India, China not playing for '2nd place': Obama

Insisting that the US cannot afford to cut its education budget, President Barack Obama has said it has to compete with countries like India and China which are "not playing for a second place" and voiced opposition to tax breaks to the American firms shipping jobs overseas.

Obama, who was here for an election rally ahead of the November polls in support of Governor Deval Patrick, said the Republicans want to cut education spending by 20 percent to help pay for a 700-billion-dollar tax break that only the wealthiest 2 percent Americans will ever see.

The Republicans may think that a cut in education spending is a "good idea" but countries like India and China don't, he said.

"We see an America where every citizen has the skills and training to compete with any worker in the world. The other side might think it's a good idea to cut education by 20 percent, but you don't think it's a good idea. You know who else doesn't think it's a good idea -- China, and South Korea, and Germany, and India," Obama told an audience of about 8000 Saturday.

He said these countries are boosting education spending, not cutting back. "They understand that whoever is able to train their young people will be able to out-compete any other country in the world. Those countries are not playing for second place. And the United States doesn't play for second place. We play for first."

Obama said it was for this reason that tens of billions of dollars in taxpayer subsidies that used to go to big banks are now going where they should -- to students and families.

"That's why we want to make our new college tax credit permanent, which will be worth 10,000 dollars in tuition relief for every student in America," he said.

Stressing that taxpayers should never again pay a bailout for Wall Street's mistakes, Obama said he will "fight the efforts of some in the other party to privatise Social Security, because as long as I'm President, nobody is going to take the retirement savings of a generation and hand it over to Wall Street.

"That's why we won't go back to the days when insurance companies and Wall Street banks had free rein to run roughshod over the middle class."

Obama further said the country's future must be "driven by American innovation and American ingenuity."

He said tax breaks should be given to small businesses, US manufacturers and clean energy companies that are creating jobs in the US "because I don't want to see all the solar panels and wind turbines and electric cars built in Europe or in Asia."

"We don't want to keep giving tax breaks to corporations that ship our jobs overseas," he said.

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GDP to grow by 9.2% in 2010-11: CMIE

The Indian economy is expected to grow by 9.2 percent in 2010-11 following impressive growth in the manufacturing and services sectors, Centre for Monitoring Indian Economy (CMIE) said here.

"We maintain that the Indian economy will grow by 9.2 percent in 2010-11, as we expect impressive growth in the manufacturing and services sectors as well," CMIE said in a statement.

The Index of Industrial Production (IIP) dropped dramatically to 5.6 percent in August, after growing by 13.8 percent in July. It had recorded a growth of 11.2 percent in the June quarter, but we believe that the growth was much higher than 11.2 percent, CMIE said.

This is because sales revenues of the manufacturing companies rose by 23.8 percent, while the rate of inflation in manufactured products (including petroleum products) was 8.2 percent, implying that sales volumes grew by about 14.4 percent.

The IIP has a very old base year (1993-94), outdated weights and a fixed frame of products and companies, and had miscalculated industrial growth for the preceding two years (2008-09 and 2009-10) as well. It is therefore imperative that the index is corrected at the earliest to enable meaningful analysis, CMIE said.
In August, the rate of inflation touched a six-month low of 8.5 percent. It was calculated as per the new series released on 14 September with 2004-05 as the base year. A moderation in the prices of primary food articles, manufactured food products and paper & paper products helped keep inflation in check.

We expect WPI-based inflation to moderate to 7.9 percent in 2010-11, as compared to our earlier projection of 8.5 percent based on the old series, it said.

CMIE expects that the agricultural production to grow by 7.2 percent pc in 2010-11.

The withdrawal of the southwest monsoon has been delayed this year, and the plentiful rain across large parts of the country has encouraged farmers to bring more land under cultivation.

As of October 7, kharif sowing was completed across 1,022 lakh hectares, which was 64 lakh hectares more than the acreage reported in the corresponding period of 2009.

Cumulative rainfall for the season (June-September) is 102 percent of the long period average, according to the India Meteorological Department's end-of-season report.

Agricultural production is therefore expected to grow by a healthy 7.2 percent in 2010-11, after recording a 6.6 percent decline in the preceding fiscal, CMIE said.

FDI inflows down by about 60% in Aug

Reflecting fragile recovery in world's major economies, foreign direct investment into India dipped for the third consecutive month, by about 60 percent to USD 1.33 billion in August.
The FDI inflows in August 2009 were USD 3.26 billion.

Contrary to smart recovery in the domestic economy and a rebound in exports, overseas investment show a slackening trend in the current fiscal, an official said.

For the April-August period of 2010-11, FDI inflows declined by 35 percent to USD 8.92 billion compared to USD 13.8 billion in the same period last year, the official said.

According to experts, weak global economic recovery is one of the reasons for declining FDI in India.

"The main reason for the decline in FDI is slump in the major western economies like the US and Europe...," international trade expert with India's prestigious Indian Institute of Foreign Trade (IIFT) Rakesh Mohan Joshi said.

Crisil chief economist DK Joshi said: "This is not a good news for Indian economy. This reflects that global economic recovery is still fragile and some impact of that would be reflected in our FDI."

Foreign investment in July 2010 was at USD 1.78 billion, a dip of 49 percent and in June international inflows were at USD 1.38, a dip of 46 per cent over the year ago period.

The sectors which attracted foreign investment, included services, telecommunication, construction activities and computer software and hardware, the official said.

The country received maximum investment from countries like Mauritius, the US, the UK, Singapore, the Netherlands and Japan.

The government has recently floated discussion papers for public comments to liberalise FDI in multi-brand retail and defence sector.

The foreign investment remained low-key despite a recent UNCTAD survey showing that India would remain the second most important FDI destination for transnational corporations during 2010-2012, next only to China.

In its latest 'World Investment Prospects Survey 2010-2012', the United Nations Conference on Trade and Development (UNCTAD) said transnational corporations remain buoyant about investment prospects in China, India and Brazil.

FDI for 2009-10 at USD 25.88 billion was lower by 5 percent from USD 27.33 billion in the previous fiscal.