Indian Economy-News & Updates

[1980rk]

IMF raises India’s growth forecast





WASHINGTON: The International Monetary Fund on Wednesday raised India’s growth forecast to 5.4 per cent for 2009, even as it projected the world economy to shrink by 1.4 per cent.

In April, it forecast a growth of 4.5 per cent for India. In its update to the World Economic Outlook, the IMF said the global economy would contract by 1.4 per cent. Earlier it had projected a growth of 1.3 per cent. The Chinese economy would expand by 7.5 per cent, as against 6.5 per cent forecast in April, it said.

“The global economy is beginning to pull out of a recession unprecedented in the post-World War II era, but stabilisation is uneven and the recovery is expected to be sluggish,” the IMF said. — PTI

Source

 

[Neo]

India may face drought if monsoon is weak ​

Friday, July 10, 2009

WASHINGTON: India’s huge farm economy may be hit by a bad drought if its annual monsoon rains remain weak with the window for planting crops closing by mid-July, a report from a US Agricultural Department attache said.

“The slow progress of the monsoon and its poor performance during the first quarter of the monsoon season (June-September) is causing serious concern among farmers as well as the (Indian) government,” said a report by the USDA attache in New Delhi.

“The window of opportunity for planting most kharif crops (rice, coarse grains, soybeans, peanut, cotton and pulses) will be over by mid-July. If rains come in the next week, planting operations will pick up,” the report said.

“Otherwise, the country could be heading for a severe drought,” the report added. Attache reports are not official USDA data.

In Australia, a scientist said India’s monsoon will remain weak, according to the Madden-Julian Oscillation index, which gauges the eastward progress of tropical rain.

India’s monsoon rains have now covered all of the country, but the country’s Meteorological Department said last week that as of July 1, the rains were 29 per cent below normal.

Some weather experts have already raised the possibility that the formation of an El Nino weather anomaly in the equatorial Pacific Ocean may have led to a weakening of the annual Indian monsoon rains.

Those rains are a life blood for India’s farming sector. The country is one of the world’s biggest producers and consumers of everything from sugar to soybeans.

Worries that India’s sugar production may be hit by the faltering monsoon is a prime reason why sugar values have rallied to a three-year top in the New York raw sugar market.

“Since the beginning of the monsoon season on June 1, rains have been consistently below normal in almost all parts of the country with the deficiency widening with each passing week,” the attache’s report said.

It added that this drought could be worse than the one that struck in 2002, which caused significant crop losses.

 

[Gabbar]

India can save $8.3 bn annually on Rel KG-D6 gas​

Reliance Industries' eastern offshore KG-D6 gas fields at peak production will help the nation save USD 8.3 billion annually or 0.7 per cent of the GDP, investment banker Morgan Stanley said.

"Assuming 80 million cubic meters per day of gas supplies for a year as a whole, India could save USD 8.3 billion annually," Moran Stanley said in a research note on RIL for its clients.

RIL, which is currently producing 31-32 mmcmd, is likely to touch 80 mmcmd in next six months. This peak output could replace close to 26 million tons of crude oil, which is as much as ONGC produces domestically, or about 17 per cent of current demand in India, the report said.

"We estimate 20 mmcmd of gas would go to the fertilizer industry and most of the rest to the power industry. This implies that as much as 13 million tons or 50 per cent of the country's fertilizer production, and about 12,500 MW of power, or 8-9 per cent of overall power produced in the country, can run on RIL's gas."
RIL stated gas production from KG-D6 fields on April 2 and has signed contracts with 15 fertilizer plants to sell close to 15 mmcmd gas. Additionally, it has contracted over 25 mmcmd to 19 power plants and 3.3 mmcmd to steel plants.

Morgan Stanley report stated that 5 mmcmd more gas could go to fertilizer plants and identified power plants that can take more of KG-D6 gas.

 

[NSG_BlackCats]

89 lakh GSM mobile users added in June​

NEW DELHI: GSM mobile operators like Bharti Airtel and Vodafone Essar have together added 89 lakh new users in June this year, taking the total mobile subscriber base to 31.58 crore.
According to the date released by the GSM representative body Cellular Operators' Association of India (COAI), the pace of monthly addition has picked up from 83 lakh new users in May, but is still slower than April's 89 lakh new users and 1.08 crore in March.

Top mobile operator Bharti Airtel added 28.18 lakh new subscribers in June, a marginal increase from 28.13 lakh in the previous month, COAI said.
Vodafone Essar, however, saw growth in new subscribers slowing as it added only 23.68 lakh in June against 25.38 lakh new in May this calendar, it added.
Idea Cellular added 16.10 lakh users in June compared with 13.04 lakh new users in May, while Aircel added 11.13 lakh new users from 11 lakh in May, COAI said.
The data did not include additions by Reliance Communications, but total GSM subscribers include Reliance's GSM users at the end of May. Reliance Communications expanded its GSM mobile service to all the service areas of the country in January this year.

Link

 

[Joshi]

India Selects Sites for U.S.-Built Nuclear Plants
http://online.wsj.com/article/SB124767102079145841.html


Larsen Profit More Than Triples
http://online.wsj.com/article/SB124772487363149733.html


BSNL Profit, Revenue Down
http://online.wsj.com/article/SB124772651306349903.html


Bajaj Auto Profit Jumps 67%
http://online.wsj.com/article/SB124772863018949965.html


India Unlikely to Achieve $200 Billion Export Target
http://online.wsj.com/article/SB124763989328444041.html


Power Availability in India to Improve in 18 Months
http://online.wsj.com/article/SB124763636751943921.html

http://economictimes.indiatimes.com/articleshow/4782492.cms
Anil Ambani, Steven Spielberg script a $825-mn Dream deal

Its the biggest and the most high-profile deal in Indian entertainment. Anil Ambani-promoted Reliance Big Entertainment (RBE) has finally sealed the funding for its much-hyped 50:50 joint venture with Hollywood’s iconic director Steven Spielberg’s DreamWorks.

DreamWorks Studios will get an initial funding of $825 million, which includes equity from Reliance ADAG to make films for a global audience. The company would make five to six films per year, and the first production would start this year for release in 2010. Of the $825 million, $325 million will be equity infused by Anil Ambani as his personal investment, $150 million will come from The Walt Disney Company as a distribution advance, and the rest will be funded by JP Morgan via debt.

http://economictimes.indiatimes.com/articleshow/4760116.cms
BMW likely to launch Mini Hatchback in India by Dec 09


http://economictimes.indiatimes.com...mpact-cars-from-India/articleshow/4777265.cms
Nissan looks at sourcing for non-compact cars from India

CHENNAI: Nissan Motor India is steadily progressing on its business plans in India — be it sourcing, hiring or identifying production bases. Even for the non-compact car segment, the Japanese auto major has found India to be an attractive and cost-effective sourcing point, according to company officials.

About 90% of the car produced at the new facility would have indigenous content. Nissan has already signed up with 94 Indian vendors for this project.

The suppliers would take up positions at the greenfield plant, that would cover a total built-up area of 3 lakh sq m. This plant would have the capability to produce cars on three platforms — A segment cars, B segment products and light commercial vehicles.

The Indian arm of the Japanese automobile major had started receiving enquiries from some of its counterparts in Europe to supply from India. Both on the cost and quality front, the subcontinent had an edge, the official said.

 

[NSG_BlackCats]

TCS targets $3bn revenues from BPO in five years​

MUMBAI: Tata Consultancy Services on Saturday said it is targeting business process outsourcing (BPO) revenues of 3 billion dollars in the next five years.
"There is a huge amount of opportunity through BPO. The global spend of BPO is estimated at $400 billion by 2013," TCS COO N Chandrasekaran told reporters.
"We want to take our BPO revenues to $3 billion in the next five years from Rs 800 crore, which we registered in the first quarter of this year," he said. Last year, TCS bought Citibank's BPO business Eserve for $512 million making it one of the larger outsourcing deals in 2008-09. The BPO company has 26,000 persons working. The company would hire 1,500 to 2,000 in this financial year, primarily in India, he said.

Presently, TCS BPO has 100-plus customers in 50 plus countries. Banking and financial services segment is the largest segment with estimated revenues of $100 billion, he said. Healthcare and retail are emerging verticals while utilities and media are untapped potential in the BPO industry, he said. It offers BPO services in banking and financial services, insurance, pharma, retail, telecom, travel, media and energy segments.

Link

 

[white_pawn]

Record foodgrain output in 2008-2009: Govt​

PTI 19 July 2009, 01:15pm IST

NEW DELHI: India produced a record quantity of foodgrains in the last crop year at 233.87 million tonnes, surpassing the previous high in 2007-08 by about three million tonnes.

"Despite vicissitudes of weather, total foodgrain production increased from 230.77 million tonnes in 2007-08 to 233.87 million tonnes in 2008-09 as per the fourth advance estimates," Minister of State for Agriculture K V Thomas told the Rajya Sabha in a written reply last week.

Some states had witnessed delayed rains last year, which impacted Kharif sowing a bit.

Though the fourth advance estimate has raised foodgrains production by over four million tonnes against the earlier estimate of 229.85 million tonnes released in May, a final output projection is yet to come.

Nevertheless, the government achieved its target of foodgrains production of 233 million tonnes in 2008-09. Foodgrains comprise rice, wheat, pulses and coarse cereals.

As the Centre is yet to release fourth advance estimates of production of different crops during 2008-09, the crop-wise data could not be available.

The government releases four advance estimates followed by a final projection of foodgrains production for every year.

Record foodgrain output in 2008-2009: Govt - India Business - Business - NEWS - The Times of India

 

[white_pawn]

Top 10 cos add over Rs 1.42 lakh cr; RIL regains Rs 3 tn mark​

19 Jul 2009, 1250 hrs IST, PTI

MUMBAI: The country's top-10 firms added Rs 1,42,000 crore to their market capitalisation last week with country's most valued firm, Reliance
Industries crossing Rs 3 trillion mark after two weeks.

The country's most-valued firm, Reliance Industries Ltd, added Rs 24,395 crore to its market valuation taking its total market cap to Rs 3,04,292 crore. Shares of RIL surged nearly 9 per cent on the Bombay Stock Exchange (BSE) to end the trade at Rs 1,933.40 on Friday.

RIL had a market valuation of Rs 2,79,897 crore last week.

The coveted club, which comprises of 4 private sector and 6 public companies, added Rs 1,42,320 crore to their market valuation to Rs 16,04,896 crore for week ended July 17.

The total market-cap of the elite club stood at Rs 14,31,433.42 crore in the previous week ended July 11.

State run Oil and Natural Gas Corporation (ONGC) and National Thermal Power Corporation (NTPC) together added Rs 21,567 crore to their market cap.

At the end of the week total market valuation of ONGC stood at Rs 2,22,763 crore and NTPC's at Rs 1,69,114 crore.

Private sector telecom services provider Bharti Airtel added Rs 8,562 crore to its market cap taking its total valuation to Rs 1,57,071 crore at the end of Friday.

Two other public sector firms, Minerals and Metals Trading Corporation (MMTC) and National Mining Development Corporation (NMDC) together added Rs 52,394 crore to their market valuation.

The market cap of MMTC stood at Rs 1,56,207 crore and NMDC at Rs 1,55,119 crore.

Bharat Heavy Electricals (BHEL) jumped to the seventh position from the ninth slot after adding Rs 11,912 crore to its market valuation while IT bellwether Infosys Technologies slipped to the eighth slot from the seventh even after adding Rs 8,052 crore to its market cap.

The country's largest public sector lender State Bank of India slipped to the ninth slot from eighth even after adding Rs 8,320 crore to its market cap and FMCG conglomerate ITC added Rs 7,119 crore to its market valuation.

Besides the top-10 firms, two private sector lenders, ICICI Bank and HDFC Bank together added Rs 14,733 crore in their market cap at the end of Friday.

The total market valuation of ICICI Bank stood at Rs 82,660 crore and HDFC Bank at Rs 61,170 crore.

RIL has retained its numero uno position in the club of top-10 firms followed by ONGC (Rs 2,22,763 crore), NTPC (Rs 1,69,114 crore), Bharti Airtel (Rs 1,57,071 crore), MMTC (Rs 1,56,207 crore), NMDC (Rs 1,55,119 crore), Bhel (Rs 1,09,065 crore), Infosys (Rs 1,06,990 crore), SBI (Rs 1,06,320 crore), and ITC (Rs 86,811 crore).

Top 10 cos add over Rs 1.42 lakh cr; RIL regains Rs 3 tn mark- Market News-Stocks-Markets-The Economic Times

 

[xebex]

If we can pull this off nicely....man we would be joining an elite group of countries that hav unique currency symbol. Not eve China have one.lol.

 

[TopCat]

What a crap. Who wants to buy rupee as of todays status and have them in national reserve??? Symbols will only make sense if US or European central banks issues guarantee against rupees and other economies buy it.

 

[King Julien]

FII inflows, ECBs help swell forex kitty by $2.3 bn

MUMBAI: Foreign exchange reserves rose $2.3 billion during the week ended July 17, on the back of inflows as a result of share purchases by
foreign institutional investors and external commercial borrowings by corporates.

According to the data released by RBI in its weekly statistical supplement (WSS), total foreign exchange reserves including gold and special drawing rights (SDR) — currency with the International Monetary Fund — rose $2.3 billion to touch $266.2 billion during the week ended July 17. Navin Raghuvanshi associate vice-president, Development Credit Bank, attributed the increase to inflows through both external commercial borrowings and FIIs during the week. This could have helped the reserves pile up, he added.

RBI buys dollars in the open market to prevent any abrupt rise in the value of the rupee. In addition to the mop-up by the central bank, the reserves also impacted the valuation of non-dollar assets in reserves against the dollar.

Although central banks do not disclose the currency composition of reserves, it is widely believed that 40% of reserves are in non-dollar assets, which include the sterling pound, yen, euro and the yuan. In other developments, both the central and state governments have not availed of any overdraft from RBI under their Ways and Means Advances account (WMA) account.

 

[BanglaBhoot]

Meager Monsoon Threatens Indian Growth

NEW DELHI -- An unusually dry start to India's monsoon season is threatening to hurt agricultural output in an economy still hugely dependent on rural areas for growth.

After India's driest June in 83 years, four of 28 provinces have declared drought, and many farmers don't have enough water to grow a full crop. More than half of Uttar Pradesh, the most populous state and a key rice and sugar cane-growing area, is suffering from drought.

A poor crop yield could push up food prices, straining the government's budget and complicating the central bank's efforts to revive the economy without letting inflation get out of hand.

The Meteorological Department forecasts rainfall in the June-September wet season at 93% of the long-term average, which isn't an unusually large deviation. But the distribution so far has been uneven, with some areas flooded while others have been parched. Rainfall from June 1 to July 22 was 19% below normal, with the northern and northwestern regions worst hit.

The June-September monsoon is critical for summer-sown crops, including oilseeds, rice and sugar cane. India's poor irrigation system forces farmers to bank heavily on the annual rains: 60% of India's farmland is rain-fed, with the rest relying on irrigation. If rainfall remains sporadic through September, winter crop yields could also be hit.

"I've sown only a third of wheat that I usually sow each year because there's no water," said Mohan Singh, a farmer from Punjab state. Heavy rains last week lashed the state, but they came too late for farmers to plant a full crop. "We are badly hurt," says Mr. Singh.

Two-thirds of India's 1.1 billion people live in villages, and agriculture accounts for around 18% of gross domestic product. Rural demand accounts for more than half of domestic consumption, so any decline in farmers' incomes would hurt demand for everything from fuel and motorcycles to soap and gold.

The government hasn't sounded the alarm yet. That may reflect confidence that measures to spur economic growth in rural areas will help to offset some of the shock from a weak crop.

"It's premature to draw any doomsday conclusion and it's better to wait to check if rains revive," said Arvind Virmani, chief economic adviser to the federal Finance Ministry.

Economists are starting to pencil in the impact of sustained drought on the economy. Amid the global crisis, growth slowed to 6.7% in the year ended March 31 from 9% a year earlier. The government forecasts an expansion between 6.25% and 7.75% for the current year, but a poor harvest could cast that projection into doubt.

"If overall rainfall deficiency falls to 20%-25%, India's gross domestic product growth could be pared to sub-5% this fiscal year," said Mridul Saggar, chief economist at Kotak Securities.

The government forecast a 4% expansion in farm production in its budget last month, but Morgan Stanley said low rainfall could limit growth to 1.5% to 2%.

A slump in agriculture would put pressure on the government to respond with support measures, even as it struggles with a deficit estimated to swell to 6.8% of GDP this fiscal year. "The government can't look away from the problem and despite the tight fiscal situation, it will try to incentivize farmers, which may swell its subsidy bill," said Shubhada Rao, chief economist at Yes Bank.

Economists say inflation will likely reappear in September, as food prices remain high and a recent fuel-price rise ripples through the economy. The Reserve Bank of India expects inflation at 4% by the end of this fiscal year on March 31. Jahangir Aziz, chief India economist at J.P. Morgan Chase, said inflation could rise by two to three percentage points over that forecast if the monsoon rains don't pick up.

Meager Monsoon Threatens Indian Growth - WSJ.com

 

[BanglaBhoot]

India's pockets of prosperity?

Special Economic Zones are attractive on paper. But they pose thorny political problems.

By Laura Alfaro, Lakshmi Iyer and Semil Shah
from the July 31, 2009 edition

Cambridge, Mass. - Imagine that the US government designated Long Island a Special Economic Zone (SEZ). Firms could operate there with tax exemptions, minimal red tape, no tariffs on imported inputs, and superior infrastructure.

Many firms would want to locate there, boosting industrial activity, exports, and jobs. But would Long Islanders benefit? Would they be willing to sell their land to firms? What if the government acquired the land on behalf of the firms?

In India, these questions aren't hypothetical – they have become thorny political problems.

India enacted an SEZ Act in 2005, hoping to boost infrastructure, promote investments, attract foreign firms, create industrial clusters, and increase exports while creating jobs.

SEZs are not novel: Previous incarnations, such as free-trade zones, have had a mixed record worldwide. But perhaps due to China's rapid growth, developing nations have taken a second look.

In 2007, China attracted $84 billion in foreign direct investment (FDI), mostly through its SEZs. India had only $23 billion in FDI and a large trade deficit, so SEZs became a key part of its development strategy.

That policy has become a magnet for criticism. The preferential treatment given to SEZ firms is being challenged by a case filed in Indian courts, alleging the SEZ policy to be "discriminatory" and "arbitrary."

Favors to SEZ firms also raise other concerns. For instance, would these advantaged firms withstand global competition once tax breaks were removed? How much employment would these zones generate? Should a government with a growing budget deficit grant five-year tax exemptions? All nations that have tried SEZs have had to deal with these trade-offs. In India, however, these concerns have been trumped by a bigger issue: land.

Doing business in these zones has proved quite risky for firms. As of June 2009, 568 formal approvals had been granted for SEZ projects, but only half of these had acquired the required land. The government's role in land acquisition, either via joint ventures or eminent domain, has many perceiving SEZs as "land scams." Projects initiated by India's leading industrialists, including the Ambanis and the Tatas, have stalled in the face of farmer opposition to land acquisition. The issue has become so contentious that the recently reelected Congress Party made stronger landowner protections part of its manifesto.

More than half of India's workforce is tied to agriculture, so the transfer of farmland from small owners to large firms has stirred up strong passions. Peasants don't see the payoff. China was able to suppress similar unrest, but India has not. A lethal government response to a 2007 protest ended up scrapping the Nandigram SEZ. And a bill that would have made it easier for government to seize land for private companies didn't pass.

What measures are left for the Indian government to ease these land acquisition problems? Rules that require original landowners to benefit economically from the success of SEZs sound appealing, but may slow the pace of their creation.

If the market is allowed to work on its own, the "invisible hand" would probably force firms to pay higher prices directly to landowners, thus slowing down projects and reducing rates of investment return. There is certainly no silver bullet, but measures aimed at addressing landowner rights and equity may reduce some of the opposition to SEZs and thereby ensure their long-term sustainability for India.

Considering how thorny the issue has become, the question must be asked: Does India really need them?

India's growth process has been largely bottom-up: Entrepreneurs have succeeded despite government bureaucracy – not because of it. The best policy for the government may be to provide the benefits of SEZs – low tariffs, reasonable taxes, good infrastructure, little red tape – to all firms in all parts of the country.

India's pockets of prosperity? | csmonitor.com

 

[beckham]

India beat China in trust factor in business: survey

Amid rising hopes of global economic turnaround Indians have emerged as an optimistic lot than their Chinese counterparts when it comes to trust in business.

survey conducted in six countries including the US and France, for public relations firm Edelman found out that India and China are the most positive states in business.

"At 75 per cent, India recorded the highest level of trust in business while China followed with 60 per cent saying they trust business to do what is right," the report said.

The survey was conducted by research firm Strategy One and sampled 1,675 informed publics in two age groups (25-34 years and 35-64 years) in India, China, US, UK, France and Germany.

The 2009 Midyear Edelman Trust Barometer has found that nearly one-half of the informed publics (48 per cent) in the US trust business to do what is right while 41 per cent of those surveyed in France share the same thought.

According to the survey in India and China banks are the most trusted industry.

"Our mid-year results reinforce the optimism evident in the Indian market," Edelman India Managing Director Robert Holdheim said.

According to the survey, nearly 7 out of the 10 informed publics in India and China rate the reputation of large multinational corporations as good or excellent.

In China and India, 96 per cent and 81 per cent of the informed publics say their country is headed in the right direction.

"They reflect a general perception that the economic situation is much better in India than in many other countries, and that it will continue to improve more rapidly than elsewhere.

"High levels of trust for both government and business (and the banking sector specifically) are the reward for avoiding the problems faced by so many others," Holdheim added.

 

[rubyjackass]

Has anyone heard of Tata's GSM entry package? Its called DOCOMO. Comes with no tv ads. I think this will increase the number of GSM users in India by leaps. Also the prices will come down a lot. Airtel and Vodafone are going to get bit in their ***.

PS: This post is not an advertisement campaign.