Indian Economy - News & Updates - Archive

[Neo]

India’s annual inflation heads towards 8pc ​

Saturday, May 17, 2008

NEW DELHI: India’s annual inflation rate headed towards 8 per cent in early May, clocking a 3-1/2-year high, but analysts said it was unlikely to provoke more monetary tightening for now as economic growth appeared to be slowing.

The wholesale price inflation rate, India’s most widely watched measure, rose 7.83 percent in the 12 months to May 3, its highest since November 2004 and above a median forecast of 7.50 per cent in a Reuters poll.

The government and central bank have taken steps in recent weeks to calm inflationary pressures in Asia’s third-largest economy, and the finance minister said he expected inflation to moderate once cuts in steel and cement prices flowed through.

The surprise jump, which stemmed from higher prices of industrial fuel, metal products and some food items, briefly sent the rupee to a 13-month low against the dollar and the 10-year bond yield to its highest in more than two weeks.

“I think pressures will persist in coming weeks and (inflation) will prevail above 7 per cent for the next three to four months,” said D K Joshi, principal economist at domestic rating agency Crisil in Mumbai.

“It’s a Catch-22 situation as they (the central bank) have to manage slowing growth and rising inflation. It’s a tough task.”

Industrial output growth slowed to an annual 3 per cent in March, its weakest in six years, according to data this week, sparking concerns about a wider slowdown in the economy.

The 10-year bond yield rose 7 basis points after the inflation data to close at 7.93 perc ent and the rupee fell to 42.92 before finishing at 42.53/54.

Many analysts expect inflation to remain high and say it could climb to 8 per cent in coming weeks.

In addition, previous weeks’ readings have consistently been revised higher. On Friday, the inflation rate for March 8 was revised up to 7.78 per cent from a provisional 5.92 per cent.

“The particularly striking feature of today’s release is the extraordinary upward revision.

It’s pretty clear that inflation is not 7.8 per cent, maybe 9 per cent at the moment and rising, “said Robert Prior-Wandesforde, an economist at HSBC in Singapore.

He did not expect the Reserve Bank of India (RBI) to act just yet, but if inflation hit double digits, he expected it to raise rates and tighten cash conditions around July-September, although he doubted that would be very effective.

“Against that background, it is going to be hard for the RBI to resist doing something more,” he said.

India’s annual inflation heads towards 8pc

 

[Neo]

Despite 6.2 percent growth, India's agro industry lags behind​

Calcutta News.Net
Sunday 18th May, 2008 (IANS)

India's agro-industry has miles to go before it catches up with the rest of the world. Its share in the agro-products of developing countries has gone up only marginally from 3.1 percent in 1995 to 3.8 percent in 2005, despite growing at 6.2 percent in the 10-year period.

China tops the list by accounting for 26.5 percent of the total agro-products in developing countries, says the UN Industrial Development Organisation (Unido) International Yearbook of Industrial Statistics 2007.

'Malaysia's and India's agro-industry grew on average by 8 and 6.2 percent respectively over 10 years (1995-2005), while the regional agro-industry growth performed at 5.7 percent,' the report states.

India's agro-industry employment share, says the Unido report, in total manufacturing formal employment is only 1.2 percent, while it is 9.5 percent in the Philippines, 8.8 percent in Malaysia and 7.6 percent in China.

'There is tremendous potential in India for the growth of the agro-industry. It is happening in other countries, but not in India. What is needed is proper coordination with farmers, and adequate processing infrastructure for agro-products,' P. Chengal Reddy, secretary general of the Consortium of Indian Farmers Associations (CIFA), told IANS.

According to an official estimate, the food-processing sector has the largest employment generation potential.

It generates employment for 54,000 people per Rs.10 billion investment, while in textiles the job potential is 45,000 and in paper it is 25,000.

The employment generation in medium, small, and micro enterprises in food processing increased from 3.8 million in 2002-03 to 4.5 million in 2006-07.

Reddy said the lack of infrastructure and technical know how was causing a huge loss of agro products, particularly perishable products like fruits and vegetables.

'India loses agro products worth Rs.1 trillion every year caused by transport loss, post-harvest poor storage facilities and the use of pesticides,' Reddy said.

'Though India is the second largest producer of fruits and vegetables in the world, the level of processing is only about 2.2 percent'.

Officials in the ministry of food processing industries (FPI), however, paint a rosy picture, claiming that the food-processing sector will generate over a million jobs in due course when different initiatives start bearing fruit.

'Foreign direct investment (FDI) in food processing sector has gone up from Rs.1.75 billion in 2004-05 to Rs.4.41 billion in 2006-07,' a senior ministry official said.

The government has permitted FDI up to 100 percent in the food processing sector.

The FPI ministry is proposing mega food parks in different parts of the country with strong backward and forward integration facility, and integrated cold chain at the farm gate level, collection and strategic distribution centres.
The ministry's Vision Document 2015 on food processing industries intends to increase the processing of perishables from six to 20 percent and share in global food trade from 1.5 to 3 percent by 2015.

'In order to meet the estimated investment of Rs.2 trillion to accelerate the growth in food processing industries, the government will chip in 10 percent, while the rest of funds will come from financial institutions and private investors or FDI,' the official said.

Despite 6.2 percent growth, India's agro industry lags behind

 

[Neo]

Mumbai airport voted best in India​

Calcutta News.Net
Saturday 17th May, 2008 (IANS)

Mumbai airport has been voted the best airport in India in a survey conducted by the Airport International Council, a body of operators who collectively manage over 1,600 airports worldwide.

According to the survey, shorter check-in queues, cleaner toilets, trolleys that work and a great retail experience had put Mumbai on top of the list.
Passengers at 100 airports across the world were asked to rate airports, among other things, on the basis of service, ambience and navigational aids within the terminals.

Mumbai airport scored 3.57 out of 5 - just a little below the industry average of 3.83. While Mumbai came out on top, Delhi followed at a distant 2.6, the survey said.

In all, 21 Asian airports were surveyed. Among them, Kuala Lumpur came out the clear winner.

Mumbai's Chhatrapati Shivaji International Airport (CSIA) is being modernized and upgraded by Mumbai International Airport Pvt. Ltd. (MIAL), a joint venture between the GVK-SA consortium and the Airports Authority of India (AAI).

MIAL was awarded the mandate of modernizing and upgrading it in April 2006. CSIA is India's busiest airport and catered to 25.8 million passengers and 533,593 tonnes of cargo in 2007-08.

Mumbai airport voted best in India

 

[Neo]

`Make India a trading hub for gem & jewellery'​

Chennai, May 17

Gem & Jewellery council wants India to become a trading hub. Undaunted by high interest rates, withdrawal of GSP benefits by the US and the general economic slowdown in some markets, India's Gem and Jewellery exports grew 22.27 per cent to touch $21 billion (Rs 95,000 crore) in 2007-08.

Because India imports key raw materials - gold and diamonds - the exports are highly import-intensive. Last year, the industry imported $18.50 billion worth of raw materials, according to the Gem & Jewellery Export Promotion Council GJEPC). However, the value addition of $2.5 billion, plus the domestic market for jewellery sustains the livelihood of some 30 lakh people.

According to Mr Sanjay Kothari, Chairman, GJEPC, India has about 10 per cent of world market and has a huge potential to export more. Towards this end, the Council has taken a few steps. One of them is to develop India into a trading hub. Today, Israel and Hong Kong are leading trading centres in the world. India can easily be another major trading centre, Mr Kothari said.

Another step is to build Indian brands - to popularise `Made in India'. Today, leading brands such as Tiffany get their products made in India, but sell under their own brands. For a start, GJEPC wants to popularise `Made in India' brand in West Asia, Mr Kothari said.

FORECASTING TRENDS

The Council has also called for forecasting fashion trends. A `Trend Cell' has been formed for this purpose. Alongside, the Council will work with the National Institute of Design and the National Institute of Fashion Technology for enhancing design capabilities of artisans.

Mr Kothari said that exporters from the South frequently suffer from a want of gold supplies. Exporters are not allowed import directly - they have buy from institutions such MMTC and banks such as SBI, ABN Amro and Nova Scotia. Because the demand from the South is relatively small, these agencies do not operate there.

The GJEPC has represented to the Government to allow exporters to import gold.

IIJS 2008

Meanwhile, the Council holding an international exhibition, India International Jewellery Show (IIJS) 2008 between August 7 and 11, Mumbai.

Over 700 exhibitors with over 1,500 booths on an area 50,000 sq metres will showcase their products, Mr Kothari said. In a similar show last year, business worth Rs 3,000 crore was transacted, he said.

The Hindu Business Line : `Make India a trading hub for gem & jewellery'

 

[Neo]

Envisaging a dynamic India by 2020​

Rajiv Mundhra, Director, Simplex Infrastructures

India's Economy, post independence, in many ways looks like a success story. It has shaped up in quite an impressive way with rapid economic growth rate, bold policy reforms, major foreign investments, boom in the information technology sector and infrastructure developments across the nation. Of all these, the growth of infrastructure across all industries has been a key propellant in shaping the nation’s growth.

On the very same note, it becomes significant to examine the country’s infrastructure development. However, an understanding of infrastructure is incomplete without an understanding of goals set in this direction. They are perhaps an insight into what India’s infrastructure would be like in let’s say 2020, a picture utopian yet inspirational in nature — which not only requires expeditious plans but also quicker implementation of those plans, in order to bolster and keep pace with the requirements of our growing Economy.

In the wake of globalisation, providing major impetus to the infrastructure sector in India has been the government’s encouraging initiative of public-private partnership (PPP). This has been brought in for advanced technology, better management and financial resources in setting up new capacities and improvement of existing ones.

The effect of PPPs in terms of garnering investments and bringing in increased efficiency is undisputed. Moreover, FDI flow has been instrumental in the sector’s growth. However, simplifying the procedures and making them part of the government’s ongoing efforts would further augment FDI.

Measures to bring in both sectors to function together include a slew of incentives in the form of tax holidays, mergers and partnerships. Joint public-private models like BOT (Built, Operate and Transfer), BOOT (Built, Operate, Own and Transfer) and DBFO (Design, Built, Finance and Operate) with different levels of shared responsibility and contribution have been formulated to further dovetail operating procedures to accommodate each party.

The private sector’s response to these measures has been encouraging. Large amount of funds in the market, courtesy the economic boom and consequent increase in the private sector’s risk-taking ability have also contributed to this response. There is an all round expansion being undertaken across the major infrastructure segments — power, energy, roads, railways, airways, shipping and telecom. This development is attributed to the many big and small infrastructure Companies that have marked their presence across all verticals.

Giving globalisation a new face, Indian Companies are also exploring global opportunities, having realised the importance of acquiring overseas assets, projects, brand and goodwill to ensure their longevity.

The burgeoning construction industry, however, has certain constraints too, which include high duties on construction equipment. The state governments should persuade the Union government to reduce duties on construction equipment. Moreover, infrastructure Companies are said to be facing manpower crunch. The Companies have dealt with this in their own ways. Some have responded by increasing their employee remuneration; while others have changed recruitment standards with a view to make greater number of people eligible. There is also a need to institutionalise training of construction workers, which is nearly absent at the present moment.

Vision India 2020, simply put, entails major aspects of the final picture that would emerge as an outcome of resolving above-mentioned hurdles and moving towards exploring greater avenues for growth. When the country is witnessing a gaping demand for better infrastructure facilities in order to fulfil requirements that arise with such magnitude of development, an efficient network of infrastructure services is imperative as it enables cities and villages to become vehicles for economic and social prosperity of the nation. This would imply an India where infrastructure infuses new life into the Economy, thereby laying the foundation for future growth and expansion....

Envisaging a dynamic India by 2020

 

[Flintlock]

Mumbai airport voted best in India​

Calcutta News.Net
Saturday 17th May, 2008 (IANS)

Mumbai airport has been voted the best airport in India in a survey conducted by the Airport International Council, a body of operators who collectively manage over 1,600 airports worldwide.

According to the survey, shorter check-in queues, cleaner toilets, trolleys that work and a great retail experience had put Mumbai on top of the list.
Passengers at 100 airports across the world were asked to rate airports, among other things, on the basis of service, ambience and navigational aids within the terminals.

Mumbai airport scored 3.57 out of 5 - just a little below the industry average of 3.83. While Mumbai came out on top, Delhi followed at a distant 2.6, the survey said.

In all, 21 Asian airports were surveyed. Among them, Kuala Lumpur came out the clear winner.

Mumbai's Chhatrapati Shivaji International Airport (CSIA) is being modernized and upgraded by Mumbai International Airport Pvt. Ltd. (MIAL), a joint venture between the GVK-SA consortium and the Airports Authority of India (AAI).

MIAL was awarded the mandate of modernizing and upgrading it in April 2006. CSIA is India's busiest airport and catered to 25.8 million passengers and 533,593 tonnes of cargo in 2007-08.

Mumbai airport voted best in India

Wow...really?

That's pretty unbelievable, since it was voted among the worst in the world a couple of months back...

 

[Neo]

Wow...really?

That's pretty unbelievable, since it was voted among the worst in the world a couple of months back...

Yep, surprised me aswell. I thought HYD or BLR would beat BOM anytime!

 

[Flintlock]

Yep, surprised me aswell. I thought HYD or BLR would beat BOM anytime!

HYD isn't fully operational yet...its having teething problems and the management is getting settled in...besides, most flyers probably have never even heard of it..

BLR hasn't started operations as yet.

 

[Flintlock]

India's Reliance Entertainment in Hollywood deal
Mon May 19, 2008 3:09am EDT

MUMBAI, May 19 (Reuters) - A unit of India's diversified Reliance ADA group, controlled by billionaire Anil Ambani, said it has signed deals with eight Hollywood production houses, as it seeks a bigger global presence.

Reliance Big Entertainment will develop and co-finance some of the projects emanating from these deals, and secure the Indian rights, it said, without specifying financial details.

"They are part of (our) long-term strategy for media investments in Hollywood... to build a fully integrated movie company with substantial holdings in production, distribution and exhibition," it said in a statement at the weekend.

The deals are with production houses including George Clooney's Smokehouse Productions, Tom Hanks' Playtone Productions, Brad Pitt's Plan B Entertainment, Chris Columbus' 1492 Pictures and Nicolas Cage's Saturn Productions, it said.

Los Angeles-based Creative Artists Agency was "instrumental in brokering the deals", and is advising Reliance on its Hollywood strategy, it said.

The company expects to generate about 30 scripts from the deals, and would be a co-producer, a part producer or a distributor of the movies, the Economic Times said, citing Chairman Amit Khanna.

Reliance Entertainment, which controls Reliance Big Entertainment, aims to have a presence across content and distribution platforms including television and digital media.

It controls producer and exhibitor Adlabs Films Ltd (ADLF.BO: Quote, Profile, Research), a private FM network, as well as gaming portal Zapak.

Billionaire investor George Soros recently paid $100 million for a minority stake in Reliance Entertainment, which the company said valued it at $3 billion.

India's UTV Motion Pictures, a unit of UTV Software Communications (UTVS.BO: Quote, Profile, Research), has co-production deals with Hollywood studios including News Corp's (NWSa.N: Quote, Profile, Research) 20th Century Fox.

Walt Disney Studios (DIS.N: Quote, Profile, Research), Viacom Inc (VIAb.N: Quote, Profile, Research) and Sony Pictures (6758.T: Quote, Profile, Research) are doing co-production deals in India, home to the world's most prolific movie industry. (Reporting by Rina Chandran; Editing by Ranjit Gangadharan)

 

[vish]

Man, my dream pair is finally coming true... Katrina Kaif and Nicolas Cage...

 

[Flintlock]

Future of BPOs lies in rural India: Karnik

BS Reporter / Hyderabad May 18, 2008, 4:34 IST

The future of India's BPO sector lies in moving more of its operations to rural parts, according to Kiran Karnik, former Nasscom president and member of IDG's global advisory board. Rural India not only offers lower costs but also an abundant pool of highly-motivated talent.

"Indian companies have been setting up BPOs in various countries including Sri Lanka, Vietnam, China, and Thailand. However, the biggest unexplored market is here. The future destination for the Indian BPO industry is within the country," he said.

Delivering his keynote address at the first national rural BPO conference organised by Byrraju Foundation, the NGO arm of Satyam Computer Services, in Hyderabad, Karnik said Indian BPO companies are moving slowly towards rural areas.

"We face competition as a result of the success we have achieved, coupled with the already-existing problems like lack of talent and the related issue of attrition. Clearly, there is a huge untapped talent in smaller towns and the industry should find ways and means to identify this."

Saying that Indian IT and BPO facilities are being set up as world-class facilities, he said that companies should look at small and cheaper facilities for services like data entry to tide over infrastructure and hiring costs.

Future of BPOs lies in rural India: Karnik

 

[Neo]

EU investment in India surges past China in 2007 ​

Tuesday, May 20, 2008

BRUSSELS: The flow of European cash into Indian firms surged more than fourfold last year, far surpassing EU investments into Chinese companies, estimates from the bloc’s Eurostat data agency showed on Monday.

Foreign direct investment from the 27-nation European Union into India jumped to 10.9 billion euros (17.0 billion dollars) last year, up from 2.5 billion in 2006, Eurostat said. Meanwhile, the flow of EU foreign direct investment (FDI) into China excluding Hong Kong slumped last year to 1.8 billion euros from 6.0 billion euros in 2006 despite intense media interest in the country as an emerging Asian economic power.

The drop meant that China was the least popular destination for EU FDI last year among the four major emerging economies, with oil-rich Russia taking in 17.1 billion euros in European investment and Brazil 7.1 billion euros.

The United States, Europe’s biggest trade partner, remained by far the biggest destination for EU investors’ cash, taking in 112.6 billion euros, up from 79.0 billion euros. Overall, EU FDI into the rest of the world rose 53 per cent last year to 419.9 billion euros, up from 275.0 billion euros in 2006.

Meanwhile, non-European investors ratcheted up investments in the EU by 89 per cent last year to 319.2 billion euros from the 168.9 billion euros recorded in 2006. Britain took in the lion’s share of FDI into Europe last year, with 87.0 billion euros or 27 per cent of the total.

Despite its diminutive size, financial services hub Luxembourg was the second biggest recipient of FDI in Europe last year with 50.2 billion euros or 16 per cent of the total. The Grand Duchy was followed by France which attracted 23.4 billion euros of FDI last year or seven per cent of the total.

Eurostat defines FDI as a long-term investment by an investor in one country in a company in another country that gives the investor more than 10 per cent control over the voting rights on the target company’s board of directors.

http://www.thenews.com.pk/arc_news.asp?id=3

 

[Neo]

India’s subsidy burden may touch Rs 3,000bn by March ​

NEW DELHI: India’s subsidy burden is become unbearable touching Rs 2310 billion. Economists believe the subsidy basket may go over Rs 3000 billion by the time the country goes to polls in March next year as the Prime Minister Dr Manmohan Singh led United Progressive Alliance (UPA) government would try to be more liberal.

Sources in the Finance Ministry admit that the government’s balance sheet would be still worse because of the farm loan waiver of Rs 6. 44 billion this year and hefty sums spent on the rural employment guarantee scheme.

But for parking most of the subsidy liability outside the budget, the deficit would have remained where it was last year and as such more subsidies that the government provides now for electoral gains would put a big hole in the Union Budget and much bigger deficit, the sources admit. A higher deficit means the government pumping in more money in the market than its earning and that is bound to push up the prices.

The Finance Ministry officials are not ready to divulge as to where Chidambaram has hidden the subsidies and how much he has actually deferred for his successor to handle. A source, however, disclosed that the oil, FCI (Food Corporation of India) and fertilizer bonds that the government has issued are not shown in the budget except to the extent of interest paid on them.

The actual subsidy that the government will have to pay for is right now parked in the balance sheets of the state-owned oil and fertilizer companies and FCI as compensation paid to them from the taxpayer’s money to bear the losses. There bonds, however, will have to be ultimately paid by the government and it is the total cost of these bonds that reveals the actual subsidy bill that has piled up.

The oil bonds issued to compensate the state-owned oil companies alone total up to Rs 1350 billion. The oil companies are, however, losing heavily at the rate of Rs 3 billion a day from the steep rise in the crude oil prices in the international market and the government will not be able to allow any increase in prices of petrol and diesel or kerosene and cooking gas in an election year. Obviously, this means more oil bonds in the coming months to subsidise the oil companies.

Daily Times - Leading News Resource of Pakistan

 

[Flintlock]

India Ranked Above China in Social Protection

The Asian Development Bank ranks India 10th among 31 Asia-Pacific countries in providing social security like health care and education

India has fared better in providing social security like health care, education and child welfare to its people than China and Malaysia, as per a new index brought out by the Asian Development Bank.

In a list of 31 Asia-Pacific countries, India ranked at 10th place, above China and Malaysia, but below Uzbekistan, Mongolia, South Korea and Japan, which topped the ADB's Social Protection Index (SPI).

Apart from China and Malaysia, the countries which are ranked below India include Philippines, Nepal, Indonesia and Bangladesh. Pakistan was ranked at the bottom, next only to Papua New Guinea.

The ADB, in the new Index, has established that providing social protection is not subject to the wealth of a nation. Even poor countries like India can afford to provide social cover in the form of health insurance, labour market, child protection, education among other things, if there is government will.

On a scale between zero and 1, India has scored 0.46 points, with Japan topping the chart with 0.96 points. However, the ranking of India shows that although people are getting some level of social protection, the impact of social protection programs on the incomes of the poor is low.

Social protection is basically a term coined for showing the extent to which Asia-Pacific countries provide for welfare, labour market, social security, health insurance, micro-credit, child protection, education, and health support programmes to their citizens, mainly to those living below the poverty line.

The ranking is expected to have some effect on international donors who work for supporting social protection activities.

Japan to invest over Rs 8,500 cr in infrastructure projects in India- Infrastructure-Economy-News-The Economic Times

 

[Flintlock]

Japan to invest over Rs 8,500 cr in infrastructure projects in India
12 May, 2008, 0019 hrs IST, TNN

NEW DELHI: Japan has committed Rs 8,582 crore as assistance to develop nine infrastructure projects in India. The assistance will help in undertaking projects such as the Kolkata metro, Hogennakal water supply project and Tamil Nadu urban infrastructure project, an official release said.

The second phase of the Delhi metro project will also be funded by Japan. This is the highest-ever official development assistance by the Japanese government to India. Negotiations on infrastructure projects like dedicated freight corridor, Chennai metro and Delhi-Mumbai industrial corridor have already been initiated between the two governments. Both the governments are also negotiating to set up an IIT in India.

The two have also agreed to have a bilateral currency swap agreement to meet any short-term liquidity crisis, which marks a major step in strengthening their bilateral economic relation. India and Japan have also set up forums like the High Level Policy Dialogue on Economic Development and the India-Japan Strategic Dialogue on Economic Issues that will hold discussions annually, the statement added.

The other projects covered by the latest aid include Hyderabad outer ring road project, Haryana transmission system project and UP forestry and poverty alleviation project. Earlier in the year, Japan had committed to fund the Goa water supply and sewerage project as well as the Maharashtra transmission system project.

http://economictimes.indiatimes.com...ure_projects_in_India/articleshow/3030554.cms