Implementation of Twenty Point Programme Should get Focused Attention-Jaiswal

The Minister of State for Statistics and Programme Implementation Sriprakash Jaiswal today complemented the states for effective implementation of the Twenty Point Programme-2006 of the Central government. Inaugurating the review meeting of the Twenty Point Programme-2006 programme aimed socio-economic development of the country under which schemes like poverty eradication, food security, housing for all, women welfare and social security are run, the minister said that out of 19 parameters monitored on the monthly basis, excepting a few, the performance of most of them have been very good.

Some of these parameters are- SC families assisted, habitation covered for quality of water supply, houses constructed under Indira Awas Yojana.

Calling upon the nodal Central ministries to provide all support to states for improvement in the performance in these schemes, the minister complimented Himachal Pradesh, Tamil Nadu, Rajasthan, Gujarat and Uttarakhand for working hard to achieve the targets. He said some States including West Bengal, Assam. Bihar,Sikkim, Mizozoram, and Chattisgarh need to improve further. He said these states should focus attention to the proper implementation of the programmes and schemes covered under TPP so that the performance of these schemes is improved and desired benefits are passed to the deserving citizens.

Mr. Jaiswal said Monitoring Committees should be set up at State, district and block level and their meetings held at regular intervals to ensure extensive monitoring of the welfare programmes being taken up under TPP – 2006. The Minister also drew attention of the implementing agencies to the variation observed between information provided by States and by Central nodal ministries and wanted corrective measures to be taken to ensure creation of credible information.

The Twenty Point Programme, as you all aware, was started in 1975 by the then Prime Minister Smt. Indira Gandhi. The objective of the Twenty Point Programme has been to improve the living standard of the poor and down-trodden sections of our society. The emphasis has also been in streamlining production, procurement and distribution of essential commodities, implementation of agricultural land ceiling and distribution of surplus land, development of handloom sector, workers’ association in industry, apprenticeship scheme to enlarge employment and training etc.

The TPP has been restructured thrice since its inception in 1975 primarily because of introduction of new schemes and programmes by Government of India from time to time and also that some of the schemes/programmes having achieved their targets are no more required for monitoring. The first revision was held in 1982 and the second in 1986. The third and last revision took place in 2006. The restructured programme is called Twenty Point Programme – 2006. TPP – 2006 consists of various pro-poor schemes and schemes/programmes for the common man with focus on poverty alleviation, employment generation especially in rural areas, housing, education, family welfare and health, protection of environment and others. About 35 schemes and programmes covered under TPP – 2006 are being administered by different Administrative Ministries/Departments of Government of India. Yet, as I said rather, these schemes and programmes, being for the benefit of the poor, have been kept under TPP for special monitoring by the Ministry.

Index of Six Core Industries (Base: 1993-94=100) – September 2010

The Index of Six core industries having a combined weight of 26.7 per cent in the Index of Industrial Production (IIP) with base 1993-94 stood at 253.7 (provisional) in September 2010 and registered a growth of 2.5% (provisional) compared to 4.3% registered in September 2009. During April-September 2010-11, six core industries registered a growth of 4.0% (provisional) as against 4.5% during the corresponding period of the previous year.

Crude Oil

Crude Oil production (weight of 4.17% in the IIP) registered a growth of 12.5% (provisional) in September 2010 compared to a growth rate of (-)0.5% in September 2009. The Crude Oil production registered a growth of 10.2% (provisional) during April-September 2010-11 compared to (-)1.2% during the same period of 2009-10.

Petroleum Refinery Products

Petroleum refinery production (weight of 2.00% in the IIP) registered a growth of (-) 10.2% (provisional) in September 2010 compared to growth of 3.4% in September 2009. The Petroleum refinery production registered a growth of 2.6% (provisional) during April-September 2010-11 compared to (-)3.6% during the same period of 2009-10.

Coal

Coal production (weight of 3.2% in the IIP) registered a growth of (-)2.0% (provisional) in September 2010 compared to growth rate of 6.5% in September 2009. Coal production grew by 0.4% (provisional) during April-September 2010-11 compared to an increase of 11.6% during the same period of 2009-10.

Electricity

Electricity generation (weight of 10.17% in the IIP) registered a growth of 1.3 % (provisional) in September 2010 compared to growth rate of 7.4% in September 2009. Electricity generation grew by 4.0% (provisional) during April-September 2010-11 compared to 6.4% during the same period of 2009-10.

Cement

Cement production (weight of 1.99% in the IIP) registered a growth of 5.2% (provisional) in September 2010 compared to 6.5% in September 2009. Cement Production grew by 4.7% (provisional) during April-September 2010-11 compared to an increase of 12.3% during the same period of 2009-10.

Finished (carbon) steel

Finished (carbon) Steel production (weight of 5.13% in the IIP) registered a growth of 5.8% (provisional) in September 2010 compared to 0.8% (estimated) in September 2009. Finished (carbon) Steel production grew by 3.9% (provisional) during April-September 2010-11 compared to an increase of 1.7% during the same period of 2009-10.

N.B: Data are provisional. Revision has been made based on revised data obtained.

Wholesale Price Indices for Primary Articles and Fuel & Power in India (Base: 2004-05 = 100) Review for the week ended 16th October, 2010 (24 Asvina, 1932 Saka)



The WPI [with base year 2004-05] for the week ended 16th October, 2010 in respect of ‘Primary Articles’ and ‘Fuel & Power’ is given below:



PRIMARY ARTICLES (Weight 20.12%)



The index for this major group declined by 0.4 percent to 181.0 (Provisional) from 181.8 (Provisional) for the previous week.



The annual rate of inflation, calculated on point to point basis, stood at 16.62 percent (Provisional) for the week ended 16/10/2010 (over 17/10/2009) as compared to 18.05 percent (Provisional) for the previous week (ended 09/10/2010).



The groups and items for which the index showed variations during the week are as follows:-



The index for 'Food Articles' group declined by 0.7 percent to 179.5 (Provisional) from 180.8 (Provisional) for the previous week due to lower prices of fruits & vegetables (4%) and bajra, jowar, fish-inland, masur and urad (1% each). However, the prices of poultry chicken, arhar and fish-marine (4% each) and barley (3%) moved up.



The index for 'Non-Food Articles' group rose by 0.3 percent to 161.6 (Provisional) from 161.1 (Provisional) for the previous week due to higher prices of copra (7%), raw jute (5%), raw rubber (3%) and raw silk (1%). However, the prices of fodder (3%) and cotton seed and castor seed (1% each) declined.



FUEL & POWER (Weight 14.91%)



The index for this major group rose by 0.4 percent to 148.3 (Provisional) from 147.7 (Provisional) for the previous week due to higher prices of light diesel oil (6%), aviation turbine fuel (3%), naphtha and furnace oil (2% each) and petrol (1%). However, the prices of bitumen (2%) declined.



The annual rate of inflation, calculated on point to point basis, stood at 11.25 percent (Provisional) for the week ended 16/10/2010 (over 17/10/2009) as compared to 11.14 percent (Provisional) for the previous week (ended 09/10/2010).

Why the world is jittery about rare earths exports from China

Reuters reported that China's dominance of rare earths used in high tech products has aroused growing international attention after reports that the government has been choking off shipments, possibly out of political pique.

Here is an explanation of the issue and why it matters.

Q - Why are China's rare earths important?
A - The computer you're possibly reading this on almost certainly contains rare earths set of 17 minerals with magnetic, luminescent and other properties that make them useful in hard drives, magnets, lasers and other gadgets important in computing, clean energy and military applications. Rare earths are relatively common in the ground but are much more scarce in concentrations that make mining them worthwhile.

China produces about 97% of the world's rare earths and that means its policies in the sector ripple across the world. China mined about 120,000 tonnes in 2008. It has about 36% of the world's known exploitable reserves of rare earths. Since the 1990s, Chinese miners and processors have massively expanded production while foreign competitors in the United States and elsewhere have shut down.

China's dominance has been helped by state support together with relatively low wages and loose regulation of environmental damage caused by mining and processing rare earths.

Q - Has china been blocking exports?
A - Reports in the New York Times have said that China cut some shipments of rare earths to Japan, possibly out of anger over a sea territory dispute.

The reports have also cited industry sources as saying that China may have taken similar steps against the United States and Europe after Washington launched a trade investigation into Chinese state support for clean energy technology.

China does not have a history of using its economic sway as a blunt political weapon and nor does it have many resources it can withhold. Perhaps that is changing.

Mr Gareth Hatch the founding principal of Technology Metals Research said that the difficulties some foreign purchasers have had may have arisen from China's stricter enforcement of export quotas and related measures not out of pressure for political ends.

China said that it has been alarmed to see its rare earths reserves being mined so voraciously and then sold abroad at prices that it says do not reflect the metals' real importance and the environmental cost of processing them. That push to control exports has been stoked by China's efforts in green technology where rare earths can be used to make more efficient batteries wind turbines and other technology. It has been imposing stricter controls on mining and cracked down on unlicensed mining and smuggling.

Beijing has introduced export duties and quotas for rare earths. This year it steeply cut export quotas so total exports for 2010 will be about 40% below 2009 levels. For the H2 of the year they will be 72% below levels in the H2 of 2009.

Mr Hatch said that "I have heard of a handful of consumers of rare earths outside of China have had a challenge acquiring certain materials samarium would be one used in permanent magnets, compounds of lanthanum and cerium would be others used in a variety of applications. But this has been driven by the traders not wanting to ship lower value light rare earths in favor of the heavier, more valuable stuff. Most other folks I've spoken to have not mentioned any issues, beyond grumbling about the price."

Q - What does China want to do with its rare earths?
A - The government wants to get into more profitable higher end production and to nurture homegrown industry champions. China is also pushing to become a major force in green technology in which rare earths are an important ingredient.

Restricting exports will force foreign companies to buy more of the completed products containing rare earths from China until other countries increase their own production. Beijing's quotas do not apply to finished products.

Q - What are the implications and what could happen?
A - China's push has ignited economic and geo-political jitters. One worry is that Beijing's chokehold on exports could hurt foreign companies and drive up international prices.

Mr Hatch said that some purchasers were aghast at the current pricing as it puts them at a terrible price disadvantage compared to their competitors based in China. A more distant worry voiced by some in Washington is that China could cut off the United States and other potential rivals of access to minerals used in military equipment.

Chinese officials from Premier Mr Wen Jiabao down have said that their government is not using its rare earth as a political weapon. Last week officials denied a Chinese newspaper report that China would cut quotas by 30% next year.

Industry players will be waiting to find out what quotas Beijing will set in place next year and beyond and also want a finer sense of how the quotas will work. Already some governments have said foreign companies should not be so dependent on China for such an important ingredient.

Mining outside China that offers access to rare earths could benefit from this push including in the United States, Vietnam, South Africa, Australia and Canada. But mining rare earths is the easy part. The more difficult and expensive part is separating and processing the minerals so they can be used for final applications.

Governments and companies will have to decide whether they are willing to pay for that capability. It could be very expensive and take years to set up such production facilities.

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SAIL and NMDC to use Kobe technology to make steel

Steel Authority of India Ltd and National Mineral Development Corporation plan to use Kobe Steel’s patented technology for steelmaking under their joint ventures with the Japanese steelmaker.

Mr Ajay Dua former secretary ministry of industry and commerce and currently an advisor to a number of Japanese companies told DNA that both SAIL and NMDC, under their joint ventures with Kobe, are doing a feasibility study for using this technology in India.

He said that “The report is expected by November, when the final plans of setting up a steel unit based on this technology will be frozen.”

He said “Under ITMK3, instead of iron ore lumps, ore fines or dust is used for steel production. These fines, which get wasted as dust lying on the mouth of the mines, are heated to form iron nuggets. These nuggets have 97% Fe content and are heated to molten state and fed into electric arc furnaces for making steel.”

He said that “The major advantages of the process are that it uses iron ore fines, works on thermal coal instead of conventional coking coal and takes less land to set up a plant adding that the plants are modular in nature and require 20 acres to produce iron nuggets for a 0.5 million tonne unit.”

Mr Dua said that both SAIL and NMDC are upbeat about the technology and may look at taking the joint ventures forward beyond one steel unit.

Currently, SAIL has decided to set up a 0.5 million tonne steel mill using ITMK3 process at its Durgapur Alloy Plant and NMDC is scouting for land in Andhra Pradesh and Chhattisgarh.

India will be the second country after the US to use this unique technology, called Iron Making Third Generation Technology.

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Lack of demand and strong rupee makes Indian Steel-mills introspect

October started with the forebodings of an auspicious beginning as Indian mills had hiked flat product prices by INR 1000 per tonne to INR 1500 per tonne. However the dream has been rudely shaken as the market failed to digest the hike. It is anticipated that producers will either reduce the prices in equal measure or at least roll over, faced with a Hobson’s choice.

The reduction could be in the range of INR 500 per tonne to INR 1000 per tonne as domestic off take fell short of their expectations in October.

The reasons for a premature soggy sentiment are as follows

1. Demand from the key consuming sectors viz., manufacturing and projects has lagged.

2. Falling international price levels (3%) since September fuelled by appreciation of Indian Rupees (5%) since September has added fuel to fire making imports cheaper.

3. Liquidation of imported material at cheaper rates has put pressure on domestic levels Imported cargo is being offered at about INR 30500 per tonne basic, compared to the mills’ offers of INR 33000 tonne has is a discomforting.

The pall of gloom has been enlarged with the ominous proposition of imports hitting the Indian shores after a month as booking has already commenced, since international levels have receded by almost USD 20 per tonne to INR 25 per tonne in the last 6 weeks. So far this month, domestic traders have already placed orders for about 200,000 tonnes of imported coils.

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Why not currency NAVs?

S.MURLIDHARAN (The author is a Delhi-based chartered accountant.)

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There is a strong case for disclosure of NAV at least by countries whose currencies are allowed to float in the international markets.

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A derivative, goes its definition, is an instrument which derives its value or strength from its underlying assets. On this touchstone, option in a share is a derivative just as share futures are. Why, even a share itself, come to think of it, is a derivative deriving as it does its strength from the value of the undertaking(s) of the company issuing it.

A unit of a mutual fund derives its value from net asset value (NAV) which is nothing but the current market value of all the shares and securities the scheme has invested in as increased by the income if any that has accrued and as reduced by all the liabilities and ultimately divided by the number of units participating in the scheme.

Gold standard

Where does this leave currencies? When gold bullion standard was in vogue, one could anytime exchange actual gold for the paper currency it represented thus making the two fungible. Its international version, the gold exchange standard, practised by the US from 1944, coinciding with the birth of the Breton Woods twins IMF and the World Bank, was too good to last for ever.

That it lasted for almost three decades is as much a testimony to the US' doggedness in maintaining the status of international reference currency for dollar as to the sluggish market for gold during this period. When the standard was in vogue, the US promised to exchange each batch of $35 with one ounce of gold. The NAV of a dollar in other words was 1/35 {+t} {+h} part of an ounce of gold. Of course, the US is not bound by any such commitment now with the peg having been junked in the early 1970s in the wake of the first oil shock.

This article however is not about the gold exchange standard pioneered by the US and foisted on the world. It is about the need for underlying assets for a currency that is floating in the international market.

Today, no country is under gold standard, or for that matter, under any standard at all. So much so, the US dollar, by far the currency with maximum international acceptability, the one in which maximum international commerce takes place, is not backed by any underlying asset whatsoever. And even if it is implicitly backed, there is no way one can know what the underlying assets are.

Commodity currencies

There are commodity currencies, meaning currencies of countries whose mainstay is export of some raw material. The Australian and Canadian dollars belong to this genre. But the description is only picturesque involving no commitment to exchange the currency in favour of the commodity that is the country's forte and which it has in abundance.

People dealing in these currencies however have the satisfaction that the currency has not emerged out of thin air and is backed by a precious commodity the world needs, though to be sure there is no legal commitment on the country to exchange for its currency a given quantity of the commodity.

There are a few dubbed as revisionists who pine wistfully for the return of gold standard. With the stock of gold dwindling by the day, return to gold standard en masse would produce disastrous consequences for the world, particularly to those countries not piling up gold reserves.

Even when in vogue, one of the criticisms of gold standard was that it was stacked against nations not fortunate enough to have gold either as a natural resource or as a wise investment but were blessed with other resources like oil or coal or what have you. Indeed, gold standard was guilty of setting store by a single commodity whose availability is limited and distribution skewed.

It was this rather muted rebellion that found a feeble resonance and voice a couple of years ago when the oil exporting nations led by Venezuela, Russia and Iran toyed with the idea of minting a unique currency backed by oil only to give it up finding China baulking at it.

The international order for currencies supposed to be enforced by the IMF is as feeble and effete as the WTO in the domain of international trade in goods and services and investments. But it would be in everybody's interest, including the US', to settle for some discipline on currencies, especially those that are floating.

A currency that is not floating affects largely the domestic constituency whereas a floating currency like the dollar impinges on the fortunes of billions of people across countries, and hence its free and untrammelled minting must be reined in. Such an international order, especially for floating currencies, would bring about a modicum of discipline in minting and overall supply of a currency.

But the zillion dollar question for the dollar would be what would underwrite it. To be sure, the world cannot return back to the days of pristine gold bullion standard when one could swap a currency for the underlying gold. Neither for that matter would it be possible for Australia, for example, to exchange its dollar for a predetermined unit of coal.

True value

But at the same time every country whose currency is floating in the international financial market should be obliged to publish periodically, like a fund manager of a mutual fund, its NAV under neutral international surveillance. That the dollar is grossly overvalued would become known to the entire world at the first disclosure given the fact that the vast amount of dollars in circulation within and outside the US would weigh heavily in diluting the net worth of the nation.

The short point is when a fund manager can be obliged to publish NAV on a daily basis in case of an open-ended scheme and periodically in case of a close-ended scheme despite there being exit route through the exchange, there is no reason why the nation's financial managers should not be cast with a similar responsibility.

This of course presupposes meticulous accounting of assets and liabilities with a proper survey being done of a nation's latent and patent assets giving rise to the tantalising prospect of window dressing hitherto associated with corporations. Nonetheless, there is a strong case for disclosure of NAV at least by countries whose currencies are allowed to float in the international markets.

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