Indian Economy - News & Updates - Archive

[Flintlock]

'Robust revival of economy next fiscal'
31 Aug, 2008, 0923 hrs IST, IANS
NEW DELHI: The slowdown in the Indian economy has been on expected lines and a robust revival is seen next fiscal year thanks to the measures being taken by the government, Planning Commission Deputy Chairman Montek Singh Ahluwalia has said. "The slowdown was not unexpected," Ahluwalia said, referring to the sharp dip in the growth of India's gross domestic product (GDP) to 7.9 percent in the first quarter of this fiscal from 9.2 percent in the like period of last year.

"What I also want to say is a growth of almost eight percent is also healthy and impressive. We should expect revival to a higher level next fiscal," Ahluwalia told IANS in an interaction. He said the tight monetary policy of the Reserve Bank of India (RBI), in a bid to curb price rise, was one of the main reasons for the dip in manufacturing growth from 5.6 percent from 10.9 percent in the first quarter of last fiscal.

"So you can also expect the inflation rate to start moderating from the next few months," said the Oxford-educated economist, who had started his career with the Washington-based World Bank. "Inflation will begin softening within a few months time. The prices of crude oil appear to be softening in the global market. Good monsoon will make a big difference," said Ahluwalia.

India's central bank had also pruned the growth projection to 8 percent, from 8.5, percent because of global and domestic developments when it reviewed its monetary policy for the current fiscal late last month. Ahluwalia also expected reforms to get a big push forward, especially in the area of public-private partnerships in infrastructure projects, covering roads, ports, airports and energy.

"Lot of good things are happening in the states. Some of them are quite ahead in inking infrastructure projects through the public-private partnerships (PPPs)," he said. "Andhra Pradesh, Gujarat, and Maharashtra are doing very well in developing airports through the PPP model. Andhra Pradesh is getting metro train for Hyderabad through PPP. Even health facilities are being upgraded in collaboration with the private parties."

"Many states want to have metro trains. As a metro project is very expensive, the states should and are looking for private collaborators. The centre will certainly chip in with viability gap funding wherever necessary," he said. In the same vein, Ahluwalia said that there was a need to implement the projects at a faster pace to retain the growth momentum.

"Infrastructure projects intended for capacity building have to be implemented with a strong supportive policies and administrative support," he said. "Accelerating the pace of PPP contracts in infrastructure is extremely important. Policies have already been shaped, and the ministries are required to the projects fast. I think quite a lot has been done," said Ahluwalia.

'Robust revival of economy next fiscal'- Indicators-Economy-News-The Economic Times

 

[Ravsta12]

hello ppl?? i asked a question plz read my last post if any1 will plz bother

 

[nitesh]

The Hindu Business Line : Exports up 31.2%, crude oil pushes import bill by 48.1%

Exports up 31.2%, crude oil pushes import bill by 48.1%
NEW DELHI: India's exports increased by 31.2 per cent in July but the country's total import bill soared by 48.1 per cent on the back of huge rise in crude oil imports.

Exports grew to $16.34 billion while imports rose to $27.14 billion, leaving a trade deficit of $10.79 billion in July, according to official figures released here on Monday.

On the back of increase in global prices, the crude oil import bill in July shot up by 69.3 per cent to $9.48 billion from $5.6 billion a year ago.

For the April-July 2008 period, exports showed a growth of 24.6 per cent rising to $59.19 billion while imports crossed the $100 billion figure in first four months of the current fiscal.

Consequently, the deficit in this period ballooned to $41.22 billion. - PTI

 

[Flintlock]

hello ppl?? i asked a question plz read my last post if any1 will plz bother

Its a very old discussion, whether the Indian way will work better or the Chinese.

I usually take the stand that the Chinese system works better for the Chinese, and the Indian system works better for the Indians. If the Chinese seem to be doing better than the Indians, its because of the structure of Indian society itself and its numerous problems.

Most supporters of democracy agree that India will do better in the long run, and most supporters of the Chinese model contend that India can never catch up with China.

In any case, both countries have had interesting histories, and have been influential and prosperous in the past, so there is no reason why it should not be so again.

I do not agree that there is institutional decline in India. Perhaps, it is true that institutions in India have not improved as much as the rest of the world, which probably explains why India has fallen behind in these rankings. However, there is an improvement in government services and facilities, even if it is small, and in pockets of the country.
As the middle-class grows larger, and more voters are concerned about the quality of life rather than just their next meal, the quality of government services will further improve.

 

[nitesh]

Urjit R Patel: RBI as an oil spigot?

The RBI, between June 5 and August 8 in effect provided US$4.4 bn to government-owned oil companies in exchange for oil bonds (outright purchase or collateralised repo). The SMO from the perspective of the RBI is effectively a swap on the assets side of its balance sheet, specifically, rupee-denominated oil bonds for foreign currency reserves. Since the liabilities side of the RBI’s balance sheet is unchanged, the SMO is monetary neutral.

Notwithstanding the language reminiscent of central bank provision of market liquidity for financial intermediaries during times of crisis, the case for the SMO premised on “systemic implications for the smooth functioning of financial markets” is not entirely cut and dry. However, the SMO has everything to do with maintaining petroleum imports into the country. The SMO could have been more accurately christened as “RBI Swap Facility for Oil Companies Routed through Designated Banks”.

The fact of the matter is that the RBI has had to willy-nilly don the mantle of market maker of first (as opposed to last) resort for oil bonds because of scarce interest from banks to buy the bonds or hold them as collateral for the benefit of oil companies. Presumably, this is because the price on offer did not adequately internalise the unattractive caveats of the bonds. The coupon and the non-SLR eligible nature of these bonds (in combination) make them largely unattractive to scheduled commercial banks and other participants in the secondary market. The market would have discounted these bonds on account of the embedded characteristics.

The matter then arises regarding the valuation of oil bonds by the RBI in the absence of a credible market-determined price history for the bonds. It is reported that the oil bonds were priced at a spread of 25 basis points above the yield of G-Sec of the relevant maturity. Of course, this positive spread over G-Sec in itself does not mean that a quasi-fiscal subsidy is not operative. Outright purchases of these securities at prices above fair value (or even acceptance of collateral above fair value) would constitute a quasi-fiscal subsidy from the RBI. Without access to the valuation methodology that would have been deployed, it is difficult to gauge the fair value with accuracy.

It is estimated that oil bond issuance over the current fiscal could be about 2 per cent of GDP; therefore, the money due to the oil companies from the Union government is expected to be huge for the foreseeable future. Unless there is a sharp correction in oil prices or a policy combining adjustment in domestic retail prices and reduction in government duties, the oil companies will continue to require help to source the foreign exchange to import crude oil (although the SMO has been ascribed as a temporary facility). If demand does not adjust, supply will; reports of long lines at diesel pumps in several states show that the oil companies are responding in a manner that is feasible for them.

Several conclusions and observations can be made. First, the dire fiscal situation that the central government finds itself in has now sucked the RBI in its vortex, but it is to be hoped that a durable alternative mechanism will be put in place with alacrity to ensure that the SMO is not further resorted to; it can be argued that some of the hard work over the past decade to ensure that the RBI’s proximate objective for conducting monetary policy is not compromised — by getting stuffed with government paper — has been undone. Secondly, we would be hard-pressed to name another country (even among those that subsidise fuel) that has had to resort to the central bank in this manner. Thirdly, praying for international crude prices to adjust sharply downwards soon does not constitute government policy, sound or otherwise. Fourthly, the proceeds of the oil bonds upon maturity will be in rupees, hence the RBI, if it wants to rebuild official foreign currency assets to make up for the decline on account of the SMO, will have to intervene in the market at the time and buy foreign currency at the ruling market exchange rate (the central bank shoulders an exchange rate risk if rebuilding foreign currency reserves is an objective).

 

[nitesh]

Urjit R Patel: RBI as an oil spigot?

The RBI, between June 5 and August 8 in effect provided US$4.4 bn to government-owned oil companies in exchange for oil bonds (outright purchase or collateralised repo). The SMO from the perspective of the RBI is effectively a swap on the assets side of its balance sheet, specifically, rupee-denominated oil bonds for foreign currency reserves. Since the liabilities side of the RBI’s balance sheet is unchanged, the SMO is monetary neutral.

Notwithstanding the language reminiscent of central bank provision of market liquidity for financial intermediaries during times of crisis, the case for the SMO premised on “systemic implications for the smooth functioning of financial markets” is not entirely cut and dry. However, the SMO has everything to do with maintaining petroleum imports into the country. The SMO could have been more accurately christened as “RBI Swap Facility for Oil Companies Routed through Designated Banks”.

The fact of the matter is that the RBI has had to willy-nilly don the mantle of market maker of first (as opposed to last) resort for oil bonds because of scarce interest from banks to buy the bonds or hold them as collateral for the benefit of oil companies. Presumably, this is because the price on offer did not adequately internalise the unattractive caveats of the bonds. The coupon and the non-SLR eligible nature of these bonds (in combination) make them largely unattractive to scheduled commercial banks and other participants in the secondary market. The market would have discounted these bonds on account of the embedded characteristics.

The matter then arises regarding the valuation of oil bonds by the RBI in the absence of a credible market-determined price history for the bonds. It is reported that the oil bonds were priced at a spread of 25 basis points above the yield of G-Sec of the relevant maturity. Of course, this positive spread over G-Sec in itself does not mean that a quasi-fiscal subsidy is not operative. Outright purchases of these securities at prices above fair value (or even acceptance of collateral above fair value) would constitute a quasi-fiscal subsidy from the RBI. Without access to the valuation methodology that would have been deployed, it is difficult to gauge the fair value with accuracy.

It is estimated that oil bond issuance over the current fiscal could be about 2 per cent of GDP; therefore, the money due to the oil companies from the Union government is expected to be huge for the foreseeable future. Unless there is a sharp correction in oil prices or a policy combining adjustment in domestic retail prices and reduction in government duties, the oil companies will continue to require help to source the foreign exchange to import crude oil (although the SMO has been ascribed as a temporary facility). If demand does not adjust, supply will; reports of long lines at diesel pumps in several states show that the oil companies are responding in a manner that is feasible for them.

Several conclusions and observations can be made. First, the dire fiscal situation that the central government finds itself in has now sucked the RBI in its vortex, but it is to be hoped that a durable alternative mechanism will be put in place with alacrity to ensure that the SMO is not further resorted to; it can be argued that some of the hard work over the past decade to ensure that the RBI’s proximate objective for conducting monetary policy is not compromised — by getting stuffed with government paper — has been undone. Secondly, we would be hard-pressed to name another country (even among those that subsidise fuel) that has had to resort to the central bank in this manner. Thirdly, praying for international crude prices to adjust sharply downwards soon does not constitute government policy, sound or otherwise. Fourthly, the proceeds of the oil bonds upon maturity will be in rupees, hence the RBI, if it wants to rebuild official foreign currency assets to make up for the decline on account of the SMO, will have to intervene in the market at the time and buy foreign currency at the ruling market exchange rate (the central bank shoulders an exchange rate risk if rebuilding foreign currency reserves is an objective).

 

[nitesh]

Editorial: Change, with continuity

The general perception for some time has been that there are differences between the finance ministry and the Reserve Bank of India on key policy issues, including interest rates and exchange rate management. Observers will therefore read an extra significance into the fact that the serving finance secretary, D Subbarao, has been named to succeed Y V Reddy as RBI governor, in preference to the existing deputy governor. No one in the last three decades or more has made such a direct move from North Block to the top job in Mint Road. Whether Dr Subbarao’s positions on the critical issues differ significantly from his predecessor will be known soon enough. What is important is that the new dispensation at the RBI quickly comes to grips with the situation and responds effectively to both the structural needs of the financial sector and the immediate macro-economic challenges.

The first test will come with the quarterly monetary policy announcement, scheduled for end-October. Dr Reddy took an aggressive anti-inflationary stance in the past few months, with the stated intent of bringing inflation expectations firmly under control. Once embarked upon, such a stance must be followed through to its logical conclusion, which means that as long as the inflation rate is way above the comfort zone, policy rates must be raised. However, it has appeared on occasion that the finance ministry has not been persuaded about the merits of this approach and believes that maintaining a growth-friendly interest rate scenario is the priority. The question that the new governor must ask is whether a reversal of the current policy stance will hurt more by fuelling expectations than it will help by shoring up growth.

A second area of concern in the short term is the movement of the rupee, which has swung both ways over the past year and a half, leaving people confused about the nature, even existence, of exchange rate policy. With competing proposals for exchange rate management on the table, the RBI needs to make both the end-game and the transition path clear.

But just as his predecessor had to deal with the fall-out of the Asian financial crisis (successfully protecting India from the virus), Dr Reddy has had to deal with unprecedented macro-economic circumstances, from the surge in capital inflows to the recent supply-side inflationary pressures. He responded by sterilising the dollar inflows (which pushed up money supply, risking inflation), and then began moving aggressively on interest rates when the inflation surge of 2008-09 was not fully visible. In doing so, he ploughed a lonely furrough for a while, so it is ironic that his legacy should be an inflation rate that is way above what the RBI would like it to be. As often happens, therefore, his legacy is essentially an unfinished agenda. Dr Subbarao would be well advised to aim for a fine balance between continuity in fighting inflation and change on the structural side of the financial sector — for which two expert committees have laid out their road maps.

 

[nitesh]

Shyam Ponappa: Changing mindsets about food prices

There is a radical disconnect between reality, policies, and public opinion on a number of issues in India. This is not only disconcerting, it reflects a mindset that is not conducive to resolving these issues beneficially. Consider some examples:
# the state of our food grains production, pricing, supply and demand,
# supply constraints that are structural, but have triggered monetary responses leading to reduced consumer spending and dampened business investment, slowing GDP growth to 7.9 per cent in April-June 2008 (perhaps heading as low as 7 per cent for 2008-09?),
# the shoddy and worsening state of our roads and highways, despite considerable effort and vast expenditure, or
# the misrepresentation by naysayers of nuclear power as an adjunct to other methods of power generation.

Food supply & demand: One aspect of the problem has to do with supply not increasing as fast as demand. A study by Icrier estimates that given current trends, domestic demand for total cereals will exceed domestic supply after 2020. The implication is that with continuing high levels of anticipated world demand, if we do not increase domestic supply through better research and application, extension, and/or strategic investments abroad with supply contracts, high food prices could well get worse in the years ahead.

Repressed food prices: A second aspect of this issue relates to pricing. India’s food grains procurement prices have been repressed relative to the market and to world prices for many decades. Small farmers get the worst of it, because they have to sell as soon as they harvest, i.e. when prices are generally low. They cannot afford not to sell at procurement prices which are far below market, as shown by the Minimum Support Price. Yet, while the National Commission on Farmers chaired by Prof. M S Swaminathan recommended an increase in procurement prices, even this newspaper(!) ran an editorial that these recommendations were wrong because this would lead to higher prices and more inflation, without providing data and context, or further explication. While scepticism is healthy to the extent of seeking facts to arrive at conclusions, such statements without supporting data or reasoning appear rather arbitrary and uninformed.

Data & analysis: The need and collective responsibility is to help establish and address the relevant facts, as well as to make them widely accessible. For this, the data have to be continually aggregated and available, and studied.

Perversely, many of the same pundits who argue for low food procurement prices make the opposite argument in the case of oil and petroleum products, i.e. that prices should be increased, despite our fuel costs being much higher than in many other countries — which will indeed increase inflation across the board. What justifies these contradictory positions: pass through fuel price hikes, which are an input cost to many products/services, while repressing food prices? Certainly not the simple inequity that makes farmers more expendable, one hopes?

Policies from a solutions mindset: There need to be long-term, concerted, well-coordinated efforts involving the Centre and the states to address the underlying supply deficiencies. This needs to be driven by analysis of the facts. Start with tracking realities and analysing the data. This country’s burgeoning population is finally becoming more able to afford the food they need and want. Keeping procurement prices low holds down incentives for production, apart from inflicting great hardship on small farmers who have to contend with rising input costs and general prices, while selling their produce for less.

 

[nitesh]

Merchandise exports likely to stay robust

Data released by the commerce ministry show that in the April-July period, Indian exports have already reached $59.2 billion, which is 28 per cent of the export target of $200 billion for the current financial year.

In the same period last fiscal, a much lesser percentage of the $160-billion exports target for FY08 was achieved, but the target was met by the end of the fiscal.

While experts are analysing the 31.2 per cent rise in exports during July (the segment-wise export data is not available at the moment), higher overseas sales of petroleum products, chemicals and engineering goods is seen as the possible reason for the healthy export growth.

Moreover, the near-10 per cent depreciation in the rupee against the dollar has also resulted in better realisation of export income.

Tushar Poddar, vice-president, Asia economic research, Goldman Sachs, says that despite concerns of a slowdown in developed markets like the US and EU, the downside to Indian exports is limited.

“First, exports to developed markets — the US and EU — are not as important as in the past. Nearly two-thirds of India’s exports now go to other regions, especially to China, West Asia and Africa. As these markets continue to grow, we believe demand for exports will sustain,” Poddar said in a report today.

Moreover, the recently finalised free trade agreement (FTA) with the 10-member Association of South-East Asian Nations (Asean) will also add pace to export growth as import duties will be brought down.

According to Poddar, high-skilled products from sectors like engineering goods as well as resource-intensive products have more potential in emerging economies like Brazil, Russia and China rather than traditional products like handicrafts and leather, which are exported to the US and EU.

The resource-intensive sector has seen high export growth rates owing to rise in prices of commodities.

“The large exports of refined petroleum, however, have more to do with refining capacity rather than any commodity endowment. Indeed, of the total value of about $25 billion of exports in 2007-08, only about 14 per cent represents value-added due to refining, the rest being oil imports. Be that as it may, volumes have also been rising. Further, in the near term, our commodities team does not expect commodity prices, especially oil, to decline substantially, which will continue to sustain export growth,” Poddar said.

While India exports more of petroleum products, light consumer goods, chemicals, as well as food products, other Asian countries like China, Korea, Taiwan and Japan have export interests in transport goods, machine and electronics. Thus, India’s export interests are mostly not in competition with these countries.

 

[nitesh]

Centre okays hiring private specialists for govt service

The gates have been opened for the hiring of outside specialists by government departments and agencies on a contractual basis with the government approving the Sixth Pay Commission recommendation to this effect.

The approval of the recommendation for allowing lateral entry into the government service implies that private sector specialists can be hired and appointed to government posts, including possibly cadre posts, with salaries that are market-linked.

Government officials said the scheme was aimed at bringing in outside expertise for specialised functions in technical, scientific or other streams. The terms of the contracts, including the emoluments to be paid, will be the responsibility of the nodal ministries.

The enhanced expenditure would have to be met by the ministry or department from its annual budgetary allocation.

The lateral entry scheme is expected to boost the availability of talent in government departments. Citing instances, officials said professionals like actuaries, harbour pilots or IT specialists could not be inducted into service at government pay levels.

 

[nitesh]

Direct tax kitty swells 38%

Riding on higher tax deducted at source (TDS) receipts, net direct tax collections rose by 38.31 per cent to Rs 84,409 crore in the first five months of fiscal 2008-09, as compared with Rs 61,030 crore in the corresponding period last fiscal.

This is a slight moderation compared with the over 42 per cent growth in net direct tax collection seen in the same period of the previous fiscal. Net direct collection refers to tax collections after refunds, but before transfer of states’ share in central revenues.

Overall growth in TDS was more than 40 per cent, but growth in corporate TDS was even higher. Corporate TDS collections rose by over 55 per cent to Rs 26,445 crore in the April-August period this year against Rs 17,037 crore during the year-ago period.

The higher TDS compliance is attributed to several verifications and surveys carried out by the Income Tax Department, which resulted in detection of hundreds of crore of rupees not deducted or not paid to the government account after deduction.

Corporation tax collections were up 43.49 per cent to Rs 48,450 crore during the period as against Rs 33,766 crore in the same period last year.

Personal income-tax (including fringe benefit tax, securities transaction tax and banking cash transaction tax) collections grew at 31.79 per cent to Rs 35,840 crore in the period as against Rs 27,195 crore a year ago.

 

[Marshal]

India set to achieve $40 bn FDI in FY09 - The Financial Express
India is set to attract foreign direct investment of USD 40 billion in fiscal 2008-09 with overseas investors betting big on the manufacturing sector in world's second fastest growing economy.

The country received USD 20 billion foreign direct investment (FDI) between January and June in the calendar 2008 and USD 10 billion in the first quarter of the current fiscal.

"Going by this, achieving USD 40 billion in 2008-09 does not seem unrealistic," Secretary in the Department of Industrial Policy and Promotion Ajay Shankar said at a FICCI function in New Delhi. The target for the fiscal is set at USD 35 billion. The inflows in 2007-08 were USD 25 billion.

Shankar said, though seeing slight moderation in production growth, India has emerged among the preferred destinations for the overseas investors. Automobiles and construction equipment segments are attracting increased interest among investors.

The DIPP Secretary expressed hope that the growth outlook in the manufacturing sector would be "more positive" in the next few months.

"There was a slight moderation but the industry has undertaken cost-cutting and other productive measures," he said.

The Index for Industrial Production (IIP) growth had dropped to 5.4 per cent in June this fiscal from 8.9 per cent a year ago. For the April-June period as well, the IIP rose by 5.2 per cent against 10.3 per cent in the same period last year.

Within IIP, manufacturing expanded by 5.9 per cent in June against 9.7 per cent in the same month last year. For the first quarter, the segment grew by 5.6 per cent, compared to 11.1 per cent in the corresponding period in 2007-08.

Though the growth outlook for 2008-09 has been lowered to sub-eight per cent by different agencies, India remains among the fastest expanding economies.

 

[nitesh]

150,000 emergencies handled by Gujarat’s ‘108′ project

150,000 emergencies handled by Gujarat’s ‘108′ project

If you are in Gujarat and face an emergency, just dial the toll-free number `108′ and experts will rush to your help. At least 150,000 emergencies have been handled by a project being run by the state government and the Hyderabad-based Emergency Management and Research Institute (EMRI) in the past one year since its launch.”I want to make the 108 Emergency Response Service (ERS) one of the eight wonders of the world,” said Venkat Changavalli, CEO of EMRI.

Changavalli was speaking Friday at the first anniversary here of Gujarat EMRI completing successful operations in the state.

He said EMRI was now operational in Andhra Pradesh, Gujarat and Uttarakhand. “Recently, I was in Europe and people there were surprised by the scale and scope of our achievement,” he said.

In India there are two million emergencies every year. “Our mission is to save one million lives in a year,” said Changavalli.

Six more states that have signed MoUs with EMRI are Madhya Pradesh, Tamil Nadu, Rajasthan, Goa, Assam and Karnataka. Operations would begin in all the six states by Nov 1, Changavalli said.

On August 29 last year, Gujarat EMRI was inaugurated by Chief Minister Narendra Modi and former president A.P.J. Kalam with just 14 ambulances and a year later there are over 300 ambulances.

The public private partnership (PPP) project between EMRI and the Gujarat government has become a model for other PPP projects. Today, within a span of just 12 months, it provides in all the 26 districts of the state, a world class emergency response service, said Gobind Lulla, Gujarat EMRI chief operating officer.

“Even as I am talking, three ambulances are being launched, taking the total to 303. It will be 320 by the end of next month,” Lulla said.

“95 percent of the emergency calls are attended in one ring. Within two to three minutes the ambulance is on its way,” he added.

On July 26 when the serial blasts occurred here, within an hour our team took 62 people to the trauma ward. Only one person died after admission.

Since its launch, 150,000 emergencies have been attended to. Currently, Gujarat EMRI is responding to 1,300 emergencies on a daily basis and saving 60 lives per day, Lulla said.

A common person thinks that 108 services means ambulance but it is more than just that. It has four aspects like medical, police, fire services and natural disasters all being attended to through the single toll-free number `108′, Lulla said.

EMRI has given special attention to pregnant women in rural areas. Of the 1,300 cases per day, 400 are related to pregnancies., and of these 366 deliveries are taking place in the EMRI ambulances, Lulla said.

“Health is most basic. If good health prevails it helps other areas of progress. For the government EMRI is one aspect. More important is increasing the number of trauma centres so that critical patients can be taken directly by 108 service within the ‘golden hour’ so that life can be saved,” said Health Minister Jaynarayan Vyas.

In seven-and-half minutes, one life should be saved is the target of EMRI.

The need for such a service arose because the country lacked a systematic Emergency Response Service (ERS), prevalent in the developed countries of the world. It is appalling that despite progressing in other areas of medicine, India still lacks basic emergency services, said Changavalli.

The project is the brainchild of B. Ramalinga Raju, founder and chairman of Satyam Computers and his brother B. Rama Raju. It was launched in Hyderabad on Aug 15, 2005.

 

[Flintlock]

Centre okays hiring private specialists for govt service

The gates have been opened for the hiring of outside specialists by government departments and agencies on a contractual basis with the government approving the Sixth Pay Commission recommendation to this effect.

The approval of the recommendation for allowing lateral entry into the government service implies that private sector specialists can be hired and appointed to government posts, including possibly cadre posts, with salaries that are market-linked.

Government officials said the scheme was aimed at bringing in outside expertise for specialised functions in technical, scientific or other streams. The terms of the contracts, including the emoluments to be paid, will be the responsibility of the nodal ministries.

The enhanced expenditure would have to be met by the ministry or department from its annual budgetary allocation.

The lateral entry scheme is expected to boost the availability of talent in government departments. Citing instances, officials said professionals like actuaries, harbour pilots or IT specialists could not be inducted into service at government pay levels.

That is a great step forward. I must say that I am surprised!

Its high time that the government took things away from the jack-of-all-trades bureaucrats.

 

[nitesh]

That is a great step forward. I must say that I am surprised!

Its high time that the government took things away from the jack-of-all-trades bureaucrats.

No flint, this is already in practice, although not published, mainly in NAL and HAL especially