4 ECONOMY MUMBAI | THURSDAY, 16 APRIL 2015

"Senior leaders should refrain from

We might have an electoral alliance in "The PM has asked the petroleum ministry to find a
making open comments. They should not
some states at a particular juncture way to increase production for petroleum
create unnecessary controversy as
but there will not be any national level products...We need to be self-reliant as far as the
interested sections want to create
alliance with them (regional parties) sector is concerned,"
confusion" PRAKASH KARAT
P C CHACKO NITIN GADKARI
General Secretary, CPI(M)
Union Transport Minister Source: PTI
Spokesman, Congress
> .

N RECIPE FOR A GLOBAL ECONOMY N

Disinflationary trends quicken in March
Sinha for full rupee Wholesale price index (WPI)- lower oil prices over the medi-
based inflation averaged 2.1 per um term will also temper
cent in FY15. This is one-third inflationary expectations
IN FREEFALL
CRISIL Core Inflation
Indicator (CCII), an alternative
measure of core inflation,
WPI saw a fall owing to lower
inflation in basic metals, alloys,
and metal products and certain

convertibility
of the reading seen in 2013-14 going ahead. Non-food manufacturing which is calculated by remov- chemical products that are not
inflation
at six per cent, signalling a In March, primary article CRISIL core inflation ing metal prices from the prices captured in the core at the con-
sharp decline in inflationary inflation also moderated, indicator (CCII*) % of manufactured articles, fell sumer retail level (CPI).
10
pressures in the economy. In falling to 0.1 per cent from 1.4 to 0.4 per cent from 0.8 per cent With CPI inflation at six per
March, WPI-based inflation per cent. This was driven by 4.3 in February. The reason met- cent and WPI inflation at 2.1 per
was -2.3 per cent the fifth declining prices in non-food (- 0.4 als are excluded from the CCII cent for 2014-15, the Reserve
Capital account consecutive negative reading 7.1 per cent) and minerals (-27
compared to -2.1 per cent in per cent) in the month. On the
is that metal prices are mostly
determined by changing glob-
Bank of India (RBI) has space to
reduce the repo rate further. The

convertibility still a February. other hand, the level of infla-

This decline reflects sub- tion in food articles remained
dued manufacturing inflation much higher, albeit dropping 3.3
-0.4 -2
al demand-supply dynamics
and volatility in exchange rate
rather than domestic condi-
RBI, in its last meeting, had cho-
sen to wait for more clarity on
the risks to inflation and trans-
distant dream
-4
and a sharp fall in fuel in the month to 6.3 per Jan, 2009 Mar, 2015 tions alone. mission of recent rate cuts to
inflation. Food inflation cent from 7.7 per cent. *CCII removes base metal prices from In March, the overall basic lending rate, before lowering
NEELASRI BARMAN & ABHIJIT LELE both primary and This drop was driven by WPI manufacturing index metals prices fell (-3.1 per cent), interest rates further. After the
Source: CRISIL
Mumbai, 15 April manufacturing also lower inflation in food with inflation in non-ferrous meeting, many banks have cut
fell considerably to 4.4 grains (2.2 per cent) - metals declining 0.9 per cent, their lending rates improving
Capital account convertibility of the rupee is a per cent from 5.6 per especially in wheat, wholesale level in March due while being negative for fer- the transmission machinery.
distant dream because macro economic param- cent in the previous jowar, and bajra. This to unseasonal rains, consumer rous metals (-4.1 per cent). As a Given these factors, RBI is like-
eters have to be stable before it is implemented. month. CRISIL was in part due to a price index (CPI)-based infla- result, CCII and the non-food ly to cut rates further by 25-50
The low current account deficit should be sus- Headline inflation CORE strong base effect. In tion next month might contin- manufacturing inflation were bps in the current financial year.
tained and the fiscal deficit needs to be contained. was pulled down by INFLATION addition to this, despite ue its current benign trend. at variance. Some of this gap On inflation, recent unsea-
Jayant Sinha, minister of state for finance, falling fuel prices due to TRACKER moderation, inflation Core inflation, an indicator was filled with falling manu- sonal rains, early signs of an El
said on Wednesday India should embrace capital the sharp fall in global remained high in pulses of demand-side pressure on factured food inflation an Nio occurrence, which might
account convertibility if it has to become a top oil prices. Prices contracted by (13 per cent), fruits and veg- prices, continued its downward item included in the CCII. impact monsoons, adminis-
global economy. Last week, Reserve Bank of India 12.6 per cent in fuel and power. etables (11 per cent) while ris- journey in March. Non-food Manufactured food inflation tered price revisions and faster-
Governor Raghuram Rajan said, My hope is we Inflation dropped most in avi- ing slightly for milk and egg, manufacturing inflation fell to eased from 1.3 per cent to 0.6 than-anticipated increase in
will get to full capital ation turbine fuel (-35.7 per meat and fish. -0.4 per cent year-on-year from per cent in March on the back demand side pressures might
If India wants to be a global economy, account convertibili- Whats capital cent), petrol (-18 per cent), The impact of unseasonal 0.1 per cent in February with of declining sugar, bakery result in derailing inflation off
then the capital account convertibility is ty in a short number a/c convertibility diesel (-12 per cent) and lique- rains is yet to reflect in food the following items recording products, tea and coffee prices. the RBIs projected path. On
needed of years. Freedom to convert fied petroleum gas (-8 per inflation. Therefore, food infla- negative inflation textiles (- The decline in sugar prices is in the other hand, soft global
JAYANT SINHA Capital account cent). Crude oil prices for the tion might remain at current 2.7 per cent), basic metals (-3.1 line with the fall witnessed in commodity and food prices,
local financial
convertibility means Indian basket slipped below levels or inch up in the coming per cent), chemicals (-1.2 per global sugar prices in March. the current slack in the econo-
Minister of state for finance
the freedom to con-
assets into foreign $55-a-barrel levels in March. months. While ample stocks of cent), rubber (-1.2 per cent) and WPI core measure fell while my and global disinflationary
BS REPORTER vert rupees into for- ones at market- Oil prices are expected to wheat can be deployed to curb leather (-2.7 per cent). In other the CPI core remained pressures are all pushing infla-
New Delhi, 15 April eign currency and determined remain benign in the coming wheat inflation, the prices of categories such as wood & wood unchanged at 5.6 per cent in the tion down. How these risks
back for capital exchange rates months and average $60-65 a chana (gram), mustard and bar- products, paper & paper prod- month (after excluding trans- play out in the coming months

M
inister of state for finance Jayant Sinha transactions. India Leads to free barrel (Brent) in 2015-16 from ley could rise. In addition, with ucts, and machinery & machine port and communication). The will determine the inflation tra-
(pictured) on Wednesday batted for has current account exchange of an estimated average of $85 a little signals of any build-up in tools, inflation moderated in divergence in trend is explained jectory in 2015-16 and anchor
full capital account convertibility of convertibility but currency at lower barrel in 2014-15. Prospects of inflationary pressures at the the month. by the fact that the core from monetary policy action.
the rupee. not capital account rates and an
If India wants to be a global economy, then convertibility. unrestricted
the capital account convertibility is needed, he We are surely on

Few takers for Coal

mobility of capital
said at a conference on the National Pension that path but it will

Some Aravali
System. He also noted the market feeling that it takeafewmoreyears. Beneficial for a
was not needed right now. The rupee as a cur- country because
inflow of foreign

Indias imported coal

Reserve Bank governor Raghuram Rajan had rencyshouldbemore

forests opened
last week said the rupee might become fully con- frequently traded investment
vertible over the next few years. India has current internationally, said increases
account convertibility, more or less, but not cap- DwijendraSrivastava, The flip side,
ital account convertibility for the rupee. chiefinvestmentoffi-

My hope is we will get to full capital account
convertibility in a short number of years, Rajan
had said.
Hed added the central bank was fairly open to
the inflow of foreign funds but there were a few
areas such as debt (short-term flows) in which it
preferred tight control.
Many analysts have credited RBI for its policy
of partial capital control, which helped it tide
over the impact of the currency meltdown, which
had hit many Southeast Asian economies with
full capital convertibility in 1997-98.
However, unlike those countries, India did
not have a higher proportion of foreign short-
term debt in its loan portfolio. That crisis erupted
since those countries took short-term external
debt and used these for long-gestation infra-
structure projects.
Infact,dataissuedbythefinanceministryear-
lier this month had shown that short-term debt to
the overall total fell to 18.5 per cent as on end-
December 2014 against 20.5 per cent at end-
March 2014. In absolute terms, short-term exter-
nal debt was $85.6 billion at end-December, a fall
of 6.7 per cent from the level at end-March
In May-August 2013 as well, capital control
helped the country withstand the effects of spec-
ulation of the US Federal Reserve tapering its
monetary stimulus programme, despite India
seeing as much as $20 bn being pulled out by
foreign investors.
After big-bang economic reforms in 1991, the
government and RBI have been progressively lift-
ing curbs on capital flows.
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to real estate
though, is that it
cer (debt) at Sun- PROBAL BASAK Chairman and Managing though power units were grap-
daram Mutual Fund.
could destabilise Kolkata, 15 April Director Sutirtha Bhattacharya, pling with acute coal shortages
Indias external an economy due to however, said, Time changes. during most of 2013-14.
sectorwasvulnerable massive capital State-owned Coal India, told by We cannot blame anybody now. Explaining this, an official said,
till recently, with the flows in and out of the Prime Ministers Office to Anyway, it is not bothering us Power plants have been NITIN SETHI law, prior clearance from the
current account the country keep a provision for imports in because unless there is a firm importing coal for many years. New Delhi, 15 April central or state government
deficitabovethecom- fuel supply agreements with order and payment, we are not Most of them prefer their own is required for using forest
fortlevelof2.5percentofthegrossdomesticprod- power producers, imported less importing. imports than coal Some good forests in the patches for non-forestry pur-
uct. It was 4.2 per cent of gross domestic product than half a million tonnes in the Our core area is Power plants imported by Coal Aravali hills around Delhi poses.
(GDP)in2011-12androseto4.7percentin2012-13. firstyearbecausetherewerefew not to trade and want to ensure India. could soon be opened to real But the Haryana govern-
Afterseverecurbs,includingrestrictionsonimport takers. import coal. But in their fuel Before floating estate sector and others for ment is now re-demarcating
of precious metals, the deficit fell to 1.7 per cent in After the provision for thenationalinterest, requirements are the expression of development. the lands in the
2013-14. In 2014-15, it continued to stay low, with imports was included in fuel we were directed to fulfilled by interest for imports The Haryana Aravalis to dis-
the third quarter showing a deficit of 1.6 per cent. supply agreements, Coal India dothisandbeingthe domestic coal. As last year, Coal India government has tinguish forest
The fiscal situation remains fragile. The turn- imported coal for the first time national miner we they decide to held meetings with decided to areas from non-
ing point was in 2007, the year of the global finan- in 2013-14. It was expected the will do it, he told import at the last power plants and demarcate these forest ones. It
cial crisis. The fiscal deficit of the central govern- miner would receive requisition Business Standard. moment, they do the initial estimate forests, falling had earlier
ment has been 4.6-6.5 per cent in the past six for about five million tonnes but According to the not like to ask CIL was the miner within the state decided that
years, before falling to 4.1 per cent in 2013-14. The Coal India ended the financial fuel supply agree- to do it for them would have to boundaries, as until the
government is committed to keeping the fiscal year importing only 460,000 mentsformulatedin import five million non-forest lands The forest clearance Supreme Court
deficit low and the target of 3.9 per cent has been tonnes of coal. 2013, following a presidential tonnes. Given low stocks, on its records. regulations which took a final view
retained for this year. The deficit target will be Coal India was initially directive, of the minimum many thought Coal Indias Consequently currently prevent on the matter,
progressively reduced to 3.5 and three per cent in opposed to the idea of imports. assured quantity of 80 per cent imports would be higher than the forest clear- the lands from status quo
2016-17 and 2017-18, respectively. After the Prime Ministers Office oftheannualcontractforpower the initial estimate. But this ance regulations being diverted for would be main-
Experts believe utmost care should be taken issued a directive to arrange for plantscommissionedafter2009, did not happen because power which currently any other activity tained good
along the path of convertibility. Ajit Ranade, chief adequate coal supplies to power Coal India will offer 65 per cent plants preferred importing prevent the would not apply on forests growing
economist at the Aditya Birla Group, who was producers on its own or through ofdomesticcoalandtomeetthe their own coal. lands from these lands, making on revenue
part of an RBI committee on capital account con- imports in 2012, Coal Indias balance 15 per cent, it offered to According to an industry being diverted it easier for real lands would
vertibility in 2006, said many of the recommen- then chairman, Zohra Chatterji, import for willing power pro- source, power plants want to for any other estate and other also be record-
dations of the committee had been implemented, said, We are not in the business ducers on a cost-plus basis. Coal ensure their fuel requirements activity would industries to chop ed as forest-
including raising the amounts resident Indians of importing coal. It is one of the IndiaengagedMMTCforarrang- are fulfilled by domestic coal. not apply on the forests to use lands, where
could remit abroad and the facility for non-resi- ways to meet the demand, the- ing imported coal. As they decide to import at the these lands, the lands the Act applies,
dents to use rupee accounts. However, he still oretically. Coal India had to finally last moment, they do not like to making it easier keeping real
suggested caution. When asked, Coal India import only 460,000 tonnes, ask Coal India to do it for them. for real estate and other estate and other develop-
industries to chop the forests mental activities out of
to use the lands. bounds for the green patch-
The decision of the state es. But taking a U-turn, the
Afghan President Ghani to visit India on April 27 government to do so was government has now decid-
conveyed in April 13 by the ed to classify these patches
principle secretary of the as non-forest lands in its
NAYANIMA BASU Ghani and Indian Prime Minister former president Hamid Karzai, had However,thesituationhassomewhat state forest department to records, unless the central
NewDelhi,15April Narendra Modi are expected to hold made several attempts to procure mili- turned ironical now with the new gov- lower officers. government advises the
their bilateral meeting on April 27. This tary weaponry, such as fighter jets, mis- ernment there making several indica- At the moment under Supreme Court otherwise at
The newly-elected President of will be followed by several other meet- siles and field guns, under the pact. tions that it wants to now have the deal prevailing Supreme Court a later date. Large chunks of
Afghanistan, Ashraf Ghani Ahmadzai, ings by Ghani with Indian officials, busi- Under the SPA, India had been only withPakistan,leavingIndiahighanddry. orders, lands with healthy forests in the Haryana
will be on his maiden visit to India in the nesses and think-tanks on April 28. supplying non-lethal defence equip- Ever since coming to power in forests growing are governed Aravalis were never put on
week starting April 27. During the visit, Afghanistan has been pushing for an ment such as communication devices September last year, Ghani has been by strict regulations of the government records as
both sides are expected to take up bilat- arms deal with India under the Strategic and transport equipment. However, the cozying up with Pakistan. There were Forest Conservation Act, forestlands and could now
eral matters ranging from a pending Partnership Agreement (SPA) for the Modi-led government is reportedly keen reports that he had rejected the arms 1980, regardless of the offi- formally be recognised as
arms deal to Indias involvement in the past two years. The agreement was to have the arms deal go through with deal with India and might ink a similar cial status of the land on gov- devoid of protection of the
development of the war-torn country. signed in 2011. Afghanistan, under its Afghanistan. deal with Pakistan instead. ernment records. Under this green laws.

Bike ambulance service starts in Karnataka

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No Air Surcharge
Move aimed at providing relief to accident victims in congested areas within minutes
BS REPORTER
Bengaluru, 15 April
Bengaluru on Wednesday became
the first city in the country to get an
ambulance service on two-wheelers.
The Karnataka government has tak-
en the novel initiative to launch the
Bike Ambulance service to reach out
to patients and accident victims
stuck in congested city areas. To
begin with, the health department
has launched 30 motorcycle ambu-
lances, managed by GVK-EMRI.
Karnataka Chief Minister
Siddaramaiah, who flagged off the
first Bike Ambulance, said, This is a
new concept. Due to increase in pop-
ulation and dense traffic it is very
difficult for a regular ambulance to
reach an accident spot and many a
time necessary relief does not reach
the victims. Bike ambulance reaches
faster and provide immediate assis-
tance to victims within minutes of
an accident.
Already, 718 ambulances are there
in the city. Bike ambulances will sup-
port accident victims within the
golden or platinum hour, he said.
The chief minister handed over
the keys of the First Responder
Bikes to EMRI.
The two-wheeled ambulances are
equipped with first-aid kits and oxy-
gen cylinders, and the rider will be a
trained paramedic with a driving
licence. The 30 First Responder
Bikes, launched alongside the
already existing 711 Arogya Kavacha
108 Ambulances, are stationed at
hotspots in the city so that they reach
accident spots within Platinum 10
minutes to provide care to the affect-
ed, U T Khader, minister for health
and family welfare, said.
The department has pressed into
service as many as 30 Avenger 220CC
bikes, modified into two-wheeler
ambulances.
Of the 30 ambulances, 21 will be
stationed at strategic locations in
Bengaluru, while Mysuru,
Mangaluru, Kalaburgi, Belagavi,
Hubballi-Dharwad, Davangere,
Tumakuru, Vijayapura and
Shivamogga will get one each.
The paramedic will reach the
spot in 10 minutes and give first aid
and start resuscitation measures to
save the victim till a four-wheeler
ambulance arrives, Khader said.
Each motorcycle ambulance will
carry 40 medical items, including
stethoscope, pulse oxymeter, band-
ages and IV normal saline, apart
from 53 basic drugs. The govern-
ment has spent nearly ~2 lakh on
each ambulance.
The two-wheeled ambulance is
equipped with first-aid kits and
oxygen cylinders, and the rider is a
trained paramedic with a driving
licence
PHOTO: SAGGERE RADHAKRISHNA