Dems predict historic House vote

WASHINGTON — House Democrats are predicting that a rare Sunday session module display digit of the most significant legislative triumphs in decades: passage of a past calculate to overhaul the nation's upbeat care system to provide news to millions of grouping who currently lack it.

Republicans resolutely anti to the calculate didn't concede defeat Saturday, but warned they module make Democrats clear affectionately in the start elections if the fiercely debated measure becomes law.

With President Barack Obama's emotional attractiveness from Sat ringing in their ears, House Democratic leaders prepared for three showdown votes Sunday: on a "rule" to found speaking guidelines; on a package of changes to a Senate-passed bill, including redaction of special Medicaid benefits for Nebraska; and on the senate calculate itself, the focus of intense national speaking for months.

Democrats need 216 votes to transfer apiece one. With every 178 Republicans and at least two dozen Democrats vowing to vote no, the legislation's fate lies in the safekeeping of about 20 Democrats who remained floating late Saturday.

Party leaders appeared overconfident that most would break in favor of the bills. They pointed to Obama's emotional speech to the caucus at the Capitol, and they cited a sense of momentum from the handful of rank-and-file Democrats who hit announced their hold over the past several days.

Obama told House Democrats they hit arrived at "one of those moments" when they can realize their highest aspirations in public life.

"This is digit of those times where you can honestly say to yourself, 'Doggone it, this is exactly why I came here,'" he said. "'Because I conceive so deeply in this land and I conceive so deeply in this democracy and I'm willing to stand up modify when it's hard."

If Democratic leaders prevail on every three House votes, Obama could sign the senate version of the calculate into law. The calculate of "fixes" would go to the senate low fast-track speaking rules that would enable Democrats to transfer it without facing a Republican filibuster.

Democrats control 59 of the Senate's 100 seats, digit vote shy of the number needed to overcome bill-killing filibusters from a united GOP.

House Democrats hit long insisted that senators concord to change the calculate that the senate passed on Christmas Eve. Since then, it became deeply unpopular with many Americans, because of the special deal for Nebraska, a newborn tax on generous employer-provided upbeat plans and other aspects.

In a sign of crescendo Democratic confidence Saturday, House leaders dropped plans for a controversial parliamentary tactic. They agreed to allow a simple yes-or-no vote on the senate bill. By thinking to transfer the package of fixes on the aforementioned day, Democrats hope they can persuade constituents they did not hold the senate measure as a stand-alone bill.

The legislation, affecting virtually every American and more than a year in the making, would extend news to an estimated 32 meg uninsured, bar insurers from denying news on the basis of existing medical conditions and revilement federal deficits by an estimated $138 billion over a decade.

Congressional analysts estimate the cost of the two bills compounded would be $940 billion over a decade.

House leaders continued to negotiate late Sat with a handful of anti-abortion Democrats who threatened to switch from "yes" to "no" on the legislation without greater assurances that no federal money low the newborn laws would be used for nonappointive abortions.

It was unclear whether Obama would concord to supply an executive order along those lines. Long-standing federal policy bars U.S. aid for abortions except in cases of rape, incest or when the mother's life is in danger.

House Speaker Nancy Pelosi and other crowning Democrats who joined Obama on Sat spoke of the upbeat legislation in past terms, citing the many presidents who tried and failed to rewrite the nation's laws. Several cited tales of ordinary Americans struggling to clear bills when insurance companies denied or revilement soured coverage.

Republicans who vow to do every they can to kibosh the legislation in either congressional room "are not meet delaying the inevitable, they are delaying the imperative," said senate Majority Leader Harry Reid, D-Nev.

Sterling Hits 10 - Month Low vs Dollar

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LONDON (Reuters) -Sterling sank to a 10-month low against the dollar on Monday and looked set to post its biggest one-day drop in more than a year after polls showed a growing chance that an upcoming general election may result in a hung parliament.

Having broken through the key $1.50 level, the pound at one point dropped roughly 3 percent on the day, with traders citing selling by a UK bank after AIG said it would sell its Asian life insurance business to insurer Prudential Plc.

Market participants also used weaker-than-expected data on mortgage approvals as another reason to knock the pound to a three-month low against the euro, leaving it at an 11-month trough versus a currency basket.

Analysts said negative sterling sentiment snowballed in London trade, leading to frantic selling in the currency after it broke through key technical levels against the dollar.

"Sentiment on sterling is very bad at the moment. Given half a chance, people will just sell it," said Paul Robinson, chief sterling strategist at Barclays Capital in London.

"Election uncertainty is going to persist, I don't think the MPC is suddenly going to change its tune (on the possibility of resuming quantitative easing) ... I can't see anything changing sterling's prospects in the short run."

By 12:29 p.m. British time, the pound traded 2.4 percent lower on the day at $1.4885. Having tumbled as low as $1.4781, the pound looked to be heading for its biggest one-day percentage loss since February 2009.

"At these levels, sterling's clearly oversold," said Geoffrey Yu, currency strategist at UBS in London. "I'd say $1.45 is the limit (to short-term sterling weakness)."

Technical analysts said selling picked up after the pound made a decisive break of key support around $1.5270 late last week, around the 50 percent Fibonacci retracement of 2009 rally.

In a matter of seconds, the pound dropped roughly 2 cents, taking it below its 61.8 percent retracement level around $1.4855, which some analysts said may open the door to more losses.

The euro rallied around 2 percent to 91.50 pence, its highest since early December, and was poised to clock its best daily percentage gain since late October 2009.

Analysts said they expected sterling to stay under selling pressure against the euro, while acknowledging that gains in the euro may be limited by the single currency's weakness against the dollar due to ongoing concerns about Greece's debt problems.

Broad losses pushed sterling down to 76.5 against a currency basket, its lowest since October last year.

Sterling hit a one-year low against the yen of 132.07 yen, while it plumbed its weakest in 25 years against the high-yielding Australian dollar.

PRUDENTIAL DEAL

Analysts said the biggest drag on sterling was a Sunday Times/YouGov poll showing the ruling Labour party may win more seats in parliament even if the opposition Conservatives win more of the popular vote.

Expectations are high that a general election due by mid-year may result in a hung parliament, which would make it difficult for the ruling party to pass unpopular plans to cut the deficit, which would be negative for sterling.

AIG said it would sell AIA to Prudential for $35.5 billion (24 billion pounds) dollars. The announcement sparked sterling selling on speculation that the insurer may have sell pounds for dollars as part of the sale.

Traders also dumped the pound after data showed a dip in mortgage approvals in January, even as mortgage lending and consumer credit rose.

Market participants also brushed off a reading of manufacturing PMI which showed the manufacturing sector expanded faster than expected last month.

Sterling continued its slide despite an upward revision to UK economic growth last week as concerns simmer about a tepid economic recovery, high public debt and political uncertainty.

Sentiment has also deteriorated in the last week after the Bank of England said it stood ready to return to its asset-buying scheme if economic conditions warranted.

This has prompted speculators to dump the pound, with positioning figures late last week showing another hefty rise in bets that sterling will depreciate.

Source: http://www.nytimes.com/reuters/2010/03/01/business/business-uk-markets-sterling-midsession.html

TMA president leery of Medicare payment cuts

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March 1 is a notable date for physicians; it’s the date when Medicare physician payment cuts across the country are slated to be cut by about 21 percent.

The cuts were slated to go into effect Jan. 1, but Congress delayed the cuts until later in the year.

The Texas Medical Association has been tracking the developments, and the following statement is from Dr. William Fleming III, president of the TMA, which is the largest state medical society in the nation and represents nearly 45,000 physicians.

“We’re just four days from a Medicare meltdown in this great country. The effects of the Medicare disaster go far beyond Medicare patients. In fact, it could affect every single Texan. Here is why: Most health insurance companies base their payments to physicians on Medicare rates. In some cases, insurance companies reduce their rates every time Congress freezes or cuts physician Medicare rates. But they don’t bother to freeze the premiums our patients and their employers are paying.

“For the past nine years, the cost of running a doctor’s office has increased dramatically. At the same time, what the government pays your doctor to care for Medicare patients has not kept pace. The flawed payment system is unsustainable. Since 2001, physicians’ costs have gone up 20 percent more than physicians’ Medicare payments. In fact, come March 1, when the 21.2 percent cut goes into effect, physicians will receive less from Medicare than they currently receive from Medicaid. This is appalling because no one pays less than Medicaid.

“Physicians simply cannot keep their doors open with few paying patients. Physicians are sick. We want to take care of our patients. That’s why we went to medical school in the first place. If Congress and President Obama truly want health system reform then they must fix the Medicare system. We need a rational Medicare physician payment system that automatically keeps up with the cost of running a practice and is backed by a fair, stable funding formula.”

TCC hosts clinics

Tarrant County College will host mass clinics and offer free H1N1 vaccinations. The vaccines are being offered to the general public and are being administered by the Tarrant County Health Department.

March 1: A clinic will be at TCC South Campus, at 5301 Campus Drive, from 2-7 p.m. The clinic will be on the second floor of the Student Center in the Living Room, Room SSTU 2105.

March 8: A clinic will be at the TCC Southeast Campus, at 2100 Southeast Parkway in Arlington, from noon to 5 p.m. The clinic will be in the North Ballroom.

March 10: A clinic will be at the TCC Northeast Campus, 828 W. Harwood Road in Hurst, from noon to 5 p.m. The clinic will be in the Student Center Galley, Room NTSU 1506A.

Methodist Mansfield honored

Methodist Mansfield Medical Center recently was honored with the Pro Patria Award from the U.S. Department of Defense as well as the Outstanding Business of the Year for 2009 award from the Mansfield Area Chamber of Commerce.

The Pro Patria Award is from the Texas Committee for Employer Support of the Guard and Reserve, given to a civilian employer that has programs and policies that excel at supporting employees who serve in the military reserves, according to a release.

The Mansfield Chamber of Commerce recognized the medical center for its support of the chamber, its role supporting the economy of the city, innovative leadership and outstanding customer service, according to a release.

Cleburne hospital earns accreditation

Texas Health Harris Methodist Hospital Cleburne earned a three-year accreditation from the American College of Radiology for its CT scans in adult and pediatric patients.

The hospital’s radiology department was evaluated by board-certified physicians and medical physicists, who ensured the equipment and personnel meet ACR standards. CT scans are images used to diagnose a variety of medical problems, such as cancer, trauma and cardiovascular disease.

Source: http://www.fwbusinesspress.com/display.php?id=12066

Prudential to Buy A.I.G. Unit for $35.5 Billion

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Prudential P.L.C. of Britain said Monday that it had agreed to buy American International Group’s big life insurance business in Asia in a deal valued at $35.5 billion.

The sale of American International Assurance, which is based in Hong Kong and is commonly known as A.I.A., would lead to the biggest repayment yet toward the more than $180 billion that the U.S. government has invested in A.I.G. as part of a huge bailout. The Federal Reserve Bank of New York, which holds preferred shares in A.I.A., would receive the first $16 billion in proceeds from a sale, Chris V. Nicholson and Andrew Ross Sorkin report in The New York Times.

With a takeover of A.I.A., Prudential would become the indisputable leader in the Asian life insurance sector. Prudential said the combined group would be the leading life insurer in Hong Kong, Singapore, Malaysia, Indonesia, Vietnam, Thailand and the Philippines and the leading foreign life insurance business in China and India.

A 162-year-old company — which is not related to Prudential Financial in the United States — the British Prudential already draws a majority of its revenue from Asia, with more than 11 million policyholders in 13 markets.

“We are combining the two strongest international life insurers in Asia,’’ Tidjane Thiam, chief executive of Prudential, said in a conference call Monday to announce the deal.

Acquiring A.I.A. accelerates a strategy outlined by Mr. Thiam to sharply increase the firm’s revenue in Asia. The region is considered one of the fastest-growing markets for life insurance thanks to a culture of saving and increasing affluence in many countries.

“Transformational is an overused word,” Mr. Thiam said, “but this deal is transformational.” He noted that in 2008, 44 percent of new profit for Prudential came from Asia; if A.I.A. and Prudential had combined in 2009, that figure would be 60 percent. That geography, he said, promises “sustainable growth for years to come.”

Prudential said that the new company would assume the name Prudential, be headquartered and incorporated in Britain, and be traded on the London Stock Exchange with American Depository Receipts traded on the New York Stock Exchange.

That said, the A.I.A. brand is not set to disappear.

“We like good brands and we tend not to kill them unnecessarily,” Mr. Thiam said.

In a separate statement, Mr. Benmosche said both companies were “committed to preserving the A.I.A. brand and the unique strengths of each of our sales forces, which is key to capitalizing on A.I.A.’s long term potential.”

Once the deal is complete, the company said, it intends ‘‘in due course’’ to seek a dual primary-listing on the Hong Kong Stock Exchange.

‘‘This transaction offers the opportunity to bring together two leading companies, positioning the combined group to capture the future growth opportunity in Asia,’’ Prudential said.

Under the terms of the deal, Prudential would pay about $25 billion in cash and about $10.5 billion in a combination of stock, preferred shares and convertible preferred shares. The company said it would obtain the cash for the deal through a $20 billion rights issue and $5 billion in senior debt.

The rights issue must be approved by shareholders, and the deal faces other regulatory approvals. Prudential said it anticipated that the rights issue would take place in May and that the transaction would close in the third quarter.

Several analysts downgraded Prudential shares on Monday.

‘‘It’s going to be enormously dilutive,’’ ING analyst Kevin Ryan told Reuters, speaking of the rights issue. ‘‘No one knows exactly what A.I.A. contains or how profitable it is, or how it overlaps with Pru’s existing businesses.’’

Prudential first approached A.I.G. last year, but it was rebuffed because its offer was too low, according to people briefed on the matter. Mr. Thiam said that the price was raised because A.I.G. had prepared its Asia unit for an initial public offering, which meant greater transparency, and that the deal announced Monday included its Philippine assets, which was not the case before.

A.I.A., founded in 1919 and one of A.I.G.’s oldest divisions, is widely considered one of the top businesses within A.I.G. The division has about 20 million policyholders throughout Asia, served by 23,000 employees and 300,000 agents. It has customers in Australia, Brunei, China, Hong Kong, India, Indonesia, Macao, Malaysia, New Zealand, the Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam.

According to Prudential, A.I.A. had an operating profit of $1.438 billion after tax in the financial year ending Nov. 30, 2009, based to unaudited figures.

A.I.G. had been preparing an initial public offering of the division, lining up banks to oversee what would have been among the largest listings this year. Analysts had estimated that an I.P.O. could raise as much as $20 billion, depending on the size of the stake sold. It has now abandoned that plan.

‘‘In considering two viable, very attractive alternatives to successfully monetize A.I.A., including an initial public offering, we decided that a sale to Prudential enables A.I.G. to realize value on a faster track to repay U.S. taxpayers,’’ Robert Benmosche, A.I.G.’s chief executive, said Monday. ‘‘This transaction, the most significant milestone to date in our ongoing effort to repay taxpayers, also gives us greater flexibility to move forward with A.I.G.’s restructuring and focus on enhancing the value of our key insurance businesses, which will benefit all stakeholders. ’’

A sale to Prudential would have more certainty than a huge I.P.O. amid falling equity prices and jittery market sentiment, which helped draw the support of U.S. government officials for a deal.

‘‘The Hong Kong market has shown that there is good support for big international listings, so I don’t think that a possible decision to sell rather than list is due to the market environment,’’ said Francis Lun, general manager at Fulbright Securities in Hong Kong.

But a sale would be ‘‘timesaving and much less complicated,’’ Mr. Lun said. Rather than take the risk that markets might turn sour during the months of preparations for an I.P.O., he said, ‘‘they would prefer to have a sure thing.’’

Before the financial crisis of 2008, A.I.G. was the world’s largest insurer, owning a diverse array of services across the globe assembled largely by its longtime chief executive, Maurice R. Greenberg. Since its rescue by the U.S. government, however, the company has sought to sell off businesses to help repay its bailout funds.

Mr. Benmosche has outlined a future for the company in which it would focus on selling property and casualty insurance worldwide, under a unit rebranded Chartis, and life insurance only in the United States.

Soon after arriving at A.I.G. in August, Mr. Benmosche slowed the company’s sales campaigns, instead seeking to fetch higher prices for the businesses it hopes to sell.

Beyond the sale of A.I.A., the insurer is also trying to sell another life insurance unit, the American Life Insurance Company, to MetLife for about $15 billion, according to people briefed on the matter.

Those negotiations have been stymied over a tax issue that requires resolution from the Internal Revenue Service, these people said, though they still expected to reach a deal. The company is also seeking to sell other units, including an aircraft-leasing business.

For Prudential, the purchase of A.I.A. represents such a significant shift that some analysts had wondered it if would look to sell its British business. In response to a question about that Monday, Mr. Thiam said, ‘‘the U.K. generates cash and capital for us, and it’s an important part of the group.’’

‘‘We are very British in identity, even if my accent is not,’’ said Mr. Thiam, who was born in Ivory Coast.

Chris V. Nicholson reported from Paris. Bettina Wassener contributed reporting from Hong Kong and Michael J. de la Merced from New York.

Source:http://dealbook.blogs.nytimes.com/2010/03/01/prudential-agrees-to-buy-a-i-g-s-asia-unit-for-35-5-billion/

India Budget 2010: Quick Hits from ISB

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Ease of Doing Business: Incremental Steps But Right Intent

The major concern surrounding private investment in India has been the ease of doing business. The budget addresses some of these concerns, albeit through incremental measures. Clarification of the capital gains treatment on the conversion to LLPs will ease compliance requirements for private businesses that convert. The easing of tax audit limits, some rationalization in the limits for TDS and the increased time limit for payment of Tax Deduction at Source will also ease compliance, especially for small businesses. That the rollout of the Direct Tax Code was not delayed beyond 1 April 2011 is also a signal in the right direction towards a simplified tax regime. Granting additional banking licenses should aid the flow of industrial credit. However, these have only been incremental steps and measures towards higher FDI limits and a simplified corporate law would aid this further.

--Sidharth J. Negandhi

Giving the Bottom of the Pyramid its Due

The budget has laid down a roadmap towards inclusive growth with clear measures to promote growth at the bottom of the pyramid. The rollout of the nutrient-based subsidy augurs well for agricultural productivity. Seeking private participation in food grain storage capacity and allowing external commercial borrowing to be raised for food processing is a step forward in creating a robust food supply chain that benefits producers though more concrete measures such as tax holidays may have acted as additional stimulants. Also, a mere moratorium for payment of farm loans as opposed to a waiver signals that the onus of performance lies with the farmers. Setting up a national social security fund and the interest subvention for low cost housing create a rounded structure for development at the bottom of the pyramid.

--Sidharth J Negandhi

A New, Definite Direction Towards a Direct Tax Code

Budget 2010 is a turning point in the move from the current tax regime to the Direct Tax Code. The extent of the measures may be argued in light of sufficiency, but the direction and intentions are very clear. The reshuffling of the tax slabs upwards is a step towards what the DTC regime proposes. Increase in the 80C (includes provident fund, life insurance premium, pension plans, mutual fund investments, infrastructure bonds and national savings certificate) exemption limit. especially targeting the infrastructure sector is also a key reform. The increase in the limit for tax audit, reduction of surcharge for companies, allowing business activities up to Rs. 10 lakhs, introduction of the Saral II form for individuals, change in provisions for deductibility vis-à-vis late deposit of Tax Deducted at Source are all steps towards rationalizing the tax regime into one that is more tax-payer friendly and transparent.

--Manas Mody

No More Holiday for the Tech Sector

Disappointing the IT & ITES sector, the finance ministry decided not to extend the tax holiday beyond its expiry on March 31, 2010. In addition, the Minimum Alternative Tax has been increased to 18% from 15%. As a result, the IT & ITES sector will be adversely affected. The sector contributes about 25% of India's export revenues and about 5% to GDP. This sector employs about 10 million people directly and indirectly. Clearly, sustenance and growth of the IT & ITES sector is essential if India's economy is to achieve double digit growth. Also, given the macro-economic environment and the need of the IT & ITES companies (especially the small and medium-sized ones) for fiscal support, it would have been most prudent to extend the tax holiday for a few more years. Unfortunately, the budget turned out to be unfavorable.

--Mahesh Yellai

Positive Though Slow Move Towards Fiscal Consolidation

The budget has retained Service Tax at 10%. The base excise duty rate on major non-petroleum products have been hiked to 10% from 8% as a roll back of the stimulus measure taken last year. These moves outline a positive movement towards fiscal consolidation. The fine print says that the proposal for common rates for a wide variety of products and services go beyond just intent and actually pave the way for a smoother implementation of Goods and Services Tax code by the new proposed deadline of 1st April, 2011. However, considering that the current year is a non election year, the measures could have been more drastic especially given that the Direct Tax Code has also been pushed to a later implementation date. The budget also does not make any amendments to Central Sales Tax rates which were proposed to be phased out gradually prior to the commencement of GST.

--Somesh Satnalika

A Lack of Political Will in Education

It is a watershed year for the education sector in India with the Right to Education Act becoming operational from April 1, 2010. The budget has increased the allocation for education to 31,036 crore rupees from 26,900 crore rupees. The states will have access to a further 3675 crores through the Finance Commission. While this is a higher allocation, this still constitutes only about 4.5% of expected GDP, much lower than a number of other developing nations. The Finance Minister has followed the old adage of throwing more money in to build more schools and hard infrastructure, and there is no clarity on proposals for improving the quality of instruction and teachers. Year after year, we find that the Sarva Shiksha Abhiyaan has unspent amounts, and increasing inefficiencies in the delivery of quality education. The budget has stopped short of any firm commitment for the implementation of the Right to Education Act or providing the right incentives for state and private players to contribute to this mission. Overall, a plaid budget for the education sector, displaying a lack of political will to implement the Right to Education Act and making quality education a reality for all the children.

--Vignesh Nandakumar

More Money in Consumers' Pockets

The Finance Minister's promise of making the budget for the common man's benefit was fulfilled at least in terms of direct taxes. From the point of view of the individual tax payer the increase in slab limits, with the maximum slab over Rs 8 lakhs to be taxed at 30% aims to provide relief to over 60% of tax payers.

For Indian companies too there is a strong promise with the introduction of the new direct tax code from April 1, 2011. However, the Minimum Alternate Tax increase from 15% to 18% is a bit of a blow. The budget aims to earn a net gain from direct taxes of approx Rs 20,500 crores which will put more money in the hands of the consumer and in turn boost consumer spending.

--Salome Shah

Positive Budget for New and Existing Sources of Power

This is a remarkable budget for the energy sector, particularly given the visible and strong steps taken towards renewable power. The allocation of Rs 1000 cores towards the Jawaharlal Nehru National Solar Mission and the establishment of a Clean Energy Fund are very positive stimulus for further investment by the private sector and towards making India a significant renewable energy player. The budget has kept all supply options open by providing an allocation for micro-hydel plants, particularly in parts of the country where it makes more sense, e.g. Ladakh.

The budgetary allocation for addition of power capacity has been doubled from last year – particularly focused on introducing critical technology into the sector. This, coupled with the change in the Mega Power Policy, is likely to bring down the cost of power. The introduction of new technologies will also hopefully increase the efficiency of our power plants and transmission and distribution.

The establishment of a Coal Regulatory Authority for competitive bidding of the coal reserves is a step in the right direction to encourage more players to enter the field, thereby allowing for more efficient usage of limited resources, and will serve to break the entrenched monopoly in the coal sector.

In all, a very positive budget for the power sector, for both the existing and new sources of power. This could genuinely translate into more innovative technologies transforming the sector and a significant increase in output to meet current demand.

-Vignesh Nandakumar

Markets Cheer Budget 2010

With uncertain signals emanating from North Block, the expectations for Budget 2010 from were extremely low. Markets were thus pleasantly surprised by a balanced budget that may be best described as one that signaled the continued commitment to the reforms process, managing the fiscal deficit and spurring economic growth. The attempts to spell out implementation timelines for programs such as the Goods and Services Tax and the Direct Tax Code, as well as take action on items such as fuel prices was clearly appreciated. While consumption is linked more to credit, markets cheered the message from the minister that he will put more money in the hands of consumers through changes in the personal tax structure. While questions remain on issues such as whether an extension of debt repayment would indeed improve banks' non-performing assets, and how firm the plans are to make the famed GST and DTC operational in April 2011, the overall feel good nature and the lack of unpleasant surprises buoyed market sentiment. [As of about 2:20, the Sensex was up 281.75 points, at 16,535.95.]

--Prashant Krishnan

More Licenses to NBFC and Private Players, a Welcome Move

Overall, the Budget announcements spell good news for the financial sector. However, the implementation and regulations to follow will determine the efficacy and benefits to be derived from the changes made.

Given that the lion's share of the populous banks are the Public Sector Unit banks, the Rs. 16,500 crore allocated to PSUs could help them revamp their operations and bring in greater efficiency and raise the standards of services offered. It would also serve to help them expand operations and mobilize savings in rural areas and small towns.

The icing on the cake is more licenses to Non Banking Financial Companies and private players, something they have been eagerly waiting for and which comes to them in small numbers. For this reason, they are traditionally concentrated in bigger towns and have not managed to extend their reach. Their presence in Tier-2 cities would not only give consumers more opportunities to borrow and invest but it will also raise standards of public sector offerings in the same area. Regulation though will continue to have to be watched in this space.

Hopefully, this will provide a stimulus for the economy to move towards greater freedom to multinational banks and financial institutions.

It was disappointing to not hear of any increased Foreign Direct Investment limits in banks/insurance companies/stock exchanges which would help develop the financial sector further.

--Husna Ilyas Ghouse

Exemption on Long-term Infra Bonds, the Only Silver Lining for Infrastructure

The proposals for infrastructure in the Union Budget 2010 were disappointing to say the least. No mention of the subsidy roll-back, in line with the Parekh committee recommendations, means that the government will have to foot an unserviceable and rising subsidy bill for yet another year. The 1 rupee hike in central excise duty seems a half-hearted measure of controlling the subsidy bill. What was more disheartening was the opposition outburst and walk-out on this announcement, which indicates that it might be passed on to citizens.

[India broker] Reuters

A broker reacts while trading during the presentation of India's federal budget, at a stock brokerage in Mumbai February 26, 2010.

On the taxation front, the repeated postponement of the Goods and Services Tax by another year to April 2011 was again disappointing. While the centre-state revenue sharing arrangements still need to be resolved, yet another year is a long time and the country will lose out on the immediate efficiency improvement s that the GST will bring on the infrastructure and logistics front. In addition, what's to say that the government will stand by its promise of implementing the GST next year as well – just another case of bureaucratic lethargy?

The silver lining is the exemption of 20,000 rupees on personal income for long-term infrastructure bonds, which should stimulate retail investment in infrastructure.

--Kartik Rajendran

Is Simply Pushing the Nutrient Fertilizer Subsidy Program Enough?

While it was heartening to hear the finance minister announce the introduction of nutrient-based fertilizer subsidy program from 1 April 2010, this might not be enough to alleviate sector concerns.

Rather than the fertilizer subsidy regime, the inputs going into the subsidy calculations – global raw material prices, energy consumption contirbute more to cost build-up.

Though the new regime will compensate fertilizer companies for the costs they incur, it will help little in optimization of the costs themselves. The finance minister has failed to lay out a management framework that would insulate against volatile commodity prices, energy consumption inconsistencies and ensure overall operational efficiency. The mere implementation of the new nutrient based regime will more likely pass on the burden to the tax payer.

--Soumitra Sharma

source: http://online.wsj.com/article/SB126716985909752099.html

Obama's new health care strategy -- his own plan

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President Obama begins a big health care week with a new approach -- his own health care plan.

The White House posts the new Obama plan at 10 a.m., after nearly a year in which the president outlined general principles while leaving most of the details to Congress.

The results included two very different House and Senate plans that Obama is now trying to fuse into a starting point for Thursday's big health care summit with congressional leaders from both parties.

Among other items, the Obama plan will reportedly call for new federal restrictions on health insurance rate hikes. The proposal is a response to the request by Anthem Blue Cross in California for premium hikes of as much as 39 percent.

(Posted by David Jackson)

Source: http://content.usatoday.com/communities/theoval/post/2010/02/obamas-new-health-care-strategy----his-own-plan/1