| UPA survives Opposition ire...LS clears Finance Bill  The Government survived an Opposition onslaught in parliament and also managed to clear the Finance Bill as the Yadav chieftains and Mayawati threw their weight behind the UPA to keep the "communal forces at bay". All efforts by the BJP and the Communist parties to corner the Congress-led coalition on a spate of issues - IPL row, Phone Tapping controversy and price rise - came to naught. Interestingly, the RJD and SP backed Left parties' a Bharat Bandh agitation to protest against the Government's failure to rein in spiraling prices, especially that of essential commodities. In another bizarre development, Sibu Soren voted in favour of the UPA during the cut motions moved by the BJP. The saffron party then announced it would withdraw support to the Soren government in Jharkhand, only to back track on the move on Friday. Despite the BJP's 'U' turn, the JMM was still divided on whether to stick with it or go with the UPA in Jharkhand. Meanwhile, Jharkhand chief minister Shibu Soren wrote to BJP president Nitin Gadkari apologising for voting for the UPA in the cut motions for the demands for grants in relation to the budgetary proposals.
Talking of the Union Budget, finance minister Pranab Mukherjee rejected the Opposition's demand to rollback the hike in taxes on petrol and diesel. A reversal in the prices of fertilizers was not affordable in view of the economic compulsions, he said. Mukherjee announced a debt relief package for coffee growers besides making marginal changes in tax proposals to benefit sectors such as construction and encourage the setting up of new hospitals. At the same time, he rejected the demand for waiving the service tax on air travel saying that the levy on domestic travelers would only be Rs100 per ticket, while international travel would attract a maximum tax of Rs500. Mukherjee pointed out that while the fresh concessions would mean a revenue loss of about Rs3-4bn during the fiscal year. The entire Opposition walked out in stages, starting with the BJP, and the Lok Sabha passed the Finance Bill by a voice vote after including the relevant official amendments. " Any additional burden at this juncture could indulge in financial profligacy that I cannot afford to do...oil price is so volatile...when will it go up...nobody knows," Mukherjee said. The Finance minister said that construction of hospitals with at least 100 beds in any part of the country would qualify for tax concessions based on their investment. He also restored the customs duty concessions for 'ostomy' appliances which are used to treat cancer patients while reducing the basic customs duty on 11 drugs to five per cent. Likewise, to render tax relief to the construction sector, Mukherjee announced that by providing higher abatement, the newly imposed service tax would be levied only on 25% of the total value of the property, including land, instead of on 33%, as was proposed in the Budget. For the benefit of the urban poor, the Finance Minister also waived the service tax on low-cost housing under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) and the Rajiv Gandhi Awas Yojana. Finance Bill debate...FM unveils fresh relief measures Global markets swing as Europe debt issue worsens  Markets across the world were rattled briefly after Standard & Poor's downgraded Greece's rating to "junk" while also cutting the ratings of Portugal and Spain, citing these nation's spiraling debt. Risk appetite tumbled, with commodities and stocks taking a beating while the dollar and gold gained. The cost of insuring against sovereign debt default by Greece, Portugal and Spain surged while the spread between the benchmark notes of Greece and Germany shot up. Sentiment across asset classes, markets and regions nose-dived as European leaders dragged their feet over a rescue package for Greece, stoking fears that the debt-ridden nation could end up defaulting on its obligations. Pressure mounted on the leaders of euro-zone countries, particularly Germany's Angela Merkel, to agree quickly on the details of the proposed bailout.
The situation seemed to stabilise by Friday evening as all the stakeholders agreed to do their bit to contain the debt contagion. Germany may now approve its share of the bailout by May 7. So, the EU and IMF decided to raise the aid package to €120bn over three years, up from an original plan of €45bn this year. The Financial Times (FT) reported that Greece has agreed the outline of a €24bn (US$32bn) austerity package. Final details of the measures, which are intended to slash the budget deficit by 10-11% of GDP over the next three years, were still being worked out, the FT added. A successful auction of Italian debt also helped soothe nerves. Global stocks also got a boost from strong earnings from major US companies, which lifted Wall Street and raised hopes that the world's largest economy was picking up steam, tempering some worries about Europe's debt problems.
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