ECONOMY: Bank taxation not a solution – Pranab Mukherjee

Rakesh Jhunjhunwala’s Latest Interview – Bullish on Agriculture – a kind monsoon this year, Sensex to continue surge ?!!

Gorkhs Daju

Forwarded by Gorkhs Daju

Thursday, June 3, 2010: This is verbal transcript of Rakesh Jhunjhunwala’s  recent TV interview. Posting here as some of you may prefer reading rather than watching the video. Video is available in above link.

It has been said by Ace investor Rakesh Jhunjhunwala with a conviction that India growth story is the most sustainable story and it can”t be reversed and with the time it is being more and more proved and recognized. He continued to say that the agriculture and agricultural products are his new area of interest in the current market.

He further said that there is no doubt about the fact that money is going to come into the Indian markets from both the local as well as from the foreign fronts. Speaking about the concerns looming over the euro zone growth prospects and its impact on the world economy, he commented that the problems are for real and says that the fact remains that there are large deficits and they have to be handled carefully. The growth is certainly going to be below par.

Adding further he said that the silver lining out of the euro zone crisis is that the bottom of this economic dip will start once the public accepts and the government realizes that they can”t spend themselves out to prosperity.

He believes that nothing more worst is going to happen to Europe or the US in the next 12-18 months and the worldwide growth will be good this year and also feels that the Europe growth concern is unlikely to have any impact on the Indian markets.

Talking about the recent Ambani truce pact, he said it is a good thing that the family is coming together, adding to it further he said that both the brothers are smart enough to protect their own interests.

He again expressed confidence in sectors that promote India”s growth story like infrastructure or banking that are on his favorites, but for now the new area of interest is agriculture and agricultural products. He believes that anything that is serving agriculture is going to do very well.

Expressing his view point he said that he was staying away from telecom stocks for some time because of huge 3G payments and consolidation that is yet to happen in this sector. He also said that he was also not bullish on real estate stocks however he feels that the infrastructure sector is relatively good.

Checkout entire Rakesh Jhunjhunwala Portfolio – Holdings As on Sept. 2009

Bank taxation not a solution – Pranab Mukherjee

Finance Minister Pranab Mukherjee (File Photo)

From The Economic Times Bureau,
By Deepshikha Sikarwar,

BUSAN (S Korea), 4 Jun 2010, 0047 hrs IST: India is not keen on any tax on banks to fund future bailouts, but is all for better regulation, finance minister Pranab Mukherjee told ET in an interview on the sidelines of a meeting of finance ministers from the G20 countries.

The proposal to tax banks is likely to be considered at the meeting. The crux of the idea under debate is that public money cannot be used to fund future bank bailouts. Instead, banks should be taxed to build a corpus for future bailouts.

The finance ministers and heads of central banks of the G20 countries are meeting here on Friday and Saturday to work out the agenda for the meeting of the heads of states later in the month.

The finance minister said India does not support binding fiscal commitments and would also not commit to reducing subsidy. “Taxation is not the alternative,” he said, adding that India has enough regulatory tools such as adjusting CRR and SLR to insulate banks from volatility of cashflows.

“Banks will simply pay the tax and not reform their ways. This will not solve the problem. Crisis has raised certain questions on regulation and those need to be answered,” a government official said.

India is not the only one opposed to the tax. Australia and Canada—whose banking system survived the financial meltdown unscathed—too are opposed to such a tax. The US and European countries favour a bank tax to pay for future bailouts.

The finance minister also said India does not support global rules on fiscal consolidation. “Sovereign countries will have to be given the elbow room and decision-making process as per (their) will,” he said, adding that countries cannot go on living beyond their means.

On the issue of fuel subsidy, Mr Mukherjee was categorical that India will not commit to any cap on energy subsidy. “You cannot just impose an artificial ceiling of the energy subsidies without taking into account the requirement of energy for sustainable development of a country’s economy.”

Mr Mukherjee was optimistic of the outcome of the Busan summit. “I am very positive… We will be able to present an agenda to the leaders,” he said.

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