Newsprint: China brings prices down, domestic industry unhappy

Business Standard reports

Newsprint prices in the domestic market have declined by 4 to 5 per cent over the last three months on account of cheaper Chinese imports and falling international prices.
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"The primary cause for declining newsprint prices could be huge stock with big publications or indiscriminate imports, particularly from China," said Raji Philip, president of the Indian Newsprint Manufacturers' Association and chairman and managing director of Hindustan Paper Corporation.
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According to Philip, newsprint consumption in the country is around 14 lakh tonne, while the production is about 8 lakh tonne. The excess domestic demand is met through imports from Canada, Russia, China and some other countries.

Big domestic newsprint players have lined up capacity additions and the dependence on imports was set to go down. Excessive dependence on imports would be self-defeating for the domestic industry, he said.

Rs 18,750 cr subsidy paid to fertiliser cos: Paswan

PTI/FE reports

Assuring expeditious clearance of subsidy payments due to fertiliser companies, chemical and fertiliser minister Ram Vilas Paswan has said Rs 18,750 crore has been paid to these companies under the head this year.

Admitting that fertiliser companies have expressed concern over delayed subsidy payments, he said another Rs 4,000 crore will be paid to these firms as subsidy in the next few weeks.

India Inc asks FM not to micro-manage

Have you wondered why businessmen have this benign image of free market supporters, despite their never ending attempts to control market using the power of government? It's because of reports like this. FE reports:

India Inc on Wednesday said there was no evidence to prove finance minister P Chidambaram’s views that companies artificially jacked up prices leading to higher inflation. In fact, it wanted the government to stay away from micro-management, which it felt, was a retrograde step.

“In case prices go up due to a supply-demand gap, there are many ways to tackle it. Let the market decide it. In an economy that is seeing such growth, minor spike in prices is fine,” Habil Khorakiwala, president, Ficci told FE in an interview.

I am not suggesting that businessmen today have all the power and consumers have none. But that's how a businessman would like it to be. Nothing against Khorakiwala too. A friend who met him yesterday said he is a very nice guy.

Sops to semi-conductor industry

FE reports

The government is likely to give upfront equity commitment and sops to semi -conductor units set up in select locations, instead of support to all such units. Moreover, this support will have to be partly funded by state governments.

According to officials, a list of such locations will be drawn up soon and will be announced as a part of the proposed National Semi-conductor Policy. The information technology ministry has been demanding an upfront equity commitment from the government other sops including zero interest loans as well as income tax exemptions to all semi-conductor units. Finance ministry feels that such a move will have severe financial ramifications for the government. It is estimated that the equity component for such projects alone will be to the tune of Rs 1,200 crore. Officials have also pointed out that a 100% income tax exemption for 10 years would have a financial implication of around Rs 15,500 crore. In addition, excise duty reductions would also cost the exchequer around Rs 10,000 crore.

When will farmers earn as much as the lowliest government employee?

In a superb piece, BL says

Successive governments at the Centre and the States have tried their hand at reducing the cost of cultivation. Most States supply electricity either free or at highly subsidised tariffs; urea fertiliser is made available at a substantial discount and now banks are being arm-twisted to offer credit at rates below what they charge other customers. Yet even if these inputs were available free, the yield from the farm would be far from princely. Besides, there is a cost to hiring labour and that is not coming any cheaper.

If Sasidharan's family had instead been on dry land — almost 50 per cent of the 141 million hectares of cultivated land in the country is not irrigated — growing coarse cereal, it would have needed a holding in excess of 15 hectares to earn a net income equal to his current salary at Saint Gobain. But such farmers would be rare. Just 1.2 per cent of land holdings in the country exceed 10 hectares each. In contrast, the average farm size in the US was 197 hectares in 1997.

Nine out the every ten farmers (the total number of cultivators is now about 12 crore) will need to give up their land and look at other professions if the farm holdings are to be consolidated into viable sizes of at least 10 hectares each.

That is what has happened in the US, where just 2 per cent of the population now works on the farm as against 21 per cent in 1930 and 41 per cent in 1900.

The spread of education is providing people such as Sasidharan and Nandakumar the passport to an alternative, and far more remunerative vocation. But to transform the lives of more than 10 crore farmers and as many farm workers is a mind-boggling challenge for society, of creating employment opportunities in the services and industrial sector, of managing the shift of workers from the farm — farm labour is already difficult to find in many States at the current wages — and of equipping farm family members with the skills that would fit them in industry and services. Are we ready for it?

I liked even the heading!

States to earn Rs 40,000 cr from liquor, lotteries

BL reports

During the current fiscal, liquor and lotteries are together expected to generate Rs 40,274.13 crore in revenue for States - that is almost 13 per cent of the total amount (Rs 3,10,266.21 crore) they would earn from their own tax and non-tax revenue sources.

According to the Reserve Bank of India's latest report on `State finances: A study of budgets of 2006-07,' liquor (excise) alone is slated to yield Rs 29,533.48 crore, making it the largest revenue source for States after sales tax (Rs 1,20,709.15 crore).

Doing business

A BS report which begins thus - Stung by a recent World Bank report on the difficulties of doing business in India, the government has held a series of meetings to address the problem areas mentioned in the annual document - has this

Four meetings of the Committee of Secretaries have been held on the issue, with at least nine departments, including economic affairs, revenue, shipping, commerce, financial sector, land resources, and small scale industry being asked to respond to specific issues raised in the report.

In their responses, departments like commerce and industry and revenue have questioned some of the findings. Another meeting is scheduled soon, at which the government hopes to finalise corrective measures.

Way to go!
World Bank report - here