News4u – News Desk : (PTI) The Plan panel today said the government’s refusal to accord environment clearance to Vedanta’s proposed USD 1.7 billion aluminium project in Orissa would not tarnish India’s image as an investment friendly destination.

“I don’t know much about Vedanta, but yesterday’s development will not undermine India’s image as investment friendly nation,” Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters after inaugurating an exhibition-cum-sale organised by the Central Cottage Industries Corp here.

In a big blow to Vedanta Resources, yesterday, the government had rejected environment clearance to company for bauxite mining for the USD 1.7 billion aluminium project in Orissa.

The government took this decision after accepting recommendations of the Forest Advisory Committee (FAC) headed by N C Saxena which sought ban on the mining project in Orissa’s Niyamgiri hills in view of various violations at the site.

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News4u – News Desk : (PTI) US Deputy National Security Advisor Mike Froman has said he did not make any link between the Bhopal gas leak issue and India’s request for loan help from the World Bank in an e-mail communication with Planning Commission Deputy Chairman Montek Singh Ahluwalia.

“With regard to recent reports about my private correspondence with Ahluwalia, I want to make clear that I was not making any link between what are two separate and distinct issues nor issuing a ?threat? of any sort ? any assertion to the contrary is absolutely wrong, both in intent and in fact,” he said in a statement released by the US Embassy here last night.

His statement came against the backdrop of a controversy kicked off by his email to Ahluwalia in which he had written that “voices” regarding American company Dow Chemicals could have a “chilling” impact on the investment relations.

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News4u-News Desk-The Plan panel on Saturday said that the ambit of development scheme Integrated Action Plan (IAP) for Naxal-hit districts would be widened to include even backward districts which are not in the grip of Naxalism. “We are really thinking of IAP for poor and backward districts which includes 35 naxal districts. Don’t think it makes sense to have ‘Integrated Action Plan’ only for Naxal- hit districts. The action plan would have 60 to 65 districts including 35 Left wing extremism (LWE) districts,” Plan Commission Deputy Chairman Montek Singh Ahluwalia said in New Delhi.

A committee under the Member Secretary of the Commission, Sudha Pillai, would be set up for formulation of the action plan for such districts, he said, addressing a conference on forestry administration in LWE areas.The Planning Commission recently gave its nod to the Rs 13,742-crore package for developing the Naxal-hit districts and the proposal has been sent to Prime Minister Manmohan Singh.

Besides aiming to improve governance in the Naxal- infested districts, the special package would also focus on infrastructure development like drinking water supply, electricity, roads and health services in these areas.As per the initial proposal which came from the Cabinet Committee on Security to the Commission for vetting, as many as 35 districts were to be covered under the IAP. But during deliberations on the plan, some members suggested to increase the number of districts to 60.

Those who are for more coverage argue that the problem is not with funds but improvement in governance which is the key for capacity-building, without which the allocated money will not be absorbed properly.The other view was that with the increase in the number of districts under the action plan, the amount of fund allocation for each district would come down.

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News4u – News Desk : The plan panel on Wednesday said fuel price hike will further increase inflation in July, but it will fall below double digits by the end of December.

“I think although there will be an adjustment upward (in inflation) when fuel price hike gets fed in July numbers… I don’t alter my conclusion that at the end of the year it will be low,” Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters on the sidelines of an Indo-Oman event.
He said that inflation will be well below double-digit by the end of this year.
He said the June inflation number seems to be consistent with the sort of cautious optimism we have been expressing.
“You will see more decline as time goes by,” he said.
Ahluwalia said high inflation cannot be avoided by not adjusting fuel prices.
“This will result in huge losses to oil marketing companies. You will cover these losses by hidden subsidies that would generate inflationary pressure,” he said.
However, in 2009-10 the government had borne a loss of over Rs one lakh crore due to subsidies on diesel, LPG, Kerosene and petrol.

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News4u – News Desk :  (PTI) After dubbing the hike in prices of kerosene and cooking gas as “disastrous for the common man”, senior Congress leader Anil Shastri has now trained his guns on Planning Commission Deputy Chairman Montek Singh Ahluwalia for his remarks that inflation will ease by December-end.

In microblogging site ‘Twitter’, Shastri said, “Deputy Chairman Planning Commission has said inflation will ease into a comfortable zone by December, which he said verbatim last November also”.

Shastri is a special invitee to the Congress Working Committee and also the Editor of party mouthpiece ‘Congress Sandesh’.

The Congress leader had termed the increase in prices of kerosene and cooking gas as “disastrous” and sought the intervention of Congress President Sonia Gandhi.

“Increase in prices of kerosene and cooking gas is disastrous. The common man is badly affected. Soniaji must immediately intervene,” he tweeted on June 26.

Food inflation

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News4u – News Desk : Food inflation may see a further increase in the weeks to come, but that is no reason for alarm as the rise is more a result of low base effect, Planning Commission Deputy Chairman Montek Singh Ahluwalia said on Wednesday.

As of 29th May, food inflation stood at 16.74 per cent.
“It is quite possible when the data comes out on Thursday, you may see a little increase in food inflation. That is not the reason to worry. As you see the weeks go by, food inflation would come down again,” Ahluwalia said in New Delhi.

Ahluwalia attributed this possibility of low base last year, which means inflation at this time last year was quite low, which may make even a nominal price rise now look higher.

“That is because this time last year, food index had actually fallen and then it began to rise very sharply,” he said.
Prices of edibles had started rising last year, after food production was hit by poor monsoon that accounts for 80 per cent of the annual rains the country receives.
Ahluwalia said key to lower food inflation is a sensible fiscal and macro policy and a good harvest.

Earlier this week, Chief Economic Advisor Kaushik Basu had said food inflation has petered out.

Food inflation remains at elevated level because inflation is calculated on yearly basis. Otherwise, food index is only marginally higher in May than in November, he had said.
To a separate question, Ahluwalia said the government’s borrowing programme would not be affected due to liquidity crunch fuelled by debt raised by telecom companies for telecom licences, besides payment of advance tax.

The government plans to borrow Rs 4.57 lakh crore this fiscal. The system is facing liquidity shortage due to over Rs 67,000 crore outgo towards payments for spectrum for 3G mobile services and another Rs 38,000 crore is due to payment towards spectrum for broadband wireless spectrum.
Besides, corporates have been paying advance taxes for the first quarter this fiscal. Ahluwalia said fiscal deficit will be very much in control.

“I think with the good monsoon, which is very much on the cards, we are going to have fiscal deficit very much under control.”

Fiscal deficit is projected to come down to 5 per cent of GDP this fiscal compared to 6.6 per cent of GDP, helped by revenue mop up from 3G telecom and broadband licence auction.

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News4u-Business Desk-Planning Commission Deputy Chairman Montek Singh Ahluwalia on Saturday said that inflation would come down in the next two to three months because of declining food prices and ruled out that food inflation would spill over to non-food items.

“I do not think it matters if inflation reaches double digit mark in one week… but in the next two-three months, the overall inflation will come down as the food prices are declining,” Ahluwalia told reporters on Saturday when he asked whether inflation will reach double-digit figures.
He added that declining food prices would also not allow spreading of food inflation to non-food items.
“I do not think it (spreading of food inflation) will happen as the food prices will further come down,” he added.
Food inflation has come down to 16.22 per cent for the week ended 13th March from 16.30 per cent in the previous week. The over all inflation is, however, at 9.89 per cent for the month of February.
Ahluwalia, who was here to attend ‘Law Congress’, added that the rabi harvesting season will also result into lowering of inflation.

“We have enough food stocks in our hands and the coming rabi harvesting season is also expected to be good,” he said.
Deputy Chairman said that the country was now aiming at 10 per cent GDP growth in 12th five-year plan.

“Prime Minister has told us to look at 10 per cent GDP growth in the 12th five-year plan and we are examining it…though earlier we viewed growth between 9 and 10 per cent,” he said.

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News4u- News Desk – High food inflation is likely to ease in the next few months as rabi harvest is expected to be good, Planning Commission Deputy Chairman Montek Singh Ahluwalia said on Friday.

“I expect food price inflation to come down in the next couple of months on the back of an (expected) good rabi crop,” Ahluwalia said at a conference in Mumbai on Friday.
Downplaying fears of WPI inflation touching double-digits, he said, “I don’t think this will happen. I expect WPI inflation to gradually come down…you will see that.”
With the growth momentum returning, the Commission sees a GDP growth of 8.5 per cent for FY 11 and 9 per cent in the subsequent fiscal.
“I think the economy is doing very well…we have weathered an extra-ordinary crisis…now we are well set to get back to 8.5 per cent (GDP growth) in 2010-11 and hope to see 9 per cent growth after that,” Ahluwalia said.
“We are going to get back to the path of fiscal prudence,” he said, adding that with the economy improving institutional investments will continue to invest.

“I think the fiscal deficit has been brought down– economic growth momentum has returned. We are counting on this momentum continuing in the next two years…that is what we predicted and that is what we were expecting,” the Planning Commission deputy chairman said.
He attributed the high food prices to the drought-like conditions last year.
“I think it (high food prices) is mainly because of the drought conditions last year. Excessive speculation and exaggerated reports have also contributed (to the price rise),” Ahluwalia said.

Now, however, with rabi crops coming in food price inflation is likely to decline in the next couple of months, he added.
On the government borrowings and whether it would impact private demand, he said, “There is no need for too much worry about government borrowings next fiscal.”

The government is expected to borrow Rs 4,57,000 crore next fiscal.
Asked about the poor response on PSU issues that hit the markets recently, he said the relatively poor response did not indicate that the government should slow down its disinvestment plan.
State governments should proactively take steps to improve basic infrastructure like health and education, Ahluwalia said.

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News4u- Business desk- New Delhi (PTI) The Planning Commission today said food prices will come down in the next two months easing the overall inflation, which is currently at over 8.5 per cent.

“The trend is that food price will come down in the next two months. I am sure that the trend down on food prices will bring down the overall inflation in the next two months,” Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters.

The wholesale price inflation (WPI) rose to 8.56 per cent in January, the highest in over 13 months, shooting past the RBI’s forecast of 8.5 per cent for this fiscal end.

The WPI hike was mainly because of a surge in prices of food items such as sugar, potatoes and pulses. Overall inflation in December was 7.31 per cent.

In January, sugar prices rose by 58.96 per cent year-on-year while potatoes turned costlier by 53.

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News4u-Business Desk-Satisfied with the outcome of the deliberations on the quantum of the budgetary support for 2010-11, Planning Commission Deputy Chairman Montek Singh Ahluwalia on Wednesday said the Centre and the states have to focus on improving the effectiveness of public expenditure.

“We have a very satisfactory outcome on Plan expenditure. I am confident that on the Plan expenditure side we have what we need to make the developmental impact,” he told reporters when asked about his meetings with Finance Minister Pranab Mukherjee on the gross budgetary support (GBS)–the budgetary assistance for various government programmes–for 2010-11.

Although Ahluwalia refused to answer questions on the quantum of GBS, the Commission and the Ministry are believed to have agreed to raise the GBS by about 15 per cent during the next fiscal.

While the Central ministers pitched for a hefty increase of over 80 per cent, Planning Commission insisted on an 18 per cent jump over the Rs 3.25-lakh crore GBS extended during 2009-10. Mukherjee, however, is believed to have agreed for a lower raise of 15 per cent in view of the urgency to contain fiscal deficit, which is pegged at 6.8 per cent this fiscal.

The focus, Ahluwalia said,”should be on the effectiveness of expenditure that involves the Plan panel, the ministries and also the states.”

Planning Commission Deputy Chairman Montek Singh Ahluwalia

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