they are for the masses, or for the corrupt officials and politicians)

Budget announcements:

•NREGS

–Same amount allocated again; 400 bn

•Is this good/bad?

•Push for micro enterprises & MFI & SHG ( two corpus funds to be created for each with 1 & 5 Bn)

•Swavalamban

–Pensioner’s delight

•Withdrawal age relaxed to 50 yrs / 20 yrs from joining

•Indra Gandhi old age pension scheme

–Relaxed to 60 yrs instead of 65

–Raised to Rs 500/- instead of Rs.200/-

•Interest subvention of 1 % on home loans

•Scheduled caste/ sub plan allocations

•Special attention to NE states , Naxal states & J&K

•Naxal hit districts to get 550 Mn each

Education:

With more than 30% of population going to be in their youth/teens after a decade, the plans/proposals  looks a great step forward…

Budget measures:

•520 Bn allocated towards education development

•More reasons to go to school

–Sarva shiksha abhiyan – 210 bn- more schools to get class rooms and toilets !

–Mid –day meals- 103 bn

•Getting to understand the reality

–Vocationalization of secondary education

–Higher UGC grants( 53 Bn)

–Technical education boosters ( 56.6 bn)

–ICT education initiatives ( 9.43 bn)

–National skills development fund ( 5bn)

•Optical fibre connectivity  for higher learning and research institutes

•Social spending

–Scholarships to SC/ST students in their secondary schools ( 4 mn beneficiaries )

–Aligarh Muslim university – 500 mn funds

–Kerala veterinary college – 1 bn

–IIT kahragpur – 2bn ( are we spending on research which will benefit India/ make students settle abroad??)

–IIM kolkata- Financial research & trading – 200 mn

–Economics research- 500 mn

Budget Review 2011-2012; Agriculture

Clearly, a clever attempt of taming the inflation. Instead of spoiling the masses ( and of course balance sheet) with subsidies, budget proposes a lot of measure to rectify and improve the supply chain and logistics efficiency of the agricultural products, which is a key driver in moving up the inflation and costs.

The government is looking so serious in to the issues of supply chain bottlenecks a measure to control inflation. It’s the Government’s push to facilitate storage and reduce the production and supply chain bottlenecks in the agricultural sector. A perfect execution of these measures will bring down the price difference between whole sale and retail chains and also an effective pricing for farmers.

Also we can see a planned approach to alternate edible oil resource development through palm oil outlays and it’s heartening to see agricultural inclusion of eastern regions as well…

 

Few snippets from the budget:

• The total plan outlay for agriculture & allied sector is 147.44 bn an increase of 19 %.
• Increase in  corpus of RIDF (Rural Infrastructure Development Fund) to 180 bn wherein the additional allocation would be dedicated to creation of warehousing facilities.
• Interest subvention proposed to be enhanced from 2% to 3% for providing short-term crop loans to farmers who repay on time.
• Capital base of NABARD to be strengthened by 30 bn in a phased manner, enhancing credit flow to farmers/agriculture.
• An allocation of 13.50 bn for National Food Security Mission.
• An allocation of 7.80 bn for Macro Management in Agriculture.
• An allocation of Rs11.50 bn for National Mission on Micro Irrigation.
• An allocation of Rs7 bn for National Agricultural Insurance Scheme including 1.50 bn for Modified national Agriculture insurance scheme.
• Focus on supply chain efficiency for items like fruits and vegetables, milk, meat, poultry and fish.
• Rs.4 Bn allocated for eastern states for agricultural developments, focussing on rice based plantations.
• An allocation of Rs3 bn to bring 60,000 hectares under oil palm plantations – an initiative to yield about 3 lakh metric tonnes of palm oil annually in five years.
• Rs 3 Bn towards Vegetable cultivation initiatives
• An allocation of 3 bn provided for Accelerated Fodder Development Programme to benefit farmers in 25,000 villages.
• Promotion of organic farming methods, combining modern technology with traditional farming practices.
• An approval being given to set up 15 more Mega Food Parks during FY12.
• Augmentation of storage capacity through private entrepreneurs and warehousing corporations has been fast tracked.
• Extended full exemption from excise duty to air-conditioning equipment and refrigeration panels for cold chain infrastructure.
• Include conveyor belts in the full exemption from excise duty to equipments used in cold storages, mandis and warehouses.