Indian Economy - News & Updates - Archive

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Car sales up 4.20%, bikes jump 12.11% in April​

NEW DELHI: Domestic passenger-car sales increased by 4.20 per cent in April to 1,02,899 units from 98,752 units in the same month last year.


According to figures released by the Society of Indian Automobile Manufacturers (SIAM), motorcycle sales in the country during the month was up 12.11 per cent at 5,62,357 units as against 5,01,592 units in the corresponding month a year ago.

Total two-wheeler sales in April also surged by 13.71 per cent to 7,00,995 units compared to 6,16,468 units in the same period last year.

Commercial vehicle sales, however, decreased last month to 29,842 units from 33,626 units in the year-ago period, a fall of 11.25 per cent, SIAM said.

Car sales up 4.20%, bikes jump 12.11% in April- LATEST NEWS-The Economic Times

 

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Obama's tax will not impact BPOs: E&Y​

Domestic business process outsourcing (BPO) units providing services to the American companies will not be affected by the proposed decision of US President Barack Obama to discourage outsourcing by imposing taxes, said global consultancy firm Ernst & young.

The companies which outsource business to third parties will not be impacted (by the proposed tax move)," said Ernst & Young Tax Director Rajendra Nayak. However, he added, the US companies which outsource services from their own arms including wholly-owned subsidiaries might face the heat of Obama's tax proposal, which is yet to be approved by the US Congress.

According to the E&Y expert, the captive outsourcing units of Americans will be impacted by the proposal as it would be required to adhere to the regulations of the home country. On the other hand, the domestic Business Process Outsourcing units provide services to companies from different countries, including America, will primarily be governed by Indian laws and may escape the impact of changes in the US tax laws, Nayak said.

The step, he said, is directed at encouraging the US companies to do business in the US. However, the success of this objective would depend on comparative advantage that locations like India provide over the loss of revenue because of taxes back home in the US, sources in the Central Board of Direct Taxes (CBDT) said. The US companies would stop giving business to their subsidiaries in India only after evaluating if the benefit they have in India based on lower production costs in the country is higher than the tax to be borne in the US itself, they said.

Obama's tax will not impact BPOs: E&Y- ITeS-Infotech-The Economic Times

 

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IT firms looking for more domestic share

In March, when Employees’ State Insurance Corporation, a government of India agency that provides health insurance to 10 million workers, awarded a Rs1,182 crore information-technology (IT) project to Wipro Ltd, it dropped the curtain on a bitterly fought battle.
Wipro, the country’s third largest information technology services exporter, won the order through a global tender that pitted it against both multinational firms and domestic peers such as Tata Consultancy Services Ltd, or TCS, and Infosys Technologies Ltd. The intensity of competition was an indication of the growing importance of the Indian IT market for both domestic and overseas firms.
With recession in the US, Europe and Japan forcing overseas clients to pare technology budgets, Indian IT companies are scrambling to raise their share of the Indian software and IT services market, which industry body Nasscom values at around Rs57,200 crore.
Mumbai-based TCS and Bangalore-based Infosys, India’s largest and second largest IT service exporters, respectively, have set themselves the target of earning $1 billion, or around Rs5,000 crore, in revenue from the domestic market in the next three to four years. Wipro wants to raise its India focus, as does mid-sized firm MindTree Ltd.
With sectors such as government, energy and utilities, telecom, banking and finance stepping up their IT spending, the domestic market has become attractive for firms that have until now focused beyond Indian borders. Customers in the US and Europe have traditionally made up as much as 80% of revenue earned by Indian exporters of software and related services.
According to a late 2008 report by research firm Gartner Inc., the Indian IT software and services segment, excluding business process outsourcing, is expected to grow at an annual pace of almost 20% to touch $13.2 billion by 2012.
TCS earns around $500 million (Rs2,500 crore), or nearly 8% of its total revenue, from Indian clients.
“We have a base of key clients and solutions portfolio. We have made investments and have people, business and clients. We will accelerate all of this,” a TCS spokesperson said in an emailed response.
However, the worry at TCS is that “India, like other emerging markets, is volatile and most business is project-based and not annuity based—hence there is a certain element of uncertainty,” the spokesperson said.
The volatility shows up in the India revenue fluctuations at TCS. While in the first quarter of the 2009 fiscal the company earned 8.7% of its revenue from India, the portion dipped to 6.8% by the third quarter, only to rise to 8.2% in the last quarter again.
Infosys earns less than 2% of its revenue (or less than Rs400 crore) from the domestic market.
“The market is very large, and has matured over a period of time,” said Binod H.R., head of the India business unit of Infosys, an initiative started just over a year ago to penetrate the domestic market more aggressively. He said a “big challenge” is that Indian customers are very price-sensitive.
For companies such as Infosys that have been used to higher billing rates in the US and European markets, Indian projects raise the challenge of being able to offer competitive pricing to customers while still being able to maintain comfortable margins.
“We are working on reusable tools and replicable models to address the challenge of lower pricing that the Indian market poses,” said Binod.
Still, margins are getting increasingly closer to international levels, according to Anand Sankaran, chief executive officer of Wipro Infotech, the unit that oversees the domestic and West Asia IT business at Wipro.
“Unlike some of our Indian peers, who are now discovering the potential of the domestic IT market, Wipro has always had a significant presence here. While it is true that it is a ‘value for money market’, the margins here are comfortable and getting closer to international margins,” he said.
Wipro is one of the largest system integrators—IT companies that bring together component subsystems into a whole—in India and, according to Springboard Research, has the second largest share of the domestic market after IBM Corp.
Bangalore-based MindTree hired a Wipro veteran four months ago to spearhead its domestic market growth. P.K. Gopalkrishnan, senior vice-president and India business head–IT services, said MindTree earns up to 5% of its revenue from India and aims to double it by 2014.
Increasing the domestic market share would, however, not be easy.
It entails competing with global technology firms such as IBM which, according to a late 2008 report by research firm IDC, commands a 10% share of the Indian market. IBM is the market leader and earns revenue of around Rs5,700 crore from the Indian market.
“It’s only because of sheer neglect that the Indian companies lagged behind in the domestic market space,” says Arup Roy, a senior research analyst at Gartner. “Indian companies also used to take the domestic market deals very lightly and put freshers or inexperienced engineers on the projects.”
Industry observers say that estimations of the domestic market may not capture the real potential because a lot of demand is still latent. Service providers have to first help clients identify problem areas and then design solutions.
“There is no dearth of opportunities in the Indian market, but it takes a patient services provider who can work with the client to literally convert the latent demand into real demand,” said Nasscom vice-president Rajdeep Sahrawat.

It is due to our domestic market that India is still insulated to a large extent from the Global Economic crisis.

 

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India, South Africa to bolster economic ties​

Monday, May 11, 2009

JOHANNESBURG: Despite the shadow cast by the world global financial crises that has hit South Africa hard, India is continuing to expand its economic ties, said senior Foreign Ministry officials accompanying Vice-President Hamid Ansari for the presidential inauguration ceremony of Jacob Zuma.

“The most significant relationship we have with South Africa. Through South Africa we will be reaching out to the rest of Africa. Indian companies are also using South Africa as the base to extend operations in the continent,” said Secretary (West) in the Ministry of External Affairs Nalin Surie.

Mr. Ansari utilised the visit to consolidate ties with other African countries. He met Presidents of Seychelles, Congo, Gambia, Comoros and Tanzania besides the legendry African leader and former President of Zambia, Kenneth Kaunda.

Apart from the historical context that includes the Mahatma Gandhi factor and the presence of large number of people of Indian origin, the relationship is fuelled by the very active business being conducted by all of us. “There is also sustained cultural interaction,” said High Commissioner Rajiv Bhatia. Two-way investments are estimated at $2.5 to 3 billion covering a large number of sectors. Approximately 40 Indian companies are here including big names such as the Tatas, Mahindra & Mahindra and Ranbaxy.

Two-way trade in 2007-08 was at $6.2 billions and in the first six months of the current financial grew by 11 per cent. But the global meltdown is having its impact here. Indian exports during this period fell by 14 per cent due to contraction of the South African economy. As against growth of four per cent in the last fiscal, it is expected to contract by 0.5 per cent.

Mr. Bhatia said technical and economic cooperation formed a crucial fulcrum of South Africa’s interaction with India. With a mix of first and third world economies, South Africa has made considerable progress in the financial sector and mining but needs help in human resources development. The Indian government has increased the number of slots for South Africa to 110 and this is being supplemented at the corporate level with India Inc. helping South African companies to train people.

The two countries have broken new ground in the minerals and energy sectors with the formation of two working groups on hydrocarbons and coal sectors.

Mr. Bhatia denied there was any fear psychosis prevailing among the Indian diplomats and companies. “It is open knowledge that in some parts of South Africa security is a problem. The government recognises it and is committed to tackling the issue. The flow of tourists from India is going up and Indian companies are steadily getting more involved,” he said. From the South African side, Sam Miller has invested $1billion and Sason, a coal technology major, promises to become one of the biggest investors. Another company, ACSA, is involved in the modernisation of the Mumbai airport.

Asked about the blanking out of South African defence company Denel, Mr. Surie said defence procurement was open and transparent and there was no longer any preferred relationship.

“All companies have to participate in the tendering process. This is what we have been telling some Central European countries. There is no favouritism.”

 

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India's media, entertainment revenue to double in 3 years to cross $20 billion​

New Delhi May 11, 2009,

The turnover of India's media and entertainment is expected to double to Rs 1 lakh crore ($20 bil) by 2011-12 because of a rise in consumerism and technological improvement, a study today said.

"The sector is expected to cross a turnover of Rs 1 lakh crore by 2011-12 (currently estimated at Rs 50,000 crore)," a study titled "India’s Digital Revolution–Impact on Film & Television Sector", released by Assocham, said.

It said that the turnover of the television industry is likely to grow by over Rs 52,000 crore in the next three years from the current estimated Rs 20,000 crore. "This will include both subscription and advertising revenue," the chamber said.

Currently, advertisements generate about 80 per cent of the revenue and subscriptions the rest.

"Subscription revenue is projected to be the key growth driver for the television industry as the number of homes subscribing to cable TV and DTH services will increase from over 72 million to over 100 million by 2011-12," it said.

 

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Japan's Daiichi says deep in red due to Ranbaxy deal​

TOKYO: Japanese drugmaker Daiichi Sankyo said Tuesday it lost 335.8 billion yen (3.45 billion dollars) in the year to March because of a plunge in
the value of its investment in India's Ranbaxy Laboratories.

It booked a loss of 351.3 billion yen on the Ranbaxy shares, which have fallen more than two-thirds since June when Daiichi announced it would buy 64% of India's top generic drugmaker for up to 4.6 billion dollars.

The previous year Daiichi, Japan's third largest drugmaker, had logged a net profit of 97.66 billion yen.

Ranbaxy shares have slumped due to weak global markets, financial losses reported by the Indian company and regulatory setbacks in the United States, the world's biggest drug market.

Ranbaxy, which derives 80% of its sales from abroad, has grown by selling cheap copies of branded drugs that have gone off-patent and through successful challenges to patents owned by Western companies.

But the US Food and Drug Administration (FDA) last September banned imports of more than 30 generic drugs produced by Ranbaxy because of problems in their production at two plants in India.

"If the resolution of this issue were to become protracted or the FDA imposed additional restrictions on Ranbaxy, this could have a severe impact on Ranbaxy's business prospects in the US market," Daiichi warned in a statement.

The Japanese company expects to return to the black in the current business year to March with a net profit of 40 billion yen.

But it said the global market environment would remain harsh due to the economic downturn and government restrictions on medical spending.

Japan's Daiichi says deep in red due to Ranbaxy deal - India Business - Business - The Times of India

 

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Forex inflow cheers up tourism sector​

NEW DELHI: Tourism in India may well be out of the woods if latest data is anything to go by. While the number of foreign tourist arrivals is still
less than April last year, significantly, foreign exchange earnings have gone up.

The number of foreign tourists who arrived in India -- excluding NRIs -- in April 2009 is 3.71 lakh as opposed to 3.84 lakh in April 2008, closing the gap substantially to 3.5%. Foreign exchange earnings, on the other hand, increased as compared to last year. FEEs were Rs 4,061 crore for April 2009, up from last year's Rs 3,773 crore.

"The data is certainly encouraging. After a spell of negative growth, the fact that only 13,000 fewer visitors came to India in April this year as compared to last year could mean that tourist arrivals could show positive growth by October," Leena Nandan, tourism joint secretary said.

The last quarter of 2008 spelt bad news for leisure travel and India suffered the combined impact of economic recession and Mumbai terror attacks. Growth rate dropped to 18% in January and the first three months of 2009 have been difficult for the industry.

The tourism ministry, along with the industry, has incentivised travel under the Visit India 2009 programme promoting discounts on travel, stay and sightseeing.

While growth of foreign tourist arrivals to India dropped from a high of 14% in 2007 to 5.6% in 2008, world tourism growth has come down from 6.6% in 2007 to 1.8 in 2008. According to UNWTO, world growth in 2009 is expected to be stagnant.

Industry experts say that leisure travel may be picking up slowly and India could well be on its way to recovery by year-end. India has benefited from the fact that it has so far remained unscathed by the Influenza A (H1N1) virus that has gripped Mexico and parts of Europe, US and south Asia.

Forex inflow cheers up tourism sector - India Business - Business - The Times of India

 

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India output shrinks by most in 16 years ​

Wednesday, May 13, 2009

NEW DELHI: India’s industrial output shrank by the most in 16 years in March, data showed on Tuesday, underscoring the economic challenges facing the winners of general elections ending this week.

Industrial production in Asia’s third-largest economy fell by a sharper-than-expected 2.3 per cent compared with a 5.5 per cent rise during the same month in 2008, according to government figures.

“It was the worst drop in at least 16 years, said Nikhilesh Bhattacharyya, economist at Moody’s Economy.com. Bhattacharyya blamed the poor performance on the manufacturing sector which “has been bleeding jobs in recent months, with tight credit conditions and collapsing demand at home and abroad.”

Analysts were widely expecting a 0.6 per cent year-on-year decline but the fall was nearly four times their estimates.

“Indian industrial production remains in the doldrums,” said HSBC economist Robert Prior-Wandesforde. Industrial output expanded by 2.4 per cent in the last fiscal year which ended in March, down from 8.5 per cent a year earlier.

The decline underlined the economic problems facing the new government which emerges from the elections, the results of which will be known next Saturday.

Whatever the party make-up of the new administration, the problems it will face are already clear and acute.

A raft of data has shown the economy cooling with Prime Minister Manmohan Singh forecasting growth for the fiscal year just ended in March of 6.5 per cent, the slowest in six years, after expansion of nine per cent the previous year.

The central bank expects the economy to lose more traction next year, slowing to around 5.5 per cent. Even that would be strong by world standards but it’s far below levels needed to raise the living standards of India’s impoverished millions.

“Both investment and consumption need a big push if the (current) growth trajectory is to be altered,” said Harsh Pati Singhania, president of the Federation of Indian Chambers of Commerce and Industry. “The economy is yet to get out of the slowdown mode,” he said.

But the new government’s room to fix problems will be sharply curbed by previous lavish spending on a national jobs scheme, farm loan waivers, civil service wage hikes, tax cuts to spur growth and other steps.

India’s fiscal deficit for the last financial year was six per cent of GDP, more than double the target, and 11 per cent if the states’ deficits are included, making it among the world’s highest.

Still many analysts say the economy should start picking up in the second half of the financial year and a more solid recovery will take hold in 2010-11 thanks to aggressive interest rate cuts and government stimulus moves during recent months.

“While April-June should see a bottoming out in industrial production, the economic recovery is unlikely to begin in earnest until the July-September quarter,” said HSBC’s Prior-Wandesforde.

 

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Poll effect: Air traffic picks up in April​

NEW DELHI: Domestic air traffic marginally picked up in April, thanks to the increased travel during the poll season. April saw 33.6 lakh flyers,
shed better than March's 32.21 lakh, though it was 11% down from last April's figure of 37.78 lakh, when air travel was booming.

In changing market dynamics, budget carriers are emerging as market leaders in terms of passenger load factor. Low-cost carriers like IndiGo, SpiceJet and JetLite managed to fill about 70% of their seats, while full service ones ranged from 59.9% for AI (domestic) to Jet's 65%. Vijay Mallya's Kingfisher continued to remain the leader in terms of market share at 26% and the Jet-JetLite was second at 24.1%.

Not having a domestic low cost carrier in its fold is costing Air India dear as its share was down to 17.6%. "As of now there's no plan to have a separate domestic LCC. Once all the Boeing 737s join the fleet by early next year, we may increase the number of domestic sectors covered by Air India Express as part of their international flights," said a senior official.

 

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TCS bags 5-yr Volkswagen deal​

[/MUMBAI: Tata Consultancy Services has been awarded a five-year outsourcing contract by the Volkswagen group, UK, for IT transformation and support
system across the company's commercial vehicles and passenger car brands. The auto major, an arm of Volkswagen AG, markets brands like Audi, Skoda, Seat and Volkswagen.

TCS did not share any financial details of the deal. However, the contract comes at a time when India's largest software firm has seen fall in demand for outsourcing contracts from US auto players.

Interestingly, this is the first time Volkswagen has opted for an on-shore and offshore model for its IT systems. Earlier, the UK company's entire IT work was done onsite. The move, according to analysts, is seen as Volkswagen's efforts to drive down costs. TCS's other auto clients are Italy's Ducati and Ferrari. Early this year, the $6-billion IT major got a multi-million dollar, multi-year project from Ducati.

Volkswagen group confirmed TCS as its strategic IT partner after being impressed with the Indian company's work. TCS has been working with the group for some time and its capability was tested within the first week of the teaming up on the project, when a major power outage at its head office in Milton Keynes, UK, caused many of the group's systems to fail on a Friday evening. TCS, which was intimately acquainted with every corner of the system and piece of equipmen - mobilised a global team to work overnight--both onsite and from India - successfully recovering the entire group's IT services in time for Saturday's trading.

‘‘We couldn't have better proof that were in safe hands with TCS,'' said Nick Gaines, Group IS director, Volkswagen Group.

 

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Ban on wheat futures removed​

NEW DELHI: With only hours left for the outcome of the 15th Lok Sabha elections to be known, politically sensitive issue of ban on trade in wheat
futures has been lifted. "Suspension on futures trading in wheat has been lifted today," Forward Market Commission (FMC) member Rajeev Agarwal said.

The ban was imposed in February 2007 on demand from the Left Parties and RJD leader Lalu Prasad Yadav. A senior government official said the ban on rice futures would, however, continue.

The decision to ban futures trading in both rice and wheat was announced in Parliament by the then finance minister P Chidambaram, who simultaneously announced setting up of Abhijit Sen Committee to study the impact of forward trading on prices of essential commodities.

Though Left parties and others had demanded a ban on futures trading in all essential commodities, the government decided to impose curbs only on only wheat and rice. Earlier, in January 2007, it had already banned futures trading in tur and urad, which is still in force. In the wake of high inflation last year, the government had also banned forward trading in potato, soya oil, chana and rubber. However, the restriction was removed six months later in November 2008.

Sources said the decision to lift the ban was taken by the consumer affairs minister Sharad Pawar last month, but the FMC was directed to announce the decision only after expiry of the model code of conduct. Even as the ban has been lifted, trading in wheat futures would not automatically resume in the commodity exchange platforms. The bourses would have to send their proposal to launch wheat contract. Agarwal said FMC would approve or disapprove the proposal after vetting the contract specifications.

Leading agri commodity exchange NCDEX said it would soon approach fmc for launch of contract.

Ban on wheat futures removed - India Business - Business - The Times of India

 

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Indians' surge in Silicon Valley continues despite downturn​

16 May 2009, 0041 hrs IST, IANS

WASHINGTON: The numbers of Indians and other Asians and Latinos in America's Silicon Valley continued to surge from 2007 to 2008 even as the NRI Taxation
Forex Converter
Remittances made easy
population growth of the two ethnic groups unexpectedly slowed nationwide.

For years, Santa Clara County's diverse population - with more minorities than whites - has served as a pointer for the rest of the US, but the latest data released by the US Census Bureau Thursday is expected to push back the projected date that minorities will outnumber whites across the US by a decade.

The souring economy and changes in immigration policy have curbed the growth in minority populations across the US, but Silicon Valley - with its high-tech economy, safe neighbourhoods and strong public schools - continues to be a magnet for Asians, the San Jose Mercury News reported.

Despite predictions that Asian growth would slow as the worldwide economic slump slammed Silicon Valley, the new data shows Santa Clara County from 2007 to 2008 added more new Asian residents in the nation than any other region - nearly 18,000 people.

Census estimates show the number of Asians in the county grew by 3.4 percent year to year. The number of Latinos in the county grew by 3.2 percent and the number of whites decreased by 0.2 percent, according to a computer analysis of the new data.

Nationwide, the Asian population increase slowed from 3.7 percent in 2001 to about 2.5 percent. But Santa Clara County, which became a majority-minority county a decade ago, and much of the Bay Area are clearly an exception to the nationwide trend.

Perhaps most surprising was the continued strong growth of the Asian population, even as some H-1B visa holders return to India, China and Taiwan and the Silicon Valley job magnet loses strength, said the Mercury News focusing on the Silicon Valley.

The annual census estimate does not break down whether the growth in the Asian population is driven by immigration, birthrates or migration from other states.

But Hans Johnson, a demographer with the Public Policy Institute of California, cited by the News, said an important reason for the valley's increased popularity for Asians was: "Critical mass."

With such a high concentration of Asians, he said, the valley becomes more of an attraction for new immigrants looking for family, friends and networks in finding jobs, great Asian restaurants and a nice place to live.

Indians' surge in Silicon Valley continues despite downturn- Visa Power-Travel-Services-News By Industry-News-The Economic Times

 

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Sensex seen at 14k by Budget​

18 May 2009, 0701 hrs IST, ET Bureau

MUMBAI: The euphoria is palpable. A stunning mandate, absence of any Left interference, and the likely entry of young faces in the new government Pick stocks on fundamentals could not only liven up Dalal Street punters and local institutions, but also trigger buying by India-dedicated foreign funds that stayed away from the recent rally.

But it may not be a one-way street for all. There are disturbing rumours that many traders and some big operators have been caught on the wrong foot following UPA’s convincing win. These are people, who, last week, went short on the market by writing call options, buying puts, and building naked futures positions. While some of these players are staring at massive losses, they are clearly in a minority.

According to the average of an ET snap poll of 15 leading brokers and fund managers, the benchmark Sensex is expected to rise between 700 and 800 points on Monday in early trade.

All the respondents expect the mood to be euphoric, and nine of the respondents were of the view that the Sensex could rise to 14,000 by the time of the Union Budget. Two of the respondents expect the Sensex to trade between 12,000 and 13,000 by Budget, while the remaining three declined to give any estimates.

In terms of best-performing sectors, an overwhelming majority of the respondents have placed their bets on banking and infrastructure stocks, expecting them to gain from government spending. The consensus view is that sectors like FMCG, pharma and IT could underperform in the near term.

There are still lot of short positions in the market. That, and the renewed wave of buying, could push the market up by 700-800 points at opening itself,” says A Balasubramanian, chief investment officer, Birla Sun Life Mutual Fund.

Vikas Khemani, executive vice-president and co-head institutional equities, Edelweiss Capital, expects the Sensex to open with a gap of 8-10% over Friday’s close. This view is also shared by Nirmal Jain, chairman and managing director of India Infoline.

“The market will be in an uptrend for the next one week, with most of the gains coming in the first two days of the week,” says SA Narayan, managing director, Kotak Securities. He declined to comment on any specific projections for the index, other than saying that only the Budget would decide the medium-term trend for the market.


Sensex seen at 14k by Budget- Analysis-Markets-The Economic Times

 

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NOW CHECK THIS OUT​

300 crorepati MPs as House gets richer​

NEW DELHI: Members of the 15th Lok Sabha may not be too bothered about salary hikes for themselves. Not with as many as 300 crorepatis getting the
people's mandate this time; up 95% from 154 in the last Lok Sabha.

According to assets declared before the Election Commission, the wealthiest MP in the new House is Namma Nageswara Rao of TDP, elected from Khammam in Andhra Pradesh. He is worth Rs 173 crore. Rao is followed by Congress's Naveen Jindal from Kurukshetra with assets of Rs 131 crore.

Others at the top of the crorepati club are L Rajagopal (Congress), Praful Patel (NCP), Supriya Sule (NCP), Rajkumari Ratna Singh of Pratapgarh (Congress) and Andhra CM Y S R Reddy's son Y S Rajamohan Reddy.

The list of crorepatis was compiled by National Election Watch (NEW), a nationwide body comprising more than 1,200 NGOs and other citizen led organizations working on electoral reforms.

The maximum number of crorepatis were found to be from Congress (137), followed by BJP (58), SP (14) and BSP (13). These parties are followed by DMK and Shiv Sena.

Interestingly, JD(U) was found to have the seventh biggest group of crorepatis in the House, ahead of 'richer' parties like NCP, BJD and TDP.

Amongst states, maximum crorepatis are from UP (52), followed by Maharastra (37), Andhra Pradesh (31) and Karnataka (25), Bihar (17), Tamil Nadu (17) and MP (15). Gujarat, at number 10, has sent 12 crorepatis to the new House this time — less than the number from Punjab and Rajasthan.

Anil Bairwal, coordinator, NEW, said, "The misuse of monetary incentives to buy votes has increased sharply since the last elections and continues to be a source of threat to real democracy."

Bairwal doubts that development would be the priority of the new MPs who have spent huge sums to get themselves elected. "They are more likely to focus on recovering the funds they spent and on giving favours to those who supported their campaigns," he added.

300 crorepati MPs as House gets richer- Politics/Nation-News-The Economic Times

 

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Govt will have to extend benefits of its stimulus packages​

18 May 2009, 0322 hrs IST, Amiti Sen, ET Bureau

NEW DELHI: With a steady fall in industrial production and exports over the last few months, the new UPA government will have to extend many
benefits of its previous two economic stimulus packages and weigh the need for a new one, as it looks to shepherd the economy out of its troubles.

The outgoing government announced two stimulus packages in the last fiscal year to help industry deal with the global economic slowdown, and a number of measures in these are slated to lapse over the next few months.

Industry is expected to push strongly for extending the 4% cut in excise duty that is valid until June 30. However, as the move will have revenue implications, the new government will have to decide on its importance.

Another important measure ending on June 30 is removal of interest rate caps on external commercial borrowings. The government had given industry complete freedom to take dollar loans from foreign banks and export credit agencies, doing away with the earlier borrowing cap of Libor plus three percentage points. The relaxation helped industry in accessing dollar loans easily, especially when the dollar firmed against the rupee.

The earlier stimulus package had allowed non-banking financial corporations, which play a major role in disbursing credit to industry as they do not seek collateral, the freedom to borrow from overseas multilateral agencies and development financial institutions. As industry continues to face a credit crunch, there will be pressure on the new government to continue with this policy.

The new government will also have to decide whether the interest rate subvention or a discount of 2% given to exporters of identified labour-intensive sectors should continue beyond 2009. It has to also decide whether its full budget should include higher reimbursement rates for DEPB, a popular input duty reimbursement scheme for exporters.

Another item on the industry wish list is an extension of tax sops for software technology parks (STPIs) and 100% export oriented units, which end on March 31 next year.

Exporters are looking for the government to do much more than what it has already done.

“What the government has given us so far is peanuts and has proved to be a failure. We want constructive steps to give exports a boost,” said Delhi Exporters Association (DEA) president SP Agarwal.

According to Federation of Indian Exporters Organisation director-general Ajay Sahai, countries such as China, Vietnam as well as South Korea have given much more support to their industry and exporters compared to India.

“We are preparing a memorandum highlighting areas where the new government can help exporters,” Mr Sahai said.

There is also a lot of unfinished work in the area of trade agreements. The government will have to work with other countries to settle numerous contentious issues to conclude the ongoing Doha negotiations of the World Trade Organisation (WTO). The proposed Indo-Asean free trade agreement, which the UPA government missed signing by a whisker the last time around, also needs to be ironed out and implemented.

A liberal grant under the market development assistance scheme, new schemes to incentivise exporters to explore alternate markets like South America, as well as providing export credit at nominal interest rates are proposals high up on the association’s priority list.

Govt will have to extend benefits of its stimulus packages- Policy-Economy-News-The Economic Times