58 Facts About The US Economy In 2015 You Won’t Believe Are True!

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The world didn’t completely fall apart in 2015, but it is undeniable that an immense amount of damage was done to the U.S. economy.

This year the middle class continued to deteriorate, more Americans than ever found themselves living in poverty, and the debt bubble that we are living in expanded to absolutely ridiculous proportions.

Toward the end of the year, a new global financial crisis erupted, and it threatens to completely spiral out of control as we enter 2016.  Over the past six months, I have been repeatedly stressing to my readers that so many of the exact same patterns that immediately preceded the financial crisis of 2008 are happening once again, and trillions of dollars of stock market wealth has already been wiped out globally.

Some of the largest economies on the entire planet such as Brazil and Canada have already plunged into deep recessions, and just about every leading indicator that you can think of is screaming that the U.S. is heading into one.  So don’t be fooled by all the happy talk coming from Barack Obama and the mainstream media.  When you look at the cold, hard numbers, they tell a completely different story.  The following are 58 facts about the U.S. economy from 2015 that are almost too crazy to believe…

#1 These days, most Americans are living paycheck to paycheck.  At this point 62 percent of all Americans have less than 1,000 dollars in their savings accounts, and 21 percent of all Americans do not have a savings account at all.

#2 The lack of saving is especially dramatic when you look at Americans under the age of 55.  Incredibly, fewer than 10 percent of all Millennials and only about 16 percent of those that belong to Generation X have 10,000 dollars or more saved up.

#3 It has been estimated that 43 percent of all American households spend more money than they make each month.

#4 For the first time ever, middle class Americans now make up a minority of the population. But back in 1971, 61 percent of all Americans lived in middle class households.

#5 According to the Pew Research Center, the median income of middle class households declined by 4 percent from 2000 to 2014.

#6 The Pew Research Center has also found that median wealth for middle class households dropped by an astounding 28 percent between 2001 and 2013.

#7 In 1970, the middle class took home approximately 62 percent of all income. Today, that number has plummeted to just 43 percent.

#8 There are still 900,000 fewer middle class jobs in America than there were when the last recession began, but our population has gotten significantly larger since that time.

#9 According to the Social Security Administration, 51 percent of all American workers make less than $30,000 a year.

#10 For the poorest 20 percent of all Americans, median household wealth declined from negative 905 dollars in 2000 to negative 6,029 dollars in 2011.

#11 A recent nationwide survey discovered that 48 percent of all U.S. adults under the age of 30 believe that “the American Dream is dead”.

#12 Since hitting a peak of 69.2 percent in 2004, the rate of homeownership in the United States has been steadily declining every single year.

#13 At this point, the U.S. only ranks 19th in the world when it comes to median wealth per adult.

#14 Traditionally, entrepreneurship has been one of the primary engines that has fueled the growth of the middle class in the United States, but today the level of entrepreneurship in this country is sitting at an all-time low.

#15 For each of the past six years, more businesses have closed in the United States than have opened.  Prior to 2008, this had never happened before in all of U.S. history.

#16 If you can believe it, the 20 wealthiest people in this country now have more money than the poorest 152 million Americans combined.

#17 The top 0.1 percent of all American families have about as much wealth as the bottom 90 percent of all American families combined.

#18 If you have no debt and you also have ten dollars in your pocket, that gives you a greater net worth than about 25 percent of all Americans.

#19 The number of Americans that are living in concentrated areas of high poverty has doubled since the year 2000.

#20 An astounding 48.8 percent of all 25-year-old Americans still live at home with their parents.

#21 According to the U.S. Census Bureau, 49 percent of all Americans now live in a home that receives money from the government each month, and nearly 47 million Americans are living in poverty right now.

#22 In 2007, about one out of every eight children in America was on food stamps. Today, that number is one out of every five.

#23 According to Kathryn J. Edin and H. Luke Shaefer, the authors of a new book entitled “$2.00 a Day: Living on Almost Nothing in America“, there are 1.5 million “ultrapoor” households in the United States that live on less than two dollars a day. That number has doubled since 1996.

#24 46 million Americans use food banks each year, and lines start forming at some U.S. food banks as early as 6:30 in the morning because people want to get something before the food supplies run out.

#25 The number of homeless children in the U.S. has increased by 60 percentover the past six years.

#26 According to Poverty USA, 1.6 million American children slept in a homeless shelter or some other form of emergency housing last year.

#27 Police in New York City have identified 80 separate homeless encampments in the city, and the homeless crisis there has gotten so bad that it is being described as an “epidemic”.

#28 If you can believe it, more than half of all students in our public schools are poor enough to qualify for school lunch subsidies.

#29 According to a Census Bureau report that was released a while back, 65 percent of all children in the U.S. are living in a home that receives some form of aid from the federal government.

#30 According to a report that was published by UNICEF, almost one-third of all children in this country “live in households with an income below 60 percent of the national median income”.

#31 When it comes to child poverty, the United States ranks 36th out of the 41 “wealthy nations” that UNICEF looked at.

#32 An astounding 45 percent of all African-American children in the United States live in areas of “concentrated poverty”.

#33 40.9 percent of all children in the United States that are being raised by a single parent are living in poverty.

#34 There are 7.9 million working age Americans that are “officially unemployed” right now and another 94.4 million working age Americans that are considered to be “not in the labor force”.  When you add those two numbers together, you get a grand total of 102.3 million working age Americans that do not have a job right now.

#35 According to a recent Pew survey, approximately 70 percent of all Americans believe that “debt is a necessity in their lives”.

#36 53 percent of all Americans do not even have a minimum three-day supply of nonperishable food and water at home.

#37 According to John Williams of shadowstats.com, if the U.S. government was actually using honest numbers the unemployment rate in this nation would be 22.9 percent.

#38 Back in 1950, more than 80 percent of all men in the United States had jobs.  Today, only about 65 percent of all men in the United States have jobs.

#39 The labor force participation rate for men has plunged to the lowest level ever recorded.

#40 Wholesale sales in the U.S. have fallen to the lowest level since the last recession.

#41 The inventory to sales ratio has risen to the highest level since the last recession.  This means that there is a whole lot of unsold inventory that is just sitting around out there and not selling.

#42 The ISM manufacturing index has fallen for five months in a row.

#43 Orders for “core” durable goods have fallen for ten months in a row.

#44 Since March, the amount of stuff being shipped by truck, rail and air inside the United States has been falling every single month on a year over year basis.

#45 Wal-Mart is projecting that its earnings may fall by as much as 12 percentduring the next fiscal year.

#46 The Business Roundtable’s forecast for business investment in 2016 has dropped to the lowest level that we have seen since the last recession.

#47 Corporate debt defaults have risen to the highest level that we have seensince the last recession.  This is a huge problem because corporate debt in the U.S. has approximately doubled since just before the last financial crisis.

#48 Holiday sales have gone negative for the first time since the last recession.

#49 The velocity of money in the United States has dropped to the lowest level ever recorded.  Not even during the depths of the last recession was it ever this low.

#50 Barack Obama promised that his program would result in a decline in health insurance premiums by as much as $2,500 per family, but in reality average family premiums have increased by a total of $4,865 since 2008.

#51 Today, the average U.S. household that has at least one credit card has approximately $15,950 in credit card debt.

#52 The number of auto loans that exceed 72 months has hit at an all-time high of 29.5 percent.

#53 According to Dr. Housing Bubble, there have been “nearly 8 million homes lost to foreclosure since the homeownership rate peaked in 2004″.

#54 One very disturbing study found that approximately 41 percent of all working age Americans either currently have medical bill problems or are paying off medical debt.  And collection agencies seek to collect unpaid medical bills from about 30 million of us each and every year.

#55 The total amount of student loan debt in the United States has risen to a whopping 1.2 trillion dollars.  If you can believe it, that total has more than doubled over the past decade.

#56 Right now, there are approximately 40 million Americans that are paying off student loan debt.  For many of them, they will keep making payments on this debt until they are senior citizens.

#57 When you do the math, the federal government is stealing more than 100 million dollars from future generations of Americans every single hour of every single day.

#58 An astounding 8.16 trillion dollars has already been added to the U.S. national debt while Barack Obama has been in the White House.  That means that it is already guaranteed that we will add an average of more than a trillion dollars a year to the debt during his presidency, and we still have more than a year left to go.

What we have seen so far is just the very small tip of a very large iceberg.  About six months ago, I stated that “our problems will only be just beginning as we enter 2016″, and I stand by that prediction.

We are in the midst of a long-term economic collapse that is beginning to accelerate once again.  Our economic infrastructure has been gutted, our middle class is being destroyed, Wall Street has been transformed into the biggest casino in the history of the planet, and our reckless politicians have piled up the biggest mountain of debt the world has ever seen.

Anyone that believes that everything is “perfectly fine” and that we are going to come out of this “stronger than ever” is just being delusional.  This generation was handed the keys to the finest economic machine of all time, and we wrecked it.  Decades of incredibly foolish decisions have culminated in a crisis that is now reaching a crescendo, and this nation is in for a shaking unlike anything that it has ever seen before.

 

Need to grow 1.5% faster to sustain wage hikes, sops: Arun Jaitley

Indian economy, Arun Jaitley, Indian GDP, Bharatiya Mazdoor Sangh, BMS, Seventh Pay Commission, OROP, indian express

Indian economy needs to grow by extra 1-1.5 percentage points to sustain wage hike and other benefits given to workers and the poor, finance minister Arun Jaitley said on Wednesday.

“Our GDP growth of 7.5 per cent is at a time when the world is experiencing global slowdown. We need to increase our growth rate. We have to at least increase it by 1-1.5 per cent,” he said at the felicitation function organised by Bharatiya Mazdoor Sangh (BMS).

India’s Gross Domestic Product grew at 7.2 per cent in first half of 2015-16. Finance ministry’s Mid Year Economic Analysis estimates GDP growth between 7 per cent and 7.5 per cent in the current financial year.

“In the coming year, there would be burden of Rs 1.02 lakh crore of Seventh Pay Commission, OROP (One Rank One Pension) burden is also there. That burden can be sustained only when there is increase in economic activity. Because of increased economic activity, government revenue and resources will go up,” he said.

The Seventh Pay Commission, headed by Justice AK Mathur, submitted its report to the government last month, recommending 23.55 per cent overall hike in pay, allowances and pensions of Central government employees with effect from January 1, 2016. This will lead to the Centre’s salary bill increasing by Rs 1,02,100 crore in 2016-17.

The government is ready to have dialogue with the trade unions with regard to wage increase, he said.

He said the government’s view is that the benefits of economic development should first accrue to labourers and the poor. He said minimum wages of labour should be at least respectable and take care of inflation.

Meanwhile, speaking to reporters later in the day, Jaitley said the government has to rely mainly on public investment and foreign direct investment at a time when private sector investment was growing slowly and agriculture growth was not encouraging.

“Any economy requires multiple engines to pull it. Global tailwinds can be the engines of growth, which unfortunately they have not. Private investment can be an engine of growth, which it has not. Bumper agriculture can be an engine of growth, which it has not,” he said.

“Therefore, we have to rely on other engines of growth, which are predominantly public investment, foreign direct investment, private investment in some areas like start-ups, telecom and then some increase in consumption,” he added.

Jaitley said that good monsoon can add cutting edge to growth numbers. He said low global crude oil prices have been a blessing in disguise for the government, helping to bolster resources for higher investment. “The silver lining in this has been oil prices and this is enabling us to fund public investment, the principal engine of growth,” he said.

‘Shrinking Cong strength will make GST happen’

New Delhi: Hitting back at Congress’ comment that even the trinity of Gods will not facilitate rollout of Goods and Services Tax (GST) from April 1, finance minister Arun Jaitley on Wednesday said shrinking strength of Congress in Rajya Sabha will make GST a reality, as MPs vote in Parliament, not Gods.

“Congress has said, trinity of Gods cannot make GST happen soon. Gods don’t vote, MPs do and shrinking strength of Congress in Rajya Sabha can make it (GST) happen,” Jaitley said.

Jaitley said most states are on board on GST and it was probable to implement GST in middle of the year. “A part of obstructionism (by Congress) was to stop growth. Otherwise, there cannot be volte face of this kind and secondly you cannot concoct those three reasons, which never existed,” FM said. The Winter Session of Parliament was a washout, with the government unable to resolve the impasse over GST. Lok Sabha and Rajya Sabha passed 13 and 9 bills, respectively during the Winter Session of Parliament.

Passage of GST Bill likely in next session

Finance Minister Arun Jaitley after addressing the officer trainees of the Indian Revenue Service in New Delhi on Saturday.

The government is hopeful of the passage of the Goods and Services Tax Bill in the Budget session of Parliament, when the numbers in the Rajya Sabha will swing in its favour, according to Union Finance Minister Arun Jaitley.

“Halfway through the next session, the numbers in the Upper House will also change. I am reasonably optimistic as far as the next session is concerned that we will be able to push it [GST Bill],” Mr. Jaitley said, as the strength of parliamentarians belonging to the Congress and its allies would start to diminish.

The GST is expected to boost economic growth by one to two per cent as it will replace India’s complex indirect tax regime of multiple state and central levies that makes inter-State trade and movement of goods tedious. The new tax regime should have been introduced much earlier, says Mr. Jaitley.

The government had announced a target date of April 2016 for the rollout of the GST regime, but is now eyeing a start in the middle of financial year 2016-17. The Finance Minister said he would be continuing his talks with the States and all the political parties to ensure the passage of the Bill.

After the Constitution Amendment Bill is passed in Parliament, there are three more legislation — Central GST (CGST), State GST (SGST) and Integrated GST (IGST) — that need to be passed for the GST regime to come into force.

“We are in the stage of readiness as far as those legislation are concerned which will have to be passed then by the Central government and by the State governments,” Mr. Jaitley said.

“If you ask me 4-5 years later, in Income Tax Act … did the provisions of the retrospective taxation help India or did they hurt India? My answer is very clear, they hurt India because at the end of the day we have not been able to collect those taxes and we scared investors away,” Mr. Jaitley said, addressing officer-trainees of the Indian Revenue Service.

The Minister told revenue officials to make taxation a painless process for people. “When in doubt, go straight. You’ll never go wrong. The moment you deviate by even a few inches, there is no limit to which you can fall. There is no such thing as 99 per cent integrity,” he said. “If you lean either way then you will unfairly cost the revenue or you may be unfairly taxing an assessee. ”

India did well in year of global economic turmoil: Finance Minister Arun Jaitley

Finance Minister Arun Jaitley dismissed grumblings about the economy not having taken off as "cynicism - a way of life in India".NEW DELHI: Voicing “great satisfaction” over performance of the Indian economy in “a year of turmoil and volatility” globally, Finance Minister Arun Jaitley today dismissed grumblings about the economy not having taken off as “cynicism — a way of life in India”.

Looking back at 2015, Jaitley said India has been the bright spot with growth prospects of 7-7.5 per cent despite global slowdown and adversities, and expressed optimism that the growth rate which is “quite good” would improve further in the months to come.

India has responded well to the challenge posed by the slowdown in global economy, he said, but acknowledged that “there are areas (in which) we have to respond faster”.

“As the year ends, I look back with a sense of great satisfaction,” Jaitley told PTI in an interview, during which he underlined that India’s fiscal fundamentals are “extremely sound”.

Outlining his priorities for the New Year, the Finance Minister said he would continue with structural reforms and the priorities would include GST, rationalising direct taxes, further easing the system of doing business.

“After having done that, I would like to concentrate essentially on three things – more money for physical infrastructure, more money on social infrastructure and lastly more money on irrigation because that is a neglected sector.”

Asked about murmurs that the economy has not really taken off, Jaitley dismissed such grumblings as without merit and said that “the revenue collections do not go up without the economy taking off”.

“Cynicism is a way of life in India. You can question any other data but you cannot question the actual rise of revenue and the actual rise of revenue is showing that the economy is doing better,” he said.

Asked whether the Indian industry was also prone to such cynicism, Jaitley said, “Well, I think a section of the Indian industry has overstretched itself and those who have overstretched themselves see this as a universal problem.”

Besides global headwinds due to slowdown in China and weakness in commodity markets, India also had to face domestic challenges in form of two continuous weak monsoons and slower private sector investment, making the management of the Indian economy a “great challenge for us,” Jaitley said.

“Private sector investments continued to be slow because the private sector had overstretched itself… they had surplus capacity and demand was slow.”

The government responded well to these challenges by stepping up public investment, which has been complemented by 40 per cent rise in FDI and a rebound in consumption, he said.

The government has utilised the savings from low oil prices for infrastructure spending, resulting in sectors like highways, rural roads and railways getting a significant step-up of investment. Port areas have also been targets of private sector investments, he said.

“As a result, despite the global slowdown and adversities, India became the bright spot in the global economy with a growth prospect of 7-7.5 per cent. It is lesser than our targetted 8 per cent. I have no doubt if we have had a normal monsoon, we would have been close to the target.”

Jaitley said the services sector continues to be strong, while “revival of manufacturing and the IIP (Index of Industrial Production) are high points of this year”, which is also reflected in record rise in indirect tax collections.

“Inflation remains under control, the repo rate (the policy interest rate decided by RBI) has come down this year by 125 basis points. Foreign exchange reserves were as good as always. Compared to the rest of the global economies, we were far more stable vis-a-vis the dollar,” Jaitley said while summing up the macroeconomic trends for 2015.

“The year 2015 has been an extremely challenging year as far as economy is concerned, because the world economy has been going through a downturn,”he said, while adding that imports as well as exports have shrunk due to decline in prices and shrinking of the global trade.

“International trade has contracted. So both imports and exports have shrunk. In India context, the shrinkage is more in value (terms) because the prices are low and to some extent in volumes because of the shrinkage of global trade,” he said.

Jaitley further said that the government has continued with its reform process including on fronts like FDI norms and ease of doing business, while some of the old taxation issues are being resolved “one by one”.

“The rationalisation of subsidies in a big way has taken place. The methodology of distribution of natural resources has become extremely fair… These are important positives which have emerged as far as our economy is concerned.”

On way ahead for the Indian economy, Jaitley said a “fast moving economy” will help generate more revenues for investing in physical and social infrastructure as well as irrigation.

“I have already been constrained by a 42 per cent (tax) collections going to the states on recommendation of the Finance Commission. Next year, I am constrained by Rs 1,02,000 crore extra spending because of the Pay Commission. So, I have to always keep counting my balance resources,” he said.

On some states requesting deferring the Pay Panel recommendations due to lack of resources available with them, Jaitley said a committee of secretaries was already working on the implementation.

“The Pay Commission has already raised the expectations of government servants and defying that expectation is very difficult. I don’t grudge the government servants being paid more because after all they are supposed to work harder and work honestly.”

Asked whether it would be implemented from January 1, Jaitley said, “The expert committee will decide (that). The Secretaries Committee is already working on the matter”.

Asked whether there have been any disappointment, Jaitley said, “I would say fighting a slowdown is a challenge, it can never be a disappointment and we have responded to the challenge”.

On areas where the government needs to respond faster, he said these include various structural changes.

“We need to bring our direct taxes at par with what is happening elsewhere in the world… I had hoped that we complete the process of GST this year,” Jaitley said, while putting the blame on Congress for delaying this reform with its “plain and simple obstructionism”.

“In fact, a national party adopting a disruptionist role and getting a sadistic pleasure in stalling a reform which could add to India’s GDP is a disappointment.

“It used disruption in order to obstruct and I think it is a very bad precedent for India’s Parliamentary democracy if this is followed in state legislatures, if this is followed by future opposition parties, I think it would be a bad trend to set.”

Jaitley further said the Parliament itself would have to find alternative methods of approving legislation if the Congress party does not change its tactics.

Asked about such alternatives, he said, “I hope it does not come to a stage where all legislations are passed in a din or you rely on money legislations, you rely more on executive decision making”.

Stating that some of the legislations have been passed even without discussion, Jaitley said it was not the “ideal way how laws should be passed”.

On his comments about the role of Rajya Sabha, Jaitley said, “I have frankly not argued for a fresh look at Rajya Sabha. Rajya Sabha is essential and part of India’s basic structure. The structure of Rajya Sabha cannot be altered.”
Asserting that he would never suggest altering this structure, Jaitley said, “I am only on the impact on Parliamentary democracy if the indirectly elected house continues to veto a directly elected house”.

“… Rajya Sabha as a house which is supposed to maintain a check and balance, can once in a while disagree with a legislation passed by the Lok Sabha. It can be referred to a joint session, but every other law they cannot disagree with. It cannot happen too frequently.
“And if the indirectly elected house, for political and collateral reasons, vetoes a directly elected house, it does not augur well,” he said.

Talking about the system in other countries, Jaitley said, “In Britain, they follow a pattern that the Upper House can send it (a bill) back once for reconsideration to the Lower House and if the Lower House, which works on a mandate and which has been elected on a manifesto, second time approves it, the Upper House always accepts it.”

Asked whether that can be followed in India too, he said, “That could be accepted as a possible precedent.”

On rising bad loans of banks, Jaitley said it was “a problem inherited from the previous regime”.

“We are addressing each one of the sectors – the highways, the infrastructure contracts, the discoms. There is a lot of activity on each and all of these fronts. There is a system of recapitalisation of banks, but the problem is large and therefore, we will have to continue this effort and probably even improve on these efforts,” he added.

Petroleum products to be out of GST for now: CEA

He said that the GST council would decide for how long these products would be out of the new taxation regime.

KOLKATA: Petrol and other petroleum products would not be brought under the GST regime for some time after its roll out, Chief Economic Advisor Arvind Subramaniam said today.

“Constitutionally petrol and other petroleum products will be within the GST system. But it would be out of the GST dispensation after its implementation for some time”, Subramaniam told reporters on the sidelines of an event organised by ISI here.

He said that the GST council would decide for how long these products would be out of the new taxation regime.

“Even after GST, petrol and other petroleum products would continue to be taxed the way now both by the Centre and states”, he said.

Asked about the roll-out of GST, he said that Union Finance minister Arun Jaitley had said that the government was hoping that the GST Bill would be passed soon.

“All depends on when the Constitution amendment bill gets cleared”, Subramaniam said.

Outlining the benefits of GST, he said that it would give the country a wider tax base and `Make in India’ drive would get an impetus.

“However, no single reform could determine the long-term growth of the country”, he said.

Mann ki Baat: Action Plan on ‘Start-up India’ to be unveiled on January 16, says PM Narendra Modi

Modi said the programme will be designed to suit Indian conditions and focus would be on ensuring benefits for the youth from the lowest strata of the society.NEW DELHI: Seeking to boost entrepreneurship at the grassroots level, Prime Minister Narendra Modi today said the Action Plan of the ‘Start-up India, Stand-up India’ will be unveiled on January 16 and urged the states to help spread this campaign across the country’s nook and corner.

Modi, who had made the announcement about the campaign in his last Independence Day address, said the programme will be designed to suit Indian conditions and focus would be on ensuring benefits for the youth from the lowest strata of the society.

“My dear young friends, in my August 15 address from the Red Fort, I had made preliminary mention about ‘Start-up India, Stand-up India’. After that, this spread to all the departments of the government.

“Can India be a ‘Start-up Capital’? Can the youth in the states have the opportunities in the form of start-ups, with innovations, whether it be manufacturing, service sector or agriculture? In everything, there should be freshness, new ways, new thinking. The world cannot move ahead without innovation,” he said in his monthly ‘Mann ki Baat’ radio programme, the last one for this year.

He said the ‘Start-up India, Stand-up India’ campaign has brought new opportunities for the youth.

“On January 16, the government of India will unveil the full Action Plan of Start-up India, Stand-up India… A structure will be presented before you. This programme will be connected to the country’s IITs, IIMs, central universities and NITs. Wherever there are youth, they will be linked through ‘live connectivity,” the Prime Minister said.

The programme is aimed at promoting bank financing for start-up ventures and offer incentives to boost entrepreneurship and job creation.

FCI raises Rs 30,000 crore as short-term loan for capital needs

Maximum amount of Rs 10,000 crore has been raised from PNB, followed by Rs 7,000 crore from SBI and remaining from others including public and private sector banks.NEW DELHI: In view of mounting food subsidy arrears, state-run Food Corporation of India (FCI) has raised Rs 30,000 crore as a short-term loan from consortium of banks including SBI and PNB to meet working capital requirements.

The FCI, nodal agency for procurement and distribution of foodgrains, is facing a liquidity crunch as its subsidy arrears are estimated to cross Rs 58,000 crore by March 2016, against Rs 50,000 crore at the start of this fiscal.

In 2014-15, the government had allocated Rs 92,000 crore as food subsidy, out of which Rs 91,995.35 crore was given to the FCI. The actual subsidy outgo during the year was Rs 1,02,476 crore.

In the current fiscal, the government has allocated Rs 97,000 crore as subsidy to the FCI against the estimated bill of Rs 1,18,000 crore.

“FCI has finalised the tenders for Rs 30,000 crore as a short-term loan from 15 banks including State Bank of India and Punjab National Bank. The amount will be withdrawn in phases during the fourth quarter of the current fiscal,” a source said.

So far, the whole subsidy amount of Rs 97,000 crore has been released and it has been utilised, the short-term loan is being raised for the working capital requirements, the source added.

The loan has been raised at average interest rate of 9.6 per cent and is for the period of 150 days, the source added.

The loan has been raised at average interest rate of 9.6 per cent and is for the period of 150 days, the source added.

Maximum amount of Rs 10,000 crore has been raised from PNB, followed by Rs 7,000 crore from SBI and remaining from others including public and private sector banks.

FCI has a cash credit limit of Rs 54,495 crore with a consortium of 67 banks at a rate of 10.51 per cent. In addition, it can raise a short-term loan of up to Rs 30,000 crore by inviting tenders from the banks.

The bulk of the food subsidy is paid to the FCI for running the public distribution system (PDS).

The PDS operation cost has risen sharply in the past few years due to increase in the minimum support prices (MSP) of grains as well as high storage costs, the source added.

Meanwhile, the FCI had also moved a proposal to raise Rs 40,000 crore through long-term bonds from LIC to liquidate subsidy arrears due from the government.

The proposal is at present under review of the government, the source said.

CCI doesn’t want orders stuck down on technical issues: Chairman Ashok Chawla

CCI Chairman Ashok Chawla has said all rules of judicial system are not applicable to the regulator.NEW DELHI: Weeks after Compat set aside the order against cement companies on technical grounds, CCI Chairman Ashok Chawla has said all rules of judicial system are not applicable to the regulator, which is a body of experts with each of them bringing their own inputs.

He also asserted that the tribunal focusing substantially on procedural and technical issues would mean that “substantiative points of law or issues on merit don’t get decided easily”..

Competition Commition of India (CCI) does not want its orders to be stuck down on technical issues but would follow the directions from Compat till the “system settles down”, he said.

“They (Compat) haven’t even gone into the merits. They have just said that natural justice has to be construed and applied in a very wide sense,” Chawla told PTI in an interview.

He was responding to a query about Competition Appellate Tribunal (Compat), on December 11, setting aside the Rs 6,316.59 crore penalty imposed on 11 cement makers by CCI for cartelisation and directed the regulator to pass a fresh order in three months.

“We don’t want our orders to be stuck down on technical issues. We will follow that (Compat directions) till the system settles down… (All) Judicial system rules don’t apply here,” Chawla noted.

The CCI chief, who will be retiring next month after being at the helm since October 2011, has seen many of its rulings being challenged both at the tribunal as well as various high courts.

“Our view in the Commission is that we are a multi-member body and we are seven people. The whole idea is that we are a body of experts and each brings his own inputs.

“For some part, some member may or may not be available, may not be privy to some things but he has seen the papers, he has seen the entire records. He is able to contribute to the decision the Commission is taking sitting together. So, somebody says there is no violation of natural justice,” Chawla said.

Of late, the CCI chief said, even the appellate tribunal in its appreciation of matters before it has been focussing substantially on procedural and technical issues, which is all right.

“We welcome that and we will naturally address issues which need to be addressed within the Commission but the end result is that issues on substantiative points of law or issues on merit don’t get decided easily.It takes time,” Chawla said.

Appeals against CCI rulings can be made before the Compat and in recent times, many of the watchdog’s orders have been challenged before it.

Chawla said not much jurisprudence has been built up in the area of competition law which would serve as a guide to the Commission and the stakeholders on what is the overall scheme, what is acceptable and what is not acceptable in the system.

“That is an issue and perhaps it arises out of a strict application of the rules of the judicial system to an architecture which is different in terms of what the Parliament has legislated.

“The legal architecture in a judicial system per se and the architecture in a regulatory system has to be operated in a different manner,” Chawla said.

Otherwise, the state need not have ceded the function of delivering justice in economic matters to regulatory bodies, the CCI chief observed.

“They could have as well have been performed by the sovereign and then subject to the normal course of judicial scrutiny,” he noted.

“I think this appreciation of the fact that this architecture has a specific objective is something which the system external to the Commission has to appreciate and then things will actually, substantively move forward,” Chawla said.

Compat’s judgement, earlier this month, followed appeals filed by the cement firms and Cement Manufacturers Association against two CCI orders passed in June-July 2012.

According to Compat, whether the CCI Chairperson, who did not hear arguments of the learned counsel representing the appellants could become a party to the final order passed by the CCI, was one of the questions which arose in the appeals filed against CCI order of June 20, 2012.

“Before parting with this order, we consider it necessary to mention that we have referred to various provisions of the Act (un-amended and amended) and Regulations and analysed the same to emphasise the proceedings held under the Act and the Regulations should be just and fair and in consonance with the principles of natural justice as engrafted in the Act and the Regulations,” the tribunal had said.

Interlinking of rivers is PM Narendra Modi’s priority: Suresh Prabhu

Suresh Prabhu on river interlinking project

Former Prime Minister Atal Bihari Vajpayee’s rivers interlinking project is a priority of Prime Minister Narendra Modi and it will be “considered” very soon by the Union cabinet, Railway Minister Suresh Prabhu said today.

“The dream project of former Prime Minister Atal Bihari Vajpayee ji, the interlinking of all rivers is a priority in Prime Minister Narendra Modi’s agenda and the project will be considered very soon by Union cabinet as it would be beneficial for the entire nation,” Prabhu said.

He was addressing a gathering here to mark former Prime Minister Vajpayee’s 91st birthday.

The programme was organized by Mumbai BJP general secretary Amarjeet Mishra and his NGO Abhiyan.

Prabhu, who has served in the Vajpayee Cabinet, said in his tenure, Vajpayee had emphasised to develop the infrastructure in the country and the ‘Indian Rivers Inter-link’ was proposed with an aim to link Indian rivers by a network of reservoirs and canals to reduce persistent floods in some parts and water shortages in other parts of the country.

On the occasion, Assam and Nagaland Governor Padmanabhan Acharya conferred the ‘Atal Samman’ to veteran journalist and former Vice Chancellor of Makhanlal Chaturvedy University Achyutanand Mishra for his work in journalism.

Acharya said there is a lack of infrastructure and resources in all eight states of North East India.

“The poor people of north-eastern states need special help from the Union government as well from other states,” Acharya said.

Actress Padmini Kolhapure, Dipika Chikhalia Topiwala, Sudha Chandran, Manoj Joshi, Rajpal Yadav and Shabbir Kumar read Vajpayee’s poems.

Two documentaries produce by Amarjeet Mishra, Mumbai BJP general Secretary, were also shown in the function.
Vajpayee turned 91 yesterday.

Nations cut taxes to help oil firms, India stays put

with taxes and levies in India remaining the same while realisation from crude sales falls, oil producers here have no option but to slash capex plans.

The vertiginous fall in crude oil prices has forced many countries to cut taxes and levies on hydrocarbon production and exports, but India’s stiff imposts have only turned more onerous for explorers here.

As gathered by consultancy firm Wood Mackenzie, countries like the UK, US, Colombia, Australia, Russia, Kazakhstan and Argentina have in recent weeks given a helping hand to their oil producers and exporters through steps such as reduced export duty

and petroleum revenue taxes, removal of carbon tax and even cuts in the corporate tax rate.

However, with taxes and levies in India remaining the same while realisation from crude sales falls, oil producers here have no option but to slash capex plans. In the case of nominated blocks, for instance, the oil cess, which was raised 80% to Rs 4,500 per tonne in March 2012, accounts for a huge 25% of the gross realisation from sale of crude oil at present, with Brent crude at $36 per barrel. When crude was hovering around $100 per barrel in early 2004, the cess worked out to be only 10% of the gross realisation. Analysts suggest the cess could be made an ad valorem levy, given the volatility in the crude market.

India’s oil producers like ONGC and Cairn India, as reported by FE earlier, have cut capex plans given the depressed global oil prices which, many analysts believe, could plunge further given likely supply increases from the US, Russia and Iran. Many believe that state-run ONGC may put in abeyance further development of the much-touted deepwater block KG-DWN-98/2 in the Krishna Godavari basin, which entails an investment to the tune of $6-7 billion to pump out oil and gas by 2018. Similarly, Cairn India’s FY16 capex plan could be slashed by a steep 40%, in what could accelerate the fall in output from the country’s largest onshore oil block at Barmer in Rajasthan.

Exploration and production (E&P) players in India are subject to royalty, profit petroleum (for blocks auctioned under NELP regime), cess (for pre-NELP blocks and nominated blocks), service tax, VAT, and National Calamity Contigent Duty (NCCD) etc.

Of these, the cess has proved most onerous for the industry as it was hiked to Rs 4,500 per MT from Rs 2,500 per MT in March 2012. While the cess was  10% of the gross realisation when Brent crude was ruling above $100 per barrel, it is now close to a quarter of the realisation.

Industry (Development) Act, 1974, provides for collection of cess as a duty of excise on indigenous crude oil. Cess incurred by producers is not recoverable from refineries and thus forms part of the cost of production of crude oil. The cess was levied at Rs 60 per tonne in July 1974 and subsequently revised several times.

While NELP blocks, including Reliance Industries’ KG-D6 block on the east coast, are exempted from cess, pre-NELP discovered blocks like Panna-Mukta-Tapti and Ravva pay a fixed rate of cess of Rs 900 per tonne. Royalty is charged at 12.5% for crude oil from onland areas and 10% from offshore areas from the blocks awarded under NELP auction. The royalty on natural gas is levied at 10%.

“This coupled with other levies and operational expenditure, which may not commensurately fall with oil prices, leaves very little at the net level for the affected players. Hence, it may be imperative to make cess an ad-valorem levy, which moves in line with the oil prices for the industry to make meaningful cash generation in this high-risk industry. Barring that, the firms may have to borrow to sustain capex or curtail the capex, both of which may not be in the interest of the industry and the country over the long term,” said K Ravichandran, senior VP and co-head, corporate sector ratings, Icra.

Officials told FE the petroleum ministry favoured levying cess on ad-valorem basis, although the finance ministry would have to take a final call.

“Oil explorers such as ONGC and Oil India have shared oil subsidy bill when crude oil prices were high. Now, the scenario has reversed and government may consider giving them sops as their revenues are hit after crude prices have plummeted to an 11-year low. In the short-term, the government may not have much leg room to offer tax sops, but it could reduce the royalty or cess rate,” said Salil Garg, director, India Ratings & Research. PetroFed, an association of oil and gas companies, recently wrote to revenue secretary Hasmukh Adhia and petroleum secretary KD Tripathi seeking levy of 8% cess on the price of crude oil realised.