CRZ realignment plea trashed MCZMA Will Not Entertain Any Requests For Reclassification

Mumbai: An application for realignment of the imaginary coastal regulation zone line in the Bandra-Khar area has been rejected by the state coastal zone management authority. The Maharashtra State Coastal Zone Management Authority (MCZMA) has decided not to allow such requests anymore. 

    Akhtar Rizvi, a former member of Parliament and a builder, had sought the reclassification and delineation of the high tide line, the low tide line and CRZ for five projects in Bandra on grounds of "error evident on record". What this means is that the applicant has objected to the area/plot under question being classified as CRZ. 
    The sea-facing Bandra-Khar area is prime property where market rate is approximately 24,000 per sq feet. There are 12 other projects in the Bandra-Santa Cruz belt where similar reclassifications have been sought. 
    While CRZ II norms apply in most parts of Mumbai where development can be undertaken as per the BMC's Development Control Regulations, such development is not allowed in CRZ I and CRZ III areas (traditional fishing areas etc). 
    Officials said that the Union ministry for environment and forests had already issued a notification in November last year to prepare a new coastal zone management plan for the state. "The BMC has already appointed IRS Chennai to undertake the work in Mumbai city and suburbs. The work started in January and will be completed by the year-end," said sources. Similar work has also started in other coastal districts of Thane, Raigad, Ratnagiri and Sindhudurg. 
    Officials said taking up any reclassification exercise now would interfere with the new mapping that is underway. For, any rectification requires a detailed examination on how the error crept in and its rectification. The process involves onsite verification, including corroborative and independent evidence, besides satellite imagery and survey of India maps etc. Hence, the CZMA has decided not to allow any such requests.

INDIA: GDP growth near 3-yr low of 6.1%

RBI Comes Under Pressure To Cut Interest Rates TIMES NEWS NETWORK  New Delhi: The economy grew 6.1% during October-December 2011, the slowest pace of expansion in 11 quarters, due to a slowdown in the manufacturing sector and contraction in mining activity. Although the latest data has not prompted a reduction in the annual growth projection of 6.9%, it is expected to put further pressure on the Reserve Bank of India to cut interest rates as investment has declined.      A part of the moderation from 8.3% GDP growth in the third quarter of the last financial year was on account of consumers deferring purchases due to high interest rates and elevated price levels. The crisis in Europe and the slowdown in the US also took a toll on exports, and impacted manufacturing activity in the country.      In case of mining, the ban on iron ore mining in certain parts of the country and the impact of environmental clearances on coal took a toll. Even agriculture grew at a slower pace than a year ago but that was due to a high base in the third quarter of 2010-11. Data released by the Central Statistics Office showed that the farm sector expanded by 2.7% during October-December 2011 compared to 11% a year ago.      Economists at Citibank and ratings agency Crisil predicted that the economy was on course to achieve 7% growth in the current financial year as the service sector was still recording a strong growth. Three of the four sectors clocked over 9% rise in activity, with construction too growing by over 7%.  Cabinet may take up divestment plan today      The Centre is set to provide a major push to disinvestment in the coming months to bolster its financial position and generate funds for its social sector programme. Sources said the Union cabinet could take up a proposal on Thursday to sell stake in state-owned companies, with buyback on top of the agenda.P 23  Pak moves to grant MFN tag to India      Pakistan on Wednesday moved closer to granting most-favoured nation status to India by switching to a system of "negative lists" that will restrict the import of around 1,200 items from India. Pakistan will now permit import of around 6,800 products from India compared to 1,900 products earlier.  RBI faces inflation, deficit dilemmas      In order for the government to meet its first advance GDP estimate of 6.9% for 2011-12, growth in the fourth quarter is likely to be 6.9%," Citibank economists Rohini Malkani and Anushka Shah said in a note.      "We would expect this to be the bottom or close to the bottom and Q4 is likely at 6.1% too. RBI is expected to factor in these growth dips and start cutting rates from April, first cut of 25 basis points. But RBI might not be able to cut the policy rates aggressively as inflation concerns persist, especially with international crude oil prices remaining firm," said Kotak Mahindra Bank chief economist Indranil Pan.      The continued fall in growth rates promoted industry chambers to argue for a rate cut to boost economic activity. CSO data estimated investment at 30% of GDP as compared to 32.3% a year ago. This was the fourth quarter in a row when it had declined. At the same time, private consumption also remained constant.      RBI, however, faces twin dilemmas. One inflation, especially in the manufactured good segment, remains high and there are signs of fresh pressure on oil prices due to tension in Iran. Two, it has already made public its concern over the Centre's fiscal situation. With tax collections and disinvestment targets expected to be missed and subsidies projected to be higher than the budgeted level, fiscal deficit is projected to be over 5.5% of GDP as compared to the 4.6% target.      Separate data from the finance ministry showed that the government's fiscal deficit in end-January was more than the level budgeted for the full financial year.

Social, health ills ail India on move

New Delhi: India continues to be plagued by social and health ills like child marriage, early motherhood and domestic violence. The latest data in the "State of the World's Children report 2012" released by the Unicef on Wednesday shows almost 22% women in India, who are now aged between 20 and 24 years gave birth to a child before they turned 18.      Around 57% of male adolescents (aged 15-19) and 53% of female adolescents thought a husband was justified in beating their wives. Only 35% adolescent males (aged 15-19) and 19% adolescent females have knowledge of HIV. Around two in four people in urban India and one in five in rural use improved sanitation facilities. India also ranks 46th in the list of 50 worst nations with the highest under-five mortality rate.      Almost one in three is born with low birth weight, with less than 50% kids being breastfed by their mothers.      Around 43% under five years are underweight, 16%undernourished and 48% stunted. Karin Hulshof, Unicef representative to India, said the report shows how a child growing up in an urban poor environment has similar challenges as a child in rural areas.  RAISING A STINK  22% women in India give birth to a child before they turn 18  Around 57% of male adolescents and 53% of female adolescents think husband is justified in beating up wives  Only 35% adolescent males and 19% adolescent females have knowledge of HIV

General strike set to hit nation, may spare city

New Delhi/Mumbai: Having rejected the Centre's belated bid to persuade them to drop their plan for the 24-hour general strike on Tuesday, central trade unions commanding the allegiance of lakhs of workers stepped up their efforts to turn the protest into a crippling nationwide shutdown.      Life will be severely impacted across the country for 24 hours if the trade unions succeed in pulling off the show of strength and solidarity in support of their demands: an end to contract labour, amendment  to the Minimum Wages Act, an increase in gratuity payout and compulsory registration of trade unions within 45 days.      Among the sectors that are likely to be affected by the strike are the oil and gas industry, banks and insurance, aviation, defence (ordnance factories), posts and telecom, ports and the I-T department.      However,the impact on Mumbai is likely to be mixed. Local trains will run as scheduled. While BEST's King Long airconditioned buses will not ply, some auto drivers may choose to attend a morcha at Azad Maidan, inconveniencing regular commuters. Automen's union leader Sharad Rao and taxi union leader A L Quadros have reassured citizens that autos and cabs will ply as usual. While public sector banking services will be hit, the markets, as also schools and colleges, are expected to function normally today.  WHAT MUMBAI CAN EXPECT TODAY  WHAT WILL BE AFFECTED  • Attendance at some central govt offices  • BEST AC King Longs fully, other BEST buses partially  • Autorickshaws in some suburban areas  • Branch transactions in public sector banks  • Cheque clearing in RBI  WHAT WON'T BE AFFECTED  • Essential services  • Civic, state govt offices  • Black-and-yellow, fleet cabs  • School buses  • Trains and flights  • Schools and colleges (both private & public)  • Retail shops, malls, petrol pumps, hotels and restaurants  • Markets & ATMs  IN OTHER METROS  Normal life will be hit. But airports, trains, bus stations will be open in Delhi, Kolkata Bangalore. Transport will be affected in Chennai We've been forced to go on strike: TUs  New Delhi/Mumbai: Cities across the country are bracing for the strike today. For the first time, Bharat Electronics and Hindustan Aeronautics Limited (HAL) will be taking part in the strike, according to trade union (TU) leaders.     Apprehending that the strike will send out a wrong message against the government and its reforms agenda, Prime Minister Manmohan Singh had called Intuc leader G Sanjeeva Reddy on Friday evening for talks. While it seemed like an attempt to break the Congress's union away from the array of striking unions, Reddy refused to meet the PM unless he invited other TU leaders who have joined hands to call the strike. "My message to the government is that it won't make a difference by talking to me alone. If all the leaders are called then there is a possibility of finding a solution to this," Reddy told TOI.      "We could achieve this unity when all the trade unions and workers realized over the last two years that going on their own has not helped since the government has refused to pay heed to our demands," said Gurudas Dasgupta, Aituc chief and senior CPI leader. The date was decided last November to coincide with the tabling of the Union budget, but that got postponed. "We want industrial peace. We have been compelled to go on strike. Workers also lose their wage. Strike is the last option for us," Dasgupta said.  In U-turn, Didi calls bandhs 'retrograde'  Kolkata: Chief minister Mamata Banerjee was in a combative mood on Monday, calling bandhs and strikes "retrograde politics", as CPM's trade union wing Citu feared law and order problems because of the government's "aggressive posture". "The government cannot support bandhs. Whatever is needed will be done. One can't attend office with party badges," the CM said. "If the CPM had actually worked for 35 years instead of resorting to strikes and bandhs, Bengal would have reaped gold. The treasury wouldn't be empty. Strikes and bandhs are expressions of frustration and they serve only vested interests." she said. TNN

India off WHO’s polio blacklist

New Delhi: India's name has been struck off a shame list. The WorldHealth Organization (WHO) has taken the country, which in 2009 had more polio cases (741) than any other nation in the world, off its polio endemic list after not a single case of the crippling disease was reported for over a year.      Health minister Ghulam Nabi Azad made the announcement on Saturday at a function where PM Manmohan Singh was also present. Now, only Pakistan, Nigeria and Afghanistan are on the list as India has achieved a hard-fought success after years of sustained effort by the government, international agencies and dedicated medical professionals.      For the next two years, if India does not report any polio cases, it will be officially called "polio free". Azad said, "WHO has taken India's name off the list in view of the remarkable progress that we have made during the past one year. Let us today resolve to make India polio free by 2014."      According to the PM, the real credit for this achievement goes to the 23 lakh volunteers who repeatedly vaccinated children "even in the most remote areas, often in very bad weather conditions. I commend each one of them for their dedication, for their commitment and for their selfless service". Three years ago, India had the highest number of polio cases in the world

Developers believe that availability of affordable housing within premium properties is not a practical idea

STRIKE A BALANCE

In a bid to promote affordable housing, the Maharashtra government has suggested building 20% of the flats in residential projects for EWS/LIG housing, thus offering a mix of affordable housing in premium residential projects. 

    "Generally, amalgamation of EWS housing with luxury projects does not go down well with the buyers, although in several states this has to mandatorily be provided in group housing projects. Further, there will be concerns with respect to sharing the common area maintenance costs," says Pranab Datta, Vice-Chairman & Managing Director, Knight Frank India. 
    Although affordable housing is much needed in Mumbai, insisting on 20% compulsory building of affordable housing on private land owned by builders is unfair to the developers, say industry representatives. "In such a case, incentivising is a good option, where developers will be encouraged to build affordable houses in return for some incentives. Currently the matter is under discussion and Marathon Group has filed for suggestion/ objection with the government on the same," says Mayur Shah, MD, Marathon Group. 
    To most developers, the approach to encourage EWS/ LIG housing appears forced considering the limited development options, especially in island city areas. "The plot sizes are usually small except in the cases of mill land or large cluster redevelopment, with constraints of access, utilities, open space and circulation areas," says Manoj John, VP - Corporate Planning & Strategy, RNA Corp. This move would pose challenges to design exclusive buildings meant for EWS/LIG and premium housing with minimal interference, and without compromising on aesthetics, he adds. 
    While developers are in favour of affordable housing especially in urban areas, they are suggesting that the route taken is not the best one. "When government asks to set up an industry in a not so industrialised flourishing area, they offer certain incentives. If a similar approach is followed for the real estate sector, there will be exceedingly good results to be seen," says Boman Irani, CMD, Rustomjee. Irani, who has filed for suggestion/ objection, hopes that when they get a chance to interact with the government, they will try to bring in a win-win situation for both. 
    Additionally, a mix of affordable housing with premium properties is not a practical idea, particularly for allotted plots of small size as 2000 sq. m as there may be issues from architectural and engineering feasibility to social issues such as co-existence of people with different income levels and lifestyle within the same complex. 
    "The amenities in premium projects are highend and come at a cost, which may be a burden for people living in the affordable units within the same complex. In extreme cases, this may lead to social clashes. If at all this is to be done, it should be first done on an experimental basis at plot sizes of 10,000 sq. m. and above," suggests Hemant Shah, Chairman, Hubtown Ltd. 
    However, Om Ahuja, CEO - Residential Services, Jones Lang LaSalle India is of the opinion that there has been a marked dip in premium housing sales in Mumbai over the past two to three quarters, and including a compulsory affordable housing component in such projects is a good means of ensuring there are at least some guaranteed sales. "Despite the subdued sentiments prevailing at the moment, budget housing continues to sell well in Mumbai," he says. From a social perspective, this ruling would also ensure that budget home owners in these projects have the benefit of good infrastructure, which is more or less a given in a premium project. Datta adds that it's a positive intention to provide an accommodation to the EWS of people, in the same habitat as that of the middle and upper income groups. 
    If the proposed rule is made compulsory, developers might have to go for composite buildings with four floors of affordable and 10-12 floors of premium housing. "Here, maintenance will be a cause of worry. Additionally, input costs of developer will go up resulting in cost of real estate going up," adds Mayur Shah. 
    While the move is a positive one it needs to be reviewed with recommendations from developers too since the current proposal has several discrepancies. Such new policies with discrepancies will only add to the numerous approvals a developer needs to get for construction. "The proposal states that units should be given at construction cost, which is very difficult to monitor and differs from location to location. Instead, we suggest that developers be given additional FSI incentives for such projects. Also we suggest the proposal be applicable to plots more than 5000 sq. meters instead of 2000 sq. meters, this will aid better layout design offering good amenities for buyers," says Shailesh Sanghvi, Director, Sanghvi Group of Companies. 
QUICK 
BYTE 
INCENTIVISING IS A GOOD OPTION, WHERE DEVELOPERS WILL BE ENCOURAGED TO BUILD AFFORDABLE HOUSES IN RETURN FOR SOME INCENTIVES

India loses $20bn/yr to mishaps

Estimate Enough To Feed 50% Of Malnourished Kids, Cellphone Use Top Culprit

New Delhi: India loses $20 billion (Rs 4919 crore approx) due to road accidents annually, which the World Health Organization (WHO) estimates is enough to feed 50% of the nation's malnourished children. Officially, at least 1.34 lakh people died on Indian roads in 2010, while experts claim the figure could be about 1.5 lakh considering the under reporting of such cases. 

    WHO representative in India Dr Nata Menabde while addressing international road safety experts, including the senior IPS officers at a convention held at College of Traffic Management (CTM) in Faridabad, said there is a dire need to save the vulnerable road users to reduce the huge annual financial loss. She urged that strategies have to be devised to save lives, particularly pedestrians, cyclists and two-wheeler riders besides putting curbs on drunk driving and stricter enforcement of wearing of helmets and seat belts. 
    "We need to see how we build our road, investigate properly how accidents occur and police probe these cases. There should be one group or body that should bring all sectors together, and it should announce a plan to reduce fatalities," Menabde said. 
    International experts felt that the high use of mobiles while driving is increasing the accidents globally. "The chance of accidents increase four-fold in such cases," said Adam Briggs, former chief constable of the UK. 
    CTM president Rohit Baluja said that to reduce the accidents and fatalities on Indian roads, there is a need to have proper probe to unearth the cause of accidentsEven senior traffic officials from Mumbai, Chennai, Bangalore, Haryana, Rajasthan admitted that the investigators often have little training to probe accident cases. "The usual course of investigation is on predictable lines: bigger vehicle is the culprit, dead is the victim and alive is the accused. We need to find the reasons behind such accidents as it is done in other countries," said Vivek Phansalkar, joint commissioner of Mumbai Traffic Police. 
Road accidents reduce in US, increase in India 
New Delhi: While the number of road accidents and fatalities has reduced in developed countries such as the US, the UK and Germany between 2008 and 2010 due to financial meltdown, the toll has increased significantly in India. Global road safety experts said the recession is linked to reduced miles travelled by vehicles and that has a direct impact on accidents and deaths. However, in India, the fatalities have increased from 1.20 lakh in 2008 to 1.34 lakh in 2010. TNN

THE NEW DCR RULES WILL BRING TRANSPARENCY INTO THE REAL ESTATE SECTOR

A LEVEL PLAYING FIELD, SAYS RAVI AHUJA

 The Development Control Regulations (DCR) for Greater Mumbai, 1991, apply as a regulatory compulsion on building activities and development work in areas under the jurisdiction of Municipal Corporation of Greater Bombay. The Regulation came into force on March 25, 1991 which replaced the DC Rules for Greater Bombay framed under Maharashtra Regional and Town Planning Act, 1966. 
The regulations states (in simple terms) that every person who wishes to carry out development or re-development of a building or alter any building or part of a building is to give a notice to the Commissioner, along with plans and statements. Construction is to be carried out in conformity to the regulations. 
    Under the DCR, the Metropolitan Commissioner has been the final authority for interpretation of its provisions and his decision would be final. The Metropolitan Commissioner could use his discretion to condone provisions of these Regulations except the provisions related to FSI. 
    In January 2012, the Government of Maharashtra announced further amendments to the Development Control Rules (DCR) for Mumbai with the primary motive of bringing in transparency and reducing arbitrary and discretionary decision-making. The new rules would mean pricing based onmaximum available FSI, eliminating the ambiguity that was largely prevalent earlier with respect to disproportionate saleable area. 
What changes have been made? 
    Under the new DCR, areas for balcony, flower-beds, terraces, voids, niches would be counted in the FSI. These were not earlier considered inFSI calculations. 
    To compensate for this loss in FSI, the government has allowed compensatory fungible FSI of up to 35% for residential developments and 20% for industrial and commercial developments. This can be used for bigger habitat area or flowerbeds, voids etc. 
    Fungible FSI will be available at 60%, 80% and 100% of the ready reckoner rates for residential, industrial and commercial developments respectively. 
    Under the new norms developers will have an option of 25% more parking over the DCR limit without premium and without being counted inFSI, which would bring some much needed relief to developers and end-users alike. 
    These rules would bring in transparency and curb corruption as they limit discretionary powers of authorities and provide a level playing field for all developers. Brihanmumbai Municipal Corporation (BMC) expects to earn upto Rs.1,000 crores a year, which would be used in infrastructure developments in Mumbai. 
Will this bring down costs for home buyers? 
    Theoretically, the following results should be achieved as a result of these changes: 
    With the new rules, Mumbai will witness increase in net FSI at 1.79 in the island city and 2.7 in the suburbs, which should ideally bring down costs. The earlier practices where market prices reflected disproportionate 
saleable area had resulted in an increase in cost. 
    The given FSI cap would bring cost rationalisation as developers would need to invest in quality design, maximising revenue by offering maximum value to end-users. However, in reality since no additional concessions are being given to commercial developments, the premium for additionalFSI would increase developer costs and reduce profit margins by upto 10-30%, if the incremental costs are not passed on to the buyers. The government has also issued a directive for 20% of apartments in all big projects to be distributed at construction cost to economically weaker sections. 
    In the immediate term developers may not resort to a price increase but be happy to cut down on the margins, as if they increase prices this would further aggravate the situation of already stagnated sales given interest rates are at peak levels. 
Do the new rules apply to all buildings? 
    The new DCR rules do not apply to cessed, non-cessed old buildings, Mhada layouts, chawls and slums undergoing redevelopment. This would mean waiver of premium for buildings meant for rehabilitation. The compensatory floor space index (FSI) for the saleable component of these structures will, however, be governed by the new rules. 
    Ravi Ahuja, MRICS, 
    is Executive Director, 
    Cushman & Wakefield

First all India retail inflation data today

New Delhi: Starting Tuesday the government will release the nation-wide Consumer Price Index (CPI) on a monthly basis for better reflection of retail price movement and to help the Reserve Bank take effective monetary policy steps to deal with inflation. The new CPI, according to experts, will eventually replace the Wholesale Price Index (WPI) for policy actions to deal with the price situation. 

    The monthly CPI will be in addition to the three retail price indices—for agricultural & rural labourers and industrial workers—prepared by the ministry of labour. The new data will be prepared by the Ministry of Statistics and Programme Implementation (MOSPI). 
    "CPI uses defined basket of goods and services that represents purchasing pattern of a particular household. Since this is driven from the consumption side, it provides a relatively realistic view on how consumers are affected," Deloitte, Haskins & Sells director Anis Chakravarty said. 
    He said that for these reasons a reliable indication of demand side pressures and inflation is received from utilizing CPI as a measure. AGENCIES

PM’s panel sees 7.5% GDP growth?

New Delhi: The Prime Minister's Economic Advisory Council (PMEAC) is expected to project a GDP growth rate of 7.5% for 2012-13 due to various challenges confronting the economy. For the current fiscal, it is expected to keep it at 7%, a shade above the Central Statistics Office's (CSO) estimate of 6.9%. But, government officials say PMEAC is likely to flag the concerns explicitly when it unveils its economic outlook on Wednesday. 

    CSO's 6.9% projection is the slowest pace of growth since the 2008 global financial crisis, far below the 9% growth rate forecasted in Budget 2011-12. 
    The economy has slowed due to a combination of factors, which include high interest rates, stubborn inflation, sharp increase in input prices and the global economic slowdown. 
    The PMEAC's estimate shows that key policymakers would prefer to keep the projection modest and not be too bullish despite signs of some improvement in the economy. The stock market has revived, while the rupee has stabilized after being the worst performing currency last year. After last year's experience, North Block too is expected to be conservative, while assuming the growth rate for its 2010-13 Budget numbers. 
    The slowdown in the economy and the industrial sector has put most of the 2011-12 Budget numbers in doubt. The government is unlikely to talk 8%-9% growth, considering the challenges in the conomy. 
    Global crude and commodity prices are a concern, while the sovereign debt problems in the Eurozone and the US are yet to be fully fixed. 
    The PM's council is likely to project that inflation, as measured by the wholesale price index, is expected to ease to around 7% by Marchend, similar to RBI's assessment. Inflation has remained a key policy challenge for the government for the past two years, prompting RBI to raise interest rates 13 times since March 2010 to calm stubborn price pressures. While food inflation has eased significantly, bringing relief, manufactured product inflation still remains a worry. 
    The PMEAC is also expected to discuss the issue of fiscal consolidation and the need to repair public finances to boost confidence. The government has said it would be difficult to meet the fiscal deficit target of 4.6% of GDP for the current fiscal year. Officials and economists say the fiscal deficit for the current fiscal is expected to be around 5.2%-5.5% of GDP. Rising spending commitments, sluggish tax revenues and expanding food and fuel subsidies have hurt the government's plan to rein in the deficit. The RBI has also urged the government to unveil a credible fiscal consolidation roadmap to help it ease interest rates. 
GDP to grow by 7.7% in 2012-13: CMIE 
Chennai:India's gross domestic product (GDP) is set to grow by 7.7% in 2012-13 on the back of lower headline inflation and strong capital inflows into the country, economic think tank Centre for Monitoring Indian Economy (CMIE) said in its latest bulletin on Economic Intelligence Service. GDP is a macroeconomic measure of the value of output economy adjusted for price changes (that is, inflation or deflation). Real GDP is expected to grow by 7.7% in 2012-13. This will be an improvement over the 7% growth projected for 2011-12. "Though the global outlook remains uncertain, domestic factors are likely to be more favourable in 2012-13 than they were in 2011-12," CMIE said in its report. TNN

LET’S BET ON THE ECONOMY: why Pranab Mukherjee is so upbeat

India's growth story is in a bit of a slump at present, but there is a growing bunch of people predicting better times ahead. Weeks before he unveils Budget 2012, Sunday Times finds out why Pranab Mukherjee is so upbeat

    It was as if someone flipped a switch at midnight, December 31, 2011. Quite magically, it turned around all that was terrible about India's economy. 
If you'd bought the 30-share Sensex on December 30 and sold it 45 days later, you'd be 16% richer. Some stocks are up between 30% and 100% in the same time. The rupee, among the worst-performing currencies in 2011, is strengthening against the dollar. 
    Finance minister Pranab Mukherjee can finally afford a smile: inflation, which had raged at two-digit levels for 
nearly two years, is below 7%. Even better, the prices of food, which hit aam admi where it matters most, have actually dropped as vegetable prices cooled rapidly. 
    No wonder, analysts Sujan Hajra and Gautam Singh at brokerage Anand Rathi expect the Reserve Bank of India (RBI), which had hiked interest rates through the last 18 months to rein in inflation, to cut rates in another six months. That will drive down borrowing costs for mortgage holders and businesses, lower the effective cost of car loans and allow banks to lend more freely. It can boost growth, which has sagged from 9% levels to below 7% now. 
    At HDFC Bank, a team of economists headed by Abheek Barua expects the RBI to cut rates in April, after Mukherjee presents his budget on March 16 and makes his policy goals clear. 
    Economist Pronab Sen, a member of the Planning Commission, doesn't expect the RBI to ease up on interest rates so fast, "I'd look for at least two more months of declines in manufacturing prices before cutting interest rates." 
    Sen is keeping a wary eye out on the prices of manufactured goods. Indeed, the three key contributors to inflation over the last two years have been oil, metals and minerals, and chemicals. The prices of these have soared, even during a global recession, driven by speculation in global commodity markets. 
    Ruchir Sharma, who moves large amounts of money in and out of emerging markets for Morgan Stanley, recently said that the biggest threat to global growth was the high prices of commodities. These drive up the prices of manufactured goods, stoking inflation and smothering growth around the world. 
    The RBI hasn't let its guard down on inflation. It conducts regular surveys of households to gauge their expectations about inflation. Its latest survey found that over 75% of households expect inflation to be above 9.5% levels one year down the line. 
    Another thing that could drive up prices is a vast tsunami of cash blowing in from the West. To prop up its economy, the US and European nations have already printed large amounts of money. European central banks have promised to print even more cash. 
    A lot of those dollars and euros will wash up in high-growth emerging markets like India and inflate prices as they get converted into rupees. But just how much excess cash is out there? 
    "I'd reckon that after Europe starts pumping in money, the total excess liquidity worldwide will be $5 trillion," says Sen. That's 5 followed by 12 zeros, or roughly five times the size of India's entire economy. 
    While economists worry about what this money can do to inflation, marketmen can't wait to see it pouring in. A big infusion of overseas money is almost certain to lift India's equity markets and could trigger another bull run. 
    However, for foreign investors to get truly excited about India, policymakers will have to show that they're back at work. An official in the office of Prime Minister Manmohan Singh is upbeat about the prospects of revival: "We're trying to sort out bottlenecks in sectors like power, coal, infrastructure and so on," he says. "The Prime Minister often chairs as many as four meetings a day." 
    Many analysts expect India's fiscal deficit, the gap between what the government spends and what it gets in revenue, to balloon to 6% of its economy, much more than the 4.6% number that Mukherjee had budgeted for last year. But it might not be so dire, says Sen. "I'd reckon that the actual deficit would be close to 5% of GDP." 
    But as he sets out to balance his books, the finance minister's biggest worry could be the fiscal mess in three states: Punjab, Kerala and Bengal. Punjab's deficit is expected to worsen to nearly 4% of the state economy, from less than 3.5% two years ago. Its farm economy has peaked out and industry is sputtering. Its government says sops for nearby Himachal and Uttarakhand have lured its industry away. But the Akali-BJP regime sacked its own finance minister when he dared ask for reforms. 
    Kerala might also need a bailout, though its deficit is lower than Punjab's, at around 3.5% of the state economy. Bengal's fiscal mess, a legacy of 34 years of Left rule, is gigantic: during the election campaign last summer, a figure of Rs 200,000 crore was touted as its total debt. But nobody knows whether the number is correct. 
    For decades, the Left's MIT-educated finance minister, Asim Dasgupta, managed to miraculously balance budgets despite plummeting revenues and soaring spending. Even today, official numbers project Bengal's deficit falling to 2.5% of the state economy this fiscal, from 3.4% levels two years ago. 
    Bengal's rookie finance minister Amit Mitra travelled to Delhi recently to pitch for a bailout package to fellow Bengali Mukherjee. His demands, which topped Rs 80,000 crore, included a Rs 66,000-crore handout to repay debt and interest over three years. 
    Such large handouts might not gel with Mukherjee's plans as he tries to shrink the deficit and prop up growth. Expect a sensible budget, not a Santa Claus one. You can also expect a surge in the markets and plan for higher inflation as well, as growth seeps back into the economy. 
YES, NO, CAN'T SAY 
THE STRENGTHS 
Stock market booming. Sensex continues upward sprint for seventh straight week in a row The rupee has recovered after being one of the worst performing currencies last year. It is now at 49.27 to a dollar Corporate profits are robust The farm sector is performing better The country posted record production 
THE WEAKNESSES 
Growth is slowing. Government expects 2011-12 GDP growth at 6.9%, the slowest pace of growth in nearly 3 years Government finances are under stress. The fiscal deficit is expected to miss the target of 4.6% of gross domestic product set for 2011-12 Subsidies are mounting further. Food, fuel subsidies are expected to remain under stress Several key economic reforms are still pending in Parliament 
THE RISKS 
Sovereign debt problems in the Eurozone and the US continue to pose serious concerns Rising global oil prices are another cause of worry Food inflation has eased from double digit levels. But manufactured product inflation still a problem area Slowing investments. This could hurt growth if policies are not put in place 
FACTORS TO WATCH OUT FOR 
The Union budget for 2012-13. Signal for pro-growth policies will boost sentiment Timeline for repairing public finances would be keenly awaited Pace of policy implementation, particularly in infrastructure is another area that will be closely tracked