Indian Economy-News & Updates

[keeninterest]

For last few years export is crossing the expectation of the Govt of India and now projecting $ 450 billion export by 2013/14. Is such high export good for the country?




'Govt aiming to increase exports to $450 billion in 3 years'

'Govt aiming to increase exports to $450-bn in 3 years' - The Economic Times

india is well on target to achieve the said figure, and mind you these will just be the merchandise exports.

we are close to clocking 25b usd exports/month at present which means even if the exports remain constant as were recorded in the month of feb-march, india should be doing closer to 300b usd in the fiscal 2011-12 but there wont be a constant and with a decent number of FTAs in place the % growth is expected to be in the region of at least 15% and the higher limit as shown in the past could very well touch 30%, so the target for fiscal 2011-12 alone should well be in the region of 330b usd and upwards.

from this point onwards even if the growth in exports was to be recorded at around 16% for the next two fiscals (12-13, 13-14) we should be at the said figure of 450b usd, and as i said these are just the merchandise exports, there remains a huge scope in the services export so if india's over all exports by fiscal 2013-14 were to be recorded well over 600b usd, dont be surprised.

and yes high exports are indeed helpful and you might not want to discount that the imports might as well see a spurt so to off set the increase you pretty well want the jump in exports. the thing to look forward will be to what extent the finished goods/manufactured goods form a part of these exports a sector that is highly labour intensive, the more the better.

 

[bhagat]

India’s domestic BPO market to touch $1.4 bn in 2011

India’s domestic BPO market is set to touch $1.4 billion in 2011, growing by more than 23 per cent from the $1.1 billion figure of 2010.

The research director of the research firm Gartner, TJ Singh, said volumes are likely to increase in the domestic BPO market, especially in telecom. Singh, who said a growth rate of more than 23 per cent is relatively good, added that BPO models are likely to be adopted by players in more sectors.

Gartner said in a Business Today report that the domestic BPO market, which was worth $885.6 million in 2009, would touch $1.69 billion next year. By 2014, the figure would rise to $2.47 billion said the research firm.

The growth in 2010 was driven mainly by an increase in volumes in existing BPO engagements and also by several new deals that were a result of pent-up demand from the previous year.

The report said BPO service providers from the US and Europe were focusing on the Indian market along with players who are based in India, including Omnia, Kenkei, Androemeda, Genpact, Magus, MphasiS, Intelenet Global Services, Tech Mahindra, Aegis, Spanco and HTMT.

Singh said large and midsize service providers have increased their activity in the domestic market. Companies that were looking only at the international arena now are turning towards India as even during the global economic recession the country's BPO market had grown rapidly.

Gartner also said the growing demand for multi-country shared services and BPO services would take the BPO services market in the Asia Pacific region, excluding Japan, from $8.6 billion in 2010 to $9.86 billion in 2011.

India

 

[Varad]

Fin Min to take up 46 FDI proposals next week

NEW DELHI, APRIL 14:
The Government will take up 46 foreign investment (FDI) proposals including that of Dhanalakshmi Bank and Honda Motors India next week.

The Foreign Investment Promotion Board (FIPB) meeting to be chaired by the Department of Economic Affairs Secretary, Mr R. Gopalan, will take place on April 20, the Finance Ministry said.

Of the 46 investment proposals, 25 are new while the rest are those in which decisions were deferred during the previous FIPB meetings.

The 165th FIPB meeting is the first one after the Government announced major changes in FDI norms on March 31. The board is mandated to consider and recommend proposals relating to FDI under the Government route.

Besides the proposals by Dhanalakshmi Bank and Honda Motors on the agenda of the board, the other new applicants include G4S Security Services (India) and Park Control and Communications Ltd, Bangalore.

During the last meeting, the board had approved 14 FDI proposals, including that of Mauritius-based Ghir Investments totalling Rs 1,289.85 crore. The meeting was held on March 11.

As per the meeting agenda, the panel is also likely to take a decision on pending cases including those of Punj Lloyd, Lokmat Media Ltd, Arshiya International and Pran Beverages (India) Pvt Ltd.

During the 11-month (April-February) period this fiscal, FDI inflows into India declined by 25 per cent to $18.3 billion.

With an aim to attract larger FDI inflows into the country, the government has been taking several steps, including simplification and rationalisation of the policy.

On March 31, the Department of Industrial Policy and Promotion, the nodal agency on FDI policy, had effected several major changes in the norms.

Besides allowing greater flexibility to Indian firms to raise overseas capital, the Government also scrapped the norms that required a foreign company to obtain its domestic joint venture partner’s approval for making investments in the same field outside the joint venture.

The new norms also allow Indian companies to issue equity against import of capital goods. The facility of conversion of capital goods import into equity was earlier available only to companies raising external commercial borrowings (ECBs).

The policy regarding foreign investment for production and development of agriculture seeds and planting material has also been liberalised

Business Line : Industry & Economy / Economy : Fin Min to take up 46 FDI proposals next week

 

[bhagat]

Indian inflation rises to nearly 9%


NEW DELHI — India's inflation unexpectedly accelerated in March to nearly nine percent, data showed on Friday, raising pressure on the central bank to be even more aggressive as it battles to tame prices.
Annual headline inflation, measured by the wholesale price index, India's main price measure, leapt to 8.98 percent in March from 8.31 percent the previous month, stoked by higher food, fuel and manufacturing costs.
The figure was far above market expectations of 8.30 percent and is the highest among major economies in the Asia-Pacific region.
The ministry also sharply revised upwards January's inflation reading to 9.35 percent from 8.23 percent earlier.
"With inflation numbers of this magnitude, especially core inflation, the Reserve Bank of India (RBI) may feel compelled to be a bit more aggressive next time around," said HSBC chief India economist Leif Lybecker Eskesen.
India released the data on the same day China revealed that inflation in the world's second biggest economy had soared to a 32-month high and at a time when regional governments struggle to bring surging prices under control.
The RBI has raised its key policy rates eight times since March 2010, making it the most hawkish central bank in Asia.
Inflation has been one of the biggest problems for the embattled Congress-led government, which is also reeling from a slew of corruption scandals.
Poorer households, the backbone of the Congress party's support, have been especially hard hit by the increased cost of living.
Fuel and power prices climbed 12.92 percent, food rose 9.47 percent and manufactured goods climbed 6.21 percent, the data from the ministry of commerce showed.
Economists expect the central bank to hike rates again at its next meeting on May 3, even with recent data showing industrial output slowing sharply as a result of monetary tightening.
Bank policymakers have sought to minimise the risks to economic growth by raising rates in quarter point steps, but economists now expect it to move more aggressively with a possible half a percentage point rise in May.
Economists now say inflation, initially fuelled by spiralling food prices, has spilled over into the general economy, pushing up wages and other costs.
The latest data comes as Asian economies including South Korea, China, Indonesia and Taiwan battle inflation pressures with global prices of crude oil and other commodities rising.
China reported on Friday inflation hit 5.4 percent year-on-year in March, its highest since July 2008, suggesting Beijing's efforts to rein in soaring costs are still falling short.

 

[bhagat]

9 per cent GDP growth rate in 2011-12 difficult, says Montek


NEW DELHI: Concerned over high headline inflation, Planning Commission today raised doubts over clocking the targeted 9 per cent economic growth in the current fiscal.

"We may not hit 9 per cent (economic growth rate in 2011-12). 6 per cent is the rate of inflation which we should be willing to accept this fiscal," Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters here.

The government and the Planning Commission had earlier projected a growth rate of 9 per cent during 2011-12, up from 8.6 per cent in the previous fiscal.

Referring to rise in headline inflation to 8.98 per cent in March from 8.31 per cent in February, Ahluwalia said, "inflation has been a concern. It has not come under control as much as I had hoped. There is need to use fiscal and monetary policy to get rid of supply constraint wherever they exist."

Referring to growth prospects in the current fiscal , he said, it may be difficult to achieve 6 per cent farm sector growth expected to be recorded during 2010-11.

"There is no chance for agriculture to grow at 6 per cent this fiscal, it may probably grow at 3 per cent", he said.

He pointed out, "Even to stay at 8.6 per cent GDP growth this fiscal, industry will have to do much better. Now industry has done about 7.8 per cent in 2009-10 (so far till February end)".

According to the latest data, the index of industrial production for April-February last fiscal stood at 7.8 per cent and the factory output dipped to 3.6 per cent in the month of February as compared to 3.9 in January.

Exuding confidence of maintaining growth momentum this fiscal, Ahluwalia said, "Between 8.6 to 9 per cent (GDP growth this fiscal) there is no big deal. I think the down side of 9 per cent is more relevant", he said adding it will not be "way off" (the 9 per cent mark).
9 per cent GDP growth rate in 2011-12 difficult, says Montek - The Economic Times

 

[Nirvana]

India outpaced China: Economist

The Indian economy may have outpaced China's growth rate in 2010, even if by a hair's breadth, according to the Economist. The article explains citing Central Statistical Organisation and IMF's World Economic Outlook data, released earlier this week, that after adjusting India's GDP for subsidies an
related stories

* China economy grows 9.7% in Q1 of 2011
* IMF lowers India's growth forecast to 8.2 pc
* China set to overtake US as world's largest energy consumer

d taxes its growth rate edges 0.06 percentage points higher than China's for the calendar year 2010.

Official Indian growth estimates are calibrated by the fiscal year running Mar 31 to Apr 1, not the calendar year running from Jan 1 to Dec 31.

This combined with the fact that India relies on counting costs for measuring GDP rather than expenditure like China means that the tax component of India's growth is underestimated if the two economic giants' GDP is compared, argues the blog post.

India outpaced China: Economist - Hindustan Times

 

[Bang Galore]

Here is the full article from the Economist. Interesting!

India outpaces China
Winning the growth World Cup

Apr 15th 2011, 17:44 by S.C. | HONG KONG

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DID India grow faster than China last year without anyone so much as noticing? Many pundits, including this newspaper, have speculated about when India's growth might outpace China's. (The debate even spawned a meta-debate in India about whether the debate was worth having.) So it would be ironic if the moment had already come and gone, without any fuss, fanfare or felicitation.

China grew by 10.3% last year, a punishing pace to beat. India, according to the advance estimate by its Central Statistics Office (CSO), grew by 8.6%. Fast, but not fast enough. But today a colleague pointed me to the IMF's latest World Economic Outlook (Table 1.1), released earlier this week. It says that India grew by 10.4% in 2010. How can that be?

India has two idiosyncrasies in the way it reports its GDP figures. First, it reports growth for the fiscal year, not the calendar year. So the 8.6% estimate refers to the 12 months ending on March 31. That in itself makes little difference. But the second idiosyncrasy is more important. India typically reports its GDP "at factor cost". That means it adds up all the income earned in the course of producing the country's goods and services. Other countries, including China, typically report their GDP "by expenditure", adding up all the spending on domestically produced goodies. Since every purchase is a sale, expenditure should equate to income: every rupee spent by one person is a rupee earned by someone else. But a couple of things get in the way: taxes and subsidies.

A sales tax adds to the amount you have to spend on a good. This boosts measures of GDP by expenditure, relative to income-based measures. A subsidy has the opposite effect.*

If these taxes and subsidies remained steady as a percentage of output, they would not affect the growth rate of GDP, even if they do affect its level. But in India net indirect taxes rose from 7.5% of output in 2009 to 9.2% in 2010, boosting the growth rate of GDP by expenditure for that year.** That was enough to lift India's growth by this measure to 10.36% in 2010. That's fully 0.06 percentage points faster than China. Jai Hind!

* A numerical example might help to illustrate the difference. In the first three months of 2010, India's GDP at factor cost amounted to 12,051 billion rupees. But the buyers of that output paid an additional 1,888 biilion in indirect taxes, adding to the expenditure measure of GDP. They also benefited from 544 billion in subsidies, subtracting from the expenditure measure. The net result was that India's GDP by expenditure in January-March 2010 was 13,395 billion (=12,051+1,888-544).

** All the figures required to reach this conclusion were available from February 28, when the CSO released its estimates of GDP (at factor cost and by expenditure) for the third quarter of last fiscal year, otherwise known as the fourth quarter of 2010.

India outpaces China: Winning the growth World Cup | The Economist

 

[SpArK]

Aston Martin One 77 at price Rs. 20 Cr becomes the costilest car in World​

The growing Indian economy is inspiring new benchmarks in the market also. The automotive sector which has become important attraction for many foreign players in the luxury segment is not left behind. The latest luxury car Aston Martin One 77 at price Rs. 20 crore has become the costliest car not only in India but also in the World. The company has launched 8 models in the market at price ranging from Rs 1.35 Cr to Rs. 20 Cr.

This highlights changing perception of world players for Indian customers from value from money segment to luxury oriented. The One 77 is being sold at price of $2.3 million and will be sold in India at Rs. 20 Crore making it the costliest luxury car anywhere in World. Confirming the news Lalit Choudary, director, Performance Cars Pvt Ltd, a division of Infinity Cars Pvt Ltd Said, “The One-77 will be available to Indian buyers at a price of R 20 crore or more, making it the most expensive car in the world.”

However it can be customized as per the requirement which can bring some changes in the overall price. It is owned by Who's Who in the world. One of its prominent customers is Tennis player Rafel Nadal. Before this Veyron was the costliest car at price tag of $1.4 milllion.

The company had only limited vehicles Worldwide. Out of total 77 vehicles, it has already sold many and people believe that only 7 are available for Indian customer. The company has started its dealership in Mumbai and will open another dealership in Delhi in coming months. Overall it has operations in 42 countries and network of 142 dealers.

Aston Martin has partnered with Infinity Cars Pvt Ltd to market the cars in India. Earlier bollywood singer Adnan Sami was roped in to open the company showroom in Mumbai but the partnership couldn't be finalised. To the shock for Sami, the payment cheque issued to him also bounced back.

The car is based on carbon sophisticated fibre One 77 chassis with a hand-crafted aluminium body. It gives maximum speed of 320 km/hr. It was unveiled at Paris Motor Show in 2008.

Aston Martin One 77 at price Rs. 20 Cr becomes the costilest car in World

 

[SpArK]

Air India to add 125 aircraft by 2015; looks at introducing more flights on domestic routes this year​

By Imran Khan | Mumbai
The state owned national carrier Air India is expected to add 125 aircraft to its current fleet of 120 by end of 2015. Deloitte Consulting India Pvt Ltd has chalked out a turnaround plan for the airline. As per their turnaround strategy, Air India will look at ways to optimise revenue profit by introducing new routes for the domestic and international market, add capacity on the existing routes, as well as focus on expanding their fleet size.

Informing about the development K D Row, Executive Director Sales & Marketing – India Region, Air India said, “We have worked on a turnaround plan in a way to optimise the profits for the airline and the same has been approved by the management team at Air India which will be effective soon. As per the company's expansion plan is concerned, we have already invested more than Rs 35,000 crore to buy the new aircraft from Airbus and Boeing.”

“Particularly for this year we are focussing on to connect to more domestic routes especially North East Region and Tier II and Tier III cities. While on the international side, this year, we have plans to start direct daily flights to Melbourne and the US, also we have plans to add capacities on our existing international routes such as in far East and in Gulf countries,” added Row.

Furthermore, as the company is the official airline partner for the International Indian Film Academy (IIFA) 2011 awards, Air India will operate four special flights to Toronto, Canada from Delhi with a stopover at Mumbai. As the IIFA event will be held from June 23-25, 2011, the airline will operate special flights from June 19 – 22, 2011 to Toronto and back from June 25-27, 2011. The airline currently operates seven direct daily flights from Delhi to Toronto. The event is supported by Ministry of Tourism, Ministry of Economic Development and Trade, Tourism Ontario and Government of Ontario.

Travel Biz Monitor :: Air India to add 125 aircraft by 2015; looks at introducing more flights on domestic routes this year

 

[SpArK]

Kalam hails India''s solar power programme
​

Dubai, Apr 16 (PTI) Former Indian president APJ Abdul Kalam has hailed India''s recently launched programme for solar energy station that will generate 20,000 Megawatts power by the year 2020.

"We are very happy to have a sustainable energy programme," Kalam, who is in the UAE to attend the Dubai Global Energy Forum 2011, said.

"Sustainability comes in two things. Number one is availability. The second one is whether we can have a green energy future. I''m very happy that Dubai Global Energy Forum is addressing green energy," he said adding that there are national interest as well as international interests involved in the subject.

The forum is being organised by the Dubai Supreme Council of Energy from April 17-19, 2011.

The forum will see the participation of global leaders and experts in the energy sector, from both public and private companies, international organisations and academic institutions to participate in plenary sessions and sharing experiences, knowledge and visions on present and future sustainable energy sources.

Kalam hails India''s solar power programme -  International News

 

[aimarraul]

Here is the full article from the Economist. Interesting!

India outpaces China
Winning the growth World Cup

Singapore economy in 14.7% growth

 

[SpArK]

India firm plans $150 mln manganese plant in Zambia | News by Country | Reuters

LUSAKA, April 17 (Reuters) - India's Taurian Manganese Ltd plans to invest $150 million to build a manganese processing plant in central Zambia, a senior company official said on Sunday.

Imran Merchant, a director at Taurian Manganese, told Reuters in an interview that construction of the plant, which would produce 720,000 tonnes of manganese per year at its peak in 2014, was expected to start by June this year.

"It will be the largest manganese processing plant in Africa with three furnaces that will have a combined peak capacity of 60,000 tonnes per month," Merchant said.

Production was expected to start in 2012 when the plant was projected to process 240,000 tonnes which would be doubled the following year, before hitting the peak in 2014, Merchant said.

The company's director said output would rise gradually mainly because Zambia's state-owned power company Zesco Ltd would only be able to provide the plant with the full power requirement of 100 megawatts by 2014.

Taurian Manganese would employ about 700 workers at peak production, Merchant added

 

[SpArK]

New Delhi, Apr 17 (PTI) Fernas Construction India, the Indian subsidiary of Turkey-based Fernas Construction Company, has bagged two major engineering, procurement and construction (EPC) projects, worth Rs 2,200 crore from ONGC and Indian Oil, a top company official said.
"Fernas has successfully executed mega EPC projects all over the world... The first project is from Indian Oil worth Rs 300 crore, while the second project is from ONGC Petro Additions Limited (OPAL) for constructing offsite and utility package in its Dahej complex at a cost of Rs 1,900 crore," Fernas Construction India CEO Rohit Singhal told PTI.
He added that "work for Indian Oil''s Paradip refinery is for laying of pipelines from refinery to port and constructing jetty back up terminal at the Paradip port and will be completed in July, 2012."
The EPC work at OPAL''s Dahej site would be completed by July, 2013, he said.
The Turkey-based company, which started operating in India in 2009, currently has an order book of about Rs 2,500 crore and is initially focusing on EPC work for Oil and Gas sector and constructing road projects on build, operate and transfer (BOT) basis.
"We expect to have an order book of about Rs 5,000 crore by the year-end from these two areas and a turn over of over Rs 2,000 crore from India by 2012-13," Singhal said.
He further said the company would be bidding for road projects worth Rs 1,000 to 2,000 crore in the coming months and is evaluating options to construct gas-based power plant in Jhabua, Madhya Pradesh.
"A final decision will take some time but expanding to power sector in India will depend on many things, including availability of natural gas," Singhal said.
Asked about company''s expansion into other areas of infrastructure like city gas projects, hydro and wind power projects, he said that all of these are on the cards but will be decided after proper due-diligence.
"We have experience of doing business in all these sectors in Turkey and other countries but here in India, we are currently consolidating ourselves as EPC provider in Oil and Gas sector and constructing roads on BOT basis," he said.
Besides this, the company has also received proposals from different companies to set up an LNG terminal on the East coast of India, near Kakinada in Andhra Pradesh, Singhal said, adding that the company would take its time before going for all these projects.
The company has recently constructed three stretches of GAIL''s Dahej-Vijaipur natural gas pipeline at an estimated cost of Rs 450 crore, he said.
According to the Fernas Construction''s global website, the Turkey-based company has number of projects spread across five continents and is working in more than 16 countries. PTI AMA RAH


Fernas Construction India bags EPC project worth Rs 2,200 cr -  Business News - News - MSN India

 

[Kevrai]

Singapore economy in 14.7% growth

according to the IMF Afghanistan is growing at 22.6%

 

[Abingdonboy]

Does anyone have any news on if India will be allowed to mine Afghan ores?:
[video]http://m.youtube.com/index?desktop_uri=%2F&gl=US#/watch?xl=xl_blazer&v=I-qeRiclfqU[/video]
This is from a whil back, any updates?