Centre releases Rs 1,138 crore for Basic Services to Urban Poor
Indian Express

Of the Rs 20,000 crore being handled by the Ministry of Housing and Urban Poverty Alleviation under the Jawaharlal Nehru Urban Renewal Mission (JNNURM), the break-up of the first installment of Rs 1,844.16 crore has been released. Rs 1,138.27 crore is being allocated to to 37 cities under the Basic Services to Urban Poor (BSUP) sub-mission and Rs 705.89 crore to 194 cities under the Integrated Housing and Slum Development Programme (IHSDP).

The Ministry has so far committed a sum of Rs 6,943.62 crore to the two sub-missions — Rs 5,224.75 crore to BSUP and Rs 1,718.87 crore to IHSDP. While the Basic Services to Urban Poor scheme covers the 63 biggest cities, the IHSDP covers the other cities that are not covered under BSUP (5,098 cities).

A total of 426 projects spread across 288 cities in 17 states have been approved so far. The total cost of these approved projects will be Rs 12,905.28 crore. About 6,98,067 houses will be constructed within the projects approved so far. Under the BSUP sub-mission, 169 projects have been approved in 38 cities belonging to 17 states. The total project cost of the approved projects under the BSUP mission will be Rs 10,498.45 crore and 5,20,248 houses will be constructed in the projects approved so far. Under the IHSDP sub-mission, 257 projects have been approved in 250 cities within 16 states. The total cost of the approved projects under the IHSDP sub-mission is Rs 2,406.83 crore.

According to a technical group of the ministry, the total housing shortage in the country is of the order of 24.7 million. The JNNURM scheme will be able to cover about 6-8 per cent of this population. Altogether, about 1.5-2 million houses and allied infrastructure, including roads, storm water drains, water supply, community halls, and health centres will be developed under the scheme.

No guarantee your EPF will earn 8.5 per cent
Indian Express

EPFO audit panel first reported a deficit of Rs 339 crore in Interest Suspense Account; prompted by Oscar Fernandes, it found a surplus of Rs 590 crore in the second audit; MoF refuses to be convinced

While EPFO’s earnings for the year were enough to pay 8 per cent, under pressure from the Left parties to retain the rate at the 2005-06 level of 8.5 per cent, Fernandes had set up a sub-committee of EPFO board members to audit EPFO’s accounts for any available surplus that could fund the Rs 450-crore deficit. Though the committee originally found a deficit of Rs 339 crore in the EPFO’s Interest Suspense Account, when Fernandes asked them to make one last attempt to find a surplus this May, the same panel managed to find a surplus of Rs 590 crore.

The Finance Ministry, whose Departments of Expenditure, Budget and Economic Affairs would have to okay the Labour ministry-recommended rate before Finance Minister P Chidambaram can sanction its notification, is not convinced about the audit panel’s about-turn. In fact, the ministry is likely to ask the EPFO’s statutory auditor, the Comptroller and Auditor General of India (CAG), to validate whether the said surpluses actually exist.

A senior Finance Ministry official told The Indian Express, “We can only rely on EPFO's audited accounts to ascertain if there are any surpluses. Even the EPFO's chief financial officer (financial adviser) had refused to concur with the audit committee’s findings at last week's board meeting. Though it was said that his views would be placed on record, our board representative had also stressed that these numbers cannot be a matter of negotiation...”

In fact, apart from the verbal objection in the board meet, the EPFO had recorded its opinion disputing the audit panel's findings in a statement that was placed before the Board along with the audit panel's report. “The liability of EPFO starts accruing immediately after receipt of contribution; however, EPFO accounts are not maintained on the lines of accounting organisations using accrual concept.”

Further, the EPFO had stressed that “the exact interest liability cannot be ascertained even at the close of a financial year; therefore, it is beyond the competence of the EPFO to ascertain whether any distributable surplus actually exists in the Interest Suspense Account”— a statement that raises questions not just about the interest rate for 2006-7 but the entire process of setting the PF rate on the basis of estimated earnings and liabilities at the beginning of a year.

While leaving it to the Board to recommend an 8.5 per cent rate “if the said estimated surplus is agreed to and considered to be distributable” by board members, the EPFO delicately sidestepped being party to the decision stating that “it is beyond the competence of the EPFO to ascertain whether any distributable surplus actually exists in the Interest Suspense Account”.
A tussle between the Finance and Labour ministries on the PF rate is not uncommon in the past few years but this time, it is different. A bulk of the Rs 1,380 crore needed in the last three years to pay higher interest rates than warranted by EPF’s income, was drawn from a Special Reserve Fund (SRF) whose surplus was not in doubt at the time. The only quandary for the Government was moral — the fund was meant to pay the PF claims of employees whose employers had turned defaulters, not to artificially boost the interest income for all PF subscribers.

By contrast, the 2006-07 rate has been recommended on the basis of the audit panel’s “interpretation” of EPF’s accounts for the last five years, as only Rs 56 crore is left in the SRF account. Combined with EPFO’s dissent note and the fact that the EPF Act, 1952, doesn’t allow for any Government dole to pay higher interest, the Finance Ministry will find it hard to notify the 8.5 per cent PF rate, unless it is able to pinpoint the surplus. Your annual PF account slip for 2006-7 will have to wait till then.

Cement prodn now free from weather moves
Business Standard

The seasonality in cement production is increasingly becoming a thing of past for the Indian cement producers. Gone are the days when the cement companies used to curtail production between April and July to avoid a market surplus that could force them to reduce prices.

The practice of regulating production to maintain prices is becoming extinct as companies are witnessing a buoyant consumption demand even in the months of July and August and therefore the cut in production between April and July has become marginal.

In the past, cement companies have seen a slump in consumption demand during the months of June and July. Therefore, the companies used to cut production by 15 per cent to ensure that there is no surplus and prices remain stable.

On an average, leading cement companies cut down production by 15-16 per cent between April and July in 2005. However, this has come down to as low as 6-8 per cent in the current year.

Demand for cement has been buoyant, driven by large amount of infrastructure and housing growth in pockets like Noida, Gurgaon, Chennai, Hyderabad, etc. The sustained demand even during the months of rain is something that helped most cement producers to go ahead with a price hike of Rs 3-5 per 50 kg bag in July.

“For the past two years, cement consumption demand has not seen any impact owing to monsoon and therefore prices have not come under pressure,” said AK Saraogi, chief financial officer, JK Cement.

Domestic cement production in the April-June period of the current year has seen a growth of 6.91 per cent over last year and consumption demand has been equally good despite the rains.

According to the Cement Manufacturers’ Association, cement production and despatch in the April-June period of the current financial year has been 41.88 million and 41.7 million tonnes, respectively, up 6.91 and 7.33 per cent over last year’s corresponding figure.

Though the July figures are not available, the data of individual companies for July point to a similar trend of increase in production and despatch figure over last year.

“Though the consumption demand is sluggish in certain markets in East and North India owing to rains, the overall demand is better than last year,” said Rahul Kumar, chief operating officer, Jaiprakash Associates.