Thursday, March 12, 2009
World economy to shrink in Great Recession: IMF
World economy to shrink in Great Recession: IMF
The Financial Express, March 11, 2009, Page 1
Agencies
The International Monetary Fund (IMF) expects the global economy to contract this year and the slump will be the worst “in most of our lifetimes”, managing director Dominique Strauss-Kahn said. The global financial crisis that has slashed international trade can now be termed the “Great Recession”, Strauss-Kahn said in a speech to African central bank governors and finance ministers in Dar es Salaam, Tanzania on Tuesday.
“The IMF expects global growth to slow below zero this year, the worst performance in most of our lifetimes,” Strauss- Kahn said. “Continuing deleveraging by world financial institutions, combined with the collapse in consumer and business confidence, is depressing domestic demand across the world.”
The IMF had forecast in January that the global economy would expand 0.5% this year. The World Bank said in a March 8 report that the international economy was likely to shrink for the first time since World War II, and trade will decline by the most in 80 years.
European governments from Dublin to Athens have committed more than 1.2 trillion euros ($1.5 trillion) to protect their banking systems and leaders pledged to spend a combined 200 billion euros to try and lift their economies out of the worsening slump. The US is spending $787 billion on an economic stimulus package to revive its economy.
The IMF is aiming to double its resources to $500 billion to better address the crisis, with Japan already pledging an extra $100 billion. Strauss-Kahn said he is “confident” the Group of 20 countries will agree to this goal at a summit in April. He urged better coordination between leading nations to help boost the global economy and called on rich countries to “reject protectionism, both in trade and finance”.
“If one crisis amongst all crises in the world that requires some coordination, it is this crisis,” Strauss-Kahn said. “It’s a global crisis, so the solution can’t be implemented by one country alone.” Poor countries may be worst hit by a slump in economic growth and trade because poverty will increase, the IMF managing director said.
Our Bureau adds: Slowing growth of the world economy will impact India, too. An Axis Bank report on inflation trends released on Monday shows that wholesale price index-based inflation would touch zero per cent by April. This will be a first for the Indian economy in the past 60 years. The low inflation will occur due to the cuts in excise duty, the strong base effect of a high inflation a year ago, plus the impact of a cut in fuel prices. From a peak of 12.82% last year, WPI-based inflation eased to 3.03 % at the end of February 21.
Author of the note, Saugata Bhattacharya, said a revival in demand is unlikely to be strong and inflation could dip further into the negative zone in April--meaning prices at the wholesale level for a range of commodities would start falling, a rarity in India.
However, consumer price index inflation, which is more representative of prices in the household consumption basket, continues to be higher. But those, too, are expected to come off a high as cuts in retail petrol, diesel and LPG prices with effect from January 31 and the 2% services tax cut announced in February 24 “are likely to be reflected in CPI inflation going forward”, the note adds.
The Financial Express, March 11, 2009, Page 1
Agencies
The International Monetary Fund (IMF) expects the global economy to contract this year and the slump will be the worst “in most of our lifetimes”, managing director Dominique Strauss-Kahn said. The global financial crisis that has slashed international trade can now be termed the “Great Recession”, Strauss-Kahn said in a speech to African central bank governors and finance ministers in Dar es Salaam, Tanzania on Tuesday.
“The IMF expects global growth to slow below zero this year, the worst performance in most of our lifetimes,” Strauss- Kahn said. “Continuing deleveraging by world financial institutions, combined with the collapse in consumer and business confidence, is depressing domestic demand across the world.”
The IMF had forecast in January that the global economy would expand 0.5% this year. The World Bank said in a March 8 report that the international economy was likely to shrink for the first time since World War II, and trade will decline by the most in 80 years.
European governments from Dublin to Athens have committed more than 1.2 trillion euros ($1.5 trillion) to protect their banking systems and leaders pledged to spend a combined 200 billion euros to try and lift their economies out of the worsening slump. The US is spending $787 billion on an economic stimulus package to revive its economy.
The IMF is aiming to double its resources to $500 billion to better address the crisis, with Japan already pledging an extra $100 billion. Strauss-Kahn said he is “confident” the Group of 20 countries will agree to this goal at a summit in April. He urged better coordination between leading nations to help boost the global economy and called on rich countries to “reject protectionism, both in trade and finance”.
“If one crisis amongst all crises in the world that requires some coordination, it is this crisis,” Strauss-Kahn said. “It’s a global crisis, so the solution can’t be implemented by one country alone.” Poor countries may be worst hit by a slump in economic growth and trade because poverty will increase, the IMF managing director said.
Our Bureau adds: Slowing growth of the world economy will impact India, too. An Axis Bank report on inflation trends released on Monday shows that wholesale price index-based inflation would touch zero per cent by April. This will be a first for the Indian economy in the past 60 years. The low inflation will occur due to the cuts in excise duty, the strong base effect of a high inflation a year ago, plus the impact of a cut in fuel prices. From a peak of 12.82% last year, WPI-based inflation eased to 3.03 % at the end of February 21.
Author of the note, Saugata Bhattacharya, said a revival in demand is unlikely to be strong and inflation could dip further into the negative zone in April--meaning prices at the wholesale level for a range of commodities would start falling, a rarity in India.
However, consumer price index inflation, which is more representative of prices in the household consumption basket, continues to be higher. But those, too, are expected to come off a high as cuts in retail petrol, diesel and LPG prices with effect from January 31 and the 2% services tax cut announced in February 24 “are likely to be reflected in CPI inflation going forward”, the note adds.
Internal auditor cannot be tax auditor for the same company
Internal auditor cannot be tax auditor for the same company
The Hindu Business Line, March 11, 2009, Page 9
K.R. Srivats, New Delhi
Come April 1, an internal auditor of an organisation cannot take up tax audit of the same entity.
The auditing profession regulator — the Institute of Chartered Accountants of India (ICAI) – has now decided to implement this norm in true spirit from this date.
This decision will mainly impact those chartered accountancy firms that were being appointed as internal auditors and also performing tax audits for the same organisation. It also covers those employees who had taken up the role of an internal auditor.
The stipulation that an internal auditor cannot be a tax auditor has been put in place to ensure there is quality of service and auditor independence is maintained, said Mr Uttam Prakash Aggarwal, ICAI President.
“If the same person is getting two assignments from the same management — as an internal auditor as well as tax auditor, the chances are high that this will influence his independence. We do not want this to happen,” Mr Aggarwal told Business Line.
Although the central council had in October 2008 taken a decision to this effect, it was not fully put into practice on account of the representations received on this front. It was submitted that this decision would create “hardship” for those who had already appointed their internal auditor for carrying out tax audit for financial year 2008-09, i.e. assessment year 2009-10.
PPP planned for developing non-metro airports’ city-side
PPP planned for developing non-metro airports’ city-side
The Economic Times, March 11, 2009, Page 7
Nirbhay Kumar & Subhash Narayan, ET Bureau
NEW DELHI: Infrastructure developers, interested in building city-side projects around a non-metro airport, may have to join hands with Airport Authority of India (AAI). The government is considering to make it a pre-condition for a private developer, an official in the government said.
“The government is planning to invite bids for non-metro airport development projects soon. The civil aviation ministry is revising the terms and conditions (for bids) after that request for qualifications (RFQs) from interested parties will be invited. It has identified about a dozen small airports, including Amritsar and Udaipur in the first round,” the official, who didn’t wish to be named, said.
City side work include development of hotels, shopping complexes, entertainment facilities and convention centres around an airport.
The official said the modified document would enable AAI to hold equity in the special purpose vehicles (SPVs) created by private firms for building city-side infrastructure. As per the proposal AAI will have an option to get fixed income from the developer with an escalation clause.
“The presence of public sector AAI will address employees’ concerns,” he said. The city-side works for non-metro airports had earlier hit a roadblock with AAI employee unions opposing the move to allow private developers to undertake commercial operation and maintenance of terminal buildings. Officials of the aviation ministry and AAI had met on Monday to discuss the issue related to the city-side development of non-metro airports by private firms.
The aviation ministry plans to upgrade 35 non-metro airports including various state capitals with a total investment (both public and private) of about Rs 40,000 crore. While it targeted to complete the infrastructural works at 24 airports by 2009 the remaining airports had a deadline of March, 2010.
Airside works at nine small airports such as Trichy, Trivendrum, Udaipur, Ahmedabad and Jaipur have been completed but their city side development is yet to begin, the official said. Airside works include terminal building, runway, taxiway and related infrastructure. “We are expecting that airside works at three more airports would be completed in a month or two,” he said.
The Economic Times, March 11, 2009, Page 7
Nirbhay Kumar & Subhash Narayan, ET Bureau
NEW DELHI: Infrastructure developers, interested in building city-side projects around a non-metro airport, may have to join hands with Airport Authority of India (AAI). The government is considering to make it a pre-condition for a private developer, an official in the government said.
“The government is planning to invite bids for non-metro airport development projects soon. The civil aviation ministry is revising the terms and conditions (for bids) after that request for qualifications (RFQs) from interested parties will be invited. It has identified about a dozen small airports, including Amritsar and Udaipur in the first round,” the official, who didn’t wish to be named, said.
City side work include development of hotels, shopping complexes, entertainment facilities and convention centres around an airport.
The official said the modified document would enable AAI to hold equity in the special purpose vehicles (SPVs) created by private firms for building city-side infrastructure. As per the proposal AAI will have an option to get fixed income from the developer with an escalation clause.
“The presence of public sector AAI will address employees’ concerns,” he said. The city-side works for non-metro airports had earlier hit a roadblock with AAI employee unions opposing the move to allow private developers to undertake commercial operation and maintenance of terminal buildings. Officials of the aviation ministry and AAI had met on Monday to discuss the issue related to the city-side development of non-metro airports by private firms.
The aviation ministry plans to upgrade 35 non-metro airports including various state capitals with a total investment (both public and private) of about Rs 40,000 crore. While it targeted to complete the infrastructural works at 24 airports by 2009 the remaining airports had a deadline of March, 2010.
Airside works at nine small airports such as Trichy, Trivendrum, Udaipur, Ahmedabad and Jaipur have been completed but their city side development is yet to begin, the official said. Airside works include terminal building, runway, taxiway and related infrastructure. “We are expecting that airside works at three more airports would be completed in a month or two,” he said.
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