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Definitive anti-dumping duty recommended on stainless steel variant
- In a move to mollify the manufacturers of hot rolled flat products of stainless steel of ASTM Grade 304 with all its variants battling against cheap import from abroad, the Commerce Ministry has recommended imposition of definitive anti-dumping duty on the subject goods from European Union (EU), South Africa, the United States and Taiwan
- However, excluded three other manufacturers of the product under probe which include companies from Spain, Malaysia and Finland.
No check on commodity speculation
- At the recent G-20 meeting in Paris, the Finance Minister, Mr Pranab Mukherjee, expressed serious concern regarding commodity price volatility and made a strong pitch for reining in wild fluctuations in the global crude market. He also observed that the best way to cool soaring prices was to boost output with better technology, more competition among producers and better information.
- Be that as it may, in recent years, commodities have emerged as a new class of asset, in the league of equities and bonds. Energy products (crude, natural gas, heating oil), metals (industrial, base and precious) and agriculture commodities have begun to attract investor interest.
- Gold and silver are, of course, classic examples of speculative fervour driving prices to stratospheric levels, in utter disregard of market fundamentals.
- While very little is invested in physical assets, a lot of hot money flows into paper contracts.
- There are several commodities being traded on the Indian futures exchanges, which are purely speculative transactions. In its present form, the futures market is skewed in favour of speculators, while genuine hedgers (those with physical market interest wanting to manage their price risks) are rather limited.
- Concerned over rising prices, the government had, in 2008, suspended futures trading in a number of food commodities, including rice, wheat, pulses (except chana) and sugar. The ban has been lifted in wheat and sugar.
- As the Finance Minister, he is fighting a losing battle against food inflation. While the demand side is robust, supply-side issues of food are not being adequately addressed.
- Adoption of technology can surely help boost the output of a number of agricultural crops. But the government policy relating to adoption of agricultural biotechnology is beset with uncertainty.
Innovation is key to MSME growth
- Innovation and adoption of appropriate technologies should be focus areas for the micro, small and medium enterprises (MSME) sector in India.
- The sector, which is one of the largest generators of employment in the country, also needs to strengthen global alliances
- the two-day ‘India Global Summit on MSMEs 2011' organised by the Confederation of Indian Industry (CII).
- MSME representatives from around 147 countries, such as Tanzania, Afghanistan, Bangladesh, Pakistan, Algeria, Malaysia, China, Sri Lanka etc. are participating in the summit, which is also holding an investors meet, procurement meet, and MSME Mart.
Rangarajan pitches for rollback of fiscal stimulus
- At a time when India Inc. is saddled with the twin problem of high inflation and low industrial growth, Prime Minister's Economic Advisory Council (PMEAC) Chairman C. Rangarajan on Thursday pitched for rollback of the excise duty stimulus that was provided to the industry to combat the slowdown in the wake of the global meltdown in 2008.
- Adjustment in subsidies will have to be done as early as possible. Otherwise, we will not be in a position to contain [the] fiscal deficit
- Dr. Rangarajan maintained that it would be a Herculean task for the government to retain the fiscal deficit at 4.6 per cent of the GDP (gross domestic product) as estimated in the budget for 2011-12
- The PMEAC chief also stressed the need for ending the “accommodatory” fiscal policy measures by raising the excise duty rates to pre-crisis levels.
- The government had provided three fiscal stimulus packages starting from December 2008 which included reduced excise duties among other sops. Accordingly, the three major ad valorem excise rates (14 per cent, 12 per cent and 8 per cent) applicable on non-petroleum products were slashed by four percentage points and later, following economic recovery, the duty cuts were partially rolled back a couple of years later.
- The present repo rate is still lower than at the pre-crisis level.
- The PMEAC chief pointed out that while farm sector growth would be stronger than what was projected earlier, “the industrial growth rate will be lower, while the services sector growth rate will remain more or less the same” as anticipated.
- Dr. Rangarajan also cautioned that although the overall savings and investment parameters were “conducive” for 9 per cent GDP growth, but “if we try to push economy to grow beyond 9 per cent, it will impact the balance of payments (BoP) and create inflationary pressure”.
