India could soon increase its presence in Russian energy assets in a big way. ONGC’s overseas arm, OVL is talking to Russia’s OAO Rosneft about partnering in two critical fuel assets in that country. One is a hydrocarbon field with estimated reserves of 500 million tonnes. Another is a refinery with a 20 million tonne capacity in Russia’s far east. OVL already has some assets in Russia, including a stake in the Sakhalin-I field. The company is also negotiating deals for other oil and gas blocks. All these deals of course, come in the backdrop of Russian president Dimitri Medvedev’s visit to India last month. That trip saw the two sides signing a comprehensive agreement on energy cooperation.
And in other news, it’s a move that will put more money in the hands of the needy, but could also stoke inflation. On Thursday, the government decided to increase payments under MGNREGA, its flagship rural employment scheme. From now on, wages will be linked to the consumer price index for agricultural labour in each state. All in all, they’ll go up by 17-30% across the country. What’s more, the wage hikes will be effective starting from 01 January.
This week’s decision allows the government to keep MGNREGA wages separate from minimum wages. Back in November Congress president Sonia Gandhi had written to Manmohan Singh asking for NREGA payments to be increased to minimum wage levels. But the rural development ministry opposed the move, arguing that states would simply increase their minimum wages for farmers, forcing the centre to foot the bill.
MGNREGA guarantees 100 days of work each year for each rural household. Until Thursday’s decision, it paid workers Rs100 for every day of work.
And the announcement of the wage hikes come at a time when food inflation is accelerating. India’s food price index shot up 18.32% in the period to 25 December. In the week to 18 December it stood at just 14.44%.
With inflation accelerating, the IMF has warned that the Indian economy could be overheating. Sanjaya Panth, the funds senior representative in India, said food inflation was spilling over into core inflation. He added that the RBI was right to tighten monetary policy over the last one year.
And the IMF also released its projections for India’s growth. Its world economic outlook expects the country to grow at 8.8% this year. But its projection for 2011-12 is a mere 8.1%. The IMF blames expected slowdown on the base effect and sluggish growth worldwide.