Indian Economy - News & Updates - Archive

[Nihat]

Inflation at its lowest-ever level, down to 0.44 pc




New Delhi: Inflation has fallen to its lowest-ever level in India with the figures at 0.44 per cent for the week ending March 7 as against 2.43 per cent in the previous week.

With inflation nearing the zero-per cent mark, India now faces the threat of deflation.

 

[Omar1984]

Infrastructure deficit chokes India

By James Lamont in New Delhi

Published: March 17 2009 10:55 | Last updated: March 17 2009 16:49

India faces a shortfall of as much as $190bn in financing key infrastructure projects as the global crisis chokes off urgently needed capital, according to a study by McKinsey, the management consultants.

Hard road: cash constraints are slowing India’s transformation to a more modern economy

Infrastructure development is one of the most important challenges facing New Delhi as it strives to sustain high levels of economic growth. The Indian government has identified the need for $500bn (€385bn, £357bn) in infrastructure spending between 2007 and 2012. But a liquidity squeeze in the local banking system and the draining away of foreign investment has cast doubt on this goal.

Decades of underinvestment in roads, ports, airports and power has left the country crippled by a severe infrastructure deficit.

Roads in the main cities are frequently clogged with heavy traffic and 90 per cent are structurally unsuitable for loaded trucks. Ports are running close to capacity.

Financial constraints threaten to block a transformation to a more modern economy.

“Structural impediments in the financial system coupled with the global credit crisis will constrain capital flows to the sector, perpetuating the deficit in core public goods and persistent inefficiencies in the economy,” the study said.

Some economists claim that if India improved its physical infrastructure the country’s entrepreneurial drive would comfortably propel it to double-digit economic growth to rival China’s. Frequent comparisons are made between China’s focus on infrastructure development and India’s often Victorian-era systems.

According to a government blueprint, a quarter of new investment in core infrastructure is expected to come from the private sector.

New projects include the $50bn Delhi-Mumbai industrial corridor, high-speed rail links between main cities and improved cargo handling at ports. The country also aims to have 500 airports operational in the next decade.

To avert a funding shortfall in infrastructure development “that India can ill afford”, McKinsey called for urgent reform of the financial system to free up capital, attract new investors – such as mutual and pension funds, and overseas infrastructure funds – and new mechanisms to facilitate investment.

Its study was critical of restrictions on insurance, pension and provident funds, a shallow bond market and constraints on external commercial borrowings.

A separate study by the Federation of Indian Chambers of Commerce and Industry and Deloitte, the audit firm, earlier this week highlighted similar concerns. It said the country’s task of mobilising $320bn for infrastructure over the next three years was severely hampered by a lack of policy clarity, cost escalations and limited long-term finance.



FT.com / Asia-Pacific / India - Infrastructure deficit chokes India

 

[jetLi]

Software major Sapient has laid off 500 employees


New Delhi: Software major Sapient has laid off 500 employees at offices in Bangalore, Noida and Gurgaon.

Sapient PR confirmed to CNN-IBN that employees have been laid off from Sapient's offices in Bangalore, Noida and Gurgaon.

No notice was given to the laid off employees.

Armed guards were deployed around the office on Friday and Saturday and employees were not allowed to enter the premises in Gurgaon.

A few months back the US-based IT company had laid off 160 employees. Sapient employs about 6,000 people in India.

Sources say Sapient India Managing Director Sandeep Dhar had sent an e-mail to employees a few months ago after 160 employees were laid off.

In the e-mail, Dhar had admitted that decision to lay-off employees was taken so that the company could respond better to current and future market opportunities.

Software giant Sapient lays off 500 employees in India

good news, India coding job of none business

 

[linkinpark]

good news, India coding job of none business

What do you mean?. Can you be more clear.

 

[Nihat]

Indian financial system resilient, says former IMF chief Camdessus

http://economictimes.indiatimes.com/...ow/4297370.cms

Here’s a big pat for the Indian financial system and it comes from none other than Michel Camdessus who was the chief of International Monetary Fund (IMF) for 13 years including 1997-98 when Asian currency crisis rocked the global economy. The Indian financial system seems to have absorbed much less toxic assets as compared to a number of other countries, he said on Saturday.

Mr Camdessus, who is now the special envoy of French President Nicholas Sarkozy for G20 deliberations on the global economic crisis, emphasised that the Indian financial system was ‘resisting the global economic crisis well’ and he found no major concern.

The French financial expert is now on a visit to India and he has met Planning Commission deputy chairman Montek Singh Ahluwalia to co-ordinate the strategies of the two countries for the forthcoming meeting of the G 20 which includes finance ministers and central bank chiefs of the top economies of the world including the US, Japan, UK, France, Germany, Russia and China. Scheduled for April 2, the next meeting of G 20 is to discuss strategies for sustained recovery from the global economic slump through a multi-pronged approach.

Mr Camdessus appreciated the government’s efforts to inject more capital into (public sector) banks and there was no particular are of concern. “The situation is reasonably under control,” he noted. That should sound like music to financial sector regulators and the government, apart from Indian finance sector players. The appreciation is significant in view of the weakness seen in the financial sector in many developed countries including the US, the UK, Germany and France.

Mr Camdessus, who was also the governor of Bank of France, said that India and France are planning to work together in brining more transparency into tax havens. India views tax havens like Cyprus, Isle of Man and British Virgin Islands as a potential source of threat in terms of tax evasion, money laundering and terror financing.

France feels that this is reforms time for the finance sector globally and this is a good window to infuse transparency on tax havens. Recently Switzerland has agreed to scrap its banking secrecy laws to bring them in line with G20 norms. Similar efforts are being pursued by the G20 in the case of Singapore too.

The former IMF chief measures to erect protectionist trade barriers should be resisted. There is a wave of ‘populist pressure’ across the globe to bring in protectionist measures and France will work with India in ensuring that government’s don’t succumb to such demands.

Mr Camdessus said governments should return to fiscal discipline as soon as possible. Persisting with huge government borrowing and spending to counter economic slowdown would not be sustainable in the long term. The will either lead to major bankruptcies and spurt in inflation which could be damaging to everybody, he added.

Mr Camdessus said the IMF should work closely with the Forum for Financial Stability to provide ‘early warning’ to prevent the kind of crisis which the world is suffering now. The G20 is planning to push for changes in IMF to ensure that the institution gears up to tackle modern challenges.

 

[Nihat]

Forex reserves at $249 bn on March 13

http://economictimes.indiatimes.com/...ow/4292968.cms

Quote:
Foreign exchange reserves rose $1.4bn during the week ended March 13, reversing the trend of the past five weeks, during which reserves dipped by close to $4bn. This was partly due to revaluation of non-dollar reserves in assets and partly due to dollar purchases by the central bank.

According to the latest figures released by the Reserve Bank of India, total foreign exchange reserves including gold and SDR (currency with the International Monetary Fund- IMF) rose $249m to touch $249.3 billion.

While foreign currency assets rose $1,432m, the value of gold in reserves rose $862m during the week largely on account of the sharp rise in global bullion prices. Reserves with the IMF dipped $5m. The value gold and SDR in reserves however remained unchanged during the week.

 

[Nihat]

Source - HT e paper.

 

[jetLi]

What do you mean?. Can you be more clear.

I mean that, India 's software industry just carry on the america and euro contract, infact just doing the Coding job.

In the software industry , it is the end-level.

 

[linkinpark]

I mean that, India 's software industry just carry on the america and euro contract, infact just doing the Coding job.

In the software industry , it is the end-level.

Of course, software industry is a service industry and has clients and contracts from US and Europe since that is where a number of companies are there which require different software needs. Remember, India also has software clients in Japan, Brazil and even China. It is just a coding job but needs brains to do that coding job which is what is being done by Indian software companies.

 

[LCA]

Nano to debut today

Nano to debut today

Published on Mon, Mar 23, 2009 at 09:26 , Updated at Mon, Mar 23, 2009 at 11:41
Source : CNBC-TV18

The world’s cheapest car will make its commercial debut today. It has been a long journey for Tata Motors—from warding off critics who scoffed at the idea of the Nano, to being caught in a political battle at Singur—the small car has come a long way. Possibly, this is a car that had the most tumultuous journey to reach its market. Now, the launch of the Nano is perhaps the most watched event in the auto world.

There is quite a lot of excitement as all eyes are on the launch of the world’s cheapest car—Tata Nano. The car will be launched in Mumbai on Monday. The two most important things that everyone has been looking forward to is, the actual price of the car and the cost of the car on road. We have been telling you that it would range anywhere between Rs 1.3 to Rs 1.8 lakh or 1.9 lakh depending on the variants, since it will come in three variants. Of course, the actual price will be announced on Monday.

Other than this, the actual booking procedure of the car is going to be announced and that is critical, as millions of people are waiting to buy this car. But the hitch is its limited volumes currently; we understand that the wait could be quite long as there are production constraints. The company plans to reach a 70,000 units target only by the end of April 2010. Currently, they have just managed to build 800-900 or 1,000 cars so far. There will also be a booking amount for the car and expected anywhere between Rs 50,000-60,000. But even after the booking amount, the real question would be that how long would a customer have to wait to get the car in his hands. That is going to be crucial.

All this queries are expected to be answered on Monday by the Tata Motors management. The real test would be whether this Rs 1 lakh car will be fuel efficient, even though the company says that it would give a fuel efficiency of about 23 km/liter, quality, fit, finish, features, along with the running and maintenance cost will also be critical.

 

[LCA]

Cricinfo - IPL permitted to seek new broadcast deal

IPL permitted to seek new broadcast deal

Cricinfo staff

March 23, 2009

The Bombay High Court has cleared the way for the BCCI to seek a new broadcast deal by rejecting a plea from Sony TV, which had challenged the Indian cricket board's decision to terminate its five-year deal to televise the IPL.

The BCCI has, meanwhile, signed a fresh broadcast rights deal worth a reported US$1.2 billion with World Sports Group (WSG), which in turn has been engaged in discussions with various broadcasters for a new IPL deal. It has been reported that Sony is among those who are now trying to negotiate a new deal with WSG and sources have indicated that ESPN-Star Sports (ESS) and NDTV, the New Delhi-based media organisation, are also in discussions to telecast the IPL.

It is unclear, though, if Multi Screen Media Pvt Ltd, which held the IPL contract under the Sony umbrella, will approach the Supreme Court to appeal against Monday's decision.

Sony had sub-licensed the IPL's subcontinent broadcast rights last year from WSG, who had won an original ten-year bid for US$1.02 billion, but moved the court after receiving a notice of termination from the BCCI, which runs the IPL. The Indian board claimed that Sony had repeatedly violated the integrity of telecast by prematurely cutting to breaks and inserting commercials during a live match, replays and other on-field action.

The court placed a freeze on IPL signing another broadcast deal and in the meantime, attempts between Sony and the IPL to negotiate an out-of-court settlement failed after the broadcaster agreed to the Indian board's commercial terms but sought a "non-terminable contract".

IPL officials were unavailable for a reaction. Rohit Gupta, president of network sales at Multi Screen Media Pvt Ltd said he could not discuss "anything at all" regarding the issue.

The IPL's relationship with Sony had turned rocky last month after the IPL lost out on a US$31.16 million deal because of a dispute between Sony and Big TV, a direct-to-home provider. Ties between the two dipped further after the subsequent resignation of Kunal Dasgupta, the then Sony CEO, who was known to be close to Lalit Modi, the IPL chairman. Sony is also understood to have been keen on renegotiating the financial terms of its contract with the IPL and had concerns about the tournament's revised dates and some of the venues that were being considered.

 

[Gabbar]

Airbus to set up manufacturing base in India in 3-4 yrs

NEW DELHI: Major aircraft maker Airbus Industrie plans to have a manufacturing base in India in the next three-four years, a top company official
said on Tuesday.

"We don't want to copy what we have done in China (having an aircraft manufacturing base there). China started more on the manufacturing side, but the biggest development in India was on engineering and services sector.

"... But we plan to develop manufacturing base in India in the next three to four years," Eric Zenin, Head of Airbus Business Development and International Cooperation, told reporters here.

Airbus Director International Cooperation Swaminathan Dwarakanath said the company projected an expenditure of about USD 1 billion in India over the next 10 years if it found the "right partners and the right projects" as part of its globalisation plans.

Maintaining that Airbus Industrie planned to shift part of its operations out of Europe, its Executive Vice President Christian Scherer said it planned to build up to 20 per cent of aero structures and 30 per cent of engineering sub- contracting offshore by 2020 and "India will get a large chunk of this business".

He said Airbus Industrie already had five engineering centres outside Europe -- two in the US and one each in Bangalore, Beijing and Russia.

The company currently has 347 aircraft of different make on order from India where it has a marketshare of 68 per cent. It predicts 992 aircraft orders till 2026 from India, including about 60 large sized ones like the jumbo A-380s.

Asked whether any orders from India were cancelled due to the economic slowdown, Scherer said a few of Kingfisher Airlines order for A-340s were shifted to Nigeria. "We are carrying out some adjustments with some customers worldwide, redirecting and rebooking aircraft orders," he said.

Referring to business in India, he said state-owned Hindustan Aeronautics Limited was building a large number of aircraft doors, mainly for A-320s.

"In the next couple of years, 50 per cent of these doors will be produced by HAL," he added.

Dwarakanath said the engineering centre at Bangalore was already developing advanced capabilities in modelling and simulation, including areas like flight management systems, aero dynamics and digital simulation.

Indian IT firms were working on "high-end activities" like crash worthiness analysis of the A-380s, their wings and electronic harness design for the A-350, which is yet to come out of the production line, he said.

Scherer said Airbus' parent company EADS had set up a joint venture with AI to establish a Maintenance, Repair and Overhaul (MRO) facility in India.

"At present, it is going through regulatory approvals. It does not matter whether it is part of the offsets but is a small part of our overall comprehensive strategy in India," he added.

 

[jetLi]

Nano to debut today

Nano to debut today

Published on Mon, Mar 23, 2009 at 09:26 , Updated at Mon, Mar 23, 2009 at 11:41
Source : CNBC-TV18

The world’s cheapest car will make its commercial debut today. It has been a long journey for Tata Motors—from warding off critics who scoffed at the idea of the Nano, to being caught in a political battle at Singur—the small car has come a long way. Possibly, this is a car that had the most tumultuous journey to reach its market. Now, the launch of the Nano is perhaps the most watched event in the auto world.

There is quite a lot of excitement as all eyes are on the launch of the world’s cheapest car—Tata Nano. The car will be launched in Mumbai on Monday. The two most important things that everyone has been looking forward to is, the actual price of the car and the cost of the car on road. We have been telling you that it would range anywhere between Rs 1.3 to Rs 1.8 lakh or 1.9 lakh depending on the variants, since it will come in three variants. Of course, the actual price will be announced on Monday.

Other than this, the actual booking procedure of the car is going to be announced and that is critical, as millions of people are waiting to buy this car. But the hitch is its limited volumes currently; we understand that the wait could be quite long as there are production constraints. The company plans to reach a 70,000 units target only by the end of April 2010. Currently, they have just managed to build 800-900 or 1,000 cars so far. There will also be a booking amount for the car and expected anywhere between Rs 50,000-60,000. But even after the booking amount, the real question would be that how long would a customer have to wait to get the car in his hands. That is going to be crucial.

All this queries are expected to be answered on Monday by the Tata Motors management. The real test would be whether this Rs 1 lakh car will be fuel efficient, even though the company says that it would give a fuel efficiency of about 23 km/liter, quality, fit, finish, features, along with the running and maintenance cost will also be critical.

very good ,
It will be a good choice for the middle class

 

[Neo]

India inflation to be near zero for 3 months ​

Wednesday, March 25, 2009

NEW DELHI: Monetary policy was key to reviving the Indian economy, with wholesale price inflation set to remain near zero for the next three months, Arvind Virmani, the finance ministry’s chief economic adviser, said on Tuesday.

He said economic growth in the fiscal year ending March 31 was likely to be close to 7 per cent after farm data is updated.

Virmani said monetary policy had to work in tandem with fiscal stimulus to lift sagging demand and growth.

“In a demand depression, monetary policy is the first line of defence. Whatever we said here (in the half-yearly review report), still applies,” Virmani told Reuters in an interview.

Since October, the central bank has cut its key lending rate by 400 basis points. The government has cut factory gate duties and service tax rates to protect growth and jobs.

The government has forecast growth of 7.1 per cent in 2008/09, but private analysts expect it to be lower after some dismal factory output and export data in recent months.

 

[Neo]

India may ease monetary policy​

NEW DELHI: India’s growth is seen slowing to 6.5 percent in the fiscal year that ends on March 31, below official forecast of around seven percent, and there is room for more monetary easing, a senior government official said.

“One of the advantages going into next year is that we have a lot of room in the area of monetary policy,” Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters on the sidelines of a business function on Tuesday.

“That is an area where we still have room,” adding that many other countries don’t have that headroom as they have lowered their interest rates to near zero.

Since last October, India’s central bank has cut its main short-term lending rate by 400 basis points to stimulate flagging growth. Still, after the latest half percentage point reduction this month, the repo rate stands at five percent leaving scope for cuts.

Ahluwalia said his growth estimate was arrived at after simulating the effect of the global recession, drop in investment, falling exports and lower oil prices, and reflects a sharp fall from nine percent or more rise in the past three years.

“The net result of that is that growth will be somewhere around 6.5 percent or something this year,” he said.

Economic expansion in Asia’s third-biggest economy is seen dropping below 6 percent to a seven-year low in 2009/10, a Reuters poll showed last week.

The global economy is expected to shrink as much as 1 percent this year — its first contraction since World War II — below a January projection of around 0.5 percent growth, the International Monetary Fund said last week.

“In the rest of the world it is very clear 2009 will be worse than 2008 and those are calendar years. Our objective is for the fiscal year 2009/10, we should try to do at least as well as we did in 2008/09,” he said. Ahluwalia said there may be a need for another fiscal stimulus package.

India’s fiscal deficit is expected to be around 10 percent of GDP, one of the highest in the world and analysts expect it to rise more as tax revenues fall due to the economic slowdown.

“I would still argue that in spite of the high fiscal deficit there is a case for an additional fiscal stimulus in the present circumstances for the next year,” he said.