The Mint Report for 28 January 2010

The Mint Report for 28 January 2010

New Delhi: Just one day before its monetary policy review, the RBI said the effects of high food prices could spill over to other parts of the Indian economy. Food prices have shot up after last year’s poor monsoon and flood in parts of the country. Figures released on Thursday show wholesale food inflation rose 17.4% in the week ending the 16 January. That’s higher than the previous week, when it had risen 16.8%.

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The deadline for the Goods and Services Tax or GST has been delayed. On Thursday the chairman of the committee of state finance ministers dealing with GST, Asim Dasgupta said it was no longer feasible to implement the tax by 1April. GST aims to unify several indirect taxes at the state and central levels into a single structure.

A new survey on how the National Rural Employment Guarantee Scheme is working will give the government something to be happy about. According to the survey, nearly two-thirds of villagers say the effort to build awareness about NREGA has been ‘good’, while about 30% rate the effort as poor. Also on the downside, the survey found that social audits of NREGA, which help maintain transparency, were only happening in half the villages. The survey was conducted by national level monitors or NLMs across 3,400 villages in two separate 3-month session last year.

And in corporate news, Tata Steel has beaten expectations for its third quarter numbers. Net profit for Indian operations shot up to Rs1,192 crore compared to just Rs466 crore in the same period last year. And net sales in Indian operations rose to Rs6,306 crore from Rs4,751 crore. Tata Steel will report consolidated figures that include its European unit Corus next month.

Government-run company Hindustan Petroleum Corporation says it plans it invest Rs25,000 crore to set up a refinery with a capacity of 15 wmillion tonnes per year. The planned refinery is likely to be a part of the company’s existing Mumbai unit.