Centre Give Nod In Principle For 91 Sezs For AP -July 31, 2008

The Centre has given nod in principle 91 SEZs for Andhra Pradesh, the highest in the country, Andhra Pradesh Major Industres Minister Dr Geetha Reddy said on July 30. Out of the 91, work for 64 SEZs are already progressing.

The state had taken care to ensure that only government land or one-crop land were acquired for SEZs, to avoid repetition of Nandigram there, the minister said. The farmers, whose land had been acquired, were being provided alternative housing sites. Alleging that the previous Telugu Desam party government had given prominence only to IT industry, she said Dr Reddy''s government gave importance to manufacturing sector as well.

According to the minister, the ground breaking ceremony for Rs 1,000 crore 5000-acre-spread private sector SEZ would be performed on August eight, near Tada,on Tamil Nadu-Andhra Pradesh border. The promoter of the project, Ravindra Sannareddy, an NRI said the SEZ would have auto components, light engineering, electronics hardware, apparel and fashion outlets and also IT and BPO units.MNCs like Venture of USA, Bura of Spain and International Apparels of Holland had already signed MoUs to set up units in the SEZ.

Rupee Appreciates Against Dollar - July 31 , 2008

The rupee appreciated against the dollar on July 30 tracking the upswing in the domestic stock market and the ease in oil prices. The rupee opened at 42.52/53 and touched an intra-day low of 42.58/59. It then gained to finally end at 42.36/37, against the previous close at 42.64/65. The rupee opened stronger with the overnight easing of global crude to $121 per barrel, against Tuesday''s $123 per barrel.

Oil Prices Ease On Demand Worries - July 30 , 2008

SINGAPORE: World oil prices eased in Asian trading on Wednesday ahead of a weekly US report on energy stockpiles expected to reinforce worries over slackening demand, analysts said.

New York's main contract, light sweet crude for September delivery, was 42 cents lower at 121.77 dollars a barrel after slumping 2.54 dollars to 122.19 Tuesday on the New York Mercantile Exchange.

Brent North Sea crude for September delivery eased 29 cents to 122.42 dollars after a drop of 3.13 dollars to settle at 122.71 Tuesday in London.

Prices have dropped about 17 per cent since they touched record highs above 147 dollars a barrel on July 11.

The fall is "gigantic in dollar terms," said Victor Shum, of Purvin and Gertz international energy consultancy in Singapore.

He said a stronger US dollar and worries about slackening oil demand in the United States, the world's biggest energy consumer, were behind the sharp decline in prices.

A stronger dollar makes crude oil more expensive for buyers with weaker currencies.

Shum said the oil market's bearish mood has also prompted some investors to move their funds out of oil.

The US Department of Energy was to release its weekly report on energy stockpiles in the country later Wednesday.

"I think the inventory data will continue to show a demand slowdown in the US and will likely add to the worries over a slackening oil demand," Shum said.

"Markets are finally working as they are supposed to, as higher prices inevitably act as a brake on demand," said John Kilduff, an analyst at MF Global.

Shum said the market's bearishness was demonstrated by Royal Dutch Shell's announcement on Tuesday that it was suspending some crude deliveries after militants sabotaged a pipeline in key oil producer Nigeria.

The impact of the news on pricing was minimal, Shum said. The Anglo-Dutch oil giant warned it may not be able to meet some supply contracts at its major Bonny terminal before the end of September.

It declared "force majeure" - a legal escape clause allowing producers to miss contracted deliveries because of circumstances beyond their control - for the remainder of July, August and September.

But Shum said supply-side risks from unrest in Nigeria, as well as tensions between the West and Iran over its nuclear programme, help to explain why prices had not fallen below 120 dollars.

"Prices have found a technical support at the low points of 120," he said. Another risk factor is the Atlantic hurricane season which can pose a risk to oil facilities and lasts into September, Shum said.

Pension Reforms Ready To Take Off - July 29 , 2008

It looks like the stage is set for pension reforms to finally take off. In a first interaction after the UPA won the trust vote, the pension fund regulator PFRDA has said the government is absolutely ready with the Pension Amendment Bill. The pension bill could be one of the biggest achievements for the finance minister if he manages to push this through and it could happen within two months. This could change the way the pension money of lakhs of government employees is managed and the kind of returns they get since the new law will allow them to invest more of their money in the stock markets as well.

For now all that the regulator needs to do is to rebid inviting private sector fund managers for the New Pension Scheme or the NPS and throwing open the NPS for private citizens, both issues which the Left was vehemently opposed to. As of now funds of only government employees are being managed by LIC, SBI and UTI. However, the bigger question for the regulator is whether government employees will opt for the new schemes since it is a voluntary offer.

At the moment Rs 1500 crore worth of funds of central government employees are already being managed by government owned fund houses and roughly 15 per cent of the monies are going as investment in equities.
Moreover, 19 state governments too have agreed to migrate to the scheme but are yet to transfer the money. Down the line the new pension scheme could also pose a challenge to the pension plans sold by life insurers. And to make this happen the pension regulator is also lobbying for hefty tax breaks.

All Eyes On RBI''s Credit Policy - July 29 , 2008

For Dr Yaga Venugopal Reddy who has smiled his way through a 4-year term at the helm of the RBI, this could be the final credit policy he delivers, but also one of the toughest.The policy comes at a time when economic worries continue to be at fever pitch.

Inflation is still in double digits at a 13-year high, and on the other hand Industrial production is starting to look shaky raising fears about growth.But for now bankers who are already feeling the sting of RBI''s inflation fighting measures expect the RBI to continue its focus on inflation, which could translate into another rate hike.

The key monetary indicators including money supply, credit and deposit growth are above RBI''s target zone. So bankers are forecasting a 25 bps hike in repo rate.A CRR hike is less likely but nevertheless a 25 bps hike cannot be ruled out. Liquidity is expected to ease in mid-August with government spending and bond redemptions expected to pick up.But there are still those who hope the RBI will not hike rates yet and wait to see the impact of measures already taken before delivering another dose of rate therapy. So even if the RBI chooses to spare the economy another rate hike in this time''s policy, the central bank''s stance will remain a tough one and inflation will remain the priority.

Orissa Approves 3 Aluminium Projects - July 29 , 2008

The State Level Single Window Clearance Authority (SLSWCA) of the Orissa government, headed by Chief Secretary, Ajit Kumar Tripathy, on July 28 gave nod for projects worth Rs 42,911 crore mainly pertaining to the aluminium sector. It includes the Rs 16,345 crore investment proposal of the National Aluminium Company Ltd (Nalco), Rs 19,668 crore proposal of L&T-Dubal, Rs 6800 crore proposal of RSB Metaltech and Rs 98 crore investment proposal of Kanpur based Bajaj Steels and Industries Ltd.

FICCI Submits Agenda To PM To Increase Investments - July 28 , 2008

The Federation of Indian Chambers of Commerce and Industry (FICCI) on July 25 given a report to the Prime Minister, Dr Manmohan Singh that suggested an agenda for the Government for the next 100 days. The chamber asked him to stimulate investments, restore business confidence in the economy and address the perception of a looming fiscal crisis.

The elaboration of the Indian economy over the last four years has been on the back of increasing investment flows and rising investment to GDP ratio. The chamber presented a broad spectrum of measures to encourage investments in infrastructure, stabilise the policy framework for SEZs, finalize a comprehensive demand moderation strategy based on market forces and grant industry status to the retail sector.

FICCI suggested a series of policy reforms comprising changes in the priority sector lending norms for banks to favour investment by corporates in the agri market, construction of warehouses, cold chain transportation, allow private sector that invests in agri infrastructure to be eligible for 150 per cent weighted deduction with regards to investment in R&D.

Govt Expects To Raise More Resources From Service Tax - July 28 , 2008

The Government expects to mop up more resources from the service tax, according to Mr P.C. Jha, Chairman of Central Board of Excise and Customs. The service sector adds more than 50 per cent of GDP while in terms of tax-GDP ratio, the share of the service tax is a meagre 1.1 per cent.

The service tax in India was launched in 1994 and in 1994-95, the tax rate was five per cent and three services were taxed and the Government raised Rs 410 crore on this score. In the past 14 years, the number of services being taxed has increased to 106 and the Government earnings from the service tax many times more and the rate of tax too has been jacked up to 12.36 per cent. In 2007-08, over Rs 51,000 crore was increased by way of service tax and the aim for the current year has been set at more than Rs 64,000 crore. Judging from the trend so far in the current year.

Rupee Ends At 42.25 Against Dollar - July 28 , 2008

The rupee dips by 11 paise against the dollar mainly due to losses in the stock market. The domestic currency opened weaker at 42.21/22 due to the decline in global indices. It reached an intra-day low of 42.35 and closed at 42.25/26, against the previous close of 42.14/15. The rupee is hoped to appreciate further in the next week and would be in a range of 41.80-42.30. In the forward market, the 6-month premium closed higher at 4.75 per cent (4.63) and the 12-month ended at 3.92 per cent (3.90).

Serial Blasts Rock Bangalore

A woman was killed and at least six people were injured in a series of six low-intensity blasts carried out in eastern parts of the information technology capital this afternoon.

The woman, who was waiting at a bus shelter in Madivala on the Bangalore-Hosur road, was killed in the blast and her husband and another person were seriously injured, police said.

Bangalore was rocked by a major terrorist attack in December, 2005 when extremists opened fire in the famous Indian Institute of Science complex in which a Delhi IIT professor lost his life.

There were also blasts in other areas like Panthrapalya, Audugodi and Vittal Mallya Road within minutes of each other from the first blast at around 1330 hours.

Police Commissioner Shankar Bidari appealed to the people of the city to maintain calm and carry on with their normal life as police have been put on alert throughout the city.

He said timer device has been used in some of the blasts and explosives in quantity equivalent to one or two hand grenades have been used in some others.

Bidari termed it as an "act of miscreants" trying to disturb peace in Bangalore and appeared pre-planned. "We will get to the criminals and arrest them," he said.

Bomb disposal squads and forensic experts have rushed to the spot for investigations.

Chronology of some recent major bomb blasts in the country:

May 13, 2008: Eight serial blasts rock Jaipur in a span of 12 minutes leaving 65 dead and over 150 injured.

January 2008: Terrorist attack on CRPF camp in Rampur kills eight.

October 2007: 2 killed in a blast inside Ajmer Sharif shrine during Ramadan, in Rajasthan.

August 2007: 30 dead, 60 hurt in Hyderabad 'terror' strike.

May 2007: A bomb at Mecca mosque in Hyderabad kills 11 people.

February 19, 2007: Two bombs explode aboard a train bound from India to Pakistan, burning to death at least 66 passengers, most of them Pakistanis.

September 2006: 30 dead and 100 hurt in twin blasts at a mosque in Malegaon.

July 2006: Seven bombs on Mumbai's trains kill over 200 and injure 700 others.

March 2006: Twin bombings at a train station and a temple in Varanasi kill 20 people.

October 2005: Three bombs placed in busy New Delhi markets a day before Diwali kill 62 people and injure hundreds.

Inflation eases to 11.89pc - July 25 , 2008

The annual wholesale price index-based inflation at 11.89 per cent during the week ended July 12, slightly lower than the previous week''s annual rise of 11.91 per cent, Government data showed on July 24.

The year-on-year inflation rate was 4.76 per cent during the corresponding week of the previous year. On a disaggregated basis, the Primary Articles group index increased 0.6 per cent as the index for ''Food Articles'' grouprose by 0.6 per cent due to higher inflation in items such as coffee (8 per cent), fruits and vegetables, urad and mutton (2 per cent each) and arhar, moong and jowar (1 per cent each). However, the inflationary trend in case of fish-marine (3 per cent), tea (2 per cent) and condiments and spices and maize (1 per cent each) declined. The index for ''Non-Food Articles'' group rose by 0.8 per cent for the previous week due to higher inflation in case of sunflower and raw rubber (3 per cent each), rape and mustard seed, castor seed and gingelly seed (2 per cent each) and raw cotton (1 per cent).

The index for ''Base Metals, Alloys and Metal Products'' group increased slightly due to higher inflation in lead ingots (6 per cent) and zinc ingots (3 per cent). The index for ''Machinery and Machine Tools'' group rose by 0.2 per cent due to higher prices of other electrical equipment and systems (2 per cent) and enamelled copper wires (1 per cent).

The heavyweight Manufactured Products group index increased by 0.05 per cent as the index for ''Food Products'' group increased by 0.1 per cent due to higher inflation on items such as coffee powder (6 per cent) and khandsari, gingelly oil and oilcakes (1 per cent each). However, rice bran oil (2 per cent) and imported edible oil, cotton seed oil and groundnut oil (1 per cent each) showed a fall. The index for ''Textiles'' group declined by 0.1 per cent due to lower inflationary trend seen in case of texturised yarn and hessian and sacking bags (2 per cent each) and hessian cloth (1 per cent).

Rupee Ends At 42.15 Against Dollar - July 25, 2008

The rupee depreciated slightly against the dollar on a day that seen high volatility. The domestic currency opened stronger at 41.98 and closed at 42.14/15, against the previous close of 42.08/09. In intra-day trade, it reached a high of 41.82/83 and a low of 42.19/20. In the forward market, the 6-month premium closed lower at 4.63 per cent (4.77) and the 12-month ended at 3.90 per cent (4.07).

Exide Industries Announces Q1 Results - July 25, 2008

Exide Industries Ltd has announced the following Unaudited results for the quarter ended June 30, 2008:

The Company has posted a net profit after tax of Rs 822.00 million for the quarter ended June 30, 2008 as compared to Rs 701.10 million for the quarter ended June 30, 2007. Total Income has increased from Rs 6645.80 million for the quarter ended June 30, 2007 to Rs 9088.80 million for the quarter ended June 30, 2008.

Spices Board Exporters To Contamination From Vietnam - July 24, 2008

KOCHI: The Spices Board here, has through a notification, alerted all exporters, manufacturers and other related industries to contamination found by European Union (EU) in whole star anise and Saigon cinnamon, which is imported from Vietnam.

Importers and manufacturing units of curry powders and garam masalas are required to make their imported consignments of whole star anise and Saigon cinnamon free from non-approved food colour, Chrysoidine, to avoid any kind of exports rejection and recall of their consignments.

According to a Spices Board press release issued in Kochi, which stated: in a rapid alert notification, the EU has informed of potential contamination of whole star anise and cinnamon from Vietnamese with a non-approved colour known as Chrysoidine.

The notification issued by the European Commission (Health and Consumers, Directorate - General) recently in Brussels has observed that Chrysoidine is a genotoxic carcinogen, exposure of which to a person's diet will increase the risk of cancer. It has been informed that there are no analytical methods now available to test this.

This is not a permitted food colour in EU. The notification says that it has received limited intelligence regarding potential contamination of whole star anise (Illicium verum) and Saigon cinnamon known as Vietnamese Cassia (Cinnamomum loureirii) of Vietnamese origin. The EU notification also states that they had received this information through their normal horizon scanning activities.

It also maintained that the intelligence is in relation to consignments destined for Indian market. Further, it clarified that there is no evidence for this product entering in the food chain in Europe.

Inflation Effects Net Incomes Of Farmers: NCAER - July 24, 2008

MUMBAI: Inflation raises prices for farm inputs as well as farm products, resulting in uncertain effects on the current net incomes of farmers, the National Council of Applied Economic Research (NCAER) said in its monthly report here on Thursday.

Inflation may benefit people with flexible money incomes but not those whose money incomes are fixed. Farmers have flexible money incomes. Therefore, theoretically at least, they should benefit from an unanticipated increase in the rate of inflation. Empirical studies however, have not found this connection, the NCAER study said.

As inflation increases, prices paid by farmers for various inputs increase faster than the prices they receive for their products, thereby the terms of trade for farmers deteriorate as the rate of inflation rises. General inflation when accompanied by growth may be associated with a slight increase in the demand for farm output.

However, increase is likely to be small due to the low-income elasticity of demand for farm output. On the other hand, higher marketing margins due to imperfections in the agricultural markets, stirred up by higher wages and various other marketing costs, reduce the demand for farm output at the farm level, NCAER said.

These opposing forces suggest that the net impact of inflation in the national economy on prices received by farmers is small in comparison to the impact on prices paid. Studies in the United States have observed that in the short run, a rise in input prices by 10 per cent reduced net income of farmers by 2.3 per cent in short run of 1-2 years and 1.2 per cent in the long run. The impact of inflation on agriculture is multifaceted.

Firstly, it raises the sector's costs of production through increased material input costs. Secondly, higher production costs may be shifted to consumers, but this possibility is limited by the competitive imports, thus reducing farmers' rate of return, the NCAER study said. The low current income from farming motivates farmers to seek higher support prices and to extend price support policies to more commodities.

Such policies result in further higher prices and higher rates of inflation. The high input prices lead farmers to take recourse to more credit, especially non-institutional credit for their farm operations which ultimately leads farmers into a debt-trap, the study said. Policies towards agriculture, especially in an inflationary setting, must come to grips with trade-offs intensified by the phenomenon.

Policies that may have beneficial effects in periods of stable prices quite frequently have overwhelming adverse side effects during inflationary periods impeding achievement of the original policy goals, it said. PTI

Power-Packed Recovery: Rpower Up 43% From Recent Low - July 24, 2008

Meanwhile, the BSE Sensex was up 52.89 points, or 0.32%, to 14,990.80, as oil prices dropped sharply on Wednesday, 23 July 2008, after the US government data showed a big increase in US inventories of gasoline.

On BSE, 57.18 lakh shares were traded in the counter. The scrip had an average daily volume of 34.83 lakh shares in the past one quarter.

The stock hit a high of Rs 189.70 and a low of Rs 173.60 so far during the day. The stock had a 52-week high of Rs 374.94 on 11 February 2008 and a 52-week low of Rs 116.30 on 2 July 2008.

The large-cap company had outperformed the market over the past one month till 23 July 2008, gaining 11.91% compared to the Sensex’s return of 5.92%. It had however underperformed the market in the past one quarter, declining 29.41% compared to Sensex’s decline of 10.64%.

From a recent low of Rs 128.10 on 16 July 2008 the stock rose 43.09% to Rs 183.30 today, 24 July 2008. The stock jumped 19.75% to Rs 170.95 in yesterday (23 July 2008)’s market rally.
The company has an equity capital of Rs 2,396.80 crore. Face value per share is Rs 10.

The proposed manufacturing unit would involve a total investment of about $3 billion and is proposed to be in place by 2010, the reports added.

Reliance Power is developing 13 power generation projects with a capacity of 28,200 megawatt (MW).

Reliance Power reported net profit of Rs 94.67 crore on total income of Rs 132.87 crore in the year ended March 2008.

Oil Prices Lower As Threat From Dolly Eases - July 23 , 2008

SINGAPORE: Oil prices eased in Asian trade on Wednesday as it looked like Hurricane Dolly would spare vital energy production facilities in the Gulf of Mexico, dealers said.

They said renewed worries about slower US growth were also weighing on prices.
In morning trade, New York's main contract, light sweet crude for September delivery, fell 23 cents to 128.19 dollars a barrel from its Tuesday close of 128.42 on the New York Mercantile Exchange.

The August contract expired Tuesday at 127.95. Brent North Sea crude for September delivery was off 25 cents at 129.30. "Oil markets believe that Dolly is now unlikely to significantly affect oil production in the Gulf of Mexico," said David Moore, a commodity strategist with the Commonwealth Bank of Australia in Sydney.

Some oil drilling companies evacuated personnel from their offshore rigs as companies waited to see where Dolly would make landfall.

Around one quarter of US domestic crude production and 15 percent of natural gas output comes from the Gulf of Mexico.

Traders were also awaiting the release of the weekly US report on energy reserves later Wednesday.

Analysts polled by Platts energy information provider are expecting US crude reserves to decline by 1.9 million barrels, while gasoline stocks are likely to rise by 500,000 barrels.

The Energy Information Administration last week said crude inventories rose by 3.0 million barrels to 296.9 million barrels in the week ending July 11, confounding market expectations for a decline of 2.2 million barrels.

The weekly report on US energy reserves provides investors with clues on oil demand in the United States, the world's biggest energy user.

Trust Vote Victory To Help Govt Expedite Reforms In Key Sectors - July 23 , 2008

NEW DELHI: Armed with a convincing victory in the confidence vote, the UPA government is now set to fast-track economic liberalisation onto a new trajectory with finance minister P Chidambaram attaching top priority to reforms in banking, pension sector and capital markets.

Streamlining of the commodities market and facilitating merger of State Bank of India’s subsidiaries with the parent bank are also high on the agenda. Disinvestment and hike in foreign direct investment (FDI) ceiling in the insurance sector are other areas shortlisted by the finance minister.

The Banking Regulation (Amendment) Bill is likely to be introduced in Parliament during the forthcoming monsoon session. This bill is to allow foreign investors to have voting rights in banks in proportion with their equity holding , rather than being capped at 10% now.

It is felt that liberalisation in these areas should be put on the fast track to make up for lost time now that the Left (which was blocking most of these reforms) is out of the picture. The new allies of the UPA like the Samajwadi Party would support these moves and there is no time to lose, top government managers feel. While containing infla-tion would be the key priority , these reform initiatives have got a shot in the arm with the government’s victory in the trust vote.

Rupee Ends At 42.68 Against Dollar - July 22 , 2008

The rupee increased by 15 paise against the dollar on a day that seen relatively thin trading volumes. The domestic currency opened higher at 42.66/68 and reached an intra-day low of 42.77/78. It closed at 42.67/68, against the previous close of 42.81/82. In the forward market, the 6-month premium closed higher at 5.23 per cent (5.09) and the 12-month ended at 4.40 per cent (4.29).

Ficci Demands Change In Nama Text - July 22 , 2008

Indian industry has asked removal of provisions in the latest non-agricultural market access (Nama) draft text that bound protection to cheap imports. The Federation of Indian Chambers of Commerce and Industry (Ficci) has also called for additional market access to Indian service providers and professionals to developed countries. Ficci has also asked for withdrawing proposals related to anti-concentration according to which sensitive tariff lines that will not be subjected to import duty cuts cannot be focused in one particular sector or sub-sector. Indian industry has been vehemently opposing the proposals as it feels they will severely impact sectors like auto-components, textiles, marine products and leather.

Delayed Rains Likely To Affect Crops In Guj - July 22 , 2008

Delay in rain after early onset of monsoon in western parts of the country is now frightening cotton, maize and paddy crops in Gujarat. Sowing in around 20 lakh hectares off the total 45 hectares of land brought under cultivation so far may be adversely impacted in the absence of enough rainfall in the state. Even the government officials do not rule out the possibility of cotton, maize and paddy crops taking a major impact if the state does not get satisfactory rainfall in the next one week.

will be suggested about selecting for alternative crops if the state fails to get enough rainfall in coming day. Meanwhile, farmers have asked power supply for 12 hours so that they can save the standing crops. A contigency plan has been chalked out in the wake of erratic rainfall in many parts of the state. Sowing in many areas comprising Banaskantha, Bhavnagar, Surendranagar and Ahmedabad disricts have taken an impact due to delay in monsoon.

Forex Reserves Rise $123 M On Revaluation - July 21, 2008

The foreign exchange reserves went up by $123 million to $308.520 billion for the week ended July 11. Last week, the reserves had dwindled by $3.393 billion to $308.397 billion. Foreign currency assets rose by $125 million to $298.786 billion during the week under consideration. Foreign currency assets expressed in US dollar terms include the effect of an appreciation or depreciation of non-US currencies. The reserves witnessed only a small increase since the RBI was seen selling dollars whenever the rupee breached the 43-mark last week. Gold and special drawing rights remained unchanged at $9.208 billion and $11 million, respectively. The reserve position in the International Monetary Fund fell by $2 million to $515million.

Ril Says No Comments On Rcom-Mtn Deal Collapse - July 21, 2008

Mukesh Ambani group flagship company RIL, that has initiated the arbitration process against Anil Ambani group firm RCOM on its negotiations with South African MTN for a possible merger, on July 18 declined to comment on the collapse of the deal. RIL said that they have no comments to offer at this point. The negotiations between RCOM and MTN had hit a rough pocket last month when RIL claimed the first right of refusal on majority stake in ADA group company, which was perceived to be talking for a deal through share swap.

Rupee Appreciates Due To Easing Of Oil Prices - July 21, 2008

The rupee gained against the US dollar on July 18 thanks to the easing of crude oil prices in the global market and gains made by the domestic equity market. The currency opened higher at 42.71/73 and closed at 42.75/76, against the previous close of 42.81/82. During the day, it moved in a range of 20 paise.

Oil was around $130 for a barrel, which helped improve sentiment in the spot rupee market. The upswing in the stock market, which gained by 523 points on Friday, also aided the rupee, said a dealer with a private bank. The companies having the option of buying dollars from the Reserve Bank of India, through the special open market operations, has to some extent taken off the artificial pressure from the spot market. Market participants said that the Reserve Bank of India would keep the monetary policy tight since inflation remains high and earlier inflation figures are being revised upwards by 60-70 basis points.The rupee could remain in the range of 42.80-43.10 next week. In the forward market, the 6-month premium closed higher at 5.07 per cent (4.78) and the 12-month ended at 4.30 per cent (4.14).

Fitch's Downgrade Not Worrisome - July 19 , 2008

NEW DELHI: Finance minister P Chidambaram on Friday downplayed the lowering of India’s credit outlook by global rating agency Fitch, saying it is not a cause of worry as economic fundamentals are strong.

“One rating agency has revised the outlook from stable to negative. I do not think that should cause us too much worry. We must look at fundamentals which I believe are still strong, but facing difficulties. I do not think we should worry about outlook,” he said.

Fitch had earlier this week revised the local currency outlook of India to negative from stable because of fiscal pressures.

Distinguishing between a rating and outlook, he said what Fitch has done is to take one step down on the outlook from stable to negative, but the rating remains the same for the country.

“What is outlook? Outlook is simply a view of the future. This is based on the context of the world economy and the Indian economy. Outlook can easily change in a month or two. If the objective conditions change, outlook can also change,” he said.

Mr Chidambaram said when this government came into office, many of the rating agencies have a negative outlook, but they changed it to stable and one or two even to positive. He, however, said change in ratings would have have an impact on interest rates. On fiscal concerns raised by Fitch, he said fiscal deficit targets given in the Budget would be met this fiscal.

“I have said every year. Nobody believed me during the year, but at the end of the year we have not only met (Budget deficit) targets but bettered them also. Even for 2007-08, the actuals are better than the revised estimates. This year also the Budget deficit would be met,” he said. The minister said Fitch and others were talking about off-Budget numbers. “These numbers are off-Budget because we do not have the money to provide for them in the Budget,” he said.

Many analysts have been saying that the deficit numbers would have been much larger had the government included expenditures like oil and fertiliser bonds in its estimates of fiscal deficit.

On deteriorating fiscal position of the Centre, rating agency Fitch earlier this week had revised the outlook on India’s long-term local currency issuer default rating of India, while retaining the rating at BBB-, which indicates low credit risk.

“The revision to the local currency outlook is based on the considerable deterioration in the central government’s fiscal position in 2008-09, combined with noticeable increase in government debt issuance to finance subsidies not captured in the Budget,” James McCormack, Asia Head of Sovereign Rating, Fitch, had said.

Lowering by Fitch would in normal times would have impact only on rupee-denominated securities, but in the present uncertain times it would also have some effect on interest rates on external commercial borrowings, stock markets and bonds, analysts had said.

Another global rating agency Standard and Poor’s had also said last week that it might downgrade India’s sovereign ratings if the country’s rising inflation, widening fiscal deficit and political instability continue in longer-term.

Fitch had said the central government’s deficit may increase from 2.8 per cent of GDP in 2007-08 to 4.5 per cent in the current year on account of higher on-Budget subsidies, interest payments and salary bill of government employees.

Fitch expects bonds issued to fertiliser and oil firms may reach 2 per cent of GDP, implying “an underlying central government’s deficit of 6.5 per cent of GDP or higher”.

Future rating actions, said McCormack, would depend upon whether the fiscal slippage in 2008-09 is reversed, leading to resumption of decline in India’s high government debt ratios.

The rating agency said higher oil prices have raised India’s oil import bill dramatically over the past three years and merchandise trade deficit, which was equivalent to 7.7 per cent of GDP in 2008-09.

Oil Gains A Dollar On Easing Iran Tension - July 19, 2008

LONDON: Oil prices rose a dollar on Friday, reversing a little of the sharp fall of this week. Crude had briefly touched a 6 week low earlier in the session as speculation grew of a more conciliatory tone ahead of talks between Iran and diplomats from major powers on Saturday on Tehran’s nuclear ambitions.

US light crude was $1.11 higher at $130.40 a barrel by 23:00 pm IST. It had dropped down to $128.54, the lowest since early June. London Brent crude was 91 cents up at $131.98. US crude fell $15 in the previous three days, putting it on track for its biggest weekly fall since the contract started trading in New York in 1983.

Olivier Jakob with Petromatrix said the expected US presence at the Geneva talks with Iran was a significant factor that the oil market could not ignore. “We will stay neutral on that meeting and would expect to see some book squaring ahead of it,” he said.

The US said this week it was sending an envoy to Geneva to join nuclear talks with Iran for the first time, to underline to the Islamic Republic and others that Washington wanted a diplomatic solution to the impasse.

Iranian foreign minister Manouchehr Mottaki said on Friday he saw almost no possibility of Israel or the US attacking his country over its disputed atomic programme.

The standoff over Iran’s nuclear programme has sparked speculation about a military confrontation with the US or Israel, helping to push up oil prices to above $147 last week.

A five day strike of Brazilian oil workers will end on Friday after limited disruption to production but oil workers in Brazil said they would expand a strike to all production and refining units of state-run Petrobras if they resume action. They will meet on July 25 to discuss their next move.

Sabotage attacks on oil facilities in Nigeria continue to shut nearly a fifth of output in the world’s eight largest oil exporter, cutting some production from one field as soon as output from others is restored.

Inflation holds almost steady at 11.91% - July 18, 2008

The annual inflation rate rose marginally to 11.91 per cent for the week ended July 5, from 11.89 per cent the previous week, mainly due to a softening in prices of food products. On a week-to-week basis, the prices of primary articles were down 0.2 per cent, while that of basic metals and alloys went up by 0.7 per cent. The manufactured products index was up 0.3 per cent and chemicals'' by 0.5 per cent.

The finance ministry said that inflation has stabilised compared to last week. The inflation for the week ended May 10 was revised to 8.57 per from 7.82 per cent. Finance Minister P Chidambaram on Thursday said that monetary measures have started having impact but still pressure exists on prices, referring to his meeting with the RBI Governor Y V Reddy.The rise was close to the levels expected by analysts. IDBI Gilts expected inflation at 12 per cent for week ended July 5. IDBI sees inflation to move higher in the near term and remaining in double digits till March 2009.IDBI Gilt further expects the Reserve Bank of India to again hike rates on indications of higher inflation. The central bank''s quarterly review of credit policy is scheduled for July 29.Economists expect India''s growth to slow this fiscal on higher borrowing costs and tough global financial conditions.

Rupee appreciates 25 paise against dollar - July 18, 2008

The rupee gained by 25 paise against the dollar on July 17 due to gains in the stock market and fall in crude oil prices. The rupee opened higher at 42.95/97 and closed at 42.81/82, against the previous close of 43.07/08. During the day, it touched a high of 42.79/80. In the non-deliverable forward market, dollars were sold as participants were seen unwinding their positions as the rupee strengthened, added the dealer. In the global market the dollar was relatively stable against other major currencies. In the forward market, the 6-month premium closed lower at 4.78 per cent (5.10) and the 12-month ended at 4.14 per cent (4.42).

Inflation data to be released on every Thursday - July 17, 2008

Concerned over leakage of sensitive data on price rise, the government has decided to release the inflation figures on July 17 against the current practice of announcing it on Fridays. Henceforth, the wholesale price-based inflation data would be released at 5 pm on every Thursday, a Commerce Ministry official said.Earlier, the inflation data was released at 12 noon every Friday. The decision comes in the wake of a few instances where the sensitive data was leaked before the official announcement, the official said.The provisional inflation data is prepared on Thursday and send to various ministries.With the inflation rising to a 13-year high of at around 12 per cent, the sensitivity of data has assumed significance for the stock markets and bond markets.Under the new schedule, the data will be released after the close of trading at bourses and will prevent traders from overreacting to the price rise indices.

Indian rupee up on lower oil - July 17, 2008

The Indian rupee strengthened on July 16 as global oil prices backed further away from record levels, marginally easing concerns over a widening trade deficit, but losses in local shares limited gains. The partially convertible rupee ended at 43.07/08 per dollar, 0.4 percent stronger than 43.23/24 at Tuesday''s close. It hit a 15-month low of 43.50 earlier this month.Oil prices came below $137 per barrel in the latter half of the day, so the rupee also edged up, a dealer with a private bank said. Oil was trading just above $137 a barrel. India''s government will have to prove its majority in a parliamentary vote next week after its communist allies withdrew support over a nuclear energy deal with the United States.

Rupee falls by 31 paise to 43.23 a dollar - July16, 2008

The Indian rupee lost 31 paise and closed above the crucial 43-level against the greenback amidst downgrading of the local currency by global rating agency Fitch and a collapse in stock markets even as the dollar softened in overseas markets.

At the Interbank Foreign Exchange (Forex) market, the Indian rupee closed at 43.23/24 against a dollar, down by 31 paise. The local currency opened weak at 43.02/04 against Monday''s close of 42.92/93 and dropped further sharply to a low of 43.3050.

The rupee premiums on forward dollar recovered its overnight losses and ended higher on fresh paying pressure from banks and corporates. The benchmark six-month forward dollar premium payable in December ended at 105-1/2 - 107-1/2 paise, up from 100 - 102 paise on Monday and the far-forward maturing in June also finished higher at 186-1/2 - 188-1/2 paise from 180-1/2 - 182-1/2 paise previously.

Four SEZ projects to come up in Nellore - July16, 2008

The sleepy hamlets in Nellore district in coastal Andhra Pradesh are waking up to fast-paced industrial development with four special economic zones and nine other mega projects coming up in the region. The total investment intentions for Andhra Pradesh in 2006-07 was Rs 25,173 crore, next only to Gujarat, and Nellore district was getting a good share of it. Easy access through road and railway network, having two airports -- Chennai and Tirupati -- nearby, an 169-km coastline and the upcoming industrial port in Krishnapatnam are attracting a number of business houses to set bases in the southern district. The 13 mega industrial projects with a proposed investment of Rs 40,150 crore, which are under different stages of implementation, will provide employment to nearly 1,35,000 people.

Rupee at 42.92 against US dollar -July 15, 2008

Snapping its 4-session gaining streak, the Indian rupee on Monday lost five paise to close at 42.92/93 against the greenback on demand for dollar amid a bearish trend in stock markets. At the Interbank Foreign Exchange (Forex) market, the domestic unit resumed higher at 42.82/84 from last weekend''s close of 42.87/88 per dollar.

Dealers attributed positive opening of the rupee to dollar sales by exporters at higher levels and lack of any dollar demand. Later, it fell back sharply and ended the day at 42.92/93 as demand for dollar picked up.

While Indian benchmark Sensex ended lower by 139 points, most of the other Asian indices ended in the red, affecting the rupee sentiment.Forex dealers said dollar buying by banks on behalf of their clients to meet their import requirements also weighed on the rupee.The global crude oil prices remained high near $144 a barrel in Asian trade on July 14. According to analysts, the rupee might trap in a narrow range and could not fall sharply on expectations of stern monetary measures by the apex bank to contain the spiralling inflation. The Reserve Bank of India fixed the reference rate for the American dollar at Rs 42.82 and for the Single European currency at Rs 68.07.

The Industrial Production Growth Slipped To 3.8 Per Cent - July 14, 2008

According to latest data, the industrial production growth slipped to 3.8 per cent in May, the lowest in six years, from 10.6 per cent a year earlier. The numbers were 6.3 per cent in April and 3.9 per cent in March of this year. The April numbers of index of industrial production was revised to 6.2 per cent, from 7 per cent earlier.

For the two months of April and May, the industrial output grew at 5 per cent, from 10.9 per cent a year earlier. In the May numbers, consumer goods grew at 7.2 per cent, while manufacturing goods growth came in at 3.9 per cent, vs 11.3 per cent a year earlier. May electricity growth was at 2 per cent, from 9.4 per cent a year earlier. However, the consumer durables sectors came back strongly to grow at 4.4 per cent, from a negative growth of -0.7 per cent a year earlier.

Director Of The International Monetary Fund (IMF) - July 14, 2008

Dominique Strauss-Kahn, director of the International Monetary Fund (IMF), on July 11 predicted no improvement in the world financial markets until the latter half of 2009. Strauss-Kahn was speaking at a conference on international economics held in the Black Sea resort city of Yalta. "It is possible that in the second to third quarter of 2009 the process of improvement (of world financial markets) will begin," he said. "The main part of the crisis could by then be behind us." World securities and commodities markets will remain unstable, he added.

"We are somewhere between the crisis of a contraction and the flame of inflation," Strauss-Kahn said. The IMF director singled out the US financial crisis and the world food price crisis, as key contributors to the "first true financial crisis of the 21st century". He couched the guarded remarks in a call for increased cooperation between international securities agencies as well as governments, saying "the economic results of the crisis are (still) before us, and to solve them inter-bank cooperation will be insufficient."

FM: No More Tax Cuts To Contain Inflation - July 14, 2008

Finance Minister P Chidambaram has said that government could not continue to reduce taxes on various items to contain inflation but there was a need for moderating demand of affluent sections to curb rising prices.The fiscal situation is under pressure, obviously you have to moderate demand of the affluent sections that is something which we have to consider in due course of time, said Chidambaram.

Fiscal steps like cutting taxes etc. help to a point, but you cannot cut taxes indefinitely, because after a point, there is nothing to cut, said Chidambaram. This year, the government has so far abolished or reduced duties on various food items, cement, cotton, oil and other commodities to contain inflation that is expected to result in revenue losses of about Rs 27,000 crore.Referring to 13-year high inflation that touched 11.89 per cent for the week ended June 28, he said at the moment the government was relying on monetary steps to moderate demand. On fall in GDP growth prospects in 2008-09, he noted had there been no turbulence in the international market, it could have been 9 per cent. However, he said the growth during the current fiscal would above 8 per cent.

Inflation Nears 12% As Fuel Costs Rise - July 12, 2008

NEW DELHI: Cost of living, already at a 13-year peak, is rising again, ruling out any chances that the central bank may soften monetary policy to boost slackening industrial output.

Annual inflation, based on wholesale price index (WPI), climbed further to 11.89% in the week ended June 28, outpacing the previous week’s 11.63% and 4.42% during the corresponding week of the previous year.

The government also sharply revised the inflation figure for the week ended May 3 by 0.9% to 8.73% as compared to the provisional data of 7.83%. This suggests that inflation may be currently close to 13%, forcing RBI to further tighten monetary policy at its review later this month, economists said. The unabated rise in the cost of living is now proving to be a major nightmare for the ruling coalition, which is set to face assembly polls in six states later this year and general elections next year.

The latest spurt in inflation is fanned by costlier food items and manufactured items as the second-round effect of price increase in auto fuel percolated into the economy. Food items like fruits and vegetables, cooking oil, textiles, fertilisers, pesticides and telephone instruments became costlier during the week.

World Economy Between Recession And Inflation: IMF - July 12, 2008

YALTA (UKRAINE): The world's economy is teetering between "the ice of recession and the fire of inflation", but may see some recovery by early next year, IMF Managing Director Dominique Strauss-Kahn said on Friday.

Addressing a conference in the Ukrainian Black Sea resort of Yalta, Strauss-Kahn characterised the economic situation as the "first crisis of the 21st century" made up of soaring inflation and a financial market crisis. But the crisis was receding.

"No one can say that the world economy is at a good temperature," he said.

"We are just between the ice of recession and the fire of inflation," he said, adding that soaring energy and food costs had topped the agenda of a meeting of leaders of G8 industrialised countries in Japan.

Strauss-Kahn said U.S. growth in the first quarter was better than expected at 0.9 percent, but anticipated a global economic recovery only in the first or second quarter of 2009.

The world economic order, he said, was rendered more unpredictable by the fact that the financial crisis originated in the United States amid doubts over low standard mortgages.
"It was the strongest economy and it was on the top of the pyramid of power," he said. "What happened now is that the pyramid is a bit upside down. It is no longer a pyramid of risk."

Although the worst of the financial market crisis was over, more challenges lay ahead.

"The answer has been global and broadly adequate. The central banks collaborated well together and they finally solved the question that avoided a crisis," he said.

"The biggest part is behind us ... The economic consequences of the crisis are obviously in front of us."
EMERGING MARKETS

Strauss-Kahn said emerging market countries were "really emerging" on the basis of high growth rates in both celebrity economies like India and China and "B-list" regions such as West Africa.

But markets should not subscribe to "decoupling" theories that suggest emerging economies are unaffected by the West's performance. The impact, he said, was merely delayed.

And inflation remained a global problem -- deeply felt among poor emerging countries -- requiring a global solution.

"The good news is after decades of stop-and-go cycles emerging economies are really emerging," he said. "But in developing countries, inflation is a huge problem. It's a case of life and death."

Price rises in Ukraine, for example, were "unsustainable" at about an annual 30 percent over the past three months.

But most developing countries were importing inflation -- the soaring price of oil, and in Ukraine's case gas imports, and rocketing food prices after droughts.

"They have almost no tools to deal with this," he said.

Strauss-Kahn said it was difficult to forecast when inflation might start coming down as there was no clear idea when oil prices might fall or when food supply and demand balances might correct themselves.

He said current oil prices of about $130-140 per barrel knocked one percentage point off global economic growth.

Oil Cost Fuels Boom In Online Classes - July 12, 2008

BOSTON: Laurel Ranticelli considered driving 40 miles round-trip to take education classes at the University of Massachusetts campus in Amherst. Then she realized she could take the same courses from her computer at home and save on fuel costs.

"It's gotten out of hand, the gas prices," said Ranticelli, 50, who lives in Springfield. "It's $70 a week. That's pretty close to my groceries."

She joins a growing number of students trying to save gas money by enrolling in online classes. Online enrollment has been steadily growing for years, but college administrators say the spike in gas prices has fuelled a surge in students seeking classes without the cost of commuting.

John Bourne, director of the Sloan Consortium, an organization in Wellesley that studies online education, said he expects gas prices to bring about "a blended classroom half online, half in class."
At Villanova University, the engineering school has seen a 40% increase in online enrollment even though summer enrollments typically stay flat. "We've attributed it to the huge gas prices," said Sean O'Donnell, who runs the engineering school's distance education programme.

In many online classes, students log on at their convenience for coursework, which is mostly through independent study. Students and professors interact through online chats, message boards and e-mail.

Kerala Govt To See Rs 3,000cr Additional Expenditure Next Fiscal - July 11, 2008

The Kerala Government will incur extra expenditure to the tune of Rs 3,000 crore in next financial year due to price increased caused by the increase in prices of petroleum products. The Finance Minister, Dr Thomas Isaac, said that the Kerala State Road Transport Corporation (KSRTC) will have to bear an additional load of Rs 60 crore because of the increase in petroleum prices. Besides, the Government will need Rs 350 crore to pay one instalment of dearness allowance to the government employees. On the other hand, the State will lose revenue on account of reduction in the sales tax on petrol and diesel. The tax had also been decreased to five per cent for other petroleum products. The Government will soon declare measures to restrict wasteful expenditure after going via the measures taken during the last 15 years.

Tata Steel Debuts On Fortune 500 List, Ranks 315 - July 11, 2008

Thanks to its acquisition of the Corus group, Tata Steel has entered the Fortune 500 list at rank 315, while India''s largest corporate group Reliance Industries jumped 63 places to reach 206. Tata Steel, part of the Ratan Tata-led Tata Group, has also been named as the company with the highest revenue growth of more than 350 percent over the past year, thanks to the consolidation of Corus'' revenues with its balance sheet. Tata acquired Anglo-Dutch steelmaker Corus in October 2006.

Companies qualify for the Fortune list on the basis of their revenues. The rankings are based on 2007 audited revenues.Tata Steel had an annual revenue of $25,707 million. The Mukesh Ambani-led Reliance Industries posted $35,915 million. Reliance and Tata Steel are the only two Indian companies in the private sector to figure among the Fortune 500, the other five are in the public sector. Reliance, in fact, comes behind Indian Oil, which is ranked 116 with a revenue of $57,427 million. The other PSUs on the list are Bharat Petroleum (287), Hindustan Petroleum (290), ONGC (335) and the State Bank of India (380).The US-based retail chain Wal-Mart continues to remain the world''s biggest corporate with revenues of $378 billion. Oil majors Exxon Mobile and Royal Dutch Shell follow Wal-Mart on the global list with revenues of $373 billion and $355 billion respectively.There were fewer American companies on the list this time (153 as compared to 162 last year) while 29 Chinese companies made it to the list, the best ever performance by China.

Rupee Ends At 43 Against Dollar - July 11, 2008

The rupee increased by 11 paise against the dollar on July 10 mainly due to heavy selling of dollars by big corporate houses. The domestic currency opened at 43.16/18 and reached an intra day low of 43.25. It closed at 43, against the previous close of 43.11/12. In the forward market, the 6-month premium closed higher at 4.68 per cent (4.16) and the 12-month ended at 4.05 per cent (3.67).

Rupee Ends At 43.12 Against Dollar - July 10, 2008

The rupee closed up by about 15 paise against the dollar on July 9 as global oil prices eased and political instability seemed to have been addressed for now. The rupee opened at 43.115 and reached a high of 43.09 during the day. It ended at 43.11/12, against the previous close of 43.26/27. In the forward premia market, the six month closed at 4.6 per cent (4.25 per cent) and the 12-month at 3.67 per cent (3.79 per cent).

Infrastructure Growth Declines To 3.5PC - July 10, 2008

Poor growth rate in electricity generation joined with petroleum refinery products production becoming almost stagnant, the overall index for six infrastructure industries grew by 3.5 per cent in May 2008 as against 7.8 per cent in May last year. Electricity sector, which takes 10.17 per cent weight in the Index for Industrial Production (IIP), highest among the six core sector industries which together take a weight of 26.68 per cent in the IIP, has recorded a growth of 2 per cent in May this year as against 9.3 per cent in the same month last year. The growth in petroleum refinery production became almost stagnant with a 0.1 per cent output growth as compared with 14.9 per cent in May last year.

The growth rate in the cement sector also declined during the month to 3.8 per cent from 9.9 per cent in the same month last year, while finished steel production grew by 5.2 per cent as against 8.4 per cent in May last year. For the first two months of the current fiscal April and May the overall growth of the core sector index stood at 3.5 per cent as against 6.9 per cent in May last year.

Indian Firms Still Minnows In Global League - July 10 , 2008

India Inc''s presence has grown in the Global Fortune 500 club with the debut of Tata Steel but its top seven entities collectively too are no match to global leader Wal-Mart, which is entering the country in partnership with Sunil Mittal''s Bharti group. The combined size of the seven Indian members in the league of Global Fortune 500 is less than 60 per cent of the turnover of the numero-uno Wal-Mart. As per the latest global rankings released on July 9 by the US business magazine Fortune, which is based on the companies'' annual revenue, there are now seven Indian companies in this league, up from six last year.

Together these seven companies - Indian Oil Corp, Reliance Industries, BPCL, HPCL, Tata Steel , ONGC and SBI - have a turnover of $221.07 billion. In comparison, Wal-Mart has retained its top position in the list with an annual turnover $378.8 billion. Excluding IOC, ranked at top among Indian companies, the six other Indian companies have a turnover of less than one-tenth of that of Wal-Mart. Including Wal-Mart, as many as five companies globally have a higher revenue than the combined turnover of seven Indian firms. These firms include ExxonMobil, ranked second after Wal-Mart with a revenue of $372.8 billion, Royal Dutch Shell (3rd with $355.7 billion), BP (4th with $291.4 billion) and Toyota Motors (5th with $230.20 billion).

Rupee Ends At 43.27 Against Dollar - July 9, 2008

The rupee appreciated slightly against the dollar on July 8 after the stock markets recovered some of the initial losses. The domestic currency opened at 43.33/34 and reached an intra day low of 43.41/42. It closed at 43.26/27, against the previous close of 43.29/30. Banks began selling dollars when the rupee touched 43.40, seemingly on instructions from the Reserve Bank of India. In the forward market, the 6-month premium closed at 4.23 per cent (4.52) and the 12-month ended at 3.75 per cent (3.95).

Kerala Chalks Out Schemes Worth Rs 40,422cr For 11th Plan - July 9, 2008

Kerala has submitted schemes worth Rs 40,422 crore to the Planning Commission for clearance for the 11th Five Year Plan. The Chief Minister, Mr V.S. Achuthanandan, said that the Government hoped to get grants to the tune of Rs 3,175.65 crore and loans of Rs 7,529.87 crore from the Centre for the implementation of the Plan. The Plan allocation for foreign-aided projects is Rs 4,861 crore.

The Chief Minister said that the loopholes in the draft Coastal Management Zone (CMZ) notification issued by the Centre had to be plugged to prevent the exploitation of coastal area resources. The draft notification contains enough loopholes that will assist investors in the tourism and construction sectors exploit the coastal areas and the resources.

Gujarat to launch Single Window Clearance Act - July 9, 2008

The state government has for the first time determined to formulate a Single Window Clearance Act to cutting down on redtapism in the state. While many states have made efforts in this direction, Gujarat claims to be the first state to come up with such an Act to promote single window clearance. Gujarat has appointed a state-level committee for Doing Business and district level committee comprising five collectors for ''Doing Business. The committees will develop a plan for standardising application forms, preparing checklists, time lines and clear flowcharts.

The previous investment summits have assisted the state mop up investments to the tune of over $ 100 billion. The main objective will be to carry out steps for reduction in time cost and procedures for the projects which are in the pipeline.

Ruppe Ends At 43.30 Against Dollar - July 8, 2008

The rupee closed about 30 paise lower against the dollar on July 7. The rupee opened at 43.13/ 15 and reached a high of 43.09/10, before closing at 43.29/30, against the previous close of 43.15/16. Nationalised banks were seen selling dollars when the rupee was around 43.30, perhaps on the instruction of the RBI. The forward premia eased, with the six-month closing at 4.52 per cent (4.50 per cent) and the 12-month at 3.95 per cent (4.01 per cent).

New Policy Holds 25pc Land For Small Industry - July 8, 2008

The new land allotment policy for the industrial development in Uttarakhand has conceived of special focus on the marginal and small industries. Under this policy, 25 per cent of the obtainable land in any particular area will now be reserved for marginal and small industries. Besides this, 25 percent of the available land will also be reserved for industries, which can promote special industrial products and give drive to the scientific entrepreneurship and technology development of the backward areas. Remaining 50 per cent of the land will be allotted via selective lottery system with certain clauses.

The approving authority for the land allotment will be a board headed by the industries minister. The new policy was formulated as a significant chunk of land is still available at the key Haridwar, Pantnagar and other industrial areas, which are being developed by the State Industrial and Infrastructure Development Corporation of Uttarakhand Ltd (SIDCUL).

Karnataka Govt To Conduct Global Investors Meet In Jan ''09 - July 8, 2008

The Karnataka government is mulling to organise a global investors'' meet in January 2009 on the replica of the one held recently in Gujarat. The state targets to project tier-2 and tier-3 cities as the new growth centres to the prospective investors, Murugesh R Nirani, minister for large and medium industries, said. The government will concentrate on attracting investment to steel, cement, food processing, ITT and automobile sectors. The government have already approved 65 investment proposals comprising an investment of Rs 1,062 crore via the single window clearance committee. Through the proposed global investors'' meet, the state will attempt to attract investment proposals in the order of Rs 500,000 crore.

The high powered panel to approve mega investment projects has received 36 major investment proposals worth Rs 50,000 crore which will be approved during the meeting of the committee chaired by chief minister B S Yeddyurappa during the first week of August. The state government proposes to build an industrial corridor along the Bidar-Hyderabad national highway. This corridor, stretching over 500 km, will be developed on the models of Chennai-Bangalore-Mumbai industrial corridor which has already been cleared by the Central government. The government is setting up a task force to develop a blue print for the proposed setting up of special economic zone steel, cement, food processing, automobile and ITT parks.

Indian Companies Create Thirty Thousand Jobs In US - July 7, 2008

According to USIBC and FICCI, Indian employers and their American workers contribute billions of dollars to federal, state and local coffers by way of wages, corporate taxes, payroll taxes and income taxes. Tatas has been rated as the largest Indian companies. IN A telling demonstration of reverse outsourcing, 12 Indian companies have invested billions of dollars in the United States (US), creating and retaining more than 30,000 American jobs. According to an assessment by the US India Business Council (USIBC) and Federation of Indian Chambers of Commerce and Industry (FICCI), Indian employers and their American workers contribute billions of dollars to federal, state and local coffers by way of wages, corporate taxes, payroll taxes and income taxes.

Inflation Inches Higher To 11.63% - July 7, 2008

Driven by higher prices of fruits and vegetable, cereals and some manufactured items such as iron and steel and edible oil, inflation grew to a new 13-year high of 11.63 per cent. During the week ending June 21, inflation moved up by 0.21 per cent from 11.42 per cent in the previous week and 4.32 per cent in the corresponding week a year ago.

The wholesale price index-based inflation inched up on account of higher prices of unrefined oil that soared by eight per cent, tea by four per cent, fruits and vegetable, sea fish, maize and bajra by two per cent each.At the same time, pulses, including urad and moong and spices became expensive by one per cent each.Despite attempts made by the government to tame price rise, items like iron and steel, edible oils and cement became costlier during the week.

Rupee Up By 14 Paise Against US Dollar - July 7, 2008

The rupee gained 14 paise to close at 43.15/16 against the US currency after a smart rally in local equity markets and on some dollar selling by foreign banks. In active trade at the Interbank Foreign Exchange (Forex) market, the local unit opened slightly better at 43.25/26 and improved further to settle the day at 43.15/16 against yesterday''s close of 43.29/31 a dollar.

Forex dealers said rupee drew support from a firm trend in local equity market where the benchmark Sensex rose by 360 points. However, they quickly added that rupee is expected to remain under pressure as the crude oil prices remained high over USD 144 a barrel in Asian trade on July 4. Selling dollars at higher levels by some foreign banks also boosted the rupee sentiment.

The Reserve Bank of India (RBI), however, fixed the reference rate for US dollar at Rs 43.21 and for single European unit at Rs 67.92. The rupee premiums on forward dollar remained sluggish and ended further lower on sustained receivings by exporters. The benchmark six-month forward dollar premium payable in December ended at 95-97 paise, slightly down from 96-99 paise on Thursday and the far-forward maturing in June also closed lower at 161 - 165 paise from 171-174 paise previously.

World Must Brace For Oil Beyond $150 - July 5, 2008

LONDON: Oil's meteoric rise since the start of the year to nearly $150 has distressed consumers and policy makers the world over, but the stark reality is prices are likely to rise higher still. For two decades, prices were relatively stable, but then they rose seven-fold from a trough below $20 in 2001.

Since breaching the $100 mark on the first trading day of this year they have risen around 45 percent. Given such momentum, politicians' efforts to bring the price down could well be a waste of energy. "It rose so fast it's got a bubble feel, but bubbles can go on for very sustained periods, and underlying that is an extremely tight fundamental position," said Stephen Thornber, head of global energy research at Threadneedle Asset Management.Global demand of some 86 million barrels per day is almost level with supply, and production growth is not keeping pace with soaring demand from emerging economies such as India and China. Citing the strength of Asian demand, investment bank Morgan Stanley last month predicted oil would reach $150 a barrel by the Fourth of July holiday in the United States, usually one of the busiest US travel days.

Their target proved just out of reach, with US crude stopping short at a record of $145.85. But the bulls have not gone away. Goldman Sachs, the biggest investment bank in the commodities sector, has tipped prices to hit $200 a barrel within two years.

More Monetary Tightening Likely As Inflation Soars - July 5, 2008

NEW DELHI: Costlier food and manufactured products — coupled with a weaker rupee — accelerated the annual inflation rate to a 13-year high of 11.63% for the week ended June 21. The rise in prices of food items like tea, cooking oil, vegetables and manufactured products like textiles, medicines, metals and chemicals fanned the unabated increase in wholesale price index (WPI) during the week.

Indicating that WPI, which tracks changes in the cost of living on a weekly basis, may have already scaled 12%, the government revised the inflation figure, measured for the week ended April 26, to 8.27% compared with the provisional estimate of 7.61%, an increase of 66 basis points.

Economists say that a further tightening of the monetary policy is expected later this month. Pressure is also building up for another increase in fuel prices. If crude oil prices head further north, it could push up inflation. Depreciation in the rupee is also making imports costlier, another contributing factor for inflation.The government again reiterated its commitment to tame inflation with minimum injury to growth. “One question that people ask often is that if indeed there is a trade-off between growth and containing inflation, where does the government stand. When inflation is above 11.5%, the priority for any responsible democratic government is to reduce inflation. There is no doubt about it. However, the endeavour is to see that growth is not compromised,” finance secretary D Subbarao said while speaking at the ET roundtable on inflation.

He said that the impact of surging inflation on growth will be less than what is feared by many. The finance ministry stated on Friday that headline inflation is high because main drivers continue to be petroleum products (as a result of high crude oil prices) and iron and steel products including iron ore.

India Set For Oil Hunt In Canadian Oilsands - July 4, 2008

TORONTO: India may soon sign a multi-billion-dollar deal with Canada to scour for oil in the oilsands of its Alberta province.

Quoting Indian Petroleum Secretary MS Srinivasan, Canada's Canwest News Service reported that India planned to sign the deal to hunt for oil in Alberta's oilsands this year.

``Indeed, we are going to get more actively engaged in the Canadian tar sands in the next six months, we are looking at opportunities,'' the news agency quoted Srinivasan as saying at the World Petroleum Congress in Madrid Thursday.
According to the petroleum secretary, India would ``prefer to acquire assets over producing companies on a magnitude of at least $2 billion to $2.5 billion,'' the agency said.

``Size does matter,'' Srinivasan was quoted as saying. ``We would like to be going for an economically viable size; too small an acreage may not be a commercially viable proposition.''

Srinivasan was also quoted as saying that ``India had two teams in Canada looking at oilsands assets but became `busy' with other opportunities in other countries.''
Alberta energy minister Mel Knight was also quoted as confirming that high-level delegations from India have indeed visited his province.

``This is a global business and we know we need global involvement. They (India) are very open and we have had some positive discussions about where they see the potential of doing some work in Alberta,'' the agency quoted the minister as saying.
According to the report, India has been looking for an entry into Alberta's oilsands for more than two years.

In April 2006 it was reportedly on the verge of signing a deal that would mark its foray into North America, the agency said.

Sensex Down By 571 Pts On Thursday - July 4, 2008

Proving Wednesday''s respite was short-lived, the markets were hammered again on Thursday as selling pressure returned with a vengeance to pull down the benchmark Sensex by over 570 points.

The 30-share Sensex, which gained over 700 points yesterday after a series of big losses, again lost 570.51 points at 13,094.11 as metal, realty and banking stocks were battered by investors.

The key index touched a low of 12,934.92 points and a high of 13,530.68 during the day.

The 50-stock National Stock Exchange index Nifty tumbled by 167.60 points at 3,925.75, after touching the day''s low of 3,874.85 and a high of 4,097.35 points.

Marketmen said rising crude prices and continuing political uncertainty cast a shadow on investor sentiment which in any case was bearish. They said investors looked extremely concerned after reports of crude oil touching a record high level of 144.53 dollar a barrel came amid the ongoing political uncertainty over Indo-US nuclear deal.

European Central Bank Raised Its Rate - July 4, 2008

The European Central Bank raised its benchmark interest rate on Thursday by a quarter percentage point to 4.25 per cent in an effort to reign in escalating inflation in the 15-nation euro zone.The move comes despite worries in some quarters that it could dampen growth. Bank president Jean-Claude Trichet was expected to explain the decision at a news conference, with attention focusing on whether more increases are coming.


Trichet has stressed that his main objective is to keep prices stable, and all but promised an increase this month at last month''s meeting. But he has also suggested that repeated interest rate hikes are probably not likely.


Inflation has been troubling central banks around the world as commodity prices including oil and food have spiked in a surge of new global demand. While higher interest rates slow inflation, they can also slow economic growth as money becomes more expensive to borrow; Trichet appears to have targeted inflation as the bigger threat.At the ECB''s June meeting, Trichet said members of the bank''s governing council stated a case for raising rates to combat inflation even then. On June 30, the EU statistics agency Eurostat said inflation in euro nations hit a record 4 percent in June, double the ECB''s inflation target of below or around 2 percent.


The Bank for International Settlements - a sort of central bank for central banks - also said on Monday that world headline inflation has risen significantly to 4.75 percent.

FIIs Offload Shares Worth Rs 668.43 Cr - July 3, 2008

The Sensex has made stunning gains to the tune of 700 points on July 2 but the recovery failed to enthuse Foreign Institutional Investors who offloaded nearly Rs 670 crore worth equities on the Bombay Stock Exchange.

FIIs ended up as net sellers disposing off shares of Rs 668.43 crore. They bought equities worth Rs 3,666.14 crore and sold stocks of Rs 4,334.57 crore.

However, Domestic Institutional Investors (DIIs) were on an investing mood, ending up as net buyers of equities worth Rs 421.01 crore. They purchased stocks of Rs 1,029.32 crore and offloaded equities worth Rs 608.31 crore.Further, brokers sold shares to the tune of Rs 116.95 crore on behalf of clients or retail investors while proprietors snapped up equities worth Rs 119.61 crore.Non-Resident Indians (NRIs) sold stocks to the tune of Rs 2.19 crore.

According to provisional data available on Securities and Exchange Board of India (SEBI) website, FIIs invested in shares worth Rs 174.30 crore as on July 1.

India Needs To Tighten Monetary Policy: IMF - July 3, 2008

India needs to tighten its monetary policy even though the impact of surging oil and food prices being felt globally is "not so big" in the country, the International Monetary Fund (IMF) has said. Some countries really are at a tipping point, said IMF managing director Dominique Strauss-Kahn at the release of a new study based on information and analysis by Fund economists working on 162 countries.

If food prices rise further and oil prices stay the same, some governments will no longer be able to feed their people and at the same time maintain stability in their economies, he said.They need good policy options and they need help from the international community.

Their challenge is ours, he added.Strauss-Kahn said the findings of the study underscored the need for a broad cooperative approach involving the countries affected, donors, and international organizations to cope with the effects of high prices.Although India has not been flagged in the IMF report because of many mitigating factors, the broad general policy implications apply, a senior IMF official said.

Rupee Appreciates By 30 Paise - July 3, 2008

The rupee went up by almost 30 paise against the dollar on July 2 as it tracked the 700-point upswing in the domestic stock market. The local currency opened at 43.35/36 and rose during the day to end at 43.17, against the previous close at 43.47.

Dealers said that the rupee initially fell to 43.38 but recovered as the stock market started gaining. Market participants said that the rupee could range between 43.20 and 43.50 and would continue to track the stock market as well as the soaring global oil prices. In the forward market, the 6 month premium eased slightly to close at 4.94 per cent (5.47) and the 12 month ended at 4.24 per cent (4.57).

Export Growth Decelerates To 12.9pc In May - July 2, 2008

After reporting a hefty growth of 31.5 per cent at $ 14.40 billion in April, the country''s exports displayed a distinct decelerate in momentum in the second month of the current fiscal, logging a growth of 12.9 per cent at $13.78 billion in May 2008. Cumulatively, exports during the first two months of the current fiscal at $28.18 billion were 21.7 per cent higher than $23.16 billion it recorded during April-May 2007. In rupee terms, exports during the first two months of the current fiscal at Rs 1,15,690 crore were 20.6 per cent higher than Rs 95,958 crore in the corresponding months of the previous fiscal, reflecting the gathering reduction of the rupee vis-a-vis the greenback in the current fiscal. Even as export growth displayed marked slowdown in the second month as compared to the initial month of the current fiscal, imports during May 2008 at $24.5 billion displayed a high growth of 27.1 per cent over the level of imports at $19.31 billion in May 2007. In April, 2008, import growth was 36.6 per cent at $ 24.27 billion against $17.76 billion in April 2007. In May, 2008, oil imports cost $8.4 billion against $5.6 billion in May 2007, reflecting the huge increase in global crude prices in recent months.

Weak Markets Sees Big Drop In Ipos - July 2, 2008

The figures suggest the number of companies going public in the first half of 2008 have fallen by 44 per cent as compared with 2007. And of the 30 companies that listed, almost 85 per cent of them are trading well below their issue price. Once the euphoria goes away, most of the public issues will fall flat on their tracks. Small and retail investors are advised to look into the track record, management and merchant bankers before subscribing to a public issue, said Subramanium Pisupati, President, Ventura Securities. Some players like Emaar MGF, Wockhardt Hospitals withdrew their issues because despite revising the offer price they didn''t get enough investors.Now Birla Cotsyn is launching its IPO and the response so far is slow but the management is keeping an eye on the market. With the current market conditions for me to have the present subscription is great news, said Yash Birla, Co-Chairman, Birla Cotsyn Ltd.

Inflation Begins To Sting Indian Consumers - July 2, 2008

Consumer good companies are facing a new kind of competition, as with rising inflation their cheaper range is taking the business off their topline product offerings. So instead of buying Britannia''s Good Day biscuits, some people are opting for the cheaper Tiger or Marie biscuits and the concept is called down trading. The need is to focus on products that are not only delightful, but also affordable. There has been a change in our packaging strategies, as we have launched immediate consumptions packs, said Vinita Bali, MD, Britannia. But while sometimes consumers downgrade their options within the same brand umbrella, there is a chance of them going to a cheaper brand of a competitor.

Cheaper consumer brands try to cash in when inflation is high, and consumers are looking for cheaper alternatives across soapsm, detergents and even foods. There could be a case of some downtrading but that''s bound to happen as some people will move from more expensive products to less expensive said Adi Godrej, Chairman, Godrej. So it is a wake up call for consumer goods giants, as gone are the days of strong pricing power and instead it is time for stiff competition which means products will compete with brands of the same company and even those of the competitor.

The Bombay Stock Exchange Benchmark Sensex - July 1,2008

The Bombay Stock Exchange benchmark Sensex on June 30 fell for the second straight session to a 15- month low of 13,461.60 points, as funds and general investors off-loaded holdings in refinery, bank and realty segments following projections of a fall in economic growth. The Sensex, which had lost 620 points on Friday, fell further by 340.62 points to a level last seen on April 13, 2007. The index touched a low of 13,405.54 and a high of 13,872.06 points, revealing a wide fluctuation in share prices during the day.

The index has dropped 33 per cent this year, its worst six months since the benchmark''s introduced in 1979. The wide-based National Stock Exchange index Nifty tumbled by 96.10 points at 4040.55, after touching the day''s low of 4021.70 and a high of 4163.00 points. Selling pressure gathered momentum after reports that the rising crude and inflation data might pull down the economic growth to 7.5 per cent from the previous level of 9 per cent. ICICI Bank, second-largest lender and index-linked, fell to its lowest in almost two years after a leading banker forecast a drop in loan profitability.

Inflation Consumer Prices Goods Used By Industrial Workers - July 1,2008

Inflation based on consumer prices of goods used by industrial workers fell to 7.75 per cent in May against 7.81 per cent in the previous month, giving some respite to the Government struggling hard to contain double digit wholesale prices-based inflation.

The Consumer Price Index for industrial workers (CPI-IW) figure, released here today, follows the latest government data released last week that shows the wholesale prices-based inflation at a 13-year high of over 11 per cent for two straight weeks. The inflation data based on consumer price index for industrial workers (CPI-IW) has increased by one point to 139 points in May, according to offical data here.

Dealers High Crude Oil Prices Hurt The Rupee Sentiment - July 1,2008

The Indian rupee dropped by another 14 paise to nearly a 15-month low of 43.02/03 against the Greenback on fresh month-end dollar demand amid growing concerns over capital outflows and rising crude oil prices.In wide movements at the Interbank Foreign Exchange (forex) market, the local currency gradually moved downwards after resuming weak at 42.90/92 per dollar against its last close of 42.88/89 per dollar.

Dealers said high crude oil prices hurt the rupee sentiment as oil corporates rushed to buy dollar for their monthly import payments.Global oil prices hovered around its historical high and was traded above $142 per barrel in Asian trade. India imports nearly 70 per cent of its oil requirements and high crude prices will widen the country''s trade deficit, exerting pressure on the domestic unit.