Strong earnings from Caterpillar drive Dow higher

AP, NEW YORK, April 30: Caterpillar drove the Dow Jones industrial average higher Friday after the company reported a huge gain in first-quarter earnings.

The world's largest maker of mining and construction equipment rose 2.5 percent after its earnings increased more than five-fold. The company also raised its sales and profit forecast for the year.

The Dow added 4 percent in April, its best month since December.

The Dow rose 47.23 points Friday, or 0.4 percent, to close at 12,810.54. Caterpillar accounted for 21 points of those gains. The company's stock has soared over the past year on booming demand for its products.

"The industrial sector and the manufacturing sector of this country are much stronger than many investors have perceived," said Rob Lutts, president and chief investment officer of Cabot Money Management.

The Standard & Poor's 500 index rose 3.13 points, or 0.2 percent, to close at 1,363.61. The index gained 2.8 percent in April.

The Nasdaq composite added 1.01 point to 2,873.54. It rose 3.3 percent for the month.

Both the Nasdaq and the S&P 500 had their best month since February.

Strong corporate earnings pushed major stock market indexes to 2011 highs in the last week of the month. On Wednesday, the S&P 500 doubled from its 12-year low reached on March 9, 2009 after the financial crisis. The Nasdaq is at its highest level since 2000.

The Russell 2000 index of small stocks also hit a record high on Wednesday after the Fed pledged to keep short-term interest rates at record lows. That motivated investors to continue buying risky investments such as small stocks.

The Russell has soared 77 percent over the past two years. Small-company stocks tend to rise more quickly than the overall market as the economy emerges from a recession. Investors also see them as likely takeover targets for larger companies that are flush with cash. The Russell rose 3.74 points, or 0.4 percent, to 865.29 Friday.

Goodyear Tire & Rubber Co. rose 12 percent, the most of any company in the Standard & Poor's 500 index, after it set a company sales record and reversed its loss from the first quarter of last year.

Coinstar Inc. rose 5 percent after the owner of Redbox DVD rental kiosks posted a 32 percent increase in its net income.

Research In Motion Ltd. fell 14 percent after the maker of the BlackBerry slashed its earnings and sales forecasts because of weak phone sales.

The dollar fell to a three-year low against an index of six major currencies. It's down 7.6 percent this year.

The dollar has been sinking against other currencies that have higher interest rates than the U.S. Low interest rates in the U.S. also encourage investors to borrow in dollars to buy investments denominated in other currencies, which also pushes the dollar lower.

Two stocks rose for every one that fell on the New York Stock Exchange. Trading volume was 3.7 billion shares.

5 banks fail in Fla., Ga., Mich.; makes 39 in '11

AP, WASHINGTON, April 30: Regulators on Friday shut down banks in Florida, Georgia and Michigan, a total of five closures that lifted the number of U.S. bank failures this year to 39.

The pace of closures has slowed, however, as the economy improves and banks work their way through piles of bad debt. By this time last year, regulators had closed 64 banks.

The Federal Deposit Insurance Corp. seized First National Bank of Central Florida, based in Winter Park, Fla., with $352 million in assets, and Cortez Community Bank of Brooksville, Fla., with $70.9 million in assets.

The agency also took over First Choice Community Bank of Dallas, Ga., with $308.5 million in assets; Park Avenue Bank, based in Valdosta, Ga., with $953.3 million in assets; and Community Central Bank in Mount Clemens, Mich., with $476.3 million in assets.

Miami-based Premier American Bank agreed to assume the assets and deposits of First National Bank of Central Florida and Cortez Community Bank. Bank of the Ozarks, based in Little Rock, Ark., is acquiring the assets and deposits of First Choice Community Bank and Park Avenue Bank. Talmer Bank & Trust, based in Troy, Mich., agreed to assume the assets and deposits of Community Central Bank.

In addition, the FDIC and Premier American Bank agreed to share losses on $270 million of First National Bank of Central Florida's loans and other assets, and on $51.3 million of Cortez Community Bank's assets.

The agency and Bank of the Ozarks are sharing losses on $260.7 million of First Choice Community Bank's assets and $514.1 million of Park Avenue Bank's assets. Talmer Bank & Trust is sharing with the FDIC $362.4 million of Community Central Bank's assets.

The failure of First National Bank of Central Florida is expected to cost the deposit insurance fund $42.9 million. The failure of Cortez Community Bank is expected to cost $18.6 million; that of First Choice Community Bank $92.4 million; Park Avenue Bank, $306.1 million; and Community Central Bank, $183.2 million.

Florida and Georgia have been the hardest-hit states for bank failures. Twenty-nine banks were shuttered in Florida last year and 16 in Georgia. The four shutdowns in those states on Friday brought to four and 10 the number of bank failures in Florida and Georgia, respectively this year.

California and Illinois also have seen large numbers of bank failures.

In 2010, authorities seized 157 banks that succumbed to mounting soured loans and the hobbled economy. It was the most in a year since the savings-and-loan crisis two decades ago.

The FDIC has said that 2010 likely would mark the peak for bank failures.

There were 140 bank failures in 2009, costing the insurance fund about $36 billion. The failures last year cost around $21 billion, a lower price tag because the banks that failed in 2010 were smaller on average. Twenty-five banks failed in 2008, the year the financial crisis struck with force; only three were closed in 2007.

From 2008, the year the financial crisis struck, through 2010, bank failures cost the fund $76.8 billion. The deposit insurance fund fell into the red in 2009, and its deficit stood at $7.4 billion as of Dec. 31.

The FDIC expects the cost of resolving failed banks to total around $52 billion from 2010 through 2014.

Depositors' money — insured up to $250,000 per account — is not at risk, with the FDIC backed by the government. That insurance cap was made permanent in the financial overhaul law enacted in July.

The number of banks on the FDIC's confidential "problem" list rose to 884 in the final quarter of last year from 860 three months earlier. The 884 troubled banks is the highest number since 1993, during the savings-and-loan crisis.

Beijing turns to currency to cool inflation

AP, BEIJING, April 30: Surging inflation that helped trigger protests in Shanghai is prompting China's leaders to turn to a tool they long resisted: speeding up the rise of the country's tightly controlled currency.

Rising prices are a political threat to China's communist leaders and they have declared taming inflation their priority. But they suffered a setback in March, when a double-digit jump in food costs pushed inflation to a 32-month high of 5.4 percent. That was despite four interest rate hikes since October, curbs on bank lending and government orders to producers to hold down price increases.

How fast to let the yuan gain is a high-stakes balancing act. A stronger yuan could help ease inflation by making oil and other imports cheaper. But Beijing also worries that a rising yuan might hurt exports and lead to job losses and unrest, so any gains will likely still be too small for Washington and other critics that say an undervalued yuan is swelling China's trade surplus.

"Policymakers have sent a clear message that currency appreciation will be used as a tool to counter imported inflation" due to near-record global prices for oil and other commodities, said Credit Agricole CIB economist Dariusz Kowalczyk.

At a Cabinet meeting this month, Premier Wen Jiabao said the government would "increase the flexibility of the yuan's exchange rate" to ease price pressures, the official Xinhua News Agency reported.

Wen, China's top economic official, gave no details or a target for the yuan's value. But such a promise from a senior leader is rare and reflected rising official urgency, especially after Beijing has rebuffed demands by Washington and others to ease currency controls.

In March, Wen had publicly rejected a rapid rise in the yuan, saying at a news conference Beijing had to consider the impact on Chinese companies and jobs. On Friday, the central bank set the yuan's exchange rate at 6.49 to the U.S. dollar — its highest official level since a currency revaluation in 2005.

Economists blame China's inflation on the dual pressures of consumer demand that is outstripping food supplies and a bank lending boom they say Beijing allowed to run too long after it helped the country rebound quickly from the 2008 global crisis.

Attempts at price controls, subsidies for the poor and orders to local leaders to guarantee adequate vegetable supplies have had mixed results.

In Shanghai, self-employed drivers who are being squeezed by higher living costs erupted in frustration at a rise in state-set fuel prices and new fees charged by warehouse owners and at China's busiest port.

Hundreds of drivers halted work for three days starting April 20, disrupting cargo shipments. Some freight companies suspended business for fear of being attacked by protesters. Officials responded by lowering some fees.

"Living costs are higher but freight rates are the same, so truckers or company owners earn less," said Xie Qiang, owner of a Shanghai trucking company.

Similar pressures last year ignited a wave of strikes across China by factory workers whose wages were frozen after the 2008 crisis and faced rising living costs. Japanese automakers and some other facilities were temporarily idled.

Beijing usually prohibits strikes but went along with last year's demands, possibly to put more money in workers' pockets as part of sweeping efforts to reduce reliance on exports by promoting consumer spending.

The government has clamped down on lending but analysts say it will be months before the effects of that and other curbs are felt. They say inflation should climb further through at least midyear before easing.

Beijing also is struggling to control an overheated economy that expanded by a rapid 9.7 percent in the first quarter of this year, barely slowing from the previous quarter despite Beijing's efforts to steer growth to a sustainable level after 2010's double-digit gains.

The World Bank is forecasting 9.3 percent growth this year, well above the 8 percent target announced by Wen in March.

"That growth is being generated by the same policies that are fueling inflation. So what looks like a great number applies to a very stressful economic situation," said Patrick Chovanec, an associate professor at Tsinghua University's School of Economics and Management in Beijing.

Beijing broke the yuan's direct link to the dollar in 2005 and allowed the currency to rise gradually after that. It was frozen again following the 2008 crisis to help Chinese exporters compete abroad after a plunge in global demand wiped out millions of factory jobs. Beijing promised more flexibility again last June but the U.S. government says gains since then have been too small.

Analysts say even a faster rise for the yuan will be gradual — perhaps a 5 percent gain against the dollar this year instead of the 3 percent previously forecast. The yuan has risen about 1.5 percent this year, after gaining 3.6 percent in 2010.

"It wouldn't be a major move," said Kowalczyk. "It will not placate the U.S. government, but at least it will go some way to showing that China is listening."

U.S. manufacturers say the yuan is undervalued by up to 40 percent, giving China's exporters an unfair price advantage and hurting foreign competitors. Some American lawmakers want punitive tariffs on Chinese imports to force Beijing to take action.

Beijing also has resorted to the blunt tool of freezing prices of electricity and some other basic goods, but that is starting to backfire.

In the southeast, export regions are suffering power shortages that force factories to suspend production every other day. Power companies are squeezed between low state-set rates and high gas and coal prices, so they have avoided adding more generating capacity despite double-digit annual increases in demand.

"At the moment it is not very attractive to build an electricity plant in China and some regions have a shortage of electricity," said Louis Kuijs, a World Bank economist in Beijing. "At some point these administrative prices must be raised."

Chinese leaders have ordered local authorities to ensure adequate supplies of vegetables in markets and to pay subsidies to poor families.

In a possible effort to deflect criticism, it has imposed fines on retailers who it said cheated shoppers by overstating the size of price cuts on discounted items.

"I think you should have confidence in the Chinese government's capability in managing vegetable prices well," said a deputy commerce minister, Fu Ziying, at a news conference this week. He gave no time frame for when inflation might subside.

Hiring likely to boost spending despite gas prices

AP, WASHINGTON, April 30: Consumers as a whole will likely spend more this year. But it's not because we'll all be earning more money. Even people lucky enough to get a raise will likely spend most of the extra dollars to pay higher gas and food prices.

Yet employers are hiring more freely this year and more people working means more money being spent to fuel the economy.

"It is hard to spend money without an income. More jobs will be good for consumer spending," said David Wyss, chief economist at Standard & Poor's in New York.

People made more money and spent more money in March, the Commerce Department reported Friday. But after adjusting for inflation, spending rose only 0.2 percent and after-tax incomes were essentially flat.

Consumer spending, which accounts for roughly 70 percent of economic activity, grew at an annual rate of 2.7 percent in the January-March period. That was a sharp decline from the 4 percent growth in the previous quarter.

Less spending led the overall economy to grow at only a 1.8 percent annual rate in the first three months of the year — weaker than the 3.1 percent growth in the October-December quarter of 2010.

Americans were poised to spend more this after Congress agreed to give them a 2 percentage-point cut in Social Security payroll taxes. But a steady rise in gas prices has siphoned away most of that extra money, leaving consumers with less discretionary money to spend on cars and appliances, at restaurants, and to take vacations.

Gas prices are showing few signs of easing. The national average at the pump on Friday was $3.91 a gallon_ 32 cents more than what consumers paid at the end of March and a dollar more than what they paid a year ago.

"Consumers have been taking the money from their tax cuts and putting it in their gas tanks to drive to work," said Mark Zandi, chief economist at Moody's Analytics. "The higher gas prices have really sucked the wind out of consumers' purchasing power."

Zandi and other economists are optimistic that gas prices will level off this spring, before dropping in the summer or fall. That would give people more discretionary money and help lift economic growth to more than 3 percent for the rest of 2011, they say.

At the same time, the economy is benefiting from the best two-month hiring stretch in five years. Unemployment dropped to a two-year low of 8.8 percent in March. Economists expect employers will keep adding around 200,000 jobs a month through the end of the year. As more people find jobs, spending will rise.

But the job growth is not expected to give workers' more bargaining power to demand higher wages.

"The unemployment rate is still very high," said Paul Dales, chief U.S. economist at Capital Economics. "You are not going to ask for a pay raise when you know there are a lot of people who could get your job."

As a result, people are saving more than they did before the recession. That's good for household budgets but bad for economic growth. The savings rate remained unchanged at 5.5 percent of after-tax incomes in March, well above the 2.1 percent pace in 2007.

Wyss said he believed the savings rate will remain around where it is now for the rest of the year.

"People were in debt up to their eyeballs when the recession began and they are gradually working their way out of so much debt," Wyss said.

Geithner gives some companies pass on new rules

AP, WASHINGTON, April 30: Treasury Secretary Timothy Geithner has decided to let companies continue to trade certain contracts used to guard against swings in currency values outside regulators' view.

New rules require that many such trades happen more transparently, on exchanges where regulators can see them. But Geithner is exempting certain contracts used by companies to hedge currency rates.

The new financial overhaul law authorized Geithner to carve out such an exemption to stricter regulation.

Business groups argue that tighter oversight of such contracts would be costly and unnecessary. But critics, including some regulators, counter that the whole market for financial contracts called over-the-counter derivatives should face stricter supervision.

The value of derivatives hinges on an underlying investment, such as currencies, stocks or mortgages. Speculators who used over-the-counter derivatives helped fuel the 2008 financial crisis.

Sen. Carl Levin, who pushed for tighter regulation after the crisis, said Geithner's decision might open the door for lax oversight in the future.

Treasury's top markets official said the contracts already include many of the safeguards the new rules impose. Investors can find information on the price for each contract, for example. Some of the contracts are traded on electronic platforms, which are less likely to freeze up after an unexpected financial shock.

Imposing new rules would mean "introducing an additional process into what is a very well-functioning market today, and you would be putting more steps into the settlement process," said Mary Miller, assistant Treasury secretary for financial markets.

Miller argued that even with the exemption, the market will become more transparent. Companies will have to report the contracts in real time, after they make a trade. The information will go to central databanks that regulators can see.

Still, the contracts, called foreign-exchange swaps, wouldn't be subject to other requirements that experts say would make them more transparent.

The contracts that Geithner carved out account for about $30 trillion of the $600 trillion global market for over-the-counter derivatives, Treasury said. The new, tougher rules will apply to currency swaps, options and other contracts used for similar purposes.

Multinational corporations such as Cargill and 3M argued for the exemption. They said the new rules would have raised their costs, thereby limiting their ability to grow and create jobs.

Advocates of tighter regulation say closer oversight is needed at each stage of the process — before, during and after a trade. They say the exemptions will make some types of trades harder to oversee.

Michael Greenberger, a former official with the Commodity Futures Trading Commission, which is responsible for policing much of the derivatives market, disputed Treasury's main defense of the exemption — that the contracts expire so fast that they don't pose serious risks to the financial system.

"Within the next 60 months, there will be a systemic break in this market, said Greenberger, now a law professor at the University of Maryland.

The decision technically is a proposal. Treasury will accept public comments for 30 days before finalizing the exemption.

Apple juggernaut sends ripples through tech world

AP, NEW YORK, April 30: Consumer technology companies reporting financial results this week are looking like rowboats bobbing in the wake of Apple Inc.'s supertanker.

Close to oblivion in 1997, Apple is now the world's second-most valuable company, after Exxon Mobil Corp. On April 20, it reported net income of $5.99 billion for the January-to-March period, nearly double that of a year ago. It shipped a record 18.65 million iPhones during the quarter. Its iPad tablet computers are so popular, the company couldn't make enough.

Apple's ascendancy has produced many losers and a few winners, as underscored over the past two weeks:

• Microsoft Corp.: loser.

Apple dethroned Microsoft as the world's most valuable technology company a year ago. In its mid-fall report, it surpassed Microsoft in quarterly revenue. In the January-March period this year, it surpassed Microsoft in net income, too.

On Thursday, Microsoft reported that revenue from the Windows operating system declined for the second straight quarter because people are buying fewer Windows computers.

Some prospective buyers are going to Macs instead — Apple reported that it sold 28 percent more units. Others are going to iPads. Goldman Sachs now believes that more than 30 percent of iPads sold may be replacing PC sales. In the 90s, the trend was the opposite, as Windows PCs were crowding out Macs.

• Nokia Corp.: loser.

Nokia said this week that it will slash 7,000 jobs through layoffs and outsourcing. It still sells more phones than anyone else, but it's losing share to Apple, especially when it comes to smartphones.

Research firm Strategy Analytics also said revenue from Apple's iPhone sales surpassed that of Nokia's phones in the January-to-March period, as iPhones are much more expensive than the average Nokia phone. That makes Apple the world's largest phone maker by revenue.

To better compete with the iPhone, Nokia is ditching its old Symbian software and adopting Microsoft's Windows Phone 7. But the transition will take time; the first Windows-powered Nokia phones aren't expected until late 2011 or early 2012.

• Research In Motion Ltd.: loser.

The maker of the BlackBerry is in a predicament that's similar to Nokia's. RIM warned Thursday that net income, revenue and unit sales for the quarter ending in May will come in below its previous forecast.

The company's high-end phones are looking old compared with the iPhone and ones running Google Inc.'s Android software. They aren't selling as well as the company expected.

RIM promised investors that new phones with revamped software will bring sales roaring back in the latter half of the year, but investors are skeptical, sending RIM's stock down Friday.

• HTC Corp., Samsung Electronics Co. and Motorola Mobility Holdings Inc.: winners, indirectly.

Although all three companies compete with Apple's iPhone, they are doing well. Unlike Nokia and RIM, the three are betting on Google's Android system, which comes the closest to mimicking the look, feel and functions of the iPhone.

Motorola Mobility is a shadow of the old Motorola, once the world's second-largest maker of phones. But its focus on Android-powered smartphones is showing signs of success. It reported on Thursday a near-doubling of smartphone sales in the first quarter.

HTC of Taiwan has been making smartphones for a decade, and sales are really taking off with the help of Android. On Friday, it reported selling 9.7 million in the first quarter.

For South Korea's Samsung, smartphone sales were a bright spot in the first quarter as overall phone sales declined and other electronics were weak. The company is embroiled in patent litigation with Apple.

• Verizon Wireless: winner.

The No. 1 U.S. cellphone carrier posted a jump in new contract-signing customers — the more profitable kind — after it introduced its version of the iPhone on Feb. 10, which ended AT&T Inc.'s exclusive grip on the device in the U.S.

(Verizon Wireless is a joint venture of Verizon Communications Inc. of New York and Vodafone Group PLC of Britain.)

• AT&T and Sprint Nextel Corp: mixed.

Verizon's new subscribers came at the expense of AT&T and Sprint Nextel Corp. But neither carrier saw signs of current customers moving to Verizon for the sake of the iPhone. Rather, it seems customers weighing between carriers were more likely to go to Verizon because of the iPhone.

AT&T appeared to be splitting new iPhone customers evenly with Verizon Wireless.

Sprint lost lucrative contract customers in the quarter, but continued its long turnaround by signing up a record number of people on cheaper, contract-free plans.

Amazon launches 69-cent song store

AP, LOS ANGELES, April 30: Amazon.com Inc. this week launched a store that sells digital songs for 69 cents, an attempt to bring more people to its e-commerce website and bolster its plan to eventually charge people to store tunes on distant servers known as the cloud.

It has cut the price on singles to 69 cents in the past, but this is the first time it has dedicated a page to the offering. About 200 songs out of the 15 million available have had prices cut to 69 cents.

On Friday, that included 26 of the top 40 songs, from artists such as Katy Perry, Jennifer Lopez and Black Eyed Peas. Other songs are priced as high as $1.29 apiece.

Craig Pape, the director of Amazon Music, said cutting prices creates a "halo effect" that helps music sales and improves the site's music recommendation engine.

"It'll give a boost that lasts into the future," he said.

The discounted music pricing follows the Seattle-based company's introduction in March of Amazon Cloud Drive and Amazon Cloud Player, which allow people to store music on its servers and play back tunes over mobile devices that use Google Inc.'s Android operating system.

People with an Amazon account get 5 gigabytes of free storage. Songs that are bought on the store are not counted toward the storage cap, but Pape said the offerings are meant to act together.

"All of that ties into this experience of getting them to discover and buy and listen to more music, so it's all interrelated," he said.

US lawmakers press Sony for info on data breach

AP, WASHINGTON, April 30: U.S. lawmakers are pressing Sony Corp. for more information about the loss of personal data in a security breach that affected 77 million accounts on its PlayStation Network.

Rep. Mary Bono Mack, R-Calif., and Rep. G.K. Butterfield, D-N.C., sent a letter Friday to the chairman of Sony Computer Entertainment America, Kazuo Hirai, demanding answers about when Sony discovered the breach and informed others, why it can't determine if credit card information was stolen, and what steps it was taking to address the crisis.

The lawmakers sought a response by May 6, two days after a congressional subcommittee was to hold a hearing on proposed data security legislation.

Pressure is mounting on Sony to restore services and compensate players. It shut down the network, which connects players in live play worldwide and powers its Qriocity music and movie service, last Wednesday after a hacker attack in the days prior. The system is being rebuilt with better security protections and some services are expected to be restored by Tuesday.

On Wednesday, lawyers filed a suit against the company on behalf of lead plaintiff Kristopher Johns for negligent protection of personal data and failure to inform players in a timely fashion that their credit card information may have been stolen. The suit seeks class-action status.

Sony has said credit card numbers were encrypted and there was no direct evidence the numbers were stolen, but it couldn't rule out the possibility. It also said it asks for, but does not collect, the 3-digit security code on the back of cards meant to protect against fraud. It is working with law enforcement to find those responsible for the breach.

A company spokesman did not immediately return a message seeking comment about either development.

Poverty in decline in Bangladesh, says governor Atiur

Dhaka, April 29: Increased remittances, better performances by the agriculture sector and improved connectivity have contributed to the fall in the poverty level, say analysts.

The number of population below the poverty line has dropped to 31.5 percent from 40 percent in 2005, said Bangladesh Bank Governor Atiur Rahman yesterday.

''It's a remarkable progress in poverty eradication. Some 15 million people have come out of poverty in last 10 years,'' said Rahman, citing the preliminary findings of the latest Household Income and Expenditure Survey (HIES).

The central bank chief shared the data at a seminar at Bangabandhu International Conference Centre in Dhaka on the need for taking a bottom-up approach and inclusiveness in budget making.

Bangladesh Economic Association and Dhaka School of Economics co-organised the programme as part of Bangladesh Social and Economic Forum 2011.

The data on reduced level of poverty comes at a time when the government is set to frame the budget for the next fiscal year following the draft of the sixth five-year plan (SFYP) for 2011-15. The SFYP aims to cut poverty by accelerating the growth of the economy, expanding by 6 percent a year now.

The latest estimate shows that the poverty level went down by 17.4 percentage points last decade. Between 2000 and 2005, the percentage of people below the poverty line dropped to 40 percent from 48.9 percent in 2000.

Analysts gave the credit to the increased inflow of remittances in the past several years amid a rise in the outflow of workers for jobs abroad.

Now nearly 70 lakh Bangladeshi migrants work abroad and send remittances to their families living mostly in semi urban and rural areas.

Prof Shamsul Alam, a member of the Planning Commission, linked the fall in the rate of poverty to a rise in crop intensity and a diversification in agricultural production.

An increase in prices of farm produces and rural wages, connectivity with towns due to expansion of road networks in rural areas, microcredit and a rise in non-farm economic activities have also contributed to the decline in poverty, analysts added.

Sajjad Zohir, director of Economic Research Group, said the reduction is consistent with other trends in the economy and the way poverty is measured.

The BB chief cited the Gini-coefficient, a measure of inequality, and claimed the coefficient was stable in the past three to four years, meaning that inequality has not increased.

The Gini-coefficient ratio dropped to 0.46 in the latest HIES from 0.47 in 2005, said Planning Commission member Alam.

''It indicates that an equitable economy has been developed,'' said Rahman, a campaigner of inclusive growth. He said the economy of Bangladesh had turned around.

''The rural economy is shining. If you look at the smiling faces of people in the rural areas and the sandals they wear, you will recognise it,'' he said.

Source: The Daily Star

SME Foundation wants tax benefit for the sector

Dhaka, April 29: The SME Foundation yesterday urged the government to make a raft of changes in the tax and VAT regime in the upcoming budget for the betterment of the sector.

The foundation placed the demands while submitting their proposals for the budget for fiscal 2011-2012 at a meeting with the National Board of Revenue (NBR) in the city.

NBR Chairman Nasir-uddin Ahmed, SME Foundation Chairperson Aftab ul Islam, its Managing Director Syed Rezwanul Kabir and other senior officials of the two government agencies were present.

The foundation suggested the government impose duty on all imported raw materials for the growing plastic industry in the lowest slab of the tax regime at 3 percent, cutting it from the existing 5 percent. Export oriented plastic industries should be allowed inter-bond transfer facilities, the SME Foundation said.

The foundation urged the NBR to double the time for bond renewal from one year, as the annual renewal system involves cost and time.

It said value added tax (VAT) should be completely withdrawn from powdered milk produced from liquid milk supplied by domestic dairy farms.

Advanced income tax on exports of leather goods and footwear should be cut by half to 0.25 percent, which will act as incentive for the industry, it proposed.

The foundation said the government should specify the agro-processing industries that will enjoy income tax exemption for the next five years to 2016.

In 2008, the government exempted agro-processing industries from paying taxes. But as the authorities did not specify the industries eligible for the tax holiday, many such industries are not getting tax amnesty despite being agro-processing farms, the foundation said.

It proposed that shops or enterprises run by women entrepreneurs should get income tax and VAT exemption facility for two years.

The foundation urged the tax administration to give cash incentives against exports of plastic products, leather goods and footwear. The women exporters should be given 5 percent more incentives than their male counterparts, it added.

Source: The Daily Star

Indian minister stresses Saarc power grid

Dhaka, April 29: A power grid linking South Asian Association for Regional Cooperation (Saarc) countries has the potential to create 100,000 megawatt of electricity capacity and help bridge the energy deficit in the region, according to KC Venugopal, India's junior power minister.

"It is estimated that a Saarc power grid linking Bangladesh, India, Nepal, Pakistan and Sri Lanka has the potential to produce at least 100,000 megawatt (capacity) in the region for common use among its member countries," the state minister said on Wednesday.

He said India is looking forward to the idea of a Saarc power grid, which would also help in improving overall relations between the member countries. Other Saarc countries are Bhutan, Nepal and Afghanistan.

"Integrating the power distribution networks would help address the power deficit faced by South Asian countries," Venugopal addressed a seminar organised by Confederation of Indian Industry and SARI, A US-sponsored energy initiative.

Despite having an installed capacity of over 172,000 megawatt, the power shortage in India has been in the range of 10 percent during peak hours.

Jayant Prasad, special secretary in the Indian Ministry Of External Affairs, said geopolitics works in favour of cross-border power trading between Saarc nations. "India is currently preparing three papers -- including on transmission -- related to the proposed Saarc electricity grid."

Manila-based Asian Development Bank has piloted the Saarc power grid.

Source: The Daily Star

State Bank of India to open branch in Rajshahi

Rajshahi, April 29: State Bank of India will soon open a branch in Rajshahi city to accelerate the exchange of trade and commerce between Bangladesh and India.

Rajshahi City Mayor AHM Khairuzzaman Liton said this to journalists yesterday after a meeting with top officials of the bank.

State Bank of India's Country Head in Bangladesh Debabrata Dutta, First Assistant Vice President RM Chakrawarty and Rajshahi branch chief Mahbubur Rahman called on the mayor at his office in Rajshahi Nagar Bhaban.

Rajshahi City Corporation in a press release said the mayor welcomed the initiative and told the bank officials to take care of its services to the city people alongside its regular banking affairs.

Source: The Daily Star

Ctg dialogue stresses budget for marginalised

Dhaka, April 29: The government should prepare a decentralised budget to uplift the livelihood and economic condition of the marginalised people, speakers said at a dialogue in Chittagong yesterday.

The demand came at a dialogue titled "National budget for 2011-12: a democratic budget and the rights of the marginalised community people" organised by Democratic Budget Movement in collaboration with Young Power in Social Action (YPSA) and ActionAid Bangladesh at a local hotel at Agrabad in the city.

For effective implementation, a democratic budget should be based on the opinions of the rural and marginal communities like the challenged, indigenous, dalits (outcaste), farmers, weavers and sex workers, the speakers said. They also said the budget should be meaningfully participatory.

They called upon the government to announce a schedule and guiding outlines enabling the preparation of district-based budgets to be incorporated into the national budget for the next fiscal year.

The speakers also stressed ensuring special budget for the challenged people, indigenous communities, sex workers and HIV (human immunodeficiency virus) affected people in the national budget.

Chittagong City Corporation Mayor Mohammad Manjur Alam was the chief guest in the programme and ActionAid Country Director Farah Kabir facilitated the programme. Democratic Budget Movement's Rabeya Sultana presented a keynote paper underscoring the need for steps to drive out elements of discrimination against any locality and communities. She also stressed special allocations for the country's backward pockets.

Terming Chittagong a lifeline for the economy, the mayor said, by developing wards or thanas of the city, the whole economy would gain. Similarly, through development of the marginalised people of the unions or districts, the entire country would be benefited, he said.

Farah Kabir said women from the marginalised communities face numerous challenges in the society. "So, special budgets are needed for them," she added.

Hena Akhtar, a leader of sex workers and social activist, said the sex workers cannot get their children educated in general schools due to social taboos and stigmas which need to be addressed.

She urged the government to allocate special budget for the sex workers so that their children may be mainstreamed to get proper education and health care.

Md Arifur Rahman, YPSA executive director, Pradip Roy, central steering committee member of Democratic Budget Movement, Principal Anwara Alam of Agrabad Mahila College, and Sahab Uddin Nipu, assistant professor of journalism at Chittagong University, among others, were present.

Source: The Daily Star