Karela Fry

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The day of the economy

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The government made a clutch of promises on the economy; almost as if it was an election campaign speech for an UPA freed of the millstone that the Trinamool Congress had become. PTI wrote about the first of these steps:

The government today approved the 12th Five Year Plan (2012-17) document that seeks to achieve annual average economic growth rate of 8.2 per cent, down from from 9 per cent envisaged earlier, in view of fragile global recovery.

“The Union Cabinet also discussed the draft 12th Five Year Plan (2012-17) and approved the draft and directed the that the draft be placed before the National Development Council (NDC),” Finance Minister P Chidambaram told reporters here.

This is nothing but a promise as yet, since there is still a way to go before the plan comes into force.

The other measure is nothing more than a statement of position. The government adoptied a bill to be place before a (hostile) parliament increasing foreign investment in insurance. NDTV profit reported:

The bills would allow up to 49 percent foreign ownership of insurance companies and in the pension sector, Finance Minister P. Chidambaram told reporters. Currently, foreign investors are barred from buying into pensions, and the cap for insurers is at 26 percent.

“The insurance regulator has categorically stated that insurance requires huge capital. It will only come if we can raise the FDI limit,” Chidambaram said.

Finally, as the NYT reports:

The cabinet also approved changes to the rules governing corporate boards and financial reporting, and it expanded the jurisdiction of the country’s new Competition Commission.

In response the market bounced up and Mamata Banerjee bounced up and down in rage. La Banerjee’s rage is likely to last longer than the market’s euphoria.

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Written by Arhopala Bazaloides

October 4, 2012 at 5:27 pm

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