The forthcoming budget is unlikely to propose a steep hike in allocation of funds for the government's flagship rural welfare scheme despite a sharp increase in the wage rates under it. The finance ministry is likely to allocate only 42,000-45,000 crore for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), a government official told ET. The scheme will have an opening balance of about 10,000 crore, the official said. This precludes...

The Prime Minister-appointed Rangarajan Committee reviewing the draft food security bill has got its economics and logic wrong, a majority of members on the National Advisory Council has said as part of a draft report. Ready to take on the PMO, the council is nearing finalization of the report that will point out errors in the Rangarajan report and defend the NAC's food security bill. The rebuttal is bound to...

The budget for the next fiscal is likely to step up the target for farm credit to 4,50,000 crore, up 20% from the current year's 3,75,000 crore. With the agriculture sector seen growing at 5.4% in the current fiscal, the government will push banks to disburse more to the sector to maintain the momentum, said a senior government official. The upheavel in the micro-finance sector will also necessitate greater lending by banks. "The...

While monetary policy is an important element of the artillery against inflation — and with the 25 basis point hike, the RBI did part of what it was expected to do to tighten policy — there is the fiscal task too. As Raghuram Rajan, adviser to Prime Minister Manmohan Singh, points out, the Centre must control expenditure, cut subsidies and not start new spending programmes. Fiscal deficits are large and rising...

The Planning Commission has said that states will have to bear the additional burden if the minimum wages notified by them are higher than that fixed by the Centre for work under the employment guarantee Act. In the case of rich "states that can afford very high minimum wages, the central government reimbursement will be limited", Planning Commission deputy chairman Montek Singh Ahluwalia told reporters. For a state where minimum wages are...