Category: Government of India

Its February again, time for the Union Budget! As per Article 112 of the Indian Constitution, the Union Budget of India, that is the annual budget of the country, is also known as the Annual Financial Statement. The budget is required to be approved and passed by the Parliament prior to its coming into existence on 1st of April, which happens to be the beginning of India’s financial year. Like every other year, the Union Finance Minister of India, Mr. Pranab Mukherjee will present the budget for the year 2011, on the last working day of the month of February
Although, the crucial budget document is prepared in complete privacy, yet each one of us is definitely interested to get an overview about the whole process and have an idea of the India Budget Expectations 2011. Some of you might also have started anticipating India’s Budget Results, 2011; isn’t it? Can Budget 2011 strike a balance between supply and demand? Let’s see!
There could be several reasons and thought processes that goes beyond our expectations from the Union Budget for 2011! Economic growth and development has been noticed in various sectors following the many proposals and initiatives mentioned in the Union Budget of India in the financial year of 2010-11, for the year 2010. This year the budget expectations are quite high unlike few years back, wherein the country’s economy was still reeling under the economic depression that was created by the economic meltdown, globally. Since the Indian Economy is slowly getting back to its track, it can be expected that the budget will bring something beneficial to us. It is being expected that this time, the budget would lay stress on controlling price hikes, controlling the inflation rate, cutting down on fiscal deficit etc.
Straightening up of the PDS and do away with the outflows!
In order to achieve and all-round development of the country and its people, the government should ensure that everyone has access to the essential and the very fundamentals of life such as health, food, education, infrastructure, and security. This calls for the growth and development of the skills in the country. The government has taken up several measures on this front such as the formation of the National Skill Development Co-ordination Board, Skill Development Mission, and NREGA (National Rural Employment Guarantee Act); now the need however is to ensure the effective and proper realization of the plans. Social welfare must count as the first priority for the Government, always.
Inflation – An intense and a burning reality!
Inflation is everywhere! So it’s quite possible that we gate to see its mention in several policy decisions in order to initiate some corrective measures. It could be anything from the usage of sophisticated techniques of farming, to monetary policy or even the budgetary policies that are framed to control the augmented pricing pressures.
As the Government commits towards the controlling of food inflation, the Finance Minister of India might be expected to unleash some of the major measures in the Budget 2011. This might include the opening of distribution and procurement centers for food grains, promote more investment in agri infrastructure, increase the expenditure on irrigation to enhance the overall productivity of the farm sector.
Simplification and Systematization of the Tax System!
Pranab Mukherjee has really done a good job by extending the tax slabs. This has helped people, specially the salaried persons immensely. The high limit of tax-exemption also has brought extra tax revenues for the exchequer since it doesn’t encourage the suppressing of the unaccounted money. There is still a possibility of improvement at the lower end income group, on the present no-tax limit for up to income of Rs.1.6 lakh.
The deadlock on GST (Goods and Service Tax) should not be extended any further by the Government of India. The Government should rather take initiatives to introduce the new tax system from 1st April, 2012. This would allow the current players to plan their ventures thereby including the cost of operation. It is highly recommended that the Government should cut down on CST that is the Central Sales Tax rate should be cut down to minimum 1% with effect from April 1, 2011.
Deregulation of the Fuel price!
Last year, the price of petrol was deregulated by the UPA government in order to shrink the fiscal deficit of the country, thereby helping the oil marketing companies to reduce their losses on the selling of fuel at subsidized rates.
Is the Government now thinking of deregulating the price of diesel now that constitutes a major share of fuel subsidy bills?
Retail FDI – Tighten Supply Chain!
The recent increase in the price of food has been the result of hoarding up of stock by the intermediaries or because of the supply shortage in the farm production. In order to manipulate the price, FDI can definitely support the government to de-bottleneck the chain of supply that is hindered by the not so effective distribution channel.
Focus on Infrastructure Growth!
A sustained infrastructural growth and development is essential in order to provide that momentum to India’s economic activities, thereby achieving optimum utilization of resources. In order to promote the joint ventures of the public and the private sector and the entry of FDI or Foreign Direct Investment into the infrastructural domain, an appropriate, genuine, organizational, and reliable model must be introduced. The Government should aim at increasing the Gross Domestic Product (GDP). It should take initiatives to plan and develop large amount of corpus for a long term towards the development of infrastructure by the use of debt funds.
Cut down on Excise and Service Tax!
Last year, the excise duty was raised to 10% by the Government, on the non-oil products for withdrawing stimulus, thereby creating sources for the funds that would cut down on the extensity of the fiscal deficit condition. Owing to inflation and rising cost of commodities, India should try and cut down on the Service tax and the excise duty. Corporate tax rates should also be brought down.
Education – Learn as you grow!
Education and Growth can be said to be the two sides of the same coin! While Education results in higher employment, this is turn paves the way for growth and development of the country. In the past few years, the education sector has witnessed several reform measures both at higher as well as primary level of education.
The implementation of the PPP model that is the public-private partnership model can prove very beneficial for the education sector and help in bringing success and sustainable momentum in the long run. The Government needs to fund the projects and encourage and trust the private sector for the final delivery of the models.
Agriculture!
For ensuring the economic growth and development of the country, it is important that India’s agriculture sector grows at a fast pace. Many people in the country still suffer from food insecurity and malnutrition. The Indian Government of India already undertook the National Food Security Mission (NFSM) in the year 2008 but it was not properly supported. The Government should now take the responsibility to support the mission properly for eradicating the malnutrition from the nation. One of the best possible ways would be to combine the mission with other flagship projects such as NREGA etc for reliving the underprivileged people in India, especially those in villages, from nutrition problems.
Since agriculture contributes immensely to the GDP of India, the Government, this year is expected to focus on the problem of rising prices. Higher should be the aim of the government. Favorable policies in the agro input sector, etc would surely help in utilizing the business potentials, in the future.
Indian Railways!
Couple of years back, India’s Railway Department had managed to bring around a good financial turnaround without any hike in the passenger fares. But this year, estimates say that the Indian Railways might miss out on the target for the year 2010-11. In the year 2010, Railways incurred a huge loss of Rs. 4000 crore. This was mainly because of the negative impacts on freight earnings and the setback on passenger earnings owing to the Naxal activities in several states of India.
The question that crops up in this situation is that will India’s Railway Department suffer a setback this time?
Information Technology!
The IT industry in India has shown amazing resilience during the period of recession. The demand for the IT Services exports is being expected to go on with countries like Europe and US recovering and also due to the increase in discretionary that the consumers spend on IT infrastructure. As per the reports by NASSCOM, it is expected that the exports would dominate the IT industry in India that comes to about USD 59 billion out of USD 76 billion in the software industry.
However, there are certain concerns and fear as well for the IT sector such as slower recovery that the developed markets of US etc, high wage inflation and attrition, pricing pressure owing to competition in the domestic markets and protectionist stance on the part of the Government of US etc. With such a scenario in the backdrop the IT industry must be eagerly awaiting for the proposal in the budget, by the Government.
Construction!
Construction & Infrastructure contributes to about 8-10% in the GDP of India. For an overall development of the country, the importance and role of infrastructure is not unknown to us. However, a big gap has been created in the targets that have been set up for the infrastructure industry and the achievements. This has been due to the slow functioning of the several related sectors, shortfall in the awarding projects, funding potential shortfalls, time and cost overruns in the construction phase etc. Government should now start addressing these problems in the Construction and Infrastructure industry. This year, as per the signals from the Finance Minister, the infrastructure sector is expected to restrict itself from its expectations on tax relief and tax breaks, thereby focusing on how to raise capital and engage in project development.
FMCG!
The FMCG sector saw a series of new launches as well as acquisitions in the year 2010, which contributed phenomenally to the sector with a growth of about 15%. The GDP growth was estimated to be 8.75% in FY11. Hence the sector is expected to continue this way, although it will be faced with several challenges such as irregular monsoon and inflation. After the harvest of the Rabi crop, we can expect the situation to get reversed. With a shift in demand from need to want, it is being expected that the categories associated with home care and personal care would grow at a rate of 15% and 20% correspondingly, in CY11.
Telecom Services & Equipments!
At the moment, the telecom industry in India is characterized by high operating cost, stagnant revenue, huge debt, dwindling earnings, regulatory uncertainty etc. There has been a very slow revenue growth at about 0.4%. The launch of 3G and MNP might act as the immediate momentum. With key metrics declining at an abating rate, it is expected that the telecom sector would do better in FY12E in comparison to FY11E. Companies having foreign market exposure might experience higher growth. During FY12, while the telecom stocks may stay subdued, but at the end of FY12E we might witness the narrowing down of discounts in the broader markets.

An informal term, Cabinet reshuffle or shuffle is an event that takes place at the Parliament whereby the head of the Government changes or rotates or rather shuffles the composition of the existing ministers in the cabinet and their responsibilities.
Generally, a cabinet reshuffle refers to that where few ministers from the cabinet are shifted from the existing portfolio to some other. The cabinet shuffle may take place periodically depending on whether there arises the need to replace the ministers who have retired or might have resigned. Forming the cabinets or reshuffling of cabinets also serves as a major way for the Government to punish or reward any supporter. It is a practice leading to shuffling of ministers when a new section or group in a party happens to takes over. Cabinet reshuffles are less common in those systems where the members of the Cabinet are not selected from the legislative branch.
Speculations on Cabinet Reshuffle, 2011
The Prime Minister of India, Manmohan Singh’s comments regarding the reshuffling of the cabinet prior to the winter months, triggered lot of speculations on the cabinet reshuffle of 2011. Several theories were being put forward behind the reasons for such a move by the Government.
Although Manmohan Singh expressed the desire to pull down the age of the Cabinet, yet the Congress was of the opinion that this would require a major and big shake-up. Many in the party also felt that the Prime Minster should wait for the coming year in order to undertake a proper and meaningful reshuffle, thereby providing the people with a strong and good political message!
To quote one of the Congress leaders:
“He may be able to do some cosmetic changes like induction of two or three ministers, but a major exercise appears very difficult,”.
In a question as to why did the Prime Minister at all give indications for reshuffling, it was believed that may be Manmohan Singh wanted to fill up the 4 vacancies created by resignation of Shashi Tharoor and Meira Kumar’s election as the speaker of the Lok Sabha.
According to some other source, reshuffling was needed in order to address certain situations in few states. Another possible reason, sources said, could be the need to address the situation in certain states.
Speculations were on high and it is being believed that Prime Minister Manmohan Singh would induct several new faces while some of the ministers from Congress would be sent for the party work. Speculations were also that owing to his deteriorating health, the chief minister of Andhra Pradesh, K. Rosaiah would be replaced by Jaipal Reddy, Union urban development minister. It was also speculated that Sheila Dikshit, the Delhi Chief Minister would be moved to the Union Cabinet, post the Commonwealth Games, 2010.
Finally the Cabinet Reshuffle Happened!
The 1st ever cabinet reshuffle for the nineteenth months of United Progressive Alliance (UPA)-II government, finally happened on Wednesday 19th 2011 at New Delhi thereby offering an end to the many speculations that cropped in prior the reshuffle.
Sonia Gandhi, the Congress president was seen meeting Prime Minister Manmohan Singh on Tuesday 18th 2011 for about two hours in order to finalize and decide on the cabinet shuffle for the union council of ministers.
Although several speculations were there prior the reshuffle regarding the nature of reshuffle and different versions were also being put up for the same, yet it was very clear for all that the “big four” at the cabinet ministry – Defence Minister A.K. Antony, Home Minister P. Chidmabaram, Finance Minister Pranab Mukherjee and External Affairs Minister S.M. Krishna – will surely retain their responsibilities and portfolios.
Three new ministers from the cabinet were elevated from their rank of minister of state while 3 new ministers of state were inducted in the United Progressive Alliance (UPA) II government, which is about 19 months old. The reshuffle is being looked up as an exercise by the Prime Minister Manmohan Singh to better the image of his ministry and free it up from the charges of corruption scandals and non-performance. The new ministers took the oaths of office and secrecy at the Ashoka Hall in Rastrapati Bhavan in the presence of President of India, Pratibha Patil who administered the whole process. Vice President Hamid Ansari, Prime Minister Manmohan Singh, Congress President Sonia Gandhi, Cabinet ministers and several dignitaries were also present at the oath ceremony.
The first cabinet reshuffle of 2011 saw the promotion of Praful Patel, Salman Khursheed and Shriprakash Jaiswal to the cabinet ministry. K.C. Venugopal, Ashwani Kumar and Beni Prasad Berma were sworn in as new ministers of state.
Following this large-scale reshuffle, the responsibility of water resources was given to Khursheed along with the additional charge of minority affairs. Patel took over the charge of heavy industries and public enterprises while though getting promotion for the good work done, Jaiswal retained his portfolio.
The overseas Indian affairs minister, Vayalar Ravi, got the additional charge of aviation.
Surprisingly, S Jaipal Reddy was given the charge of petroleum and natural gas in the cabinet shuffle.
Beni Prasad Verma, who had been Cabinet minister in the 1996 United Front government, got the MoS Independent Charge at the reshuffle. He got the portfolio of steel.
Murli Deora was shifted from the portfolio of petroleum and natural gas to corporate affairs.
Reddy has been changed from the urban development ministry that now lies with Kamal Nath. Kamal Nath’s existing portfolio of road transport and highways has now been given to C P Joshi.
Praful Patel, NCP, was elevated to the Cabinet Ministry with a shift from the civil aviation to heavy industries and public enterprises and Khursheed has been shifted from corporate affairs portfolio to water resources.
Jaiswal retained his portfolio of coal while moving up to the Cabinet Ministry.
Maken, was shifted from his portfolio of MoS home affairs to youth affairs and sports as MoS Independent charge.
Prof K V Thomas, who was responsible for MoS consumer affairs, food and public distribution before the reshuffle, was elevated as MoS with Independent charge in the same section.
This cabinet reshuffle saw some induction of new faces and the coming back of some after a long gap. Ashwani Kumar came back to the government as the minister of state for the portfolio of parliamentary affairs, planning, science and technology and earth sciences.
K C Venugopal is among the new entrant who got the portfolio of Power as MoS.
M S Gill was moved from sports and youth affairs to the portfolio of statistics and program implementation.
The Congress veteran from Himachal Pradesh, Virbhadra Singh was changed from the portfolio of steel to micro, small and medium Enterprises. Vilasrao Deshmukh was changed ferom heavy industries and public enterprises to rural development. Vilasrao Deshmukh was also given the additional charge of Panchayati Raj.
The portfolio of Kamal Nath was changed from road and transport to urban development. The overseas Indian affairs minister Vayalar Ravi was given the additional charge of civil aviation.
Kapil Sibal, who was earlier responsible for telecom following the exit of A Raja, retained both HRD and telecom after the reshuffle. Pawan Kumar Bansal, who retained the parliamentary affairs, got science and technology and earth sciences.
B K Handique was changed from the mines portfolio and was given the responsibility of development of northeastern region. C P Joshi was shifted from rural development to road transport and highways.
Selja was moved from Tourism portfolio and was given the additional charge of culture ministry whilst keeping the housing and urban poverty alleviation.
Subodh Kant Sahay at the reshuffle has been shifted from food processing industries to tourism.
The minister of state with independent charge, Dinsha Patel, has been shifted from micro, small and medium enterprises to the portfolio of mines.
With this reshuffle Union Council of Ministers stands at a total of 81 ministers consisting of 35 Cabinet ministers, six MoS with Independent charges while the remaining are ministers of state.
In this cabinet reshuffle of 19th January 2011, no minister has been dropped. This has been described by the Prime Minister Manmohan Sing as “minor”. He also said that a “more expansive exercise” will be undertaken following the Budget Session of Parliament.
Major Highlights
Coming Back of Ashwani Kumar as Minister
Ashwani Kumar had been a MP of Punjab MP, a Minister of the State, Science and Technology and Parliamentary Affairs. 50 year old, Fifty eight-year-old Ashwani Kumar, who joined UPA-II Cabinet list of lawyer-turned ministers, saw a major come back in the Union government following the recent cabinet reshuffle, after a long gap.
Ashwani Kumar happens to practice as a senior lawyer in the Supreme Court and has a political family back ground. Earlier one of the national spokes person for the Congress, Ashwani Kumar is the son of the former Punjab assembly Speaker, Prabodh Chandra. Born in the capital city of Delhi, Kumar has written many articles on economic reforms, law, democracy and international affairs and elections. Kumar was also India’s additional ex- solicitor general and got elected at the Rajya Sabha in the year 2002. He was then the minister of state of industries in the UPA-I. Apart from being an active parliamentarian Ashwani Kumar was also a renowned member of the committee on public accounts and external affairs.
Is Beni Prasad Verma Happy?
Beni Prasad Verma, a member of the Parliament from Uttar Pradesh, was given the charge of Minister of State, Steel (Independent Charge). For most part of his political career, Verma engaged in anti-Congress activism and after a long gap of about a decade, got back to the Union Council of Ministers. This 70 year old Beni Prasad Verma, a prominent leader from the state of Uttar Pradesh served as the Union minister for Communications in between the years 1996 and 1998, in the time of the United Front regime. Although entrusted with a new portfolio and new responsibilities, yet owing certain circumstances made people think as to whether Beni Prasad Verma is happy with his current role, following the recent cabinet reshuffle of 2011. Post the cabinet reshuffle process, it appeared like Verma was unhappy for not being made the Cabinet Minster. Just after the reshuffle, Beni Prasad Verma was found closeted with his close supporters at his home, following the swearing-in ceremony. He did not even come to receive the greetings from his followers who were present there with bouquets and sweets.
Later on however, he was found expressing to the media about his faith on Sonia Gandhi, the Congress president. To quote him- “I am a soldier of Congress party.” When questioned about his becoming the cabinet minister, he said- “May be. I will keep it as a suspense, I will not tell you what it is.”
He added further that “I have got more respect in Congress than in Samajwadi party,”.
Venugopal: The Young Face!
The single new minister to join the ministry of Manmohan Singh is K C Venugopal, the 1st time Lok Sabha MP from the state of Kerala. With his ministerial appearance for the first time at the Centre, this young face at the Union government is an MP from Alapuzha. Forty Seven year old K C Venugopal was lucky enough to have got power very quickly by catching hold of the slot of minister of state in the power ministry.
Ashwani Kumar and Beni Prasad Verma, the new ministers at the UPA following the reshuffle and minor expansion on Wednesday 19th, 2011, along with K C Venugopal, earlier have been Union Ministers.
A volleyball player at the university level and an ardent sports lover, K C Venugopal came in owing Shashi Tharoor’s exit from the ministry because of the IPL controversy. The entry of Venugopal into the ministry is being believed to be move to influence and persuade the Nair Community prior to the Kerala Assembly Elections in the month of May.
Cabinet Reshuffle: Old players in a New Game!
NEW DELHI: In the first major revamp of his Council of Ministers, Prime Minister Manmohan Singh Wednesday inducted three new ministers of state and promoted three to Cabinet rank while reshuffling some portfolios. Here is the list of the changes:
Cabinet Ministers
- Praful Patel: Heavy industries and public enterprises
- Salman Khursheed: Water resources and additional charge of minority affairs
- Sriprakash Jaiswal: Coal
Ministers of State
- KC Venugopal: Power
- Ashwani Kumar: Planning and parliamentary affairs, science and technology, and earth sciences
Minister of State (Independent Charge)
- Ajay Maken: Youth affairs and sports
- KV Thomas: Consumer affairs, food and public distribution
- Beni Prasad Verma: steel
The portfolios of the following ministers have also been changed:
- Sharad Pawar: Agriculture and food processing industries
- Vilasrao Deshmukh: Rural development and additional charge of Panchayati Raj
- Virbhadra Singh: Micro, small and medium enterprises
- S Jaipal Reddy: Petroleum and natural gas
- Vayalar Ravi: Overseas Indian affairs and additional charge of civil aviation
- Kamal Nath: Urban development
- Murli Deora: Corporate affairs
- BK Handique: Development of north-eastern region
- Kapil Sibal: Human resource development and additional charge of communications and information technology
- CP Joshi: Road transport and highways
- Subodh Kant Sahay: Tourism
- Kumari Selja: Housing and urban poverty alleviation and additional charge of culture
- M.S. Gill: Statistics and programme implementation
- Pawan Kumar Bansal: Parliamentary affairs and additional charge of science and technology and earth sciences
- Harish Rawat: Agriculture and food processing industries
- E Ahamed: External affairs
- V Narayanasamy: Parliamentary affairs and personnel, public grievances and pensions and Prime Minister’s Office
- Sai Prathap: Heavy industries and public enterprises
- Gurudas Kamat: Home affairs
- Bharatsinh Solanki: Railways
- Mahadev S Khandela : Tribal affairs
- Jitin Prasada: Road transport and highways
- RPN Singh: Petroleum and natural gas and corporate affairs
- Arun Yadav: Agriculture and food processing industries
- Tusharbhai Chaudhary: Road transport and highways
- Pratik Prakashbapu Patil: coal
- Vincent Pala: Water resources and minority affairs
Minister of State (Independent Charge)
- Dinsha Patel: Mines


