India, Greece Look At $1 Bn In Annual Trade

Greece and India are poised to increase their trade volume to a US$1 billion (euro730 million) annually by 2010, Indian President A.P.J. Abdul Kalam said on April 26 at the start of a four-day visit to Athens. Kalam met President Karolos Papoulias on April 26, and accompanying ministers signed two bilateral agreements for science and technological cooperation and reciprocal protection of investment.

Exporters Ask For RBI Intervention To Contain Rupee Rise

Exporters are now feeling the heat of the appreciating rupee against the US dollar. With the rupee climbing to nine-year high, the exporting community has urged the Reserve Bank of India to intervene and halt the rupee''s rise against the dollar. They also want the RBI to have a mechanism wherein the rupee is allowed to move within a specified range for exporters. The exporting community apprehends that the competitiveness of Indian exports might suffer more, if the rupee were to further strengthen against the dollar in the coming days. Asked what would be the comfort zone on the value of rupee for exporters, Mr Gupta said that anywhere between Rs 43.5 and Rs 44. The exporters are suggesting that a range be fixed around a particular rate (say 3 per cent around Rs 44) and the rupee movement should be restricted within this range for exporters. The rupee touched a new nine-year high on Wednesday (touched intra-day level of Rs 40.87 against the dollar) on the back of investors betting on continued capital inflows and some speculation that the RBI would not check rupee gains in order to tame inflation.

Exports From SEZs Grow By 52-Pc In ''06-07

Exports from Special Economic Zones (SEZs) rose 52.31 per cent in 2006-07 to Rs 34,787 crore from Rs 22,840 crore in the previous year. The growth rate was more than double the 24.71 per cent increase recorded in the previous year. In 2004-05, exports from SEZs stood at Rs 18,314 crore. Meanwhile, the total investments that would be made in the 234 SEZs for which formal approval has already been given has been estimated at Rs 3,00,000 crore.

Govt Plans To Amend SEZ Norms In 10 Days

New Delhi: The Government mulls to amend its special economic zones rules within the next 10 days to specify a minimum processing area of 50 per cent for all SEZs and also to limit the size of multi-product SEZs to 5,000 hectares. The decisions to limit the size of multi-product SEZs and also to specify the minimum processing area of 50 per cent were taken at the recent meeting of the Group of Ministers on SEZs. Negotiations are on between the Commerce, Power and Finance Ministries over the issue of taxation of sale of power within and outside the SEZs. While the Commerce Ministry is keen that there should be no taxation on sale of power within the zone, the Finance Ministry is understood to have made a case for taxing the income on power sold in the non-processing area of the SEZs. Meanwhile, the Government''s decision to limit the size of multi-product SEZs to 5,000 hectares has shocked certain developers.

Auto, Consumer Durables Affected By Interest Rate Increase: CII

New Delhi: The recent cash reserve ratio and repo rate increase by the Reserve Bank of India and the consequent increase in interest rate by commercial banks have already taken its toll on the industry, according to the Confederation of Indian Industry. The automobile sector''s growth rate down to 0.8 per cent in March 2007 compared with 20.4 per cent in the corresponding month of the previous year. The growth figures for consumer durables for February 2007 stood at 1.6 per cent compared with 20.3 per cent last year. However, corporate earnings reported significant gains in the third quarter of just-concluded fiscal (2006-2007).

Re Ends Marginally Lower At 42.08/$

Mumbai: The rupee weakened by around six paise on April 19, on profit booking by traders. The currency opened at 42.05/07, reached an intra-day low of 42.20 and finally closed at 42.07, against the previous close of 42.01. The rupee is hoped to reach 42.40 in the next week. The six-month forward premia ended at 6.10 per cent (6.28 per cent) and the 12-month forward premia at 4.68 per cent (4.78 per cent).

Annual Trade Policy To Be Declared On April 19

New Delhi: In the backdrop of a strengthening rupee, which is affecting exports and fuelling imports, Commerce Minister Kamal Nath will declare the annual supplement to the Foreign Trade Policy on April 19. The policy is likely to increase the scope of many existing export promotion schemes, such as the Focus Product, Focus Market as well as Vishesh Krishi and Gram Udyog Yojana. Duty free scrips of 5 per cent is granted against freight on board value of many farm products under the Vishesh Krishi and Gram Udyog Yojana. Exporters are granted duty free scrips of 2.5 per cent of the freight on board value of products like handloom and leather, in the Focus Product Scheme.

Nath is also likely to formally declare the extension of the Duty Entitlement Pass Book Scheme by one more year. Exporters could also look forward to relaxation of obligation norms under the Export Promotion Capital Goods Scheme. Trade analysts will be keenly observing the export aim set by the government for 2007-08. The aim of exports for 2006-07 was set at $ 125 billion, which is likely to be missed as exports in the period between April to February of the current financial year was only $ 109.12 billion. Worried by the adverse effect of a strengthening rupee on exports, Nath will meet exporters to find a solution. The increase in rupee is affecting the exporters and the matter has been brought to our notice.

FM Gives More Times To Drawback Committee

New Delhi: The Finance Ministry has allotted more time to the three-member committee on duty drawback for submitting its recommendations on the all-industry duty drawback rates for 2007-08. The all-industry duty drawback rates are worked out and notified every year after taking into account Budgetary changes in Customs duty, Central excise and service tax. The committee has now been urged to submit report by June 30. It was earlier required to submit its report by April 15. Trade and industry have been urged to furnish the details by April 30. Under the duty drawback scheme administered by the Revenue Department, Customs and Central excise duty paid on inputs and service tax paid on input services used in the manufacture of export goods are refunded to exporters in the form of drawback.

Re Zooms To 41.90/$

Mumbai: The sharp appreciation of the rupee by over 5 per cent in the current year is hoped to adversely impact the margins of most exporters. The rupee opened at 42.55/57 and closed at 41.90/91, stronger by about 60 paise against the previous close of 42.51/52 on April 13. The rupee is over-valued by almost 10 per cent according to the real effective exchange rate. One per cent appreciation in the rupee hits the revenues of an export-oriented IT company by one per cent and margins by 30-50 basis points. However, one has to also see how the IT companies have hedged their positions in the market.

Govt Target $25Bn FDI For Current Fiscal

New Delhi: The Government has set an aim of $25 billion for foreign direct investment into India for the ongoing fiscal. They have consistently been getting higher FDIs and last fiscal was the highest at $15 billion compared to just $5.5 billion in 2005-06. The aim for the current fiscal is $25 billion.

Inflation Drops To Three-Month Low

Finance Minister P Chidambaram''s plan to curb prices in the economy may be finally working. Inflation dropped to a three month low at the end of March with part of the decline being led by a drop in cement prices.Wholesale Price Index (WPI) for the week ending March 31 rose 5.74 per cent compared to 6.39 per cent the previous week, although much of that drop was because of a positive base effect.Week on week the index still continues to rise although by a marginal 0.1 per cent. However, the price of manufactured goods was reassuring, which have been consistently rising, held steady in the last week of March.At the same time cement prices dropped 0.6 per cent suggesting that supply side measures taken by the government may be starting to seep through the system.

Rupee Closes Higher Against Dollar

The rupee opened at 42.94/95 against the dollar, which was also the intra day low, and closed at 42.84 on April 12 against the previous close of 42.87. Market participants expect the rupee to trade in the 42.75-43 range. In the forwards, the 6-month premia closed at 5.36 per cent (4.93 per cent) and the 12-month closed at 4.20 per cent (3.99 per cent).

IMF Lowers India Growth Story To 7.8%

With the world economy predicted to slow down this year, the International Monetary Fund (IMF) has forecast that Indian economy will grow at 7.8 per cent in 2008. Emerging markets and developing countries are expected to continue to grow strongly, albeit at a somewhat slower pace than in 2006, IMF said in its World Economic Outlook (WEO) report.In India, rising revenues are expected to lead to a more than one per cent of GDP decline in the deficit (to 6.3 per cent of GDP) in FY07, but with a public debt ratio of 80 per cent of GDP, further consolidation remains a priority.Inflationary pressures across the region remain generally well contained, although rapid credit growth poses a challenge in a number of countries.The Economic Outlook points to a global economy that expanded vigorously in 2006, growing by 5.4 per cent while the economy of the United States slowed in the face of headwinds from a sharp downturn in the housing market.

I-T Mop Up In Pune Region Witnesses 34% Growth

Income-tax collection from the Pune region has surpassed even the revised target and has reported an overall growth of 34 per cent for the year ended March 2007. This is the first time that the Pune region has exceeded the target. According to the source, the target that had been set for the year was Rs 8,400 crore, which was revised to Rs 8,700 crore. But the Pune region has, so far (as of April 5, 2007), collected revenues to the tune of Rs 8,970 crore. The tax collection from this region was estimated to cross Rs 9,000 crore, as the final collections report was yet to come in. The corporate tax accounted for Rs 2,964 crore and income-tax stood at Rs 3,545 crore and other taxes were Rs 195 crore as on March 2007. This showed an increase of 29.49 per cent in the corporate taxes, 37.69 per cent in income-tax and an overall growth of 33.82 per cent. Taking an account of the top five corporate income-tax payees as advance tax, he said Bank of Maharashtra has paid Rs 125 crore, Cummins India Ltd (Rs 108 crore); Bharat Forge Ltd (Rs 101 crore); Thermax Ltd (Rs 100 crore); and Piaggio Vehicles Pvt Ltd (Rs 67.2 crore). This he noted was about 67.5 per cent, 48 per cent, 19 per cent, 67 per cent and 37 per cent higher respectively than what was handed over during the year ended March 2006.

Chidambaram Wants Action Plan To Maintain Tax Collections

Buoyed by an upbeat trend in direct tax receipts in 2006-07, the Finance Minister, Mr P. Chidambaram, is to discuss with the Chief Commissioners of Income-Tax (CCITs) on April 10 to chalk out an action plan for sustaining this performance in the current fiscal too. In a departure from past practice, when CCITs were required to come to headquarters here for such interactions, the Finance Minister would use the latest video-conferencing facility of the income-tax department from North Block for reaching out to the CCITs at 46 stations across the country. So far, the I-T department did not have such a video-conferencing facility. The interaction also comes in the backdrop of the Centre achieving the direct tax collections budget estimate of Rs 2,10,684 crore for 2006-07. This represented a 27.53 per cent increase over the direct tax collections of Rs 1,65,202 crore recorded in fiscal 2005-06. Direct tax mop up have topped Rs 2,24,000 crore for fiscal 2006-07 and that the Central Board of Direct Taxes is well on course to achieve the Rs 2,29,272-crore revised target for the same year. For 2007-08, the Centre has pegged direct tax collections target at Rs 2,67,490 crore. This represented a 26.96 per cent increase to the budget estimate of Rs 2,10,684 crore for 2006-07 and 16.67 per cent increase over the revised estimate of Rs 2,29,272 crore for the same year.

Inflation To Fall Below 6-Pc

For the first time in several months, the rate of inflation is expected to slip below the psychological 6% mark. This would bring some relief to the UPA government which has been grappling with price rise at all levels. The economy may well end the financial year (March 31, 2007) with an inflation rate of about 5.74%, measured by the wholesale price index. A strong base effect would place inflation at between 5.64% and 5.74% in the last week of the fiscal, close to RBI''s comfort band of 5-5.5%.

Central Excise Collections Surpasses Target In Visakhapatnam

Visakhapatnam: The central excise, customs and service tax collections in Visakhapatnam zone during 2006-07 exceeded the aim and recorded 16 per cent growth over the previous year. The target fixed for the zone comprising 13 revenue districts of coastal Andhra and Rayalaseema was Rs 9,910 crore and the actual collection was Rs 10,189 crore - Rs 7,026 crore in central excise tax, Rs 2,700 crore in customs revenue and Rs 463 crore in service tax. During the previous year (2005-06), the total revenue under the three heads was Rs 8,756 crore. In the current budget the Union Government had made e-payment mandatory for all assessees paying tax above Rs 50 lakh.

Service Tax Return Form Changed

New Delhi: The Finance Ministry has come up with a changed service tax return form (ST-3), which incorporates the changes in service tax law and procedures over the last two years. The changed format is now fully compatible to automation and electronic filing. Taxpayers should use the new form for the next return, which is to be registered by April 25. A separate entry has also been prescribed for furnishing information regarding self-adjustment of service tax paid in excess during an earlier period, against service tax liability for the period for which return was being registered.

SSI Sector Witnesses 8.87% Growth

New Delhi: The Union Minister for Small Scale Industries and Agro and Rural Industries, Mr Mahabir Prasad, asked the States to take the benefit of the package for the SSI sector declared by the Centre recently. The Minister said that in the first four years of the Tenth Plan, the annual growth rate of this sector had been 8.87 per cent. The Micro, Small and Medium Enterprises Development Act, 2006 will go a long way in developing this sector.

AP Govt To Reduce Fiscal, Revenue Deficits

Hyderabad: Efforts by the Andhra Pradesh Government to decrease fiscal and revenue deficits have proved to be windfall, with the provisional Central estimates hinting at a sanction of Rs 2,000 crore as incentive. The revenue deficit had been brought down to Rs 54 crore (as against the projected Rs 990 crore) in the last financial year. In the first year (2004-05), the State got Rs 1,000 crore. The following year, they got Rs 1,300 crore. Latest indications show that we are likely to get Rs 2,000 crore. The backward regions continue to remain backward.

FM Backs RBI Move To Hike Key Rates

Finance Minister P Chidambaram on Friday said that the government was fully supportive of Reserve Bank''s decision to increase key short term lending rates and cash reserve ratio to contain inflation.The government is fully supportive of the moves,said Chidambaram. He also said that the Reserve Bank consulted the government on both the measures announced on Friday.The Reserve Bank hiked CRR by 0.5 per cent in two phases and repo rate by 0.25 per cent. The hike in CRR would suck out Rs 15,500 crore excess liquidity from the system.