Iran urges Muslims to unite against US, including Saudi brothers

New Delhi, June 21: Diesel prices rise to record high after 60 paise hike in rates, petrol up 35 paise; rates up by Rs 8.88 and Rs 7.97 in 15 days.

Petrol price in Delhi was hiked to Rs 79.23 per litre from Rs 78.88, while diesel rates were increased to Rs 78.27 a litre from Rs 77.67, according to a price notification of state oil marketing companies. 

In Bengaluru, petrol will be costlier by 37 paise at Rs 81.81 per litre, while diesel will cost 57 paise more per litre at Rs 74.43.

Rates have been increased across the country and vary from state to state depending on the incidence of local sales tax or VAT.

The 15th daily increase in rates since oil companies on June 7 restarted revising prices in line with costs after ending an 82-day hiatus in rate revision, has taken diesel prices to a new high. The petrol price too is at a two-year high.

Over 63 per cent of the retail selling price of diesel is taxes. Out of the total tax incidence of Rs 49.43 per litre, Rs 31.83 is by way of central excise and Rs 17.60 is VAT. 

Petrol in Mumbai costs Rs 86.04 per litre and diesel is priced at Rs 76.69.

Prior to the current rally, the peak diesel rates had touched was on October 16, 2018 when prices had climbed to Rs 75.69 per litre in Delhi. The highest-ever petrol price was on October 4, 2018 when rates soared to Rs 84 a litre in Delhi.

When rates had peaked in October 2018, the government had cut excise duty on petrol and diesel by Rs 1.50 per litre each. State-owned oil companies were asked to absorb another Re 1 a litre to help cut retail rates by Rs 2.50 a litre.

Oil companies had quickly recouped the Re 1 and the government in July 2019 raised excise duty by Rs 2 a litre.

The government on March 14 hiked excise duty on petrol and diesel by Rs 3 per litre each and then again on May 5 by a record Rs 10 per litre in case of petrol and Rs 13 on diesel. The two hikes gave the government Rs 2 lakh crore in additional tax revenues.

Oil PSUs Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL), instead of passing on the excise duty hikes to customers, adjusted them against the fall in the retail rates that was warranted because of a decline in international oil prices to two-decade lows.

International oil prices have since rebounded and oil firms are now adjusting retail rates in line with them.

In 15 days of hike, petrol price has gone up by Rs 7.97 per litre and diesel by Rs 8.88 a litre.

New Delhi, Feb 10: Former finance minister P Chidambaram on Monday tore into the Modi government's handling of the economy, saying it was close to collapse and was been attended by "very incompetent doctors."

Initiating the debate on the Union Budget for 2020-21, he said rising unemployment and falling consumption was making India poorer.

The economy, he said, is facing demand constraints and is investment starved. The economy is facing fall in consumption and rising unemployment.

"Fear and uncertainty prevails in the country," he added.

He said the chief economic advisor to the BJP government for four years, Arvind Subramanian has stated that the economy is in the ICU. But "I would say the patient has been kept out of ICU and incompetent doctors are looking at the patient," Chidambaram said.

"It is dangerous to have a patient out of ICU and being looked upon by incompetent doctors. What is the point standing around and chanting slogan 'Sab ka saath, sab ka vishwas'," he said, adding every competent doctor the Modi government could ever identify has left the country.

His said a list of such people included former RBI governor Raghurman Rajan, former CEA Arvind Subramanian, former RBI governor Urjit Patel and former NITI Aayog vice chairman Arvind Panagariya.

"Who are your doctors, I want to know," he said, adding the government considers Congress as untouchable and doesn't think of any good about the rest of the opposition and so doesn't consult them.

Chidambaram charged that instead of putting money in the hands of people, the Modi government "put money in hands of 200 corporates" by way of corporate tax.

He said Finance Minister Nirmala Sitharaman in her 160- minute budget speech did not talk of the economy and its management.

"You are living in echo chambers. You want to hear your own voice," he said.

Listing problems with the Modi government, Chidambaram said it refuses to admits in mistakes, lives in denial and has predispositions.

The demonetisation of old 1000 and 500 rupee notes, as well as the hurried implementation of the Goods and Services Tax (GST), are "monumental blunders" that ruined the economy, he said, adding the Modi regime is predisposed to protectionism, a 'strong' rupee and is against bilateral and multilateral agreements.

"It is living in denial," he said, adding the economic growth has fallen for hereto unseen six consecutive quarters.

He wondered on the narrative Finance Minister Nirmala Sitharaman was trying to give after reading out a 160-minute budget speech with few pages left unread.

Her budget neither made any reference to the Economic Survey nor picked up a single idea from it, he said.

Chidambaram, who is credited with presenting a 'dream budget' more than two decades back, said the GDP growth has declined for six consecutive quarters, agriculture is growing by just 2 per cent, while consumer price inflation has risen from 1.9 per cent in January 2019 to 7.4 per cent in a matter of 11 months.

Also, food inflation is at 12.2 per cent. Bank credit is growing 8 per cent with non-food credit rising by 7-8 per cent and credit to industry by just 2.7 per cent. Credit to agriculture has declined from 18.3 per cent to 5.3 per cent and that for MSMEs from 6.7 per cent to 1.6 per cent.

Overall industrial index showed just 0.6 per cent growth. "Every major industry is either near zero or in negative zone," he said, adding thermal power plants are operating at just 55 per cent of the capacity as factories have either closed or are on the verge of closure.

"That gives you a good picture of the state of economy. You don't require MRI," he said. "You are in management for six years. How long can you blame previous managers."

He charged the government with burying unfavourable reports such as the labour survey that put unemployment at 45 -year high of 6.1 per cent at end of 2017-18. Also, consumer expenditure has falling to 3.7 per cent between 2011-12 and 2017-18.

Drilling holes in Budget numbers, he said the 2019-20 budget projected a nominal GDP growth of 12 per cent but ended with just 8.5 per cent. Fiscal deficit was targeted to be shrunk to 3.3 per cent of the GDP but ended by at 3.8 per cent and in the next fiscal it is being targeted at 3.5 per cent.

Revenue deficit was targeted at 2.3 per cent in fiscal ending March 31, 2020 but ended up at 2.4 per cent and in the next it will rise to 2.8 per cent, he said, adding capital expenditure in the next fiscal will shrink to 0.7 per cent from 1.4 per cent in the current.

Net tax revenue in the current fiscal was targeted at Rs 16.49 lakh crore but only Rs 9 lakh crore was collected in first nine months till December 2019 and "you want us to believe this will rise to Rs 15 lakh crore by March 2020," he said.

Similarly, expenditure in 2019-20 was pegged at Rs 27.86 lakh crore but only Rs 11.78 lakh crore spent during April- December and by March this is projected to rise to Rs 27 lakh crore.

"You have no money to spend... and these are masked by numbers," he said. "Numbers are not easily acceptable or believable."

Chidambaram said the government is facing shortfall in all forms of taxes - Rs 1.56 lakh crore on corporate tax, Rs 10,000 crore on personal income tax, Rs 30,000 crore on customs, Rs 52,000 crore on excise and Rs 51,000 crore on GST.

This despite "the extraordinary powers" and "all kinds of power" given to lower level tax officials, he said.

He read of list of heads under which allocation has fallen - food subsidy, agriculture, PM-Kisan, rural roads, mid-day meal scheme, ICDS, skill development, Ayushman Bharat, rural development and MGNEGA.

Jun 9: Prime Minister Narendra Modi wants all 1.3 billion Indians to be “vocal for local” — meaning, to not just use domestically made products but also to promote them. As an overseas citizen living in Hong Kong, I’m doing my bit by very vocally demanding Indian mangoes on every trip to the grocery. But half the summer is gone, and not a single slice so far.

My loss is due to India’s COVID-19 lockdown, which has severely pinched logistics, a perennial challenge in the huge, infrastructure-starved country. But more worrying than the disruption is the fruity political response to it. Rather than being a wake-up call for fixing supply chains, the pandemic seems to be putting India on an isolationist course. Why?

Granted that the liberal view that trade is good and autarky bad isn’t exactly fashionable anywhere right now. What makes India’s lurch troublesome is that the pace and direction of economic nationalism may be set by domestic business interests. The Indian liberals, many of whom are Western-trained academics, authors and — at least until a few years ago — policy makers, want a more competitive economy. They will be powerless to prevent the slide.

Modi’s call for a self-reliant India has been echoed by Home Minister Amit Shah, the cabinet’s unofficial No. 2, in a television interview. If Indians don’t buy foreign-made goods, the economy will see a jump, he said. The strategy — although it’s too nebulous yet to call it that — has a geopolitical element. A military standoff with China is under way, apparently triggered by India’s completion of a road and bridge near the common border in the tense Himalayan region of Ladakh. It’s very expensive to fight even a limited war there. With India’s economy flattened by COVID, New Delhi may be looking for ways to restore the status quo and send Beijing a signal.

Economic boycotts, such as Chinese consumers’ rejection of Japanese goods over territorial disputes in the East China Sea, are well understood as statecraft. In these times, it’s not even necessary to name an enemy. An undercurrent of popular anger against China, the source of both the virus and India’s biggest bilateral trade deficit, is supposed to do the job. But is it ever that easy?

A hastily introduced policy to stock only local goods in police and paramilitary canteens became a farcical exercise after the list of banned items ended up including products by the local units of Colgate-Palmolive Co., Nestle SA, and Unilever NV, which have had significant Indian operations for between 60 and 90 years, as well as Dabur India Ltd., a New Delhi-based maker of Ayurveda brands. The since-withdrawn list demonstrates the practical difficulty of bureaucrats trying to find things in a globalized world that are 100% indigenous.

Free-trade champions fret that the prime minister, whom they saw as being on their side six years ago, is acting against their advice to dismantle statist controls on land, labor and capital to help make the country more competitive. Engage with the world more, not less, they caution. But Modi also has to satisfy the Rashtriya Swayamsevak Sangh, the umbrella Hindu organisation that gets him votes. Its backbone of small traders, builders and businessmen — the RSS admits only men — was losing patience with the anemic economy even before the pandemic. Now, they’re in deep trouble, because India’s broken financial system won’t deliver even state-guaranteed loans to them.

The U.S.-China tensions — over trade, intellectual property, COVID responsibility and Hong Kong’s autonomy — offer a perfect backdrop. A dire domestic economy and trouble at the border provide the foreground. Big business will dial economic nationalism up and down to hit a trifecta of goals: Block competition from the People's Republic; make Western rivals fall in line and do joint ventures; and tap deep overseas capital markets. The first goal is being achieved with newly placed restrictions on investment from any country that shares a land border with India. The second aim is to be realized by corporate lobbying to influence India's whimsical economic policies. As for the third objective, with the regulatory environment becoming tougher for U.S.-listed Chinese companies like Alibaba Group Holding Ltd., an opportunity may open up for Indian firms.

All this may bring India Shenzhen-style enclaves of manufacturing and trade, but it will concentrate economic power in fewer hands, something that worries liberals. They’re moved by the suffering of India’s low-wage workers, who have borne the brunt of the COVID shutdown. But when their vision of a more just society and fairer income distribution prompts them to make common cause with the ideological Left, they’re quickly repelled by the Marxist voodoo that all cash, property, bonds and real estate held by citizens or within the nation “must be treated as national resources available during this crisis.” Who will invest in a country that does that instead of just printing money?

At the same time, when liberals look to the business class, they see a sudden swelling of support for ideas like a universal basic income. They wonder if this isn’t a ploy by industry to outsource part of the cost of labor to the taxpayer. Slogans like Modi’s vocal-for-local stir the pot and thicken the confusion. The value-conscious Indian consumer couldn’t give two hoots for calls to buy Indian, but large firms will know how to exploit economic nationalism. One day soon, I’ll get my mangoes — from them.