RBI hikes CRR to contain inflation

MUMBAI: In a move to contain rising inflation, the Reserve Bank of India (RBI) hiked the Cash Reserve Ratio (CRR) — the portion of deposits that commercial banks are required to keep with the central bank — by 75 basis points from 5 per cent to 5.75 per cent.“As a result of the CRR increase, about Rs.36,000 crore of excess liquidity will be absorbed from the system,” said RBI Governor Subbarao, while addressing a press conference here on the Third Quarter Review of Monetary Policy 2009-10, on Friday.
“We hiked the CRR without hurting growth,” said Dr. Subbarao. “There is sufficient liquidity in the system,” even after the withdrawal of Rs.36,000 crore from the banking system.

Two stages

The CRR increase would be in two stages: the first stage of increase of 50 basis points will be effective the fortnight beginning February 13, 2010 followed by the next stage of increase of 25 basis points effective the fortnight beginning February 27, 2010.The RBI left all other indicative lending and borrowing rates unchanged.Bankers “indicated that the monetary measures announced by the Reserve Bank may not put immediate pressure on lending rates,” Dr. Subbarao said.The RBI also upped its economic growth projection for the end of current fiscal to 7.5 per cent from its earlier estimate of 6 per cent.It estimated that inflation will touch 8.5 per cent by March-end from its earlier projection of 6.5 per cent in October.“However,” said Dr. Subbarao, “on the assumption of a normal monsoon and global oil prices remaining around the current level, it is expected that inflation will moderate from July 2010.”

Russia-India fighter makes successful maiden test flight

MOSCOW: Russia’s new fifth-generation stealth fighter (FGFA), a joint project with India which is set to form the backbone of the two nations’ air power till the mid-21st century, made a successful maiden test flight on Friday.The plane performed “very well” during a 47-minute flight at an airfield in the far eastern city of Komsomoslk-on-Amur and met “all our expectations,” a spokesman for the Sukhoi Corporation, which designed the FGFA, said.The flight marked a breakthrough for Russia, making it the second country in the world after the U.S. to have built a fifth-generation fighter plane. The FGFA will also be a quantum jump for India as the first joint project with Russia where the Indian aviation industry will be a full-fledged partner.Under a 2007 inter-governmental agreement, the Hindustan Aeronautics Limited (HAL) took a 50 per cent investment stake in the $8-billion project and will contribute 25 per cent of design and development work. The two countries will shortly sign commercial contracts and set up a joint venture company to build the aircraft.
India will be responsible for supplying the plane’s navigation systems, mission computer, cockpit displays and will provide composites for the airframe. While the Russian Air Force has opted for a single-seater, the IAF will get a modified two-seater derivative.The Russian Air Force is expected to begin inducting the new aircraft in 2015. The twin-seat version for the IAF may be ready two years later. Each side plans to acquire 250 planes.Sukhoi head Mikhail Pogosyan voiced confidence that the FGFA will beat the U.S. F-22 and F-35 fifth-generation fighters in cost-effectiveness.“The joint Russian-Indian aircraft will not only strengthen the defence might of the Russian and Indian air forces, but will take a worthy place in the world market,” said Pogosyan, whose company’s previous project, the Su-30 fighter jet, has become a world bestseller. India has purchased 140 Su-30MKI and will build as many under licence.Ruslan Pukhov, director of the Centre for Analysis of Strategies and Technologies, said he expected the FGFA aircraft to be very competitive in international markets because its price would be significantly lower than that of the American rivals.“I think by definition this aircraft will be able to occupy up to one-third of the market,” the analyst said.According to designers, the FGFA will be a truly stealth plane almost invisible to enemy radars: it will be 40 times harder to detect than the Su-30MKI.

Monetary Policy and Inflation:

Growth and price stability balanced approach!!! Fruits of economy development to the last standing man is the political goal.3G -data video and voice..not many people able to buy 3G hand set. entry barrier of 3500 crore and uncertainty in timing made the company not much enthused.Hence raising the money of 30k thousands will not be easy option. Asset sale -- only be used to social sector not for debt releif.

Exit policy: This budget the most important because managing the recovery and the budget deficit . Social security programme can not take back seat. sevice tax, excise duty etc can be tinkled with. rolling back the tax soap no other option.

Banking Reform at Davos

More regulation will means more cost at the same time policy maker say make it more transparent and at industries want least cost . Indian case were a bit different due to strong domestic story. Stimulus package can not be withdrawn in haste. NAREGA and stimus were two most important steps which sailed us through the financial trough. There is a chance of second deep hence stimulus should not be withdrawn in haste. In India banking are mostly in public sector also most of regulation are in govt. hands, though this is a bit less efficient. Way should be slowly making banks independant and strong on it feet. Regulated capitism is the call of the day. Theory of lessezfair is not sufficient initself a good regulation is also must. G8 , G20 or WEF has acknowledged the indian good position. Middle class of india is equivalent to europe population. large and active consumers. mobile phone , automobile growth etc are best in the world. 18% food inflation is the most important concern for today. Cooperative system should be made more transparent and be made more efficient.

Infrastructre and beurocracy is the hurdle for the growth visa vis china. land reform and land acquisition policy need to be made. saving rate of china is more than and India and also the skilled labour if given better chance then we can surpass the china.

India - Russia relation

Low level of biletaral is due to historical reason ,trade were carrying through annual plan and when it broke out there were other market to look at. Also their are other hindrace like language, culture , lack of knowlege about russia, banking system etc. Pharmaceutical, food ,iron ore petroleum etc have great scope to increase. BRIC forum need to consider on the trade as well and hence trade can increase. Focus has sifted out from Russian to SE and other countries. private players like reliance, tata etx need to look towards it.

India Pak Relation

War is not a solution slow on the dialogue because this is requirement of geopolitics . Challenge for Indian is that pressure continue on Pakistan from internation community. Real intension of pakistan to prevent it's soil for anty indian stand. West wants India to engange with Pakistan as they can concentrate on western prontier. One step ahead and two step back on dialogue. Pakistan is neihbour , war is also not a solution hence keeping the national interest , dialogue is only the solution.

P chidramram will be visiting the SAARC ministrial meeting. First they have to dismantle the terror infrastructure. America wants to reduce pressure with India so that they can concentrate on Taliban. But they do not seems serious. Dialogue between the two govt happened earlier but not concrete solution immerged.. India wants few steps from Pakistan for ressumption of dialogue. India is peace loving is proved world wide and also Pakistan has been involved in subversive activities is also world known.

India has offered the foreign secretory level talk. Sharmal seikh statement . Do not have many other option than to talk. 2004 mussaraf had given assurance than it's soil will not be used for anti indian activity but now they say it can not guarantee against it. India kept out of the Turkey conference for Afganistan. Composite dialogue 8 other issue along with kashmir. India is going to insists on terror and Pakistan on CD. India biggest donor to Afganistan but not called in for dialogue .

Us-China-India with Dalai lama angle

For china Arunachal has becoming very important. India's PM going to AP had made China very restless. These are china pressure tactice. It also do not want Dallailama meeting with Obama.

Kereek Pareekh Report on Petroleum product

Six cylinder per year at subsadised price and other at market price for IT returning family. Subsadised on LPG but going and buying the Gold.Subsidy on the targeted group. market better than the plan but market need to be regulated. Deregulate the price, higher price will make people to use public transport and car pooling etc..Subsidy can be used for beeteing the piblic transport.

Disinvestment (NIA) proceed going for the social programme.

Inflation can go around 10% due to still price raising and other demand increasing. CPI is already around 15%. Subsidy aroung 4% of GDP. Hence reduce this and also increase the revenue.

They want our developmental policy to follow the path which emits less emmission. Drought flood , forest area conservation , wild life sanctury and along with this we have to develop. The western countries who had historically be responsible for it , is not taking it's due responsibility.

Shiv Sena and MNS menace

Infrastrutural chocking due to migration has been sighted as the reason for anty north Indian stand. But why not internal maharastrian migration. Second tier cities need to develop to reduce the migration to the big cities. Urbanisation is the process of the migration .10 % GDP is being contributed to national GDP. Employement creation is the key to stop that. We can not have dramatic employement generation. Increase the manufacturing hubs for employee sucking. The rural demand generation will drive the manufacturing sectors. Roads housing, Irrigation, telecome are being built at mass level. The small scale industries need to be given more priority. Except the Delhi no other cities in North India grew like that in South,hence migration directed towards south. I think the solution is like party are banned for religious hatred. Similarly we should have a policy of banning the party who raise the national hatred, this will somewhat solve the problem Constitution is prime and even maharastra is built as per constitution. Political reform is the key and stringent action need to be taken on the party who raise the any kind of hatred.

Shiv sena policy is of vandalism. their political area is only Maharastra. Law is not taking it's course. Statement may strain the secular fabrics of the nation. MNS is funded partly by congress.

Rule of law is the prime. The political calculation need not be taken the motive for any move.

Time has come to distinguish between governance and politics. Saamna should be curbed on.

Kirit Parik Commettee on the Petroleum product pricing.

A Prime Minister-appointed expert group on suggested freeing petrol and diesel prices and called for raising LPG rates by a steep Rs 100 per cylinder and kerosene by Rs 6 a litre, recommendations that may not be acceptable to the government battling high inflation. At current global crude oil prices, deregulating auto fuel pricing would result in a hike of Rs 4.72 a litre in petrol prices and a rise of Rs 2.33 per litre in diesel rates. Considering the cascading effect an increase in diesel rates would have on food prices, this recommendation may not be accepted while there seems to be a consensus between ministries of finance and petroleum on freeing petrol prices. "Current petroleum product pricing policy of the government is not sustainable," Kirit Parikh, who headed the panel, which also included Finance Secretary Ashok Chawala and Oil Secretary S Sundareshan, said after submitting the report to Petroleum Minister Murli Deora here. At present, kerosene is sold at a discount of Rs 18.06 a litre and domestic LPG cylinder at Rs 287.59. The remainder of the gap between retail price (after the suggested increase) and the imported cost of fuel should be met by the government and by upstream firms ONGC and Oil India. Parikh, did not see much inflationary pressure because of the measures suggested saying the steps like increase in tax rates needed to bridge the fiscal gap between the retail price and actual cost was unsustainable. "There is no way we can continue with the current pricing policy," said Parikh while discussing the recommendations here. The government may take a decision on freeing petrol and diesel prices after the report. Price of petrol may go up by Rs 4.70 a litre and diesel by Rs 2.30 a litre if the government gives the pricing freedom to state-owned oil marketing companies - IndianOil Corporation (IOC) Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL). A price hike of petrol and diesel is imminent unless finance ministry pays full cash compensation to state-owned oil companies for kerosene and cooking gas, an oil ministry official said requesting anonymity. The finance ministry has decided to pay a compensation of only Rs 12,000 crore in 2009-10 to public sector oilcos for selling kerosene and cooking gas below cost as against total estimated revenue loss of Rs 31,000 crore in the fiscal year. In July last year, the cabinet had taken a decision to meet the entire revenue loss of public sector OMCs on cooking gas and kerosene either through oil bonds or cash. Losses on petrol and diesel were to be compensated by state-owned upstream companies - ONGC, Oil India and Gail India, he said. The upstream companies have already paid about Rs 8,364 crore to the three public sector oil companies for their losses on auto fuels in the first three quarters of 2009-10 .

The finance minister, however, wants to reduce fuel subsidy burden. He is in favour of deregulation , as mounting subsidy burden is a major concern for the public exchequer. The government had to pay over Rs 71,000 crore in 2008-09 as fuel subsidy though oil bonds.

Dereguate oil product is taken away from the state control . Rangrajan, B,K chaturvedi committee were also given similar recommendation earlier. Diesel subsidy through either increase in MSP or the cash .There are large diversion of the cylinder for commercial. Those who can pay should be taken out of the subsidy and those who can not afford should be subsidised. 2011-12 80% dependancy will be on the import hence it is not possible to regulate it.

Administrative price mechanism desmantled in 2002 partly. Oil marketing company can buy at the market price but sale at subsidised price. sales tax on the petroleum product need to be rationalise.

Monthly or at most quarterly review of the price should be taken.

Subsidy reduction will allow to reduce the budget deficit and hence reduce the inflation..

Need for diesel, LPG and kerosene is used by lower strata of the people. If the kerosene price increased then they may move to wood and other more climatic serious source. Subsidy dispansation should move to UID based smart card for direct subsidy. rajeev Gandhi LPG programme till 2015 to make vailable it to rural india but at the same time asking to increasing price. 4 Lakhs tax break to corporate sector. Energy sector can be seen in the paradim of socio economic spectrum.

Hence tax break needed for corporate sector or subsidy to poor people.

PM clean up move

PM wants the ministers to disclose the assets(jwellary, land,equity) and leave the business interest either directly or by the family members(spouse or minor). PM lays out the code of conduct.

GST what good it can do

Get away with the multiplicuty in admistrative acitivity and increase the compliance. Reduce tax evasion. Financial unification of the cooutries. State tax octorai, local taxes all will be unified. It may add upto 2% of GDP. European did it before FTA. impawored committee to look into this. Good of India is good for all the states. This is leap in unknon. State has to loose the right to tax hence constitution amendment required. Logistic need to look like computarised the tax system of the countries. It is a bit better to delay in start with better prepared than start with hiccup though it is impossible to start a perfect scheme in one go. Some of the policies issues are not dealt at depth. Centre want one rate but states want two rates. Political issue is two rate v/s one. 5 to centre and 7% to state . second is compensation to state for certain period.Technological preparation is missing as political issue were given priority. If in next 6 months political issue settled then the technical issue can be settled. real state and petroleum product should be included or not is also tghe issue.

Compensasation to state; Asim das gupta (chairmain) 68% of the loss can be compensated.. This is complicated as it involve all the countries. State who loose how to compensate. 120 to 140 countries has already implemented. Also some countries do not know how much they will be loosing hence a bit hesitant to accept or reject.

Food Price Inflation

10 to 15% increase in food price due to state tax. State and center should work together to reduce the price rise. Part of price rise id due imported inflation. Sugar and pulse import has lead to price rise. The public distribution system should be strengthened

Fisrt time state and center meeting together. last monsoon were a bit less hence there was some problem with supply side. Hoarder has been the problem. Inflation will be around 8.5%. By july price will come down in july when rabi crop comes in. Big difference in retail and whole. FCI deals with rice , wheat and sugar. Large difference between what farmer is getting and what consumer pay.

Telangana fiasco

Commettee form for Telangana issue. Govt wants to delay the process and buy sometime. terms of reference and time frame not yet decided.

Why wants to join Civil services

Becoming 'an IAS', as I foolishly used to say as a kid, is a dream I've nurtured since childhood. As I mellowed up, I could understand the myriad ways in which the service contributes to nation-building, to societal uplift, towards not just system maintenance but also towards development. Reading newspaper reports highlighting the endeavors of civil servants, especially on field, in rural areas, towards education, health, rural connectivity, women empowerment etc, I could always feel - This is where I belong, what I want to do.

Budget expectation:

Democracy:

Will be live by voting but at the same time the self discipline and proper working of the legislation and parliament. At least there should not be any problem in question hours. Disruption leads to the many important bill are just passed by few minutes of discussion. Even many a time the members who raise the question remain absent. Responsibility of the people and political parties to select the quality member. I think devolution of power will lead to apart from other thing will have true participation of large of number of people in the political process and then this will precipitate quality candidate for the leadership. Women and youth participant will somewhat will have positive effect on whole democratic system. The working days of the legislation is reducing day by day, though salary and perks have increased but the working days are reducing.

many a time even quorum is not there.

Election reform:

After so much effort lot of criminal background people with serious charges are elected in the processes. Election commission has a role and main is the political party . Murder , kidnapping rape , these charges are of serious type and people of these charges should not be given ticket. Also information of the candidates need to be put along with the polling booth and at the election offices. The only criteria is the winning candidates are given the ticket. Participation of people in political process is the key.

Fiscal deficit is concern now

Smaller states

I think we have got the mixed result from the smaller states. Though I am in favour of smaller states but a proper guideline should be prepared with wider consultation . Economic and geographical viability along with the people democratic and developmental aspiration need to take care off.First re organization act 1956. srimallu gave their life for it based on language.But now language is not the issue now last three states were all the same language. Now every wants to participant in the developmental process. No decision should be taken in haste. Should have a commission comprising of varied class of people. self introspection: Members should tell people what question they have asked. Even larger state not developing exp. U.P and bihar also we have Jharkhand . Gorkhaland will have single member. At least 2 crore should be the population limit.

Media has a role for better democracy. Positive reporting rather than sensualisation.

Federal relation will have a bitting for more states hence a guideline should be their

Globalization and its impact on inflation

Why was EU more vibrant than SAARC.

India 's offer to LDCs.

Whether RTI is applicable Indians abroad and how can they access it.

Grading system in 10th and 12th std.

Chronology of Kashmir problem

what is the solution for Kashmir problem?

Why can't we go the Israel way?

Naxalism is terrorism (compare)

Solution to Naxalism problem

What are the problems India is facing?

We find that the middle class in India is very self-centred. It is concerned only about rising above and not about larger issues. It only pays lip service to issues of common interests. Even voters' turnout is low for the middle class. How do you think their behaviour can be changed?"

Of what use is your engineering skills in administration?

Give a history of the Naga Movement?

What if I'm pressurised by politician?

Was the assignment level in IIT mamageable

My view on banning of internet in IIT

power sector and reforms

My view on banning of internet in IIT?

What are website that you surf?

What is difference of net surfing and net brwosing.

Are bio-fuels good alternative sources of energy?

National solar mission.

What is women's empowerment? What will you do if you are posted to a district to empower the women there?

Why o IT company in Bihar?

advantages and disadvantages of Indo-US nuclear deal.

CCEA examination Process..

why IAS over other services:

It is more closer to the people and hence get better opportunity to serve to the people..

Have you lost the age advantage?

Innovative solution to Indo-Pak problem?

What all missiles have been inducted into the army?

Young is better?

I think some experience will handy for the people to handle around 40-50 department that is there for a DM. Hence this much responsibility can be better handled by a bit more experienced people.

Naxal Problem:

1969 started as the agrarian revolt.

Deemed University should it be done away with?

Acedamic accountability of the deemed university are lacking. Strong monitoring is lacking. Yashpal committee university should be self regulatory body. deemed university in itself has free hand which is misused. The deem university advertising many big claim , these found wrong then there can be a criminal offense and punishment should be according to that. Around 2 lakhs students are in these deemed university, hence need to be considerate about them as well.

Effective regulation is required from very begining. and continuation of the monitoring is required. Many of these 44 universities has good quality infrastructure but lacking qulaity facilities as their main motive is profit making. Focus of the research is completely lacking. Commercialization capitation fees etc. are also a concern. University should be having multi disceplenary so that exchange of the ideas hence compartmentalisation of knowledge. Public scrutiny means accounts and every thing need to be checked by by an act of parliament.

Privatization of Higher education:

MSclasses4IAS.Com

Innovation in way we prepare for civil services..through technology

Notice Board

RBI hikes CRR to contain inflation

Russia-India fighter makes successful maiden test flight

Monetary Policy and Inflation:

Banking Reform at Davos

India - Russia relation

India Pak Relation

Us-China-India with Dalai lama angle

Shiv Sena and MNS menace

Kirit Parik Commettee on the Petroleum product pricing.

PM clean up move

GST what good it can do

Food Price Inflation

Telangana fiasco

Why wants to join Civil services

Budget expectation:

Democracy:

Election reform:

Fiscal deficit is concern now

Smaller states

Globalization and its impact on inflation

Why was EU more vibrant than SAARC.

India 's offer to LDCs.

Whether RTI is applicable Indians abroad and how can they access it.

Grading system in 10th and 12th std.

Chronology of Kashmir problem

what is the solution for Kashmir problem?

Why can't we go the Israel way?

Naxalism is terrorism (compare)

Solution to Naxalism problem

What are the problems India is facing?

We find that the middle class in India is very self-centred. It is concerned only about rising above and not about larger issues. It only pays lip service to issues of common interests. Even voters' turnout is low for the middle class. How do you think their behaviour can be changed?"