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Thursday,02-December-2021

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‘TN govt may get into reform mode after local body polls’

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The DMK-led Tamil Nadu government may get into reform mode post the local body elections likely to be held by the end of 2021, say party leaders and industry experts.

“Though a white paper on the Tamil Nadu government finances spoke about the necessity to hike tax rates and other things for those who can bear it, the state budget that was presented was a usual one. Perhaps the state government may get into reform mode after the local body elections,” K.C. Palanisamy, former AIADMK MP and MLA, told IANS.

Palanisamy said the local body elections may be held before the end of 2021 or February 2022.

Finance Minister Palanivel Thiaga Rajan after declaring ‘once in a generation reforms a must’ and ‘business as usual’ approach cannot continue while presenting the white paper on the state government’s finances, came out with a relatively populist budget.

As per the white paper, reforms/restructuring in state government undertakings, statutory boards, power utilities, mobilisation of tax revenues, mode of subsidy deliveries were on the cards.

“As a debutant Finance Minister, he might have taken a soft approach with his first budget which is an interim budget,” Palanisamy said.

Industry experts said Finance Minister Rajan’s budget is nothing but a status quo or an extension of the previous AIADMK government’s budget.

“The white paper set the expectation that the Finance Minister will provide a reform budget to reduce the state debt. One could agree that he needed more time to come up with the actual reforms but least expected was the transformation roadmap, a timeline,” Sriram Seshadri, Founder and Managing Partner, Disha Consulting and formerly Partner and Managing Director, Accenture India, told IANS.

According to him, a white paper lays down the problem, analysis, probable solution.

On the other hand, the government’s white paper laid out the problem statement which was well known and the expectations were there on reform proposals in the budget which surprisingly did not happen, Seshadri said.

“As an economist, I feel satisfied that the budget didn’t provide for any of the poll promises. For an economist the white paper gave an expectation that there would be a reform and transformation roadmap but the budget was disappointing,” he added.

According to him, nothing was there in the budget for beefing up the state revenues while the debt was increasing.

“Tamil Nadu will cross the debt of Rs six lakh crore mark by 2021 end. Only solace is during the budget discussions in the state Assembly, the Finance Minister has said some of the poll promises will not be met such as revising the old pension scheme for government employees,” Seshadri added.

He said if there is a reform agenda with the DMK government it has to be rolled out soon and not wait for the next year’s budget.

However, he agreed that the government will take some reform steps mainly targeted subsidies to poor sections of the society, refine the rules for ration cards and revenue optimisation initiatives like tax reforms.

“Already Tamil Nadu’s economy is the fourth largest in the country and will slip to fifth or sixth place soon. Hence, the state should regain the momentum, cut the red tape and enable ease of doing business both in MSME and large industries,” Seshadri said.

While the government’s popularity endures it should take some tough decisions to reduce government spending, disinvestment and make announcements to attract investment, he said.

“Sterlite Copper (copper smelter unit of Vedanta Ltd in Tuticorin) closure is one of the stumbling blocks for investors to invest in a big way because there is no guarantee to their investment. The government should enable reopening of Sterlite within the guidelines of the pollution control norms. Likewise closely monitor to optimize revenue on the natural resources, mining and sand. The government gets less than Rs 1,000 crore revenue whereas the potential is much higher,” he added.

However, the signs of change in the government are seen in the budget by not implementing its populist poll promises like Rs 1,000 per month dole to the female head of the family.

“Instead the government had decided to conduct a study to identify eligible beneficiaries. This move is new as in the past the state government used to disburse financial assistance for almost all ration card holders,” K. Puhazhendi, Director, Perfint Healthcare, told IANS.

Referring to Rajan’s statement that the governance will be data-based, Puhazhendi said the government can mine data available in its own departments/municipal corporations.

The smart ration cards are linked with Aadhar cards.

Puhazendhi said the government employees themselves form a big database so that undeserved subsidies can be stopped.

“Data on property taxpayers, land owners, vehicle registrations, power consumers, ration card holders, data about government employees, shops and business establishments, factories and other data are available with different departments,” Puhazhendi said.

The government can collate and gather from the people with help of door-to-door data gathering. This could be a starting point to build a database and target the subsidies and other government schemes, he added.

Stressing that the government’s focus should be on making each department, municipal corporations self-financing, Puhazhendi called for a freeze on government hiring and investment should be made in information technology systems to digitise the services.

It is high time the state government goes in for public-private partnership in the tourism sector. The state government owns several hotel properties which are in need of private investment and management.

Business

India’s Nov exports rise over 26%, imports over 57%

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India’s merchandise exports in November rose to $29.88 billion, higher by 26.49 per cent on a year-on-year basis, preliminary data showed on Wednesday.

Exports in November 2020 stood at $23.62 billion.

According to the data furnished by the Ministry of Commerce and Industry, last month’s exports rose by 15.93 per cent over November 2019.

“Value of non-petroleum exports in November 2021 was $26.06 billion, registering a positive growth of 18.1 per cent over non-petroleum exports of $22.06 billion in November 2020 and a positive growth of 18.69 per cent over non-petroleum exports of $21.95 billion in November 2019.”

The value of non-petroleum and non-gems and jewellery exports rose to $23.66 billion, registering a positive growth of 22.16 per cent over November 2020.

As per the data, India’s merchandise imports last month increased by 57.18 per cent to $53.15 billion over $33.81 billion in November 2020 and 37.96 per cent over $38.52 billion reported for the corresponding month of 2019.

“Value of non-petroleum imports was $38.47 billion in November 2021 with a positive growth of 39.9 per cent over non-petroleum imports of $27.5 billion in November 2020 and a positive growth of 40.12 per cent over non-petroleum imports of $27.45 billion in November 2019.”

“Value of non-oil, non-GJ (gold, silver & Precious metals) imports was $32.02 billion in November 2021 with a positive growth of 41.53 per cent over non-oil and non-GJ imports of $22.63 billion in November 2020 and a positive growth of 42.72 per cent over non-oil and non-GJ imports of $22.44 billion in November 2019.”

Consequently, India’s trade deficit last month widened by 128.30 per cent YoY to $23.27 billion from $10.19 billion while it increased by 82.48 per cent when compared to $12.75 billion reported for November 2019.

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Fuel prices remain static barring Delhi

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Barring Delhi, the prices of diesel and petrol remained unchanged across major Indian cities on Thursday.

Accordingly, diesel and petrol prices in Delhi stood at Rs 86.67 per litre and Rs 95.41 per litre, respectively.

Notably, prices of petrol in Delhi had been static at Rs 103.97 per litre since the past one month.

Prices have fallen in Delhi as it reduced the value added tax on the fuel from 30 per cent to 19.40 per cent. This decision was taken during a Cabinet meeting chaired by Chief Minister Arvind Kejriwal on Wednesday.

In the financial capital Mumbai, petrol and diesel prices remained unchanged at Rs 109.98 and Rs 94.14 respectively.

Prices also remained static in Kolkata at Rs 104.67 and Rs 89.79 respectively.

In Chennai too, the prices of the two auto fuels remained constant at Rs 101.40 and Rs 91.43 respectively.

Across the country as well, the prices largely remained unchanged on Thursday, but the retail rates varied depending on the level of local taxes.

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Equity indices extend gains, Power Grid top gainer

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The 30-scrip Sensitive Index (Sensex) extended gains from the previous session in early trade on Thursday.

At 9.30 a.m., the S&P BSE Sensex traded at 57,992 points, up 0.5 per cent.

It opened at 57,781 points from the previous close of 57,684 points.

Till now it touched a low of 57,680 points.

Besides, the broader 50-scrip Nifty at the National Stock Exchange (NSE) opened at 17,183 points after closing at 17,166 on Wednesday.

It traded at 17,264 points, up 0.6 per cent during the early-morning trade session.

Power Grid, Adani Green, BPCL, Mahindra and Mahindra, and IOCL were some of the top gainers during the early trade, the exchange data showed.

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