BREAKINGNEWS

ECONOMY--INDIA

India Growth Could Downshift
Wall Street Journal - 8 hours ago
The fastest-expanding major economy last year after China, India this year is set to see gross domestic product growth slow markedly -- though to a level ...
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PM's economic body pegs GDP at 8.5% Times of India
Indicators pointing towards market stability Economic Times
Economic Times
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Washington Post, United States - 31 minutes ago
China and India have their problems too. The Chinese inflation rate is increasing and China is running into severe environmental constraints such as acid ...
Brazil’s Moment in the Sun Latin Business Chronicle
A Welcome Global Slowdown Washington Post
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Hindu Economy during the Mughals
Hindu, India - 17 hours ago
In chapter two, Moosvi tells the story of India’s interaction with the world economy. Favourable trade balance and the re-minting of imported coins into ... Linking Africa's Future to Rising India and China
Korea Times, South Korea - 5 hours ago
China and India have become global leaders in forging ``bilateral investment treaties" with other developing economies, and wherever their investments go, ...
Business Wire (press release) The 12 th Annual Wharton India Economic Forum Concludes ...
Business Wire (press release), CA - 20 hours ago
PHILADELPHIA--(BUSINESS WIRE)--On March 22 nd , the University of Pennsylvania’s Wharton Business School hosted the 12 th annual Wharton India Economic ...
Former Indian president speaks at Penn Daily Pennsylvanian
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Economic Times, India - 30 minutes ago
... said that companies entering into India should become an integral part of the economy and localize the decision making for faster decision making. ... Renault cuts Indian sales target-Indian unit head
Reuters - 8 hours ago
We are working both on pink (optimistic) and more black (pessimistic) in case the economy would really plummet." The sales target had been trimmed in line ...
CNN-IBN PC's '60 MPs' remark leaves Left fuming
Times of India, India - 14 hours ago
It is a fact that 78% of India lives on Rs 20 a day while there is a growth in dollar billionaires. We are opposed to the reform package which increases ...
CPI(M) hits back at Chidambaram Hindu
Left slams Chidambaram for 'irresponsible' statement Khabrein.info
FM hits out at reforms critics Times of India
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CNNMoney.com - 56 minutes ago
'There is no doubt that the economy will slow down a bit but one should also consider factors like rising prices of soft commodities that have made ...

Politics over economics

Business Standard / New Delhi March 01, 2008 This Budget asks and answers some rather big questions. Begin by asking the man in the street, and he will say that he is happy with Mr Chidambaram’s Budget. And so the finance minister has dared politicians to criticize the farm loan waiver, and he might as well dare others to criticize the income tax cuts, if they care to. In other words, he knows that he has touched a popular nerve in both city and country. The second big question to ask, therefore, is whether economics can hope to prevail over populism, or whether political considerations always trump good economics. Certainly the UPA government’s fifth and final budget gives unequivocal answers: it is a political budget from start to finish. And so a government led by economists and economic reformers has ended up bowing to political considerations and implementing over five years programmes that they may not believe in, but which they have to introduce and then find reasons to support.   When a government led by such notables writes off Rs 60,000 crore of bank money, or 3 per cent of all bank loans, it is as well to remember the harsh words hurled at Devi Lal when he did the same; but since he was an unlettered kulak, he could be safely abused. The truth is that while farmers have been in distress, writing off loans makes every farmer who repaid his loan feel like a fool. What does that do to credit discipline? Also, the write-off does not end rural indebtedness because farmers owe more money to moneylenders. And if they got into financial trouble because farming does not pay enough, then the debt write-off is only a palliative and does not solve the underlying problem. So farmers who borrow again (if the banks are willing to lend) will also get into trouble again. But these are the questions that economists ask. There is also a question that lawyers might ask: how does the government tell the client of a private bank not to repay a loan, unless the government makes it up to the bank? And surely, the government is not about to start paying up to ICICI and HDFC and all the others, is it?   The triumph of politics shows also in the national rural employment guarantee programme, which has been extended to all 596 rural districts, even though Rahul Gandhi who first demanded this realises now that the programme is not being implemented well. Another indicator of the soft state is the increase in the income tax floor from Rs 1.1 lakh to Rs 1.5 lakh (it is still higher for women and senior citizens). But even in the United States of America, people start paying tax at a lower income level of $3,400 (Rs 1.36 lakh), while in China the tax floor is $1,400 (Rs 56,000). India is poorer than both those countries, so why do people with higher income in a poorer country get away without paying income tax? The answer is that the government wants the urban, middle-class vote.   The fifth indicator of politics trumping economics is the government’s refusal to raise petrol, diesel and cooking gas prices to reflect their real cost. So the oil marketing companies have lost over Rs 70,000 crore on this account in the past one year. The way the government does its accounting, some of these figures do not show up in the Budget, even though the government will finally have to pick up the bill. If you add up the oil subsidy, the fertilizer subsidy, the extent of the loan write-offs that have to be made good and the money that has to be provided for the Pay Commission award, the total is huge.   That brings up another big question: should the Fiscal Responsibility and Budget Management (FRBM) Act be scrapped? For this law seems to be having the perverse effect of making the government hide more and more of its expenditure and not show it in the Budget. The finance minister can then claim that he is meeting FRBM targets, when in truth he is not. Scrapping the law might encourage more honest budgeting.   The last big question is whether governments can be trusted to be responsible with money. Note that taxpayers have paid up an average of 22 per cent more tax each year through the five Budgets of the UPA government—that is a lot, when nominal GDP has been growing by barely 13 per cent. The tax-to-GDP ratio has therefore moved up many notches, but the deficit has not come down by as much. That is because the government keeps spending more—and who is to ask whether such spending is done wisely or well? More evidence of

Tourism ambassadors to launch Ramayana trail

Chairman of the Cricket Board Arjuna Ranatunga and the former player Aravinda de Silva will launch a special programme to the Indian media of places of interest associated with the epic today (17) at the Metropolitan Hotel in New Delhi.

The Ramayana has a very special place in the bondage between Sri Lanka and India and offers opportunities for Indian visitors to explore, absorb and enjoy the various places of significance as presented in Valmiki’s epic.

The launch will precede a special dinner event that Sri Lanka will host for Indian business leaders and visiting business partners from overseas at the Partnership Summit organized by the Chamber of Indian Industry in association with Ceylon Chamber of Commerce, Sri Lanka Tourism and SriLankan Airlines.

The media event for the launch of the Ramayana trail and the dinner will be attended by Swami Sarvarupananda of the Ramakrishna Mission, Sri Lanka’s High Commissioner in India Romesh Jayasinghe and Arjuna Ranatunga, Aravinda de Silva and Indian test cricketer, commentator and Member of Parliament Navjot Sidhu.

Researchers have identified over 50 places and sites in Sri Lanka connected with the names of Lord Rama, Seethadevi and King Ravana who is said to have ruled Lankapura. There are many devotees in Sri Lanka, who worship at these sites where special temples are built.

These include areas where it is believed that King Ravana has had Seethadevi in captivity. Many Sri Lankan sites have names associated with the Ramayana such as Seethaeliya, Ram Bodha (Ramboda), Ussangoda and Roomassala.

Sri Lanka Tourism will ensure the maintenance of the sacredness of these sites while facilitating foreign and local visitors the opportunity of visiting them for worship and experiencing.

The trail of Ramayana will be another string of treasures among Sri Lanka many treasures and Sri Lanka Tourism invites friends from India and the world-over to visit and enjoy the serendipity of Sri Lanka: a Land like no other where smiling people, golden beaches, rainforests, ancient cultural sites, waterfalls amongst misty mountains, adore the landscape as cited in the ancient Ramayana Epic.

 

Bajaj rolls out hamara small car prototype

NEW DELHI: Just 48 hours before the Tata ‘people’s car’ makes its debut, another ultra low-cost car, this time from the Bajaj stable, made its appearance. The prototype vehicle will serve as the basic platform for the Renault-Nissan-Bajaj ultra low-cost (priced at around $3,000 or Rs 1.25 lakh) car.

Bajaj may invest around Rs 700 crore in the venture and is pushing to expand the relationship with Renault-Nissan to ‘Lite’ trucks as well. The company showcased two Lite trucks alongside the car prototype on Tuesday.

About the company’s plans, Bajaj Auto MD Rajiv Bajaj told ET, “Renault has seen the Lite truck, but has not committed joining us for commercial vehicles. That’s one of the issues we will discuss through the course of the feasibility study over the next one month. We are open to their participation in commercial vehicles (CVs) as well. We are hoping they will incorporate and include CVs in the scope of our partnership for the ultra low-cost car.”

The Bajaj prototype, which has been designed in house with inputs from individual consultants and specialists, will be the basic platform on which the ultra low cost-car will be built.

“In terms of direction and intent, this concept will show the way. Of course, some aspects like the external shell will change. But the size, dimensions, powertrain will be more or less the same. So it is hugely indicative,” Mr Bajaj said. The vehicle will be manufactured in Bajaj’s Chakan plant near Pune.

Renault boss Carlos Ghosn has indicated that his $3,000 car will be built on a Bajaj platform with an Indian powertrain. It will have design and chassis cues from Renault. “Other than the chassis, body and interiors, the engine, transmission, steering system, brakes and suspension of the final product will be similar to the prototype,” Mr Bajaj said.

When productionised, the car will give twice the mileage of current B-segment small cars with its gasoline engine. And it will have multiple powertrain options. “We will also have a diesel option and one can always build LPG, CNG and hybrid options on to the platform as well,” Mr Bajaj said. For diesel, Bosch is “one option”, he added.

Bajaj is pitching for higher mileage as the selling point for its car. “Fuel cost is a greater component of the running cost of the car; so doubling fuel economy does more to lower the cost of the car than halving the price,” he said. “We hope the technical specs and features of our car should be quite new and that is what will provide fuel economy,” Mr Bajaj added.

Bajaj will be launching its Lite CVs in 2009. Two models with short and longer wheel-bases were presented on Tuesday. These two base models could then have varying body frames for various applications like open-bodied pick-up vans, close-bodied delivery vans, soft drinks, gas cylinder carriers etc.
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India’s exports up 27% in Nov

Press Trust of India

Tuesday, January 1, 2008 (New Delhi):

India's exports grew by 26.82 per cent in November 2007 to $12.42 billion, a respectable increase in the face of a costlier rupee, but was slower than the 35 per cent growth recorded in the previous month.

Imports in November surged by 29.26 per cent to $19.83 billion from $15.34 billion leaving a wider trade deficit of $7.4 billion against $5.5 billion.

The impact of a sharp appreciation of Indian currency against the dollar was visible in the mere 11.51 per cent export growth in rupee terms in November at Rs 49,000.16 crore.

For the April-November period of the current fiscal, exports were valued at $98.38 billion showing a growth of 22.08 per cent over a comparable period of 2006-07.

The Indian currency has appreciated 9.7 per cent against the US dollar, the main invoicing currency for trade, between April 3 and November 20 this year. It has risen 15.1 per cent in the 12 months from October 2006.

Sector wise growth

"While there is an overall growth in exports, a sector wise analysis would show that the employment-oriented segments like textile, pharma, leather and handicraft have registered a decline," Federation of Indian Export Organisations President Ganesh Gupta said.

He said the respectable figure of 26.82 per cent growth in November could be on account of sectors with high import content like petroleum performing well.

The government had extended relief to the rupee-hit exporters worth Rs 5,200 crore by way of higher tax neutralisations through various schemes.

Oil imports

Oil imports during November 2007 were valued at $5.82 billion, which was 16.72 per cent higher than the $4.98 billion in the same month last year. Non-oil imports during the month grew 35.3 per cent to $14 billion as against $10.35 billion.

During April-November 2007, oil imports were valued at $43.34 billion, up 10.19 per cent from $39.33 billion in the same period last year.

For the eight-month period, non-oil imports were valued at $107.84 billion, which was 35.24 per cent higher than the $79.73 billion of non-oil imports in April-November 2006.

Orient needs a lesson: Kamal Nath

Thursday, December 20, 2007 (New Delhi):

The war of words between Tata and the Orient Express chain of hotels threatens to turn into a diplomatic row with the Indian government joining issue with Orient for its disparaging comments about the Indian chain of hotels.

Expressing his disappointment, the Commerce Minister Kamal Nath went as far as to urge American business councils to condemn Orient and teach the super luxury hotel chain a lesson.

“Asia is known for hospitality and it is disappointing that people do not understand this. I would urge the US government to enlighten Oriental Hotels about the changing global scenario. They have to understand that today Indian entrepreneurs and intellectuals are respected worldwide and they should also do so,” said Nath.

Earlier, the Tatas, who run the Taj group of hotels, have asked for a public apology from Orient Express for making discriminatory remarks about the Indian hotel chain.

Orient had recently spurned a move by the Tatas to further a business alliance after they picked up 11.5 per cent equity in the company saying that tying up with a 'predominantly domestic Indian hotel chain' would erode its brand value.

The infuriated Tatas have shot back a letter calling Orient's views 'inaccurate, libelous and a violation of corporate governance norms.'

Irresponsible statement

"It is outrageous the fashion in which they are doing this. We are the single largest shareholder and any responsible company would not do this,” said R K Krishnakumar, chairman, Indian Hotel.

"We have to be patient and cool. We are the largest single shareholders in Orient. There are a number of other investors as well hedge funds and they have all gathered to support us," he added.

The group does not make hostile moves we can make an open offer but we do not make hostile moves as a group, he pointed out.

Tatas claim that their properties in North America command higher premium compared with Orient. The company said Indian hotel's EDITDA margins are also higher at 40 per cent against 30 per cent of Orient.

India, Sri Lanka to discuss trade

Indo-Asian News Service

Sunday, December 16, 2007 (Chennai):

Sri Lankan Minister for International Trade G L Peiris will inaugurate a two-day conference on "India-Sri Lanka: Trade and Investments" in Chennai on Monday.

The conference, organised by Observer Research Foundation in association with Confederation of Indian Industries and the Sri Lankan deputy high commission, will focus on industrial and investment climate and trade related issues.

It will also have one-to-one sessions among traders for developing bilateral contacts and relations of shared, long-term interests.

Officials and industry trade representatives from India and Sri Lanka will have a free and frank exchange of views on issues and concerns of mutual concern to both the countries and all stakeholders.

After the Free Trade Agreement (FTA) was signed between the two countries in 1998, the bilateral trade has more than doubled in just three years. From $557 million in 1999, it has now grown to $2.7 billion in 2007.

Heavy investment

Now many Indian companies are investing heavily in Sri Lanka. The Indian Oil Corp is part owner of Lanka IOC, which took over the running of 100 petrol pumps of the Ceylon Petrol Corp in 2003 and commenced retailing products.

Companies such as Ashok Leyland have set up manufacturing facility in Sri Lanka, showing a clear evidence of the distance travelled from the days when Indian products were boycotted in the island nation.

Potential market

Tata trucks, Bajaj auto-rickshaws, TVS and Hero brands of two-wheelers zip past on Sri Lankan roads. Shops in Colombo and elsewhere display Indian consumer goods alongside those imported from the US, Australia, Singapore and Europe.

There are many areas still where India has potential to invest. Pharmaceuticals and healthcare is one such area.

Many Sri Lankan investors and industries have been in India for some time now. Textile giant Brandix is putting up a unit on 1,000 acres in Andhra Pradesh. Other private investors from Sri Lanka, big and small, are also in the fray.

Inflation shoots up to 3.75%

Press Trust of India

Friday, December 14, 2007 (New Delhi):

Inflation went up to 3.75 per cent for the week ended December 1, against 3.01 per cent in the previous week on account of rise in prices of fruits and vegetables and some manufactured items.

The whole-sale price index based inflation stood at 5.36 per cent in the corresponding week a year ago. During the week prices of fruits and vegetables, condiments and spices went up, while fish-marine got cheaper.

Among the manufactured food items, groundnut oil and coconut oil went up, while khandsari and maida declined.

In fuel category, prices of aviation turbine fuel shot up by 16 per cent, naphtha by 9 per cent and bitumen rose by 6 per cent.

Inflation figure for the week ended October 6 was revised to 3.22 per cent against the provisional figure of 3.07 per cent as the wholesale price index finally stood at 215 points compared to the earlier estimate of 214.7 points.

RBI Deputy Governor Rakesh Mohan on Thursday said the central bank was targeting a three per cent inflation rate in the medium-term so that the country could move toward full capital account convertibility (CAC).

"We have been successful in lowering the inflation rate from the erstwhile range of seven to eight per cent to the present level of four to five per cent," he had said.

According to the latest government data, the prices of coconut oil and gingelly oil increased 2 per cent while groundnut oil and imported edible oil were up by one per cent. However, rice bran oil was cheaper by nine per cent, khandsari by two per cent and maida (super-refined wheat flour) by one per cent.

Rupee weakens marginally against dollar

Wednesday, December 5, 2007 (Mumbai):

The rupee weakened against the US currency and was quoted about three paise lower in late morning trade as dollar turned strong overseas and FIIs slowed down activity on equity markets.

In quiet trade at the Interbank Foreign Exchange (forex) market, the local currency resumed steady at 39.42/44 a dollar from previous close of 39.42/43 and later slipped to 39.45/46 in late morning deals.

A smart recovery in dollar against major currencies in the global markets on Tuesday and capital outflows weighed on the rupee sentiment, forex dealers said.

Exporters' dollar selling also subsided amid anticipation of the central bank intervention as the rupee surged by 33 paise in the last four days, they added. Meanwhile, the benchmark Sensex spurted by 188.63 points to touch 19718.13 in morning trade.

Dollar hits record low against euro

Saturday, November 24, 2007 (New York):

The dollar hit a new low against the euro in thin trading on Friday as speculation continued that the American credit crisis will lead to another cut in interest rates in the US.

The 13-nation European currency spiked early to hit $1.4966, breaking the previous record of $1.4873, set the day before.

"Once again the message... coming through is that with further rate cuts expected from the Fed, the dollar is struggling to find any serious supporters," said James Hughes, an analyst at CMC Markets.

In late afternoon trading, the euro had retreated to $1.4838, up from the $1.4833 it bought late in Europe the day before, but down from the $1.4848 it bought in New York late Wednesday.

The dollar fell to purchase as little as 107.56 Japanese yen, dropping below the 108-yen level for the first time since 2005. It recovered slightly to purchase 108.18 yen, down from 108.62 yen late in Europe on Thursday and 108.68 yen in American trading on Wednesday.

The British pound, meanwhile, fell to $2.0612 from $2.0634 the day before in Europe and $2.0644 in New York on Wednesday.

The Thanksgiving holiday weekend kept many players on the sidelines, while Japanese financial markets were closed on Friday for the Labour Thanksgiving Day holiday.

The euro, the pound and other currencies have been climbing steadily against the dollar since August amid fears for the health of the US economy, stoked by the subprime credit crisis.

The dollar fell to purchase as little as 107.56 Japanese yen, dropping below the 108-yen level for the first time since 2005. It recovered slightly to purchase 108.18 yen, down from 108.62 yen late in Europe on Thursday and 108.68 yen in American trading on Wednesday.

The British pound, meanwhile, fell to $2.0612 from $2.0634 the day before in Europe and $2.0644 in New York on Wednesday.

The Thanksgiving holiday weekend kept many players on the sidelines, while Japanese financial markets were closed on Friday for the Labour Thanksgiving Day holiday.

The euro, the pound and other currencies have been climbing steadily against the dollar since August amid fears for the health of the US economy, stoked by the subprime credit crisis.

 

sensex up

Tuesday, November 13, 2007 (Mumbai):

Markets closed firm on Tuesday with the benchmark index at 19,035 making a gain of 1.59 per cent or 298 points. The 30-share index moved in a range of 18,636-19,210 levels.

In broader markets, Nifty also firmed up by 1.39 per cent or 78 points in a day of volatile trade. The 50-share index touched a day low of 5,591 before closing at 5,695.

"The best thing any investor can do is to stay invested in right stocks. Investors should focus on stocks or sectors like capital goods, power and engineering amongst others," stated Ashish Kapur, CEO, Invest Shoppe.

Asian markets closed weak on the back of Wall Street slide. Japanese stocks dropped to 16-month low on Tuesday as shares of metal and shipping companies were dragged down on worries of global economic slowdown. Nikkei 225 average lost 0.46 per cent on Tuesday.

Back home analysts are expecting the markets to consolidate in near term. However, they are worried that weak global cues might play dampening role in markets recovery.

"I don't think this kind of rally will sustain if there is continued selling amid weak global cues. Valuations are definitely looking stretched. I think another 10 per cent correction from these levels cannot be ruled out," said Neeraj Dewan, Director, Quantum Securities.

"Monthly charts are looking very strong, at every fall we are going to see sharp pull back. It is going to be little more challenging this time now, you will have to think more before buying," Anil Manghnani, Director of Modern Shares and Stock Brokers said.

NTPC, HDFC Bank, Larsen & Toubro, HDFC, State Bank of India, ICICI Bank and Tata Steel were some of the leading gainers in the BSE-30 pack; they firmed up by over 2.1 per cent each.

Among the NSE-50 scrips, MTNL, ABB, Suzlon Energy, BPCL, Tata Power Company, Sun Pharmaceuticals, Reliance Energy and Punjab National Bank were some of the key gainers.

Banking gains

BSE banking index, BANKEX firmed up by 3.4 per cent or 351 points was the biggest gainer among the sectoral indices. Capital Goods and Realty indices also closed on firm ground.

Buying was seen in banking counters with HDFC Bank (up 6.9 per cent), Axis Bank (up 6.1 per cent), Bank of India (up 5 per cent), Bank of Baroda (up 4.9 per cent) and Indian Overseas Bank (up 4.5 per cent) registering notable gains.

Capital goods counters gained ground with KEC Infrastructure at Rs 40 closing the day as a top gainer. The stock surged 20 per cent on Tuesday. HEG Limited, Gammon India and Dredging Corporation of India also gained 10 per cent each.

Real estate counters Anant Raj Industries, Omaxe, Ansal API, Mahindra Lifespace Developers, DLF and Parsvnath Developers also registered smart gains of over 2.4 per cent each.

However, information technology counters continue to face selling pressure with Wipro (down 3.5 per cent), Patni Computers (down 2.6 per cent), Mphasis (down 2.4 per cent), Tata Consultancy Services (down 1.5 per cent) and Infosys Technologies (down 0.8 per cent) slipping into red.                             SOURCE-NDTV