FM Mukherjee: Will examine and modify GAAR if required

Amidst fears that FIIs may be taxed for short-term capital gains in stock markets, the government on Tuesday said it will examine and modify the General Anti Avoidance Rules (GAAR) if required.

"I will examine and modify GAAR as and when required. This is essential for anti-avoidance," Mukherjee said in Parliament Tuesday.

In his budget for 2012-13, Finance Minister Pranab Mukherjee had said that the government wanted to introduce GAAR in order to "counter aggressive tax avoidance schemes, while ensuring that it is used only in appropriate cases, by enabling a review by a GAAR panel".

Securities and Exchange Board of India (SEBI) Chairman U K Sinha had said yesterday the government "is going to have a new look at tax avoidance, so they they are going to work in that way".

The fear of GAAR had spooked stock markets which tanked 2 percent yesterday on concerns that all short-term capital gains made by FII and P-Note investments would be taxed. The Sensex, however, recovered today rising over 200 points.

Meanwhile, Finance Ministry sources seeking to allay fears that Participatory Notes -- an instrument through which FIIs unregistered with Sebi invest in stock markets - said that the I-T department will have to first prove the intention of avoidance before making GAAR applicable.

"GAAR is not created to target any class of financial instruments. The onus of proving tax avoidance lies mainly with the government and partially on the assessee," sources said.

"All benefits which a person is entitled in a DTAA (Double Taxation Avoidance Agreement) treaty can be overruled or denied if GAAR is invoked," sources said.

Provisions of GAAR will be applicable from April 1 and not with retrospective effect.

Pranab says: Major push for roads, housing in 2012

With the nation watching, Finance Minister Pranab Mukherjee is currently presenting Union Budget 2012-13 in Lok Sabha. Reading out his Budget speech, Mukherjee said India continues to remain among front-runners in economic growth. Mukherjee however said the economic growth is estimated at 6.9 percent during the current fiscal year which was was "disappointing".

"The global crisis has affected us. India's gross domestic product (GDP) is expected to grow at 6.9 percent in 2011-12, after having grown at 8.4 percent in each of the two preceding years," the minister said. "But it is also a fact that in any cross-country comparison, India still remains among the front-runners in economic growth," he added.

The minister stated that the Indian economy was at the cusp of a revival, as agriculture and services have continued to grow at a decent pace. It was industrial performance that was acting as a drag. The Finance Minister also exuded confidence that headline inflation would moderate in the next few months and remain stable.

Budget Highlights


    GDP to grow by 6.9% in 2011-12

    This year’s performance disappointing

    India still among front runners in economic growth

    Monetary policy was geared towards containing inflation

    Need to improve supply side of economy

    Exports grew 23 %

    Imports grew 29%

    Past year was supposed to be year of recovery

    To keep subsidies under 2% of GDP over next 3 years

    We were facing several challenges; global situation a dampener

    Industry pulled down growth in past two years

    Industry now showing signs of recovery

    Need to improve supply side of economy

    Subsidy for food security law to be fully provided

    Some subsidies inevitable

    Agriculture to services performed well

    Weak growth due to industrial slowdown

    Economy now turning around

    Manufacturing on cusp of revival

    Need to improve micro-economic environment

    Expect headline inflation to moderate in the next few months and remain stable

    Agri growth at 2.5%

    External trade growth encouraging

    India has successfully achieved diversification of import and export market

    Diversification has helped overcome global slowdown

    Current account deficit at 3.6%

    Fiscal balance has deteriorated due to increase in direct tax seepages and increased subsidy

    Expect smaller fiscal deficit in the coming year

    Concept of effective revenue deficit is being brought in as a fiscal parameter

    Crude oil prices to cross USD 115/barrel

    Need to take a close look at revenue expenditure, particularly subsidies

    Endeavour to restrict subsidy to under 2% of GDP

    Recommendation of task force under Nandan Nilekani has been accepted

    Direct transfer of fertilizer subsidy to retailer and then on to farmer to be rolled out

    Direct transfer of kerosene subsidy pilot project in Alwar, Rajasthan

    Direct subsidy transfer to be implemented in at least 50 more districts soon

    DTC to be implemented at the earliest

    The structure of GST network has been approved by EGoM

    Treasury management for CPACs has been enhanced

    Rs 30000 cr to be raised via disinvestment

    At least 51% stake will remain with the govt

    FDI in multi-band retail held in abeyance

    GST to be operational by August 2012

    Provision for advance pricing agreement included in DTC bill

    Reform in financial sector has been pursued to ensure more market intervention

    New scheme - Rajiv Gandhi equity scheme - to be introduced

    Simplifying process of IPOs

    Mandatory for companies to issue stocks over Rs 10 cr through online system

    8 financial amendments bills to be introduced this year

    Central Know Your Customer repository would be set up

    70,000 habitations have been provided with banking services

    Ultra small branches would be set up

    Swabhiman campaign to be extended to habitations with population of 1000 people

    81 Regional Rural Banks have migrated to core banking

    Weak RRBs to be recapitalized for another two years

    Viability gap funding under PPP is an important factor

    Oil and gas and LNG storage and oil gas pipeline, telecom towers will also be made eligible under viability gap finding

    The first infra debt fund with a outlay of Rs 8,000 cr has been launched

    Tax free infra bonds to be raised to Rs 60,000 cr

    Coal India has been advised to sign power purchase agreements with power plants

Ahead of Union Budget, Provident Fund rate slashed to 8.25%

 In one of the sharpest-ever interest rate reduction, the Employees Provident Fund Organization (EPFO) has slashed the return on statutory savings to 8.25% for the current fiscal from 9.5% last year, on cues from finance minister Pranab Mukherjee.

A notification for the reduction in rates for 4.72 crore EPFO subscribers was issued earlier this week, and comes days before the general Budget. In the present structure, the returns will be lower than the 8.6% paid under for public provident fund (PPF) deposits, a popular voluntary savings scheme.

Banks too are offering 9%-9.5% deposits of much shorter duration. But compared to banks, returns on EPF are better since the annual contribution and the interest on the balance are tax free.

At a meeting of the Central Board of Trustees last December, employee unions had demanded that the EPFO maintain the interest rate at 9.5% during the current fiscal, although based on funds available the government entity had proposed 8.25% payout.

EPFO's investment committee had said that even at 8.25%, there would be a deficit of Rs 24 lakh. But as has been the case in the past, EPFO is learnt to have spotted an unaccounted Rs 400 crore that it believes will help it push for higher interest rate.

Given the protests, representatives of employers who are on the board had suggested that 8.5% could be paid this year. The labour ministry had suggested payment of 8.6%, in line with the PPF returns, while asking the finance ministry to take the final call.

It was for the first time that North Block was asked to decide instead of the usual practice of finance ministry notifying the rate suggested by EPFO. The ministry, however, went with EPFO's calculations in notifying the 8.25% return.

Following the finance ministry order, EPFO has asked its field offices to make the payments for the year. While employee unions are expected to protest the move, union representatives on the EPFO board acknowledge that a higher payment may be difficult since the law restricts the government or any outside agency from chipping in with resources for a bailout.

Pranab Mukherjee reaches Parliament, will present the Budget 2012

Finance Minister Pranab Mukherjee will unveil the Union Budget 2012-13 in the Lok Sabha on today. He reached Parliament and will present the Budget at 11 am.

This will be the seventh time Mukherjee will be presenting budget in the Lok Sabha, the second highest number of time by any finance minister. Mukherjee had presented budgets for three consecutive years in early 1980s.

Tax payers will be looking forward to some relief from Finance Minister who is expected to raise the income tax exemption limit to at least Rs 2 lakh in his budget proposals.

The Minister may also marginally raise the slabs in other tax brackets of 10 percent, 20 percent and 30 percent. The Direct Taxes Code (DTC) Bill has also made a mention of it.

The DTC, which will replace the Income Tax 1961, however, will only come into force from 2013-14 and the Minister may make a formal announcement on it in his budget speech.

The Standing Committee of Parliament that has scrutinised the DTC Bill has already submitted its report to the Lok Sabha Speaker.

Although the Committee had suggested raising the tax exemption limit to Rs 3 lakh, it is unlikely that Mukherjee will agree to it in view of the need to contain fiscal deficit.

With limited space for give away, the Budget is likely to balance populism with some tough measures to check tax evasion and generation of black money.

However, in view of reverses in the recently concluded state assembly elections, Mukherjee may go slow on economic reforms like FDI in multi-brand retail and further opening of the insurance sector to foreign investment.

There could be some bad news for prospective car buyers as government may hike duties on luxury items to raise resources.

Mukherjee is facing a huge challenge of reviving economic growth, which has slowed down over the last six quarters.

The country's gross domestic product (GDP) growth fell to three year low of 6.1 percent in third quarter of the current financial year. It was recorded 7.7 percent in the first quarter and 6.9 percent in the second quarter of the current fiscal.

Pranab warns allies against amendments to President's speech

A dinner for UPA allies at Prime Minister Manmohan Singh's home on Tuesday ended with a serious message for Mamata Banerjee, who skipped the meeting and sent instead not one of the Trinamool Congress ministers in the UPA government, but MP Ratna De Nag.

Ms Nag arrived at the dinner late, to be handed a type-written, unsigned note for Mamata Banerjee that reportedly said that an amendment her party has sought in Parliament is embarrassing for the government she partners. The note reportedly stops short of saying that the amendment - seeking the deletion of a reference to the new National Counter Terrorism Centre (NCTC) from the President's speech to Parliament yesterday - be withdrawn.

But at the dinner meeting, sources said, Finance Minister Pranab Mukherjee made clear that if the Trinamool persisted with the amendment and there was a vote on it, the UPA government could fall. When Ms Nag said that her party did not intend to destabilise the government, Mr Mukherjee reportedly pointed out that though the UPA's allies might not willfully want the government in trouble, such moves would only have the Opposition taking advantage of the situation.

That is already happening. The BJP too has reportedly sought an amendment similar to the Trinamool's on the mention of the NCTC in the President's speech, and the main opposition party wants a vote on that amendment. In case of a vote, the TMC would find it difficult to support the government - party chief Ms Banerjee, the Chief Minister of West Bengal, has been the Group Captain for 10 chief ministers who have objected to the NCTC on the grounds that its powers encroach upon those of state governments. The Centre has delayed the commissioning of the NCTC till an extensive dialogue is completed with states.

After the dinner meeting, Home Minister P Chidambaram said it had been impressed upon all allies that members of their party must be present in Parliament to vote with the government and help it push through important legislation in the Budget Session that began on Monday. It was also decided that all UPA allies would meet every day in Parliamentary Affairs Minister Pawan Bansal's room for better floor coordination in Parliament. Partners like the TMC and the DMK have repeatedly accused the Congress-led government of not consulting them on key policy decisions and blamed it for poor coordination.

The DMK too put the government in a spot on Tuesday by moving amendments seeking that the President's address reflect India's stand on alleged war crimes by the Sri Lankan government. A resolution backed by the US against reported atrocities will come up within the next few days at the United Nations Human Rights Council at Geneva. The DMK has said India must vote against Sri Lanka. The party also wants the President's address to refer to the repeated arrests by Sri Lanka of fishermen from Tamil Nadu.

Tuesday's dinner is being seen as the government's effort to rebuild bridges amid reports that the coalition is on shaky ground. Mamata Banerjee's open snub in sending a relatively junior representative to the important dinner adds to the speculation that the coalition is very fragile. The TMC has since tried to play down Mamata's cold shoulder, with Rajya Sabha MP Derek O'Brien tweeting, "Dr Ratna Nag who attended PM dinner is our Deputy Leader in Lok Sabha. She is a lady & in our party we respect all. She's a key member of TMC."

Ms Banerjee has also denied interest in exiting the government or in exploring political options, but her actions have suggested otherwise.  While Ms Banerjee chose not to send a minister to the PM's dinner, she is sending close aide and Union Minister Mukul Roy to Punjab CM Parkash Singh Badal's swearing-in later today.

Talk of a Third Front with the Samajwadi Party, the Left and Chandrababu Naidu's TDP continues to do the rounds.

Ms Banerjee late last year forced the government to suspend its reforms in retail just days after they were announced. With her 19 MPs, she is an indispensable partner in the UPA. She also accused the Centre of violating the principles of federalism late last year, when the Centre introduced the anti-corruption Lokpal Bill in the Lok Sabha. Though the bill was passed there, it has yet to be cleared by the Rajya Sabha.

Though Ms Banerjee has said that she remains committed to the UPA, her recent gestures suggest she is not closed to exploring other options. She accepted invites to the swearing-in ceremonies for Akhilesh Yadav in UP and the Akali-BJP government in Punjab; the Congress took offence. Later, she said she would send representatives instead.

Aggressive BJP to corner Govt over Lokpal Bill

The second day of Parliament’s Budget Session on Tuesday is expected to be stormy with the opposition BJP moving a motion for suspension of Question Hour in the Rajya Sabha for discussion on Lokpal Bill.

The Upper House was, meanwhile, adjourned till noon after opposition uproar over government's stand on atrocities on Sri Lankan Tamils.

The DMK, AIADMK and Left parties had moved notices for suspension of the Question Hour to discuss atrocities on Sri Lankan Tamils.

The motion concerning Lokpal Bill, moved by Leader of the Opposition in the Upper House Arun Jaitley, comes after the government stated that it plans to take up the Bill in the second part of the Budget Session beginning April 24.

The BJP is however demanding a discussion on the issue today itself, saying it wants an “adequate reply” from the government.

Discussion on the Motion of Thanks to the President for her address to Parliament is on the agenda for today.

The Lok Sabha had cleared the Lokpal Bill on December 27 in the extended Winter Session. However, the Bill couldn't be passed in the Rajya Sabha and both sides accused each other of choreographing chaos to scuttle the legislation.

In his customary eve-of-the-session media interaction, Parliamentary Affairs Minister Pawan Kumar Bansal had said that the government has "very little time" for legislative business in the first part of the session inspite of the fact that 39 bills are listed for consideration and passing, including the Lokpal and Lokayuktas Bill, which has been approved by the Lok Sabha.

Soon after the BJP's threat to take up the Lokpal issue, Congress president Sonia Gandhi held consultations with her senior colleagues.

Those present included Finance Minister Pranab Mukherjee, Bansal, Rural Development Minister Jairam Ramesh and Political Secretary to Congress President Ahmad Patel.

Mukherjee also held a meeting with BJP leaders LK Advani, Sushma Swaraj, Arun Jaitley and Yashwant Sinha.

Curb on EC: Govt denies, but Note out in the open

A day after the government rejected reports of a possible move by the Group of Ministers (GoM) on corruption to take the model code of conduct out of the purview of the Election Commission , a leading daily on today published the ‘secret agenda note’ which disclosed the government’s intention.

The Indian Express had yesterday published a report saying the Central government has begun the process to provide statutory backing to the election code, following which the poll panel would lose the right to act on complaints of code violations which would then be dealt with by courts.

Within hours of the report being published, three senior ministers of the UPA government had denied any such agenda for the seventh meeting of the GoM on corruption, headed by Finance Minister Pranab Mukherjee, scheduled to be held at 1.00 pm today.

Law Minister Salman Khurshid said, "To my knowledge, there is no such thing on the agenda. As far as I understand, it was agreed that once the elections are over there will be an all-party consultation on the issue about electoral reforms which are being pushed by the EC." He added, “But if it is raised by any political party during the course of discussion, we will take it as and when it happens.”

“From where this idea has come? But on the GoM agenda there is nothing,” is what Pranab Mukherjee told.

Telecom and HRD Minister Kapil Sibal said in Lucknow, “I am on the GoM but I am not aware of the agenda. It so happens that bureaucracy makes certain proposals and sometimes we discuss them while at others we reject them.”

Even the Department of Personnel and Training (DoPT) said in a statement that the claims were “totally misconceived”.

“...There is no such move under contemplation of the Government or the Group of Ministers... The GoM has not made any recommendation to make the Model Code of Conduct statutory or to take it outside the purview of the Commission,” the DoPT said in a release.

However, the note published by the newspaper clearly shows that poll code is on the ‘secret’ agenda of the GoM.

“...The Chairman was also of the view that ‘Code of Conduct’ was one of the biggest excuses to stall development projects, and thus agreed with the request of the Law Minister to flag this issue and its inclusion in the agenda papers. It was also suggested that the Legislative Department may also look into the aspects where executive instructions of the Election Commission of India were required to be given statutory shape. Accordingly, Secretary, Legislative Department, has been requested to make a presentation before the GoM on the progress made in the matter,” mentions the note.

Reacting to the development, Chief Election Commissioner SY Quraishi told the daily that the government’s move was “highly misconceived” and aimed at curbing the powers of the Election Commission.

Finance Minister Pranab Mukherjee said 'India doesn’t need peanuts aid offered by UK'

The UK government is facing ‘grave political embarrassment’ after it emerged that India rejected around GBP 280 million in aid from Britain, calling it ‘peanuts’ and wanted to “voluntarily” give it up.

According to The Telegraph, Finance Minister Pranab Mukherjee once said that India “does not require” British aid, during question time in the Rajya Sabha.

“We do not require the aid,” Mukherjee said, according to the official transcript of the session.

“It is a peanut in our total development exercises (expenditure).” Mukherjee said, adding that the Indian government wanted to “voluntarily” give it up.

According to a leaked memo, Foreign Minister Nirumpama Rao proposed “not to avail of any further British assistance with effect from 1st April 2011,” because of the “negative publicity of Indian poverty promoted by UK’s Department For International Development (DFID)”.

DFID officials, however, claimed that the department told the Indians that cancelling the programme would cause “grave political embarrassment” to the UK, according to sources in Delhi.

“They said that British ministers had spent political capital justifying the aid to their electorate. They said it would be highly embarrassing if the Centre [the government of India] then pulled the plug,” the paper quoted the source, as saying.

Britain currently pays India around GBP 280 million a year, six times the amount given by the second-largest bilateral donor, the United States.

Almost three-quarters of all foreign bilateral aid going to India come from Britain. France gives India around GBP 19 million a year in aid.

FM Pranab Mukherjee: India won't cut Iran oil imports

India, which imports 12 percent of its oil from Iran, will not scale down its petroleum imports from Tehran despite US and European sanctions against the Islamic republic, Finance Minister Pranab Mukherjee has said.

"It is not possible for India to take any decision to reduce the imports from Iran drastically, because among the countries which can provide the requirement of the emerging economies, Iran is an important country amongst them," Mukherjee told.

Speaking at the end of a two-day visit aimed at wooing US investment, Mukherjee yesterday said: "Some other countries, Saudi Arabia, Nigeria, the other Gulf countries they also contribute but Iran contributes substantially."

"We (India) imports 110 million tonnes of crude per year. We will not decrease imports from Iran. Iran is an important country for India despite US and European sanctions on Iran," the finance minister said.

India, the world's fourth-largest oil consumer, is Iran's second-biggest oil client after China.

The US and other Western sanctions have been imposed on Iran's economy over Tehran's controversial nuclear programme. US President Barack Obama added to those measures on December 31, last year when he signed into law additional sanctions targeting Iran's central bank and financial sector.

Indian Ambassador to the US Nirupama Rao last week said that India's purchase of oil from Iran has dropped slightly in last two years and is expected to drop further given the difficulties New Delhi might have in making payments through banks due to tough sanctions imposed against Iranian banks.

Rao had said India was in touch with the US Government and closely monitoring the developing situation concerning Iran, when asked about the pressure from the US that India needs to reduce its dependency on Iranian oil.

Pranab Mukherjee : Difficult to meet 4.6% fiscal deficit target

India will struggle to meet a fiscal deficit target of 4.6 percent for the fiscal year that ends in March, Finance Minister Pranab Mukherjee said on Wednesday, calling it a "major challenge".

"It will be difficult to achieve the target of fiscal deficit of 4.6 percent for the current financial year though we will make our best efforts to reach as near as possible," Mukherjee said.

FM added that inflation will drop to between 6 percent and 7 percent by the end of March.

India's headline inflation was a 7.47 percent in December, a two-year low as food price pressure eased dramatically.

The current time is most challenging for all policymakers "...we have difficult 2 -3 months in the current fiscal. Our growth for 2011-12 may be around 7 percent plus or even less than that. There are also concerns about central government finances for the current fiscal", he said.

He, however, expressed hope that the Reserve Bank would take appropriate steps in its forthcoming monetary policy review on January 24 to keep the growth momentum.

"Going forward, I am sure RBI will take into account important concerns of balancing the targets of controlling inflation and keeping up growth and employment generation," he said.

The economic growth during the first half of the current fiscal has slipped to 7.3 percent from 8.6 percent in the corresponding period a year ago.

On fiscal deficit, he said the performance during the first half of 2011-12 poses some risks on both receipts as well as expenditure.

Air India turnaround: GoM to meet today to review plans

A Group of Ministers (GoM) is scheduled to hold a crucial meeting on Tuesday to critically review Air India's debt recast and turnaround plans and  recommend to the Union Cabinet additional equity infusion in the ailing carrier.

The GoM, headed by Finance Minister Pranab Mukherjee, would deliberate on the Reserve Bank of India's views on the debt restructuring plan, as well as the programme for acquisition of 27 Boeing 787 Dreamliner planes, sources said.

This would be the first GoM meeting to be attended by Civil Aviation Minister Ajit Singh, who took over the mantle of the Ministry only a month ago.

The meeting is likely to consider the recommendation by a panel of secretaries to infuse Rs 23,000 crore into the national carrier over the next 10 years, of which Rs 6,600 crore could be invested in the current fiscal ending March 31.

The debt-ridden carrier has outstanding loans and dues worth Rs 67,520 crore, of which Rs 21,200 is working capital loan, Rs 22,000 crore is long-term loan on fleet acquisition, Rs 4,600 is vendor dues and an accumulated loss of Rs 20,320 crore, according to official figures.

The meeting comes less than a week after the Central Board of Excise and Customs froze Air India's 11 bank accounts for non-payment of duties worth an estimated Rs 300 crore. An Air India official had then said "we are making on account payments and having the accounts released".

At the last meeting in October last year, the GoM had decided that it could take a decision only after the RBI gave its nod to the debt restructuring plan.

In the past two months, RBI has had several rounds of meeting with Air India's bankers, who also have met the airline's top brass to finalise the debt recast package.

FM Pranab Mukherjee: Inflation seen easing to 6-7% by March

India's inflation is expected to ease to between 6 and 7 percent by March, Finance Minister Pranab Mukherjee said on Friday, a day after data showed a sharp easing in food inflation.

Headline inflation has barely budged from above 9 percent for a year now, driven mainly by high food prices. Any moderation in food is expected to give relief on the wider inflation reading.

Mukherjee also reiterated that he expects growth for the 2011/2012 fiscal year to be 7.5 percent, with a 0.25 percent margin of error.

Pranab to review status of large infra projects today

Keen to accelerate infrastructure development, Finance Minister Pranab Mukherjee will review on Tuesday the status of eight large projects, including those in the power sector, which are getting delayed due to regulatory clearances.

"Banks have sanctioned loans for eight projects, but these are yet to be implemented due to various regulatory approvals which are pending. While seven of them envisage investments between Rs 1,000-1,500 crore, one is over Rs 5,000 crore," a Finance Ministry official said.
    
Various public sector banks have approved loans worth Rs 6,124 crore for these projects. The total cost of these projects is Rs 13,867 crore.
     
Mukherjee has begun reviewing large projects after his meeting with India Inc on August 1. The initiative follows requests by industry leaders for speeding up clearances.
     
"Besides, several other projects worth Rs 100-1,000 crore will be reviewed by the Finance Minister," the official said.
     
The meeting is also likely to be attended by other ministers belonging to the concerned ministries.
     
Projects which are slated to come up for review include: Nagai Power Plant (Rs 1,440 crore) in Tamil Nadu, Ideal Energy (Rs 1,391 crore) in Maharashtra, OCL Iron and Steel (Rs 1,190 crore) in Orissa (Rs 1,190 crore) and Palatana Power (Rs 5,279 crore) in Tripura. Besides a Rs 1,259 crore project by Bhartiya City Developers will also come up for review.
     
In the last review meeting held in mid-November, the government had announced that three mega infrastructure projects envisaging an investment of Rs 25,000 crore have been accorded regulatory clearances.
     
Infrastructure bottlenecks are considered one of the major impediments in further accelerating economic growth in the country.

Union Cabinet to fine-tune Lokpal Bill today

The Union Cabinet is expected to consider Monday the much-awaited Lokpal Bill that is likely to bring Prime Minister under the proposed anti-graft ombudsman with certain conditions and provide for creation of an independent prosecution directorate.

The bill, which is expected to be tabled in Parliament before the end of the current session, is being fine-tuned by an informal group of ministers comprising Finance Minister Pranab Mukherjee, Home Minister P Chidambaram, Law Minister Salman Khurshid and MoS Personnel V Narayanasamy.

The Cabinet, which met last night, saw some deliberations on the legislation but the detailed note on the subject is expected to formally come up before Cabinet meeting today, possibly in the evening.

Prior to that, the ministers concerned are expected to brief Prime Minister Manmohan Singh on the changes being made in the Lokpal Bill, sources said.

While the bill will see incorporation of recommendations made by the Parliamentary Standing Committee which examined it, the government has made it clear that it was open to other ideas that emanated at the all-party meeting convened by the Prime Minister on Wednesday.

"You all know that how many days are left (for Parliament session). We have literally worked day and night to ensure that we meet the deadlines," Law Minister Salman Khurshid told reporters today.

"Let us just get the Bill done and bring it to the Cabinet so that it can be brought before Parliament as quickly as possible," he said amid the looming threat of Anna Hazare to go on hunger strike from December 27 if the legislation is not enacted by then.

Referring to the various proposals floating around, Khurshid said, "the Government is not taking up anything as outstanding view but fine-tuning keeping in mind the basic structure of the law... to ensure that we take public confidence with us because we are also determined and committed to a very powerful Lokpal Bill."

Notwithstanding the demands for bringing CBI under Lokpal, the government is averse to this and instead is contemplating a provision for creating an independent "Directorate of Prosecution", carving it out from CBI.

Accordingly, the Bill is likely to suggest that the Delhi Special Police Establishment Act be amended, sources said.

The bill is also expected to provide for removal of the Lokpal Chairman or member if a joint complaint is made by at least 100 MPs.

The legislation also is likely to provide for 50 per cent reservation to Scheduled Castes, Scheduled Tribes, OBCs, minorities and women in the Lokpal bench on the lines of demand raised by almost all the parties, except BJP, at Wednesday's meeting, the sources said.

With regard to demand for inclusion of Group 'C' employees, the sources said discussions are underway to create an "appropriate mechanism" for this.

One of the suggestions in this regard is placing them under the purview of the CVC who would be asked to report the progress on anti-corruption cases to Lokpal. The Parliamentary Committee had recommended reservation for SCs, STs, OBCs, minorities and women in the Search Committee which will assist the Selection Committee to select Lokpal. However, it was silent on reservation in the Lokpal.

If reservation is provided in the Lokpal panel, it will become the first Constitutional body to have the provision.

On the issue of PM, the Standing Committee had refused to take a position but recommended three options – inclusion without exception and qualifications, inclusion with no exclusionary caveats but after demitting office and inclusion with exclusions on issues like national security and foreign affairs and some others.

Making CBI, or its anti-corruption wing, a part of Lokpal still remains a contentious issue.

The Lokpal Bill introduced in the Lok Sabha in August this year says that "Lokpal shall constitute an Investigation Wing for the purpose of conducting investigation of any offence alleged to have been committed by a public servant punishable under the Prevention of Corruption Act, 1988."

Several parties, however, are insisting that CBI's anti-corruption wing should be under Lokpal to give it teeth. On the inclusion of group C employees under the ambit of Lokpal, one of the options with the government is recommendation of the Parliamentary Standing Committee which had recommended a "broad supervisory fusion at the apex level" by some changes in the CVC Act.

"The CVC should be made to file periodical reports, say every three months, to the Lokpal in respect of action taken for these class C and D categories.

"On these reports, the Lokpal shall be entitled to make comments and suggestions for improvement and strengthening the functioning of CVC, which in turn, shall file, appropriate action taken reports with the Lokpal," it had recommended. It had also recommended "appropriate increase" in the strength of the CVC manpower.

Pranab: Practical solutions needed for economy

India needs practical solutions to address its economic slowdown, Finance Minister Pranab Mukherjee said on Today.

He also told an industry event that inflation remained unacceptably high and that this along with high interest rates was hurting growth, although economic fundamentals were strong.

Asia's third-largest economy is now expected to grow by 7.25 to 7.75 percent in the fiscal year ending next March, the government said in a mid-year review last Friday, down sharply from an estimate of 9 percent issued in February.

Inflation held stubbornly above 9 percent in November, maintaining pressure on the central bank to keep interest rates steady at a policy meeting on Friday.

Reflecting concerns about the economy, the rupee sank to a record low for the fourth day in a row on Thursday, falling to 54.30 to the dollar, as investors grew increasingly bearish about the economic outlook.

Debate rages in India over allowing FDI

For multinational merchants like Wal-Mart, it seemed to be the long-awaited opportunity to jump into India with both feet. But on Monday that moment appeared to be delayed once again.

Late last month, as part of a push to modernize his nation's notoriously inefficient retail economy, Prime Minister Manmohan Singh announced that for the first time big foreign companies like Wal-Mart and the British company Tesco could open retail stores in India.

Until now, foreign companies have been restricted to serving only as wholesalers in India. That has already helped create more modern distribution networks, often while generating better prices for farmers and other producers, and giving customers better deals, too.

But expanding the foreign presence to retailing has been seen as the necessary next step for modernists like Singh, who has been urging the move for years. Praise for his announcement came from India's corporations and some of its 175 million farmers, who see the move as part of a wave of changes that might help jolt a slowing economy.

And opponents - representing the 34 million people who work in retail and wholesale businesses, as well as left-leaning politicians - were just as loud.

On Monday, leaders of two opposition parties said finance minister, Pranab Mukherjee, had agreed to a delay. Mukherjee is expected to make a statement in Parliament on Wednesday.

All of this places Wal-Mart in a position hardly new to the company: at the center of a raging debate that pits the multinational giant from Bentonville, Ark., against local mom-and-pop businesses.

For more than a year, Wal-Mart has been operating a wholesale outlet in this northern city known for its fertile farms and hearty food. Local businessmen like Ravi Mahajan, whose family has had a wholesale general store in the narrow alleys of the Imam Nasir market for 40 years, say their sales have been cut in half as their customers - retail shopkeepers - stock up at Wal-Mart.

If the government eventually lets foreign firms expand beyond wholesaling to open retail stores, Mahajan said, many of his retail customers would be forced out of business, while squeezing out traders like himself who have long served as the crucial middleman in Indian commerce.

"We'll be destroyed," Mahajan said last week, minutes after he and dozens of other traders burned an effigy with a bloated belly and a crudely drawn face, meant to represent multinational marauders.

But Indian business is far from united in opposing foreign retailers.

Farmers like Avtar Singh Sidhu, who sells potatoes to PepsiCo for its Lays chips and has sold baby corn and other vegetables to Wal-Mart's local partner, the Indian conglomerate Bharti, argues that foreign retailers will be a boon to India's struggling agricultural sector. The multinationals, he said, will buy directly from farmers and pay better prices than local wholesalers.

Already, he said, PepsiCo is offering 6 rupees per kilo (or 11 cents) for his potatoes, while local traders offer only 3 rupees (6 cents). "We need more competition," Sidhu said.

Policymakers are looking for ways to stimulate economic growth, which fell to an annual pace of 6.9 percent in the three months that ended in September. It was the first time India's growth rate had fallen below 7 percent in two years.

The announcement by Singh's administration on Nov. 24 called for allowing foreign companies like Wal-Mart to team up with Indian partners to open retail stores in metropolitan areas with more than 1 million people. Jalandhar has 2.1 million people.

'Govt puts retail FDI on hold, to rework policy'

Amid growing opposition to its decision of allowing foreign direct investment (FDI) in retail sector, the UPA government on Monday decided to put the issue on the back burner.

Highly-placed sources told  that the government has decided to halt the implementation of the decision to allow 51% FDI in multi-brand retail and 100% FDI in single-brand retail for now.

An official announcement to this affect will be made in Parliament by Finance Minister Pranab Mukherjee when it meets next on Wednesday, reports said.

Moreover, sources said the government is mulling reworking its policy on allowing FDI in retail, amid opposition from not just the opposition parties but also from its allies - the DMK and the Trinamool Congress.

The development came after Pranab Mukherjee spoke to Leader of Opposition in Lok Sabha, Sushma Swaraj of BJP and CPI(M)’s Sitaram Yechury today.

Mukherjee is reported to have discussed with the two leaders the continuing logjam in Parliament, stressing it was sending a wrong signal to the nation. He is believed to have apprised the two leaders about the government’s decision of putting FDI in retail on hold.

Sources said Yechury told Mukherjee that the Left would not bring a no-confidence motion against the government now.

The decision to allow FDI in retail was taken by the Union Cabinet on November 24. And since the next day the Opposition has not allowed Parliament to function demanding a discussion on the issue under a rule that entails voting.

Following resistance from the opposition as well as its allies, the government had on November 30 delayed issuing notification regarding its decision on allowing FDI in retail.

The government had so far maintained that it was ready for a discussion on the issue in Parliament but not under adjournment motion that entails voting. The UPA had maintained that the decision was an executive one for which the government was not bound to seek approval from Parliament.

Meanwhile, the Congress has issued a whip directing all its MPs to be present in Parliament on Wednesday.

Also on Wednesday, the Congress has called a meeting of its parliamentary board at 9.30 am. That meet will be chaired by Pranab Mukherjee.

Pranab: Economic growth will moderate to about 7.5 percent

Confirming a slowdown, Finance Minister Pranab Mukherjee on Friday said economic growth will moderate to about 7.5 percent in the current fiscal, lower than the earlier projection of 9 percent.

"I am confident that we will be covering some of the losses in our growth momentum and may end the year with over 7.5 percent," he said while addressing the Hindustan Times Leadership Summit here.

GDP growth in 2010-11 stood at 8.5 percent.

The economy expanded at the slowest pace in two years at 6.9 percent in the July-September quarter of the current fiscal. For the first half (April-September) of the fiscal, the average growth rate stood at 7.3 percent.

GDP growth in the second quarter of the fiscal slowed to 6.9 percent from 8.4 percent in the corresponding period last year, mainly on account of rising interest rates and the uncertain global scenario.

The tight monetary policy employed by the RBI to tame inflation affected the performance of manufacturing and other infrastructure sectors, with the eight core industries recording only 0.1 percent growth in October, the lowest in the last five years.

In the Budget for 2011-12 fiscal, Mukherjee had projected a GDP growth rate of 9 percent plus/minus 0.25 percent.

"My growth projection was on the basis of achievements which we have immediately after the international financial crisis of 2008," he said, adding, "I am modest. I have not said that I will be reaching the figure I projected in the Budget."

"We can not expect we can reach a high growth rate of 9 percent overnight. We will have to live with relatively moderate growth this year. Next year, we will try to improve the growth rate higher. This year, growth could be 1 percent down. We should focus on the strategy of domestic demand-driven growth," he said.

Mukherjee said considering the current global context and slowdown in the domestic industrial sector, "The growth performance is not at all disappointing."

Earlier this week, Mukherjee had said the Indian economy is battling both global and national problems and this is getting reflected in the growth numbers.

"We have been confronting the challenge posed by inflation in the past two years. Sustained high economic growth has led to improvements in purchasing power in both rural and urban areas," Mukherjee said.

Overall inflation has been above the 9 percent-mark since December, 2010. It stood at 9.73 percent in October.

Food inflation, which accounts for 15 percent of overall inflation, fell to 8 percent for the week ending November 19 after remaining elevated for four months.

He said the rise in purchasing power has accentuated demand-supply imbalances in some specific commodities, like vegetables, fruits and protein-rich items.

"In addressing this issue, we have taken both short-term fiscal and administrative measures and also medium-term steps to improve supply response," Mukherjee said.

He said in the short and medium-term, the country should emphasise on domestic demand-driven growth to ward off the adverse impact of the global crisis and improved productivity in agriculture is necessary to meet the objective of inclusive growth.

"We have already began the process of fiscal consolidation. Though it may appears extremely difficult, I am hopeful of fiscal balance targeted for the current financial year. The state governments also need to work toward fiscal sustainability," Mukherjee said.

Let politics not block valuable foreign equity retail: Pranab

Farmers and consumers will be the casualties if foreign equity in retail trade is blocked due to narrow political gains, Finance Minister Pranab Mukherjee said Friday, calling for a debate at the right forum rather than confrontation.

Speaking at the Hindustan Times Leadership Summit here, the finance minister said global experience showed how organised retail, with integrated supply chains, cuts post-harvest wastage and gets remunerative returns to farmers and competitive prices to the consumer.

"But that needs appropriate technology and investment in a large scale," he said.

"Yet, despite this recognition, often narrow political gains take precedence over early implementation of a policy framework, even when it is being done in a calibrated and sensitive manner," Mukherjee said, referring to opposition over foreign retailers.

According to him, such policies were needed for an emerging economy like India to ensure improvement in efficiencies to vigorously pursue and sustain high growth that can also be equitable across states and between urban and rural areas.

"But in the absence of timely action or no action at all, it is the farmer and consumer who will suffer, as the nation would miss out on an opportunity."

Opposition parties have stalled functioning of parliament ever since the federal cabinet, in a meeting presided over by Prime Minister Manmohan Singh, approved up to 51 percent foreign equity in multi-brand retail and 100 percent in single brand format.

Even some allies of the United Progressive Alliance (UPA) such as West Bengal Chif Minister Mamata Banerjee-led Trinamool Congress and former Tamil Nadu chief minister's M Karunanidhi's DMK have opposed the move.