Indian Economy-News & Updates

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Bharti Airtel to Buy Warid Telecom for $300 Million

Bharti Airtel to Buy Warid Telecom for $300 Million - WSJ.com

NEW DELHI -- Bharti Airtel Ltd. will buy a 70% stake in Bangladesh's Warid Telecom International for $300 million as India's biggest mobile-phone operator by number of users seeks to offset slowing growth at home due to intense competition.

Bharti said in a statement Tuesday it will buy Warid Telecom's existing shares from the United Arab Emirates-based Abu Dhabi Group and will also subscribe to fresh equity shares in the Bangladesh company.

The acquisition comes barely months after Bharti failed to clinch a deal with South Africa's MTN Group for a possible merger. The Indian company has been looking to expand its overseas operations to boost revenue and margins, which have been hurt in recent months due to tariff cuts at home as existing and new players seek to gain or retain customers in the world's fastest growing telecom market.

Bharti had launched services in Sri Lanka in early 2009. Bangladesh is one of the largest untapped markets in South Asia with only 32% of its 160 million population having access to telecom services. In comparison, about 46% of India's 1.1 billion population has access to telecom services.

"This landmark deal underlines our intent to further expand our operations to international markets where we can implant our unique business model and offer quality and affordable telecom services," Bharti Chairman and Managing Director Sunil Bharti Mittal said in the statement.

Mr. Mittal added that Bharti will expand services "to the deepest pockets of Bangladesh and double the teledensity in few years."

Bharti will take control of the management and the board of Warid Telecom, while the Abu Dhabi Group--which has business interests in financial services, telecom and real estate in many countries--will retain 30% and have its nominees on the board.

Manoj Kohli, chief executive and joint managing director at Bharti Airtel, told reporters that the company intends to launch its brand in Bangladesh in the next few months.

Warid Telecom offers mobile services in all 64 districts of Bangladesh and has more than 2.9 million users. Grameen Phone Ltd. is the market leader with 22.75 million users, followed by Orascom Telecom Bangladesh Ltd. with 12.99 million and Axiata (Bangladesh) Ltd. with 8.87 million subscribers.

At the end of November, Bharti Airtel had more than 116 million mobile subscribers in India.

Meanwhile, Singapore Telecommunications Ltd. Tuesday said it will continue working with its associate in Bangladesh, Pacific Bangladesh Telecom Ltd., and that it sees its Indian associate Bharti Airtel's decision to take control of Warid Telecom as complementary to its own investments in the country.

"Since our investment, PBTL has grown its network capacity to 3.5 million customers and has been EBITDA positive during the second half of 2009," SingTel said in a statement in Singapore.

In response to a question about whether there have been any discussions with Bharti about a possible merger between PBTL and Bharti's new asset in Bangladesh, SingTel said it is open to working with other operators if it enhances shareholder value.

SingTel has a 45% stake in PBTL.

 

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MCD to get Rs 502 crore; nod for Rs 1436 crore JNNURM projects


13 Jan 2010, 2205 hrs IST, PTI

NEW DELHI: As Delhi prepares to host the Commonwealth Games this year, the MCD today said the Central government has sanctioned projects costing Rs
1436.32 crore for infrastructure development in the city under Jawaharlal Nehru National Urban Renewal Mission.

Chairman of MCD's Standing Committee Ram Kishan Singhal said the work on the projects could be completed by eight months to one year.

Among the projects are those related to multi-level underground parking lots, improvement and strengthening of roads, construction of grade-separator, foot-over-bridges and re-modelling of drains.

Officials said of the amount, 35 per cent will be funded by the Centre and 15 per cent by Delhi government. This means MCD is set to get 502.7 crore from the Centre for the schemes, which will come as a relief to the cash-strapped civic body.

Singhal said some key projects relate to development of 16 multilevel underground unconventional parking sites at various locations. The provision for total number of cars to be parked is 5443.

Covering of nallah in Nauroji Nagar from Africa Avenue to Ring Road for providing parking or road cum parking, covering of nallah in Press Enclave road for parking or road cum parking, construction of grade separator at intersection of Shankar Road and Upper Ridge Road are some of the other projects, he said.

Source : MCD to get Rs 502 crore; nod for Rs 1436 crore JNNURM projects- Infrastructure-Economy-News-The Economic Times

 

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FIIs raise a toast to India, infuse $1.6 bn in just 6 days


13 Jan 2010, 0641 hrs IST, Deeptha Rajkumar,

MUMBAI: Portfolio investors have pumped in a net $1.6 billion into Indian equities within six trading sessions in the new calendar, raising hopes Top 5
that many overseas fund managers may increase their allocations to India in 2010.

According to foreign portfolio managers, Fidelity , Halbis and Jardine Fleming Asset Management were among the large portfolio investors in India in 2009. Some of the other long-only funds that are bullish on India at the moment, and are planning to increase their allocations for this region include Capital International, Eton Park, Halbis and T Rowe Price.

A significant number of hedge funds too are said to have increased their India exposure.
With many of these players seeing a sharp improvement in their performance in the past quarter, inflows into their schemes have shot up.

“The allocation for India is increasing ,” says Manisha Girotra, MD and chairperson, UBS India. “Sectoral funds have also started allocating to India. Investors are coming in with a fatter wallet,” she says.

The global view is that there won’t be a double dip in the US and that developed markets are on a steady path to recovery. A greater risk appetite, the underlying recovery in India, and likely earnings upgrades here should help sustain flows to India in the near term.
“Capital flows will be primarily driven by global liquidity. Factors that will accelerate inflows will be an acceleration in reforms and revival in growth numbers as these help towards justifying higher valuations,” says Bharat Iyer, ED and head-India equities at JP Morgan. He is of the view that growth numbers are looking up and that is being factored into valuations.

Pratik Gupta, MD and head, Deutsche Equities , is of the view that emerging market equities will continue to attract good flows from the US considering that the Fed is no hurry to withdraw its liquidity support to markets.

While the Street expects no surprises from the January-March numbers, with most foreign brokerages looking at a 20-21 % growth excluding energy companies. The low base effect is partly helping exaggerate the growth numbers.

“We are looking at a 20% upside,” said an equity strategist with a leading foreign bank. “It is time for earnings to deliver. So, effectively we are getting out of the twilight phase and into the grinding phase,” he reasoned.

A strong rupee has further added to the feelgood factor about the Indian market. However, strategists are quick to add that portfolio investors will not punt on any market on factors like rupee or earnings alone. “A strong rupee is a hygiene factor. It lends some confidence in that it provides an enhanced margin of safety,” said the head of research of a leading foreign brokerage.

According to fund managers, the overall MSCI (World) universe as on January 8, 2010, is $25.6 trillion. Nearly 90% of that — $22.3 trillion — is the MSCI developed world, while the rest — $3.4 trillion — is the MSCI emerging world. If one were to do a quick recap as on February 8, 2008, the overall MSCI (World) universe was $28.6 trillion, with 88.8% of that — $25.4 trillion — being the MSCI developed world, and the remaining — $3.2 trillion — - being the MSCI emerging world.

“There is a clear indication that portfolio shifting is taking place from the developed to emerging markets. The emerging market portfolio has gone up. One should take into account that 2008 saw a massive fall in global markets. In 2009, the markets were still 10% below their peak,” said a fund manager with a foreign fund with large India positions.

Source : FIIs raise a toast to India, infuse $1.6 bn in just 6 days- Analysis-Markets-The Economic Times

 

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Bollywood mogul Anil Ambani to launch bid for MGM film studio

A Bollywood movie mogul is planning a takeover of the Metro-Goldwyn-Meyer Hollywood studio in an attempt to become one of the world’s most powerful film bosses.

By Dean Nelson in New Delhi
Published: 6:21PM GMT 15 Jan 2010

Anil Ambani already owns a controlling stake in Steven Spielberg’s DreamWorks studio and has struck a series of deals with stars including Brad Pitt, Jim Carrey, Julia Roberts and George Clooney to develop their films.

His Reliance Big Pictures company conquered Bollywood by producing the two most successful films of the last year while his current blockbuster, The Three Idiots, has broken Indian box office records. He hopes to expand his influence with an ambitious bid for MGM, the Hollywood studio which owns the James Bond franchise. Sources close to Mr Ambani confirmed his interest in acquiring MGM and said it would help him to achieve his ambition to become the world’s most powerful film mogul.

Mr Ambani, who is married to Tina Munim, a former Bollywood actress, is a controversial but respected tycoon whose empire spans power generation, distribution, insurance, financial services and communications. His company is India’s second largest mobile phone operator.

He is locked in a bitter feud with his brother Mukesh, the richest Indian, which began following the death of their father, Dhirubhai Ambani, who began his career as a petrol pump attendant and made his fortune producing polyester for the poor. The brothers fought for control of the company, which was eventually divided into two groups.

Anil Ambani emerged as the world’s greatest loser in the 2008 financial crisis when he lost more than £18 billion. Today his fortunes have revived and his empire is growing once again.

The acquisition of MGM would bring one of Hollywood’s greatest film libraries under his control and land a series of likely box office hits over the next three years. MGM will release a new James Bond film in 2011, starring Daniel Craig, and two Hobbit films starring Sir Ian McKellen.

MGM needs a buyer to avoid potential bankruptcy later this year when a series of debts must be repaid. Its current consortium of owners is asking for bids beyond $2 billion, but debts of $3.7 billion mean it is likely to be sold for a lower figure.

Source : Bollywood mogul Anil Ambani to launch bid for MGM film studio - Telegraph

 

[jaunty]

India likely to grow by 8.2 pc in next fiscal: Goldman Sachs
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15 Jan 2010, 2115 hrs IST, PTI

NEW DELHI: The Indian economy is likely to grow by 8.2 per cent in the next fiscal due to rising investment demand and global recovery, according
to financial services firm Goldman Sachs.

"The Indian economy is likely to accelerate in 2010 after the slowdown in the past two years. We think growth for FY'11 will be at 8.2 per cent driven by rising investment demand and a recovery in the global economy," it said in a report.

India registered a growth of 6.1 per cent and 7.9 per cent in the first and second quarters of the current fiscal.

Finance Minister Pranab Mukherjee has pegged India's economic growth at 7.75 per cent for 2009-10.

It further said the urban organised retail, fiscal reforms, infrastructure and exports would provide good investment opportunities.

"As a leveraged play on economic growth and rising consumer demand, we think organised retail in urban India will be a key growth area in 2010," Goldman Sachs said.

It added that disinvestment of government stakes in large state-owned enterprises (SOEs) will be an important theme for Indian equity markets in 2010.

"2010 promises to be the key year with stake sales expected in some of the largest companies in India, including, SAIL, MMTC, NTPC and NMDC," Goldman Sachs said.

It added that NTPC and NMDC alone are expected to bring in USD 5.5 billion (around Rs 25,000 crore) combined over the first three months of the year.

 

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Tata's Nano bags 'car of the year' award


16 Jan 2010, 1744 hrs IST, PTI

MUMBAI: Small car Nano, manufactured by the Tata Group, has won Autocar India 2010's 'car of the year' award.


"Recognition is for the full team that worked on the car, and the challenge now is to exceed expectations," Tata Sons' chairman Ratan Tata said in Mumbai.

The awards were given across various categories to the best and the most deserving contributors to the auto industry including Best Value for Money Car, Best Design and Styling, Best Variant of the Year, Car Ad of the Year, Manufacturer of the Year, among others.

The other winners in different categories are Bajaj Pulsar 135 LS (Bike of the Year), New Mercedes E-class (Best Luxury Car), Toyota Fortuner (Luxury SUV of The Year), Fiat Grande Punto (Best Design & Styling), Tata Indigo Manza (Best Value For Money Car), Maruti Suzuki India (Manufacturer Of The Year).

The jury for this year's Autocar Awards comprised Dilip Chhabria, Manwendra Singh, Hormazd Sorabjee, Shapur Kotwal, Renuka Kirpalani, Rajeev Khanna and Naren Kumar.

Source : Tata's Nano bags 'car of the year' award- Automobiles-Auto-News By Industry-News-The Economic Times

 

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NEW DELHI: Foreign fund houses infused a net Rs 8,191 crore ($1.7 billion) in the Indian stock markets during the first fortnight of 2010,
signaling a good start for the year, in terms of fund inflow.

During the period, foreign institutional investors (FIIs) were the gross purchaser of equities worth Rs 34,663.7 crore, while they sold stocks worth Rs 26472.1 crore, resulting in a net investment of Rs 8,191.70 crore.

According to data available with capital market regulator the Securities and Exchange Board of India (SEBI), FIIs made a net investment of Rs 6,617.40 crore ($1.4 billion) in debt instruments, during the period under review.

Interestingly, during the said period, the Bombay Stock Exchange benchmark Sensex registered a gain of 0.51 per cent, while in the same period past year, the stock market barometer had gained 81 per cent.

Source : FIIs pump in Rs 8,100 cr in market in first fortnight of 2010- Analysis-Markets-The Economic Times

 

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BMW bets big on luxury car market, to ramp-up dealer network


17 Jan 2010, 2150 hrs IST, PTI

MUMBAI: With India emerging as a hot-spot for luxury cars, German luxury car-maker BMW, plans to ramp-up its network pan-India and
cities like Coimbatore, Jaipur, Ludhiana, Bhubhaneshwar and Lucknow, among others, a top company official said here. The year 2009 has been good for the company when it sold 992 cars in the first quarter itself.

"We hope to end the year (2009) as the number one seller of luxury cars (in India)," BMW India's President, Peter Kronschnabl, told PTI here.

The company presently 12 dealers in 10 cities and plans to add 10 more in Tier II cities by the end of 2010. It expects each dealer from Tier II locations to contribute about 30-40 cars per year, he said.

BMW's global component sourcing from India is progressing as per plan, Kronschnabl said.

Source : BMW bets big on luxury car market, to ramp-up dealer network- Automobiles-Auto-News By Industry-News-The Economic Times

 

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Bharti Airtel eyes Bangladesh mobile market leader


17 Jan 2010, 1930 hrs IST, REUTERS

DHAKA: Indian telecom Bharti Airtel wants to be a market leader in Bangladesh's rapidly growing mobile market after acquiring 70 percent in operator Warid Telecom, Chief Executive Manoj Kohli said on Sunday.

Bharti, which has management and board control of the company, said the overall investment in Warid would be $1 billion. That includes the contribution from 30 percent shareholder Abu Dhabi Group. "We want to be a market leader no. 1 or 2, not no. 3 or 4," Kohli told a news conference in Dhaka. Industry watchers expect Bharti's entry into Bangladesh to lead the charge in the mobile sector that is expected to grow from 52.4 million in 2009 to 70 million by 2011. "We will make a fresh investment of $300 million in Warid to expand network in remote areas," he said.

Abu Dhabi Group has already spent $680 million in Warid, which launched its operation in Bangladesh in 2007 as the sixth mobile phone operator. Bharti has named Chris Tobit as managing director and CEO of Warid Telecom. Indian telecom companies have been looking overseas for acquisitions as the domestic mobile sector faces margin pressures from intense competition and price wars. Bharti's acquisition is also seen as a shift in focus to smaller targets after its planned $24 billion merger with South Africa's MTN failed last year.

Source : Bharti Airtel eyes Bangladesh mobile market leader- Telecom-News By Industry-News-The Economic Times

 

[RPK]

The Hindu : Business / Industry : Boeing to begin work on new aircraft repair unit

After being delayed for two years, Boeing will start construction of an USD 100-million aircraft repair and overhaul facility at Nagpur by the second quarter of this calendar year in collaboration with Air India, its top official here said on Monday.

“We deliberately delayed the MRO (maintenance, repair and overhaul) project as we wanted to time it to match with the delivery of the Boeing 787 Dreamliners to Air India. It would come up by late 2013 or early 2014,” Boeing India chief Dinesh Keskar told reporters here.

About 50 acres of land has already been allocated for the project by the Maharashtra Airport Development Company and construction would start in the “second quarter of this year“.

He said the MRO facility was intended to serve 23 Boeing 777s, 27 Dreamliner 787s as also other aircraft types like 737s ordered by Air India.

Noting that B-787s would not require major checks immediately after their deliveries to Air India starts next year, he said when these aircraft would need to go in for high -level ‘C’ checks, “the facility would be fully in place“.

The Boeing India chief projected that India would require USD 100 billion worth of planes in the next 20 years, with single-aisle aircraft forming the bulk of the demand worth USD 60 billion.

As the 10th largest military spender in the world, India would require USD 31 billion worth of defence deliveries in the next 10 years, he said.

The first Boeing 787 aircraft is now expected to be delivered to All Nippon Airways later this year, almost two years behind the original scheduled date of delivery and Air India is expected to receive the first of this sophisticated aircraft in the second quarter of 2011, Keskar said.

The Dreamliners, he said, had now reached a “new level of airworthiness” by flying to 30,000 feet altitude during flight tests, which is normally not carried out on new planes.

Referring to the industry strategy of the US aircraft manufacturer in India, he said Boeing had already working with several Indian public and private sector firms in the fields of defence and communication technology.

While Hindustan Aeronautics Ltd was producing Boeing civil plane doors along with weapon bay doors for F-18 fighter aircraft and flaperones for P-8I maritime patrol aircraft, Tata and the leading US firm have set up a joint venture to produce aerospace components for international customers.

In the defence sector, Boeing last year sold eight P-8I anti-submarine warfare aircraft to the Indian Navy and is currently in talks with the Indian Air Force for ten C-17 heavy-lift transport aircraft.

 

[indiatech]

Tata JV plans $10-bn coal-to-liquid fuel unit

By fe Bureaus
Tata Steel (TATASTL.BO : 637.6 0) has given a proposal to the Orissa government to set up a coal-to-liquid fuel facility in the state with an investment of $10 billion. Tata-Sasol, a 50:50 joint venture between Tata steel the South African company Synfuels International, has been floated for the venture. Tata Steel vice chariman B Muthuraman and Synfuels managing director Ernst Oberholster met chief minister Naveen Patnaik here on Monday, and discussed the project.

Muthuraman told Patnaik that the project would generate employment for 35,000 people. He added the project would require 3,000 acres besides land for the power plant.

According to Ernst Oberholster, the project, which would be of 3.6 million tonne per annum (80 barrels per day), would be the first of its kind in the country. The project will go to production by 2018 if implemented as per planned. He said a 1,600 mw power project would also come up as part of the project.

The coal-to-liquid fuel project,which would require about 28 to 31 million tonnes of coal per annum, will soruce the coal from Arakhpal and Srirampur mines of the Talcher coal belt. While the project will produce diesel, naphtha and LPG gas, it will contribute tar, phenyl, fertiliser and explosive materals as by-product. Oberholster said his company has been converting coal to liquid fuel for the last 50 years in South Africa and meeting about 40% of the country's diesel requirement.

 

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Indian economy may see faster eco growth than China after 2020

21 Jan 2010, 2218 hrs IST, PTI

NEW DELHI: The Indian economy is likely to grow at a faster rate than neighbouring China's after 2020, with the country primarily benefitting from
a significant younger population, says a report by PricewaterhouseCoopers.

According to the report, China is expected to be the largest economy in the world as early as 2020.

However, the Indian economy is likely to grow significantly faster than China in the decade after 2020, the report stated.

"This is due to India having a significantly younger and faster growing population than China and due to it having more 'catch-up' potential due to starting from a lower level of economic development than China at present," the report revealed.

PwC, however, cautioned that India would only fully realise this potential, if it continues over the next two decades to pursue the growth-friendly economic policies of the last two decades.

"In fact, India has the demographic potential to overtake China as the fastest growing major economy within the next 10 years," PricewaterhouseCoopers executive director and Markets & Industries leader Jairaj Purandare said.

Moreover, India is likely to become less dependent on outsourcing and more on manufacturing exports, building on its engineering skills and rising levels of education in general population over the next decade, the report stated.

Source : Indian economy may see faster eco growth than China after 2020- Indicators-Economy-News-The Economic Times

 

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Balu yarn exports in rocovery mode, global demand picking up

21 Jan 2010, 2108 hrs IST, S Sujatha, ET Bureau

COIMBATORE Threading its way up, cotton yarn exports are slowly on their path to regain lost glory. While the export turnover is still almost 20%
lower to what it was two years ago, the demand is slowly picking up and the textile mills in the country are looking forward to a further recovery in European textile industry.

In 2009, October witnessed the most emphatic rise in yarn exports ever since the global crisis set in 2008. Data available with Yarns and Fibres Exchange showed during the month, exports increased to Rs 661 crore , up by 12% over the previous year. The statistics with Southern India Mills Association (Sima) also showed that US $1243 million worth cotton and blended yarns was exported during April to December 2009.

"Though we haven’t yet reached the previous high, the demand for yarn is improving globally and we see a good revival," said Confederation of Indian Textiles Industry (Citi) & Textile Export Promotion Council (Texprocil) ex-chairman & GTN Textiles MD B K Patodia.

He said, as Japan and highly developed countries in Europe have stopped manufacturing primary textile products and began to concentrate on niche products, their requirement of yarn has grossly come down . But, the demand for Indian yarn is growing in traditional markets like Bangladesh and Korea.

Even in China, the requirement is increasing and experts believe the dragon country will soon increase its quantity of yarn import from India. According to Yarns and Fibres Exchange research, Bangladesh, South Korea, Brazil, China, Turkey, Italy and Peru accounted for half of yarn exports from India in October 2009, which was worth US $ 56 million.

Sima secretary general K Selvaraju told ET that there is also a paradigm shift in product type. "Since, the mills are concentrating on Asian markets and Far East countries, they have started producing more of fine medium counts and medium coarser counts rather than super fine counts," he said, adding, currently the export demand is mainly for such quality yarns.

Mr Patodia added, since domestic market is looking more lucrative now, the mills have increasingly started supplying to institutional buyers rather than concentrating on exports. "But after a dull 2009, the outlook for yarn exports is looking bright this year," he said.

Citi secretary general D K Nair too felt, the surging demand from garments industry in India has created a huge market for quality yarns. However, he said, the export market is also looking good and asthe cotton prices have stabilised in the last one week, the industry is looking forward to better days.

Loyal Textiles CMD Manickam Ramaswamy said the rupee appreciation is slightly affecting the yarn exports. "Since exchange fluctuation is passed on to the customers and today, there is appreciation in rupee, overseas customers are not accepting our prices. But, they will surely come back to us, when their requirements are not met else where," he added.

Source : Balu yarn exports in rocovery mode, global demand picking up- Foreign Trade-Economy-News-The Economic Times

 

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Don't underestimate India's consumers


22 Jan 2010, 1824 hrs IST, BusinessW

By John Lee

The scale of China has always fascinated merchants. In 19th century England, spinning-mill owners were convinced they would reap profits beyond their dreams if they could just get every Chinese to buy one handkerchief. Alas, the one man one handkerchief plan never took, and for multinationals hoping to tap China's masses, the country continues to disappoint. Since the global economic crisis, Beijing has constructed a way around a slump. Roads, ports, railways: Name it, and China is likely building it. But its consumers aren't pitching in. As a percentage of gross domestic product, Chinese consumption is the lowest of any major economy, at less than one-third. Almost all the country's growth this year has come from infrastructure spending or speculation in domestic assets.

Western multinationals should consider fantasizing about India instead. The momentum for its bounceback comes from Indians, including the poor, buying their way to growth. The demand for handbags, air travel, and fine dining in Mumbai may have eased, but domestic consumption accounts for two-thirds of the Indian economy, twice China's level.

China's problem is that its top-down, state-led model of development (not to mention its artificial suppression of the yuan) structurally impairs domestic spending. According to Minxin Pei, director of the Keck Center for International & Strategic Studies, three-quarters of China's capital goes to 120,000-odd state-controlled entities and their many subsidiaries, leaving 40 million-plus privately owned businesses to fight for scraps. The upshot: Business profits tend to end up in state coffers, not Chinese wallets. Wage and income growth, even for China's urban residents, hovers at about half the level of GDP growth over the past 15 years.

India's bottom-up private sector model, for all its chaos and bureaucracy, provides a stark contrast. While the nation badly needs infrastructure, its consumers are in a far better position to spend. India can now boast of an overwhelmingly independent middle class about 300 million strong, vs. China's 100 million to 200 million, depending on the parameters. Profits from India's businesses, large and small, go into Indian pockets rather than the state's.

The contrast sharpens outside these two nations' cities. Half of China and two-thirds of India live in rural areas. That's about 700 million people in each. The rural half of China is falling behind. Back in the mid-1980s, the mainland's urban-rural income ratio was 1.8. It now stands at about 3.5. Although per-capita incomes have risen, an estimated 400 million mainly rural residents have seen net income stall or decline over the past decade. Yasheng Huang, a professor at the Massachusetts Institute of Technology's Sloan School of Management, estimates that China's absolute levels of poverty and illiteracy have doubled since 2000.

In India, they've been halved. The urban-rural income gap has steadily declined since the early '90s. Over the past decade, economic growth in rural India has outpaced growth in urban areas by almost 40%. Rural India now accounts for half the country's GDP, up from 41% in 1982. World Bank studies show that rural China accounts for only a third of GDP and generates just 15% of China's growth. Meanwhile, rural India is chipping in about two-thirds of overall growth.

Source : Don't underestimate India's consumers- Features-The Economic Times

 

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Forex kitty up $899 m, touches $285 bn


23 Jan 2010, 0049

MUMBAI: Foreign exchange reserves rose $899 million to touch $285.1 billion during the week ended January 15, largely on account of revaluation of
non-dollar assets in reserves.

The latest figures released by the Reserve Bank of India (RBI) on Friday indicate that the total foreign exchange reserves comprising foreign currency assets, gold and special drawing rights (SDR — reserves currency with the International Monetary Fund) rose $853 million reflecting valuation gains in non-dollar assets. The value of SDR and the reserve capital with the IMF rose $36 million and $10 million, respectively, during the week.

“The dollar had strengthened sharply against the euro during the week. As a result, the value of euro-denominated assets in reserves, which are expressed in dollars, have risen,”said a treasury official with a private bank, requesting anonymity. Almost 40% of the reserves are believed to be comprised in non-dollar assets, including the sterling pound, yen, euro and the yuan, though central banks don’t make their currency composition of reserves public.

In other developments, the central government has kept its respective ways and means advances (WMA) account with RBI vacant during the week ended January 8. WMA is a facility under which governments (states as well as the Centre) can borrow from the central bank to meet their daily revenue mismatches. While borrowing within the limit is at the prevailing repo rate, borrowings above the agreed limit — between the government and RBI — is at 2% higher than the repo rate.

State governments availed of Rs 72 crore higher during the week under this facility, taking their outstanding
WMA balances to Rs 75 crore as on January 15.

Source : Forex kitty up $899 m, touches $285 bn- Finance-Economy-News-The Economic Times