Bond prices plummet in intra-day trade on March 30 before rallying to recover some of its losses. The price of the benchmark security closed 40 paise lower after falling by more than Rs 1.50 in day trade. The prices dwindled after news reports quoted the Reserve Bank of India''s Deputy Governor, Dr Rakesh Mohan, saying that private placement of bonds with the RBI should be avoided. This sparked off supply concerns in the market, said a dealer with a private bank. Nevertheless, the markets recovered after expectation that the net supply of Government securities would be only around Rs 91,000 crore in the first half of the next fiscal and not as feared. After the redemptions and the open market operations, the net inflow would match the demand for the securities, the dealer added. Total traded volumes on the order matching system were higher at Rs 6,525 crore (Rs 4,190 crore). The 6.05 per cent-10-year-2019 paper opened at Rs 93.5 (6.97 per cent YTM) and fell to touch an intra-day low of Rs 92 (7.19 per cent YTM). It recouped its losses to close at Rs 92.8 (7.07 per cent YTM), against Thursday''s close of Rs 93.19 (7.01 per cent YTM). The second most highly traded paper, 7.46 per cent-2017 paper opened at Rs 101.75 (7.17 per cent) and closed at Rs 101.60 (7.20 per cent YTM).
Tuesday, March 31, 2009
Rupee Plunges 60 Paise To End Above 51 – March 31 , 2009
The rupee on March 30 dropped by 60 paise to close above 51 to the greenback at 51.18/19, following a sharp fall in equity markets amid month-end dollar demand. Besides this, a firm dollar overseas against its major rivals also put pressure on the rupee. The month-end dollar demand from oil refiners as well as other importers for their import payments also put some pressure on the rupee.
At the Interbank Foreign Exchange (Forex) market, the domestic currency resumed weak at 50.90/92 a dollar against its previous close of 50.58/59 and moved in a range of 50.87 and 51.32 a dollar. It closed at 51.18/19, a steep fall of 1.19 per cent over its previous close.
The forex dealers said the rupee came under heavy selling pressure as equity markets displayed distinctly weak trends after last week''s strong rally.
At the Interbank Foreign Exchange (Forex) market, the domestic currency resumed weak at 50.90/92 a dollar against its previous close of 50.58/59 and moved in a range of 50.87 and 51.32 a dollar. It closed at 51.18/19, a steep fall of 1.19 per cent over its previous close.
The forex dealers said the rupee came under heavy selling pressure as equity markets displayed distinctly weak trends after last week''s strong rally.
Gold Surges By Rs 140 As Equities Tumble – March 31 , 2009
The gold prices surged by Rs 140 to Rs 15,440 per 10 gram in the national capital on March 30. The Silver also followed the same trend and grew by Rs 80 to Rs 22,170 per kg. The buying in gold picked up after reports that the precious metal rose in overseas market, by adding $2.95 at $926.10 an ounce. The Standard gold and ornaments rose by Rs 140 each to Rs 15,440 and Rs 15,290 per 10 gram, respectively. However, the Sovereign remained flat at Rs 12,400 per piece of eight gram. On the other hand, the silver ready surged by Rs 80 to Rs 22,170 per kg and weekly-based delivery by Rs 100 to Rs 22,290 per kg.
Monday, March 30, 2009
India Inc Puts On Hold Fresh Recruitments – March 30 , 2009
In order to cut costs to deal with the global credit crunch, the new recruitments have been put on hold by Indian corporates, says a study by industry body Assocham. 90 per cent out of 150 Human Resource professionals interviewed, said that the fresh recruitments is put on a virtual halt in the private sector as attrition rate has almost subsided in all sectors of economy.
The study also put light on the HR front as the HR professionals are under severe pressure for working out innovative ways and means to cut the unnecessary organizational frills as well as reduce the fringe benefits such as bonus and other allowances, besides curtailment in administrative costs. In order to avoid layoffs, the HR professionals have advised wages cut to the management in the range of 10-15 per cent at middle and senior-middle levels while 25-35 per cent at senior levels.
The study also put light on the HR front as the HR professionals are under severe pressure for working out innovative ways and means to cut the unnecessary organizational frills as well as reduce the fringe benefits such as bonus and other allowances, besides curtailment in administrative costs. In order to avoid layoffs, the HR professionals have advised wages cut to the management in the range of 10-15 per cent at middle and senior-middle levels while 25-35 per cent at senior levels.
Prime Minister Said Interest Rates May Be Cuts In Future – March 30 , 2009
Prime Minister Manmohan Singh on March 28 said there is scope for further interest rates cuts. He assured the industry that the credit needs would be met to enable the economy to deal with the global economic crisis. "With ample liquidity and low inflation, there is scope perhaps for a further moderation in interest rates. Domestic credit flow for productive needs has to be definitely maintained at reasonable cost", Singh said in his meeting with industry leaders here.
The Prime Minister said, "There are signs of improvement in sectors like steel and cement...The rural demands for goods and services appears quite robust and the outlook in the agriculture sector gives room for optimism". He said the disbursing of credit by the public sector banks was more in the current fiscal than in 2007-08. While on the other hand, the lending by private sector and foreign banks was reduced to one-third to one-fourth of that a year ago. To tackle a regime of low inflation and demand uncertainties across some sectors of the real economy, to ensure that the financial sector remains healthy and supportive, to husband foreign exchange reserve responsibly, to sustain a high level of expenditure bearing in mind the need for fiscal discipline.. are challenges that we confront, Singh said.
RBI governor D Subbarao, who was also present in the meeting on Thursday stated that further stimulus package would have a cost in the form of more borrowing requirements of the government.
The Prime Minister also sought views of the corporate honchos on India''s stand at the G-20 Summit on April 2. The Prime Minister said the world looks at India "with respect and hope: respect for our calibrated reforms which has resulted in growth with justice and hope that India would be an engine of growth for the world economy".
The Prime Minister said, "There are signs of improvement in sectors like steel and cement...The rural demands for goods and services appears quite robust and the outlook in the agriculture sector gives room for optimism". He said the disbursing of credit by the public sector banks was more in the current fiscal than in 2007-08. While on the other hand, the lending by private sector and foreign banks was reduced to one-third to one-fourth of that a year ago. To tackle a regime of low inflation and demand uncertainties across some sectors of the real economy, to ensure that the financial sector remains healthy and supportive, to husband foreign exchange reserve responsibly, to sustain a high level of expenditure bearing in mind the need for fiscal discipline.. are challenges that we confront, Singh said.
RBI governor D Subbarao, who was also present in the meeting on Thursday stated that further stimulus package would have a cost in the form of more borrowing requirements of the government.
The Prime Minister also sought views of the corporate honchos on India''s stand at the G-20 Summit on April 2. The Prime Minister said the world looks at India "with respect and hope: respect for our calibrated reforms which has resulted in growth with justice and hope that India would be an engine of growth for the world economy".
Saturday, March 28, 2009
Core Infra Growth Improves In Feb – March 28 , 2009
Six core infrastructure industries showed early signs of recovery. They expanded by 2.2 per cent in February from 1.4 per cent in the previous month. On the other hand, the growth was poor compared to the year-ago level of 7 per cent.
The core infrastructure industries, which comprise crude oil, petroleum refinery products, coal, electricity, cement and finished carbon steel had registered negative growth for the first time in 15 years in October 2008 and then again contracted in December. The core sector accounts for 26.7 per cent of the Index of Industrial Production and the numbers signal where the economy is headed. Growth for the April-February period fell to three per cent from 5.8 per cent a year ago.
The core infrastructure industries, which comprise crude oil, petroleum refinery products, coal, electricity, cement and finished carbon steel had registered negative growth for the first time in 15 years in October 2008 and then again contracted in December. The core sector accounts for 26.7 per cent of the Index of Industrial Production and the numbers signal where the economy is headed. Growth for the April-February period fell to three per cent from 5.8 per cent a year ago.
Friday, March 27, 2009
Call Rate Closes Higher At 4.60 Per Cent - March 27 , 2009
The inter-bank call rate closed higher at 4.40-4.60 per cent, against the previous close of 4-4.10 per cent. There was one bid for Rs 1,700 crore in the four-day repo auction in the first liquidity adjustment facility (LAF). While there were 3 bids for Rs 1,530 crore in the reverse repo auction. In line with this, there were 4 bids for Rs 900 crore in the four-day repo auction under the second LAF. In the reverse repo auction, there were 17 bids for Rs 12,220 crore. In the 14-day special repo auction scheme for mutual funds and NBFCs under the LAF, there were 5 bids for Rs 4,000 crore.
Gold Bounces Back After 4-Day Losing Streak- March 27, 2009
After four-day losing streak, the gold prices recovered by Rs 120 per ten grams on the bullion market on Thursday on renewed enquiries from stockists in view of seasonal buying coupled with higher New York advices. The silver also followed the same trend and firmed up on the back of good industrial demand. The gold futures shot up in New York after four session on the back of weaker dollar and rising demand from gold Exchange-traded funds. On the comex division of the New York Mercantile Exchange, the gold for April delivery closed up by $12 an ounce to $935.80. Silver for May delivery also rose to $13.437 an ounce.In the domestic market, the standard gold (99.5 purity) recovered by Rs 120 per ten grams to Rs 15,175 from its previous close of Rs Rs 15,055. Moreover, the pure gold (99.9 purity) also firmed up by a similar margin to Rs 15,245 from Rs 15,125 previously. The silver ready (.999 fineness) grew by Rs 185 per kilo to Rs 22,510 from Rs 22,325.
Economy Won''t Slip Into Deflation: Montek - March 27, 2009
The Indian economy is not heading towards deflation despite of inflation heading towards zero level, said Montek Singh Ahluwalia, Planning Commission Deputy Chairman The inflation rate dropped to 0.27 per cent for the week ended March 14 from 0.44 per cent for the week ended March 7.I don''t think we are heading towards deflation. It is true that inflation rate has come down...this is because at this time last year, there was a sharp increase in prices, Ahluwalia told. He also said that inflation can go to zero or may even be negative for a week or two. It has happened in the past...during 1970s the inflation rate became negative for a brief period. But I don''t expect that there would be deflation at all now.
Thursday, March 26, 2009
Govt Worried At Tax Not Being Deducted At Source- March 26, 2009
There remains a concern for the government as the employers are not deducting tax at source has resulted in a loss of more than Rs 1,000 crore to the exchequer. In the past few months, the Income-Tax Department has written to more than 1,000 employers on complying with rules on tax deducted at source (TDS) as well as the advance tax depository. More than Rs 1,000 crore tax in TDS and advance taxes are in the process (of being) extracted from deductors to be deposited in the government accounts. We have written letters to such assessees to ensure tax compliance under this head, told Saroj Bala, CBDT Member (Revenue).
However, the department has also given Commissioners as well as other officials at field formations CDs on TDS returns for streamlining the tax accrued under this head.
However, the department has also given Commissioners as well as other officials at field formations CDs on TDS returns for streamlining the tax accrued under this head.
Gold, Silver Lose Shine On Weak Global Cues - March 26,2009
The gold and silver prices fell further on the bullion market on March 25 on sustained stockists offerings backed by the weak global advices. The gold futures in New York fell for a third straight session yesterday as the stronger dollar reduced the metal''s investment appeal.
The firm equity markets also affected the gold prices, as some of the investors shifting their funds to equity markets. The gold for April delivery dropped by $28.70 to close at $923.80 an ounce on the Comex division of the New York Mercantile Exchange. The May delivery for silver also slipped to $13.357 an ounce.
In the domestic market, the standard gold (99.5 purity) fell by Rs 60 per ten grams to Rs 15,055 from yesterday''s closing level of Rs 15,115. Along with this, the Pure gold (99.9 purity) also dropped by Rs 60 per ten grams to Rs 15,125 from Rs 15,185. Silver ready (.999 fineness) slipped by Rs 250 per kilo to Rs 22,325 from Rs 22,575.
The firm equity markets also affected the gold prices, as some of the investors shifting their funds to equity markets. The gold for April delivery dropped by $28.70 to close at $923.80 an ounce on the Comex division of the New York Mercantile Exchange. The May delivery for silver also slipped to $13.357 an ounce.
In the domestic market, the standard gold (99.5 purity) fell by Rs 60 per ten grams to Rs 15,055 from yesterday''s closing level of Rs 15,115. Along with this, the Pure gold (99.9 purity) also dropped by Rs 60 per ten grams to Rs 15,125 from Rs 15,185. Silver ready (.999 fineness) slipped by Rs 250 per kilo to Rs 22,325 from Rs 22,575.
Rural Roads Programme Remains Neglected- March 26,2009
The ''Pradhan Mantri Gram Sadak Yojana'' under Bharat Nirman programme is far behind from the completion as only 31 percent roads was constructed in 2009 and the government is now planning of pumping more money into it.
"Expenditure on the project is on schedule and we have increased the allocation this year. According to the most recent survey the Centre will be able to spend the increased allocation," said Montek Singh Ahluwalia, deputy chairman, Planning Commission. The programme, which was supposed to construct all weather roads to nearly 67,000 habitations, has been dismal. The project exceeded its target only in 2005-06 by covering 18,053 kilometres instead of 15,942 kilometres but in later years it fell back. In 2006-07, it constructed only 21,422 kilometres over 35,182 kilometre and in 2007-08 it covered only 43,989 kilometres. Moreover, 2009-09 has been worst with only 10,806 kilometres constructed over a target of 35,220 kilometres.
"Expenditure on the project is on schedule and we have increased the allocation this year. According to the most recent survey the Centre will be able to spend the increased allocation," said Montek Singh Ahluwalia, deputy chairman, Planning Commission. The programme, which was supposed to construct all weather roads to nearly 67,000 habitations, has been dismal. The project exceeded its target only in 2005-06 by covering 18,053 kilometres instead of 15,942 kilometres but in later years it fell back. In 2006-07, it constructed only 21,422 kilometres over 35,182 kilometre and in 2007-08 it covered only 43,989 kilometres. Moreover, 2009-09 has been worst with only 10,806 kilometres constructed over a target of 35,220 kilometres.
Wednesday, March 25, 2009
Foreign Investors In Indian Real Estate Locked For Three Years - March 25, 2009
Overseas investors in Indian real estate cannot sell their stakes before three years to another foreign investor, the Foreign Investment Promotion Board (FIPB), the body that clears such proposals, said.
Along with this, FIPB has ruled against a provision in FDI policy that excused foreign players from the rule in cases where fund transfer is from one non-resident to another. Until now, this three-year lock-in was applicable only on foreign investment in real estate and not on investors.
According to the FIPB, the stand taken by the department of industrial policy and promotion (Dipp), the nodal agency that formulates FDI rules in the country. Dipp’s view is that a foreign investor can send back funds if it divests its stake to another foreign investor as the actual investment in a project would remain intact and only its ownership would change.
“Though Press Note 2 of 2005 has an enabling clause to permit sale of investment between two non-residents before the end of lock in, it has not been allowed so far,” a senior official in the commerce and industry ministry said.
The issue came up in the last FIPB meeting, when the board took up private equity fund 2I Capital’s request to sell its investment in Delhi-based real estate firm Uppal Housing to Mauritius-based fund ICP Investments.
Along with this, FIPB has ruled against a provision in FDI policy that excused foreign players from the rule in cases where fund transfer is from one non-resident to another. Until now, this three-year lock-in was applicable only on foreign investment in real estate and not on investors.
According to the FIPB, the stand taken by the department of industrial policy and promotion (Dipp), the nodal agency that formulates FDI rules in the country. Dipp’s view is that a foreign investor can send back funds if it divests its stake to another foreign investor as the actual investment in a project would remain intact and only its ownership would change.
“Though Press Note 2 of 2005 has an enabling clause to permit sale of investment between two non-residents before the end of lock in, it has not been allowed so far,” a senior official in the commerce and industry ministry said.
The issue came up in the last FIPB meeting, when the board took up private equity fund 2I Capital’s request to sell its investment in Delhi-based real estate firm Uppal Housing to Mauritius-based fund ICP Investments.
PM Manmohan Singh Will Meet The Industry Leaders - March 25, 2009
Prime Minister Manmohan Singh will meet the industry leaders on March 28 to review the economic situation amid India Inc urging the government to seek poll panel waiver for key infrastructure projects. The Prime Minister, who is likely to seek their suggestions for restoring the growth momentum witnessed in the past four years, corporate sources said, has invited the heads of FICCI along with Assocham and CII and other industry leaders.
With Lok Sabha polls due in April, the government is onstrained by the Code of Conduct of the election Commission to implement projects involving expenditure from the exchequer.
With Lok Sabha polls due in April, the government is onstrained by the Code of Conduct of the election Commission to implement projects involving expenditure from the exchequer.
Economy To Grow By 6.5% In Current Fiscal - March 25, 2009
The Planning Commission Deputy Chairman Montek Singh Ahluwalia on Tuesday said the economy will grow by 6.5 per cent during the current fiscal, which is much below the 7.1 per cent projected by the government earlier during the year.
Mr. Ahluwalia indicated that a 6.5 per cent GDP growth during the new fiscal starting April 1, 2009 "will be a major achievement" and would require additional stimulus - over and above what has been announced in the Interim Budget to boost the growth. Ahluwalia also said that the low inflation gives us a lot of room in (the) next six months to use all available instruments to ensure growth picks up.
He said that in spite of high fiscal deficit there is a case for more fiscal stimulus for the next fiscal. The government had announced three stimulus packages since mid-September to help industry reeling under the impact of the global economic crisis.
Mr. Ahluwalia indicated that a 6.5 per cent GDP growth during the new fiscal starting April 1, 2009 "will be a major achievement" and would require additional stimulus - over and above what has been announced in the Interim Budget to boost the growth. Ahluwalia also said that the low inflation gives us a lot of room in (the) next six months to use all available instruments to ensure growth picks up.
He said that in spite of high fiscal deficit there is a case for more fiscal stimulus for the next fiscal. The government had announced three stimulus packages since mid-September to help industry reeling under the impact of the global economic crisis.
Tuesday, March 24, 2009
Inter-Bank Call Rate Closed Up - March 24, 2009
Inter-bank call rate closed up at 4-4.20 per cent, against the previous close of 3.75-3.85 per cent. There were no bids in the repo auction In the first liquidity adjustment facility (LAF). In the reverse repo auction, there were two bids for Rs 10,000 crore. Under the second LAF, there were no bids in the repo auction. In the reverse repo auction, there were 23 bids for Rs 21,840 crore. In the 14-day special repo auction scheme for mutual funds and NBFCs under the LA F, there were no bids. In the CBLO market, there were 634 trades for Rs 64,898.50 crore in the range of 2.26-4.20 per cent.
The Rupee Bounced Back By 18 Paise - March 24, 2009
The rupee bounced back by 18 paise and closed at 50.45/46 as against the greenback due to rally in local stocks due to increased capital inflows amid a weakening dollar overseas. Also the dollar buying by the oil companies, however, put pressure on the rupee. The domestic currency moved in a limited range of 50.40 and 50.66 during the day after resuming stronger at 50.48/50 a dollar from its Friday''s close of 50.63/64 a dollar.
The Reserve Bank of India fixed the reference rate for the dollar at Rs 50.52 and for the euro at Rs 69.11. The rupee premiums on the forward dollar closed lower due to continued receivings by the exporters. The benchmark six-month forward dollar premium payable in August closed at 86-88 paise lower from 86-1/2-88-1/2 paise on Friday. In line with this, the far-forwards maturing in February also closed down at 134-136 paise from 137-139 paise previously.
In cross-currency trade, the rupee dropped against the pound sterling to close the day at Rs 73.71/73 from its previous close of Rs 73.08/10. Also it dipped against the euro to Rs 68.82/84 from its previous close of Rs 68.76/78. However, the rupee closed sharply higher against the Japanese yen at Rs 52.11/13 per 100 yen from its last weekend''s close of Rs 53.07/09 per 100 yen.
The Reserve Bank of India fixed the reference rate for the dollar at Rs 50.52 and for the euro at Rs 69.11. The rupee premiums on the forward dollar closed lower due to continued receivings by the exporters. The benchmark six-month forward dollar premium payable in August closed at 86-88 paise lower from 86-1/2-88-1/2 paise on Friday. In line with this, the far-forwards maturing in February also closed down at 134-136 paise from 137-139 paise previously.
In cross-currency trade, the rupee dropped against the pound sterling to close the day at Rs 73.71/73 from its previous close of Rs 73.08/10. Also it dipped against the euro to Rs 68.82/84 from its previous close of Rs 68.76/78. However, the rupee closed sharply higher against the Japanese yen at Rs 52.11/13 per 100 yen from its last weekend''s close of Rs 53.07/09 per 100 yen.
Friday, March 20, 2009
India Ranked 75th In The World''s Best Nations For Business - March 20, 2009
India ranked 75th in the world''s best nations for business after skidding 11 positions. The data is accumulated by US publication Forbes. India slipped from its position as lost position in many areas like technology, corporate tax rate, freedom and calming corruption. Forbes'' annual list ranks 127 nations on the basis of business environment in a country for entrepreneurs, investors and workers.
Further, Denmark topped list for the second successive year. However, India turns out to be unable to hold its 64th position in the list. The US gained two positions to be ranked 2nd on the list. Apart from this, Canada and Singapore have moved up 4 spots each to 3rd and 4th respectively.
Further, Denmark topped list for the second successive year. However, India turns out to be unable to hold its 64th position in the list. The US gained two positions to be ranked 2nd on the list. Apart from this, Canada and Singapore have moved up 4 spots each to 3rd and 4th respectively.
Call Rate Closes At 4.90% - March 20, 2009
The inter-bank call rate went up to end at 4.70-4.90 per cent, as against the earlier close of at 4.25-4.40 per cent. There were no bids in the repo and the reverse repo auction in the first liquidity adjustment facility (LAF). Under the second LAF, there were no bids in the repo auction. In the reverse repo auction, there were 8 bids for Rs 21,195 crore. In the 14-day special repo auction scheme for mutual funds and NBFCs under the LAF, there were no bids. In the CBLO market, there were 550 trades for Rs 61,844.35 crore in the range of 3-4.49 per cent.
Govt Brushes Aside Deflationary Concerns - March 20, 2009
The fears of Indian economy slipping onto a deflationary phase was brushed by the Government on March 19, stating that a sharp fall in inflation this month has more to do with the high base a year ago than any great decline in prices.
The Cabinet Secretary K M Chandrasekhar told I do not see any sign of deflation right now. Probably, decline in inflation is more due to higher base last year than any significant drop in prices. The inflation dipped more than three decade low of 0.44 per cent for the week ended March 7. The industrial production in India reported a contraction for the second month running in January by 0.5 per cent due to the impact of global economic crisis. The exports too have been shrinking by a wide margin of 12-21 per cent for five months in a row since October this fiscal.
The government sees sign of recovery in the select sectors due to stimulus packages between December and February. The automobile as well as cement, steel and infrastructure sectors are growing, Chandrasekhar said. He said the low inflation would certainly weigh on the mind of the central bank and it will be looking at these figures in having its own decisions, he said adding the private sector banks should also join public sectors peers in cutting the interest rates.
The Cabinet Secretary K M Chandrasekhar told I do not see any sign of deflation right now. Probably, decline in inflation is more due to higher base last year than any significant drop in prices. The inflation dipped more than three decade low of 0.44 per cent for the week ended March 7. The industrial production in India reported a contraction for the second month running in January by 0.5 per cent due to the impact of global economic crisis. The exports too have been shrinking by a wide margin of 12-21 per cent for five months in a row since October this fiscal.
The government sees sign of recovery in the select sectors due to stimulus packages between December and February. The automobile as well as cement, steel and infrastructure sectors are growing, Chandrasekhar said. He said the low inflation would certainly weigh on the mind of the central bank and it will be looking at these figures in having its own decisions, he said adding the private sector banks should also join public sectors peers in cutting the interest rates.
Thursday, March 19, 2009
Inter-Bank Call Rate Closed Marginally - March 19, 2009
The inter-bank call rate closed marginally higher at 4.25-4.40 per cent as compared to the previous close of 4.20-4.30 per cent. In the first liquidity adjustment facility (LAF), there were no bids in the repo and the reverse repo auction. Under the second LAF, there were no bids in the repo auction. However there were 4 bids for Rs 20,190 crore in the reverse repo auction. In the 14-day special repo auction scheme for mutual funds and NBFCs under the LAF, there were two bids for Rs 610 crore.
Bond Prices Shot Up - March 19, 2009
The bond prices shot up by around 40 paise on March 18 in anticipation of the Rs 10,000-crore buyback of government securities by the Reserve Bank of India. The central bank will buy Rs 3,000 crore of the 7.37 per cent-2014 paper along with Rs 3,000 crore worth 7.56 per cent-2014 paper and Rs 4,000 crore of 7.99 per cent-2017 paper on March 20. The total traded volumes on the order matching system were up at Rs 3,540 crore (Rs 2,985 crore). The 6.05 per cent-10-year 2019 paper opened at Rs 97 (6.46 per cent YTM) and closed at Rs 97.17 (6.43 per cent YTM) as compared to the earlier close of Rs 96.75 (6.5 per cent YTM). In line with this, the 8.24 per cent- 2018 paper opened at Rs 110.50 (6.67 per cent YTM) and closed at Rs 110.55 (6.67 per cent YTM) as against the previous close of Rs 110.25 (6.71 per cent YTM).
Gold Tumbled On The Bullion Market - March 19, 2009
The gold tumbled on the bullion market on Wednesday due to selling by the stockists as equity market surged, eroding the demand for the metals as alternate investment. The gold prices fell by Rs 140 to Rs 15,100 per ten gram. The silver also followed the same trend and lost Rs 240 to Rs 21,480 per kg on frantic selling by market participants.
A weakening trend in overseas markets along with the fall in demand due to off marriage and festival season were another factor that dampened the metal. The gold in London dipped 0.7 per cent to 908.88 dollar an ounce in early trade. Similarly, the silver also fell 0.6 per cent to 12.66 dollar an ounce as stocks in America, Europe and Asian region recorded fresh gains on easing recession concerns and better than expected U.S. housing data.
A weakening trend in overseas markets along with the fall in demand due to off marriage and festival season were another factor that dampened the metal. The gold in London dipped 0.7 per cent to 908.88 dollar an ounce in early trade. Similarly, the silver also fell 0.6 per cent to 12.66 dollar an ounce as stocks in America, Europe and Asian region recorded fresh gains on easing recession concerns and better than expected U.S. housing data.
Wednesday, March 18, 2009
IMF Sees India''s Growth Rate Slowing Considerably - March 18, 2009
India''s economy is slowing considerably and uncertainty surrounding the outlook in unusually large, International Monetary Fund (IMF) said on Tuesday.
The IMF predicted the India''s gross domestic product growth may slow to 6.3 per cent in the fiscal year 2008-2009, ending in March, and to 5.3 per cent the following year. That would be lower than the 9 per cent growth rate in the 2007-2008 year.
The IMF cautioned that a big expansion of deficit may raise fears of fiscal sustainability as India''s debt as a percentage of GDP was already elevated.
The fund said, "Policy measures to stimulate the economy and a good harvest should support domestic demand."
"The uncertainty surrounding the forecast is unusually large, with significant downside risks. The main upside risk stems from a larger-than-anticipated impact of the stimulus measures that the authorities have already implemented."
The IMF predicted the India''s gross domestic product growth may slow to 6.3 per cent in the fiscal year 2008-2009, ending in March, and to 5.3 per cent the following year. That would be lower than the 9 per cent growth rate in the 2007-2008 year.
The IMF cautioned that a big expansion of deficit may raise fears of fiscal sustainability as India''s debt as a percentage of GDP was already elevated.
The fund said, "Policy measures to stimulate the economy and a good harvest should support domestic demand."
"The uncertainty surrounding the forecast is unusually large, with significant downside risks. The main upside risk stems from a larger-than-anticipated impact of the stimulus measures that the authorities have already implemented."
Bond Prices Tumbled By About 70 Paise - March 18, 2009
The bond prices tumbled by about 70 paise on fears that extra supply of government securities will lead to a fall in demand for papers. There is an auction of Government securities worth Rs 10,000 crore. The RBI last week had cancelled an auction of Rs 12,000 crore worth securities as the bids were very low. The total traded volumes on the order matching system were Rs 2,985 crore (Rs 6,715 crore). The 6.05 per cent-10-year 2019 paper opened at Rs 97.25 (6.43 per cent YTM) and closed at Rs 96.75 (6.5 per cent YTM) as against the earlier close of Rs 97.45 (6.40 per cent YTM). In line with this, the 8.24 per cent- 2018 paper opened at Rs 110.01 (6.75 per cent YTM) and closed at Rs 110.25 (6.71 per cent YTM) as against the previous close of Rs 110.90 (6.62 per cent YTM).
Call Rate Closed At 4.20-4.30% - March 18, 2009
The inter-bank call rate closed at 4.20-4.30 per cent as compared to the previous close of 4.10-4.25 per cent. There were no bids in the repo and the reverse repo auction in the first liquidity adjustment facility (LAF). In line with this, there were no bids in the repo auction, under the second LAF. However, there were 9 bids for Rs 16,015 crore in the reverse repo auction. In the 14-day special repo auction scheme for mutual funds and NBFCs under the LAF, there was one bid for Rs 30 crore.
Tuesday, March 17, 2009
FDI Inflows Increased - March 17, 2009
Foreign direct investment inflows for the month of January of current year, increased by 54.66 per cent after contracting for three successive months. The increase is led by overseas companies that pumped $2.73 billion against $ 1.76 billion in the same month a year ago.
However, FDI inflows had dropped for three months till December, 2008, amid the global financial crisis, as overseas companies either postponed or cancelled investment plans. In January last year, FDI inflows had contracted 8.33 per cent ($1.92 billion).
Meanwhile, Indranil Pan, chief economist with Kotak Mahindra Bank, said, "The latest FDI figures may not indicate sustained growth in FDI. The increase in the month could be because of commitments made by overseas companies before the global financial crisis."
However, FDI inflows had dropped for three months till December, 2008, amid the global financial crisis, as overseas companies either postponed or cancelled investment plans. In January last year, FDI inflows had contracted 8.33 per cent ($1.92 billion).
Meanwhile, Indranil Pan, chief economist with Kotak Mahindra Bank, said, "The latest FDI figures may not indicate sustained growth in FDI. The increase in the month could be because of commitments made by overseas companies before the global financial crisis."
Rupee Rallies By 11 Paise - March 17, 2009
The Indian rupee in line with the firm equity markets also rallied further by eleven paise to close at 51.40/41 against the greenback. The rupee also got the boost from the weak dollar overseas that amid fresh capital inflows.
In two-way trade at the Interbank Foreign Exchange (Forex) market, the domestic unit resumed higher at 51.33/34 a dollar from its previous close of 51.51/52 but later slipped to a low of 51.70 in afternoon trade due to weakness in local equity markets. However, a smart recovery from the initial downtrend in stocks led the rupee to rebound to a high of 51.31 a dollar before concluding the day at 51.40/41
The BSE Sensex closed up by 186.93 points or 2.13 per cent, gaining a total 783.14 points or 9.60 per cent in three trading days since March 12.
In two-way trade at the Interbank Foreign Exchange (Forex) market, the domestic unit resumed higher at 51.33/34 a dollar from its previous close of 51.51/52 but later slipped to a low of 51.70 in afternoon trade due to weakness in local equity markets. However, a smart recovery from the initial downtrend in stocks led the rupee to rebound to a high of 51.31 a dollar before concluding the day at 51.40/41
The BSE Sensex closed up by 186.93 points or 2.13 per cent, gaining a total 783.14 points or 9.60 per cent in three trading days since March 12.
Real GDP Of India Is Projected To Grow By 7% In FY10 - March 17, 2009
The real GDP of India is projected to grow by seven per cent in FY10, the Centre for Monitoring Indian Economy (CMIE) said in its monthly review here. CMIE expects that the growth rate to soar slowly from around six per cent in the first-half to about eight per cent in the second-half of FY10. The global liquidity crisis has suddenly brought the economy''s growth of nine per cent to a grinding halt. However, FY10 would gradually recover from this jolt.
The Indian economy is likely to see quicker recovery in FY10 despite the global economy seems to be getting into a deep crisis. In the overall growth of the Indian economy, the agricultural sector has traditionally been the principal source of volatility. However, a decline in the GDP growth is usually due to fall in agricultural production. The agricultural sector in the last ten-year period ending 2005 reported a fall in output in every alternate year. CMIE pointed that this seriously debilitating trend seems to have been reversed. The agriculture sector has registered positive growth for four consecutive years - from FY 06 to FY 09. On the top of this, CMIE expects the sector to register a positive growth rate again in FY10. The CMIE report said, we expect the growth rate to slow down to 2.4 per cent. Nevertheless, a fifth consecutive year of positive growth in agriculture would contribute directly to the growth in FY10 and would have a positive impact on the domestic demand,".
The agriculture sector output in the third quarter of FY09 registered a fall of 2.2 per cent. "We believe that at least a part of the fall may get corrected with revisions in agriculture production data. This is likely to happen in the case of cotton and to a small extent in the case of rice."
The Indian economy is likely to see quicker recovery in FY10 despite the global economy seems to be getting into a deep crisis. In the overall growth of the Indian economy, the agricultural sector has traditionally been the principal source of volatility. However, a decline in the GDP growth is usually due to fall in agricultural production. The agricultural sector in the last ten-year period ending 2005 reported a fall in output in every alternate year. CMIE pointed that this seriously debilitating trend seems to have been reversed. The agriculture sector has registered positive growth for four consecutive years - from FY 06 to FY 09. On the top of this, CMIE expects the sector to register a positive growth rate again in FY10. The CMIE report said, we expect the growth rate to slow down to 2.4 per cent. Nevertheless, a fifth consecutive year of positive growth in agriculture would contribute directly to the growth in FY10 and would have a positive impact on the domestic demand,".
The agriculture sector output in the third quarter of FY09 registered a fall of 2.2 per cent. "We believe that at least a part of the fall may get corrected with revisions in agriculture production data. This is likely to happen in the case of cotton and to a small extent in the case of rice."
Monday, March 16, 2009
World Bank Will Soon Clear A Special Loan Package - March 16, 2009
World Bank will soon clear a special loan package of $2.6 billion. Under the package, India Infrastructure Finance Company is expected to get $1.2 bn while SIDBI $400 mn and Power Grid Corporation $1 bn.
World Bank''s Economic Adviser (India) Giovanna Prennushi told that the Bank is in advanced stages of approving this package. Besides this, the World Bank is also working on a loan of $3 bn for the recapitalization of public sector banks. The World bank in December last year had decided to step up its exposure to India to $14 bn beginning 2009 from about $8.1 bn during the previous three years. In line with this, the bank till February this year has approved five projects in India with a total commitment of $1.34 bn. World Bank had sanctioned a loan of $400 mn earlier this year to Power Grid Corporation.
The intentions of the World Bank over increasing its exposure to the Indian infrastructure sector is in line with its thinking that such investments would help developing nations to tide over the global recession.
World Bank''s Economic Adviser (India) Giovanna Prennushi told that the Bank is in advanced stages of approving this package. Besides this, the World Bank is also working on a loan of $3 bn for the recapitalization of public sector banks. The World bank in December last year had decided to step up its exposure to India to $14 bn beginning 2009 from about $8.1 bn during the previous three years. In line with this, the bank till February this year has approved five projects in India with a total commitment of $1.34 bn. World Bank had sanctioned a loan of $400 mn earlier this year to Power Grid Corporation.
The intentions of the World Bank over increasing its exposure to the Indian infrastructure sector is in line with its thinking that such investments would help developing nations to tide over the global recession.
Exports Fallen By 21% - March 16, 2009
The exports of India are estimated to have fallen 21 per cent in the month of February, which is a decline for fifth straight month. This is the biggest contraction in exports this fiscal that reflecting the demand collapse for Indian goods in the developed economies, which are bleeding under recession. While official data is yet to come out, but an official said that the exports in the penultimate month of the fiscal 2008-09 are set to shrink to about $11 bn as against $14.23 bn in the corresponding period last year.
Along with this, he said even the exports target, which was changed earlier to $175 bn from $200 bn for 2008-09 would be hard to meet. The exports during April-January 2008-09 have aggregated to $144.26 bn, showing a growth of 13.2 per cent. The value of merchandise shipments expanded by 21.62 per cent in the corresponding period last year. The exports after showing impressive gains till September 2008-09 went into negative zone from October when the contraction was 12.1 per cent.
However, the Federation of Indian Export Organizations (FIEO) President Sakthivel said, by looking at the falling trend it is very difficult even to achieve the target of $175 bn for the current fiscal. We can at best touch $168 billion. He said that the falling trend would continue till September and may be after that there would be any possibility of revival of exports. The US and the European Union contribute about 35 per cent to the country''s exports. With these economies in recession, the demand for overseas goods in these countries have shrunk. The textile as well as handicrafts, leather and leather goods are the worst hit sectors.
Along with this, he said even the exports target, which was changed earlier to $175 bn from $200 bn for 2008-09 would be hard to meet. The exports during April-January 2008-09 have aggregated to $144.26 bn, showing a growth of 13.2 per cent. The value of merchandise shipments expanded by 21.62 per cent in the corresponding period last year. The exports after showing impressive gains till September 2008-09 went into negative zone from October when the contraction was 12.1 per cent.
However, the Federation of Indian Export Organizations (FIEO) President Sakthivel said, by looking at the falling trend it is very difficult even to achieve the target of $175 bn for the current fiscal. We can at best touch $168 billion. He said that the falling trend would continue till September and may be after that there would be any possibility of revival of exports. The US and the European Union contribute about 35 per cent to the country''s exports. With these economies in recession, the demand for overseas goods in these countries have shrunk. The textile as well as handicrafts, leather and leather goods are the worst hit sectors.
Saturday, March 14, 2009
FX Reserves Dip At $247.292 Bln - March 14, 2009
Foreign exchange reserves dropped for the second consecutive fortnight to $247.292 billion, from 249.278 billion a week earlier, the Reserve Bank of India (RBI) said in its weekly statistical supplement on Friday.
Changes in foreign currency assets, expressed in dollar terms, include the effect of appreciation or depreciation of other currencies held in its reserves such as the euro, pound sterling and yen, the central bank said.
However, annual money supply growth touched 19.6%. The government has continued to emphasize on ways and means advances (WMA) to meet its revenue mismatches, reflecting weakening of government finances.
Changes in foreign currency assets, expressed in dollar terms, include the effect of appreciation or depreciation of other currencies held in its reserves such as the euro, pound sterling and yen, the central bank said.
However, annual money supply growth touched 19.6%. The government has continued to emphasize on ways and means advances (WMA) to meet its revenue mismatches, reflecting weakening of government finances.
Inter-Bank Call Rate Ended Marginally Up - March 14, 2009
The inter-bank call rate ended marginally up at 3.60-3.70 per cent, against the previous close of 3.55-3.60 per cent. There was one bid for Rs 225 crore in the three-day repo auction under the first liquidity adjustment facility (LAF). In the reverse repo auction, the RBI received and accepted 7 bids for Rs 17,950 crore. Under the second LAF, there was one bid for Rs 75 crore in the repo auction. In the reverse repo auction, there were 28 bids for Rs 32,515 crore. In the 14-day special repo auction scheme for mutual funds and NBFCs under the LAF, there was one bid for Rs 100 crore. In the CBLO market, there were 624 trades for Rs 46,886.15 crore in the range of 0.49-4.25 per cent.
Friday, March 13, 2009
Earnings Of Workers Dropped - March 13, 2009
In labour concentrated sectors, earning of workers dropped by 3.45 per cent a month during the third quarter of this fiscal due to worsening global economic crises, according to an official report.
Ministry of Labour and Employment said in its report after a survey of eight sectors, "The average earnings have declined at the rate of 3.45 per cent per month during the period of study (October-December 2008)." The eight sectors which surveyed, include textiles, mining, gems and jewellery, and automobiles
Average monthly earning went down by 11.43 per cent in November to Rs 15,259 and by 0.5 per cent to Rs 15,182 in the following month, the report said.
Ministry of Labour and Employment said in its report after a survey of eight sectors, "The average earnings have declined at the rate of 3.45 per cent per month during the period of study (October-December 2008)." The eight sectors which surveyed, include textiles, mining, gems and jewellery, and automobiles
Average monthly earning went down by 11.43 per cent in November to Rs 15,259 and by 0.5 per cent to Rs 15,182 in the following month, the report said.
RBI Offers Special Repo - March 13, 2009
The Reserve Bank of India said in a statement that it would conduct a special fixed term repo auction at 5% per annum for Rs. 583.30 bn on Friday, which was due for reversal on March 30. The outstanding amount under this facility as on March 12, 2009 stood at Rs1,670 crore.
However, the special fixed rate term repo under Liquidity Adjustment Facility is available till September 30, 2009 up to a cumulative amount of Rs.60,000 crore. This amount is on outstanding basis to banks exclusively for the purpose of meeting requirements of MFs, NBFCs and HFCs.
However, the special fixed rate term repo under Liquidity Adjustment Facility is available till September 30, 2009 up to a cumulative amount of Rs.60,000 crore. This amount is on outstanding basis to banks exclusively for the purpose of meeting requirements of MFs, NBFCs and HFCs.
Bond Prices Moved Lower - March 13, 2009
Bond yields arrived at the levels last seen in December 2008, with the yields on the 8.24 per cent crossing 7 per cent. According to the source, fears of excess supply and lack of trading interest pulled the bond market down. On March 12, bond prices whole day moved lower and closed about Rs 2 down than the previous close. Trading was extended by 30 minutes as the market waited for the Reserve Bank of India to announce the cut-offs for the buyback.
The cut-off yields announced by the RBI were higher than market expectations. The total traded volumes on the order matching system stood at Rs 6,320 crore (Rs 3,480 crore). The most highly traded 8.24 per cent- 2018 paper opened at Rs 109 (6.89 per cent YTM) and ended at Rs 107.05 (7.17 per cent YTM), against Monday''s close of closed at Rs 109.4 (6.83 per cent YTM). The 6.05 per cent-2019-10 year paper opened at Rs 95.5 (6.68 per cent YTM) and closed at Rs 94.25 (7.0 per cent YTM).
The cut-off yields announced by the RBI were higher than market expectations. The total traded volumes on the order matching system stood at Rs 6,320 crore (Rs 3,480 crore). The most highly traded 8.24 per cent- 2018 paper opened at Rs 109 (6.89 per cent YTM) and ended at Rs 107.05 (7.17 per cent YTM), against Monday''s close of closed at Rs 109.4 (6.83 per cent YTM). The 6.05 per cent-2019-10 year paper opened at Rs 95.5 (6.68 per cent YTM) and closed at Rs 94.25 (7.0 per cent YTM).
Thursday, March 12, 2009
India Inc Upbeat On Jobs: Grant Thornton- March 12, 2009
44 per cent of businesses in India are expecting rise in job opportunities in the next one year despite the global economic downturn, according to a Grant Thornton research report.
However, employees at nearly one-fifth of privately held businesses, globally, could see no salary increases in the year ahead. About 44 per cent businesses in India expect an increase in employment opportunities in the ensuing 12-months, while 16 per cent believe that employment opportunities would decrease and the rest (40 per cent) expect it to remain unchanged, the Grant Thornton International Business Report said.
Twenty-one per cent of businesses plan to offer no increase in pay in 2009, while 3 per cent actually expect to reduce pay. Only 10 per cent of businesses expect to increase pay above the rate of inflation, the report said. Perhaps more worrying for employees is that a significant number of privately-held businesses (60 per cent) in India intend to increase salaries of their staff only in line with inflation, Grant Thornton India National Markets Leader Monish Chatrath said.
However, employees at nearly one-fifth of privately held businesses, globally, could see no salary increases in the year ahead. About 44 per cent businesses in India expect an increase in employment opportunities in the ensuing 12-months, while 16 per cent believe that employment opportunities would decrease and the rest (40 per cent) expect it to remain unchanged, the Grant Thornton International Business Report said.
Twenty-one per cent of businesses plan to offer no increase in pay in 2009, while 3 per cent actually expect to reduce pay. Only 10 per cent of businesses expect to increase pay above the rate of inflation, the report said. Perhaps more worrying for employees is that a significant number of privately-held businesses (60 per cent) in India intend to increase salaries of their staff only in line with inflation, Grant Thornton India National Markets Leader Monish Chatrath said.
Service Tax Notice Puts Sub-Brokers In Fix- March 12, 2009
Tax authorities have served notices to hundreds of sub-brokers and asked them for payment of service tax for the last four years. This move is creating difficulties for them. The arrears and penalty only total to huge amount and at present, this could make many of them out of business, said a stockbroker. More than 200 sub-brokers of Geojit Financial Service Ltd, a Kerala-based broking firm, received notices asking them to pay service tax from October 2004.
The tax authorities, it is learnt, have acted on the basis of an observation made by the Comptroller and Auditor-General (CAG) that services rendered by a sub-broker to the main broker are taxable under “Business Auxiliary Services” (under Section 65(19) of the Service Tax Rules).
However, according to the brokers, sub-brokers are not registered with the Service Tax Department as they do not directly issue bills and collect payments from clients. They are registered with the main broker and the service taxes on brokerages are collected and paid by the main broker.
The tax authorities, it is learnt, have acted on the basis of an observation made by the Comptroller and Auditor-General (CAG) that services rendered by a sub-broker to the main broker are taxable under “Business Auxiliary Services” (under Section 65(19) of the Service Tax Rules).
However, according to the brokers, sub-brokers are not registered with the Service Tax Department as they do not directly issue bills and collect payments from clients. They are registered with the main broker and the service taxes on brokerages are collected and paid by the main broker.
7% Growth Target To Be Missed: Subbarao- March 12, 2009
It is expected that India will miss its 7 per cent growth estimate for the current fiscal year as a result of the global economic crisis, according to RBI governor Duvvuri Subbarao.
Subbarao said in an interview of Japan''s Nikkei newspaper that the next fiscal period of "2009-10 will be a more challenging year.” He also added, emerging economies should have a stronger voice in multilateral organizations such as the International Monetary Fund and the World Bank to "reflect the new realities of the global economy."
Indian economy expanded by 5.3 per cent, slowest speed in around 6 years, during December quarter as compared to corresponding period a year ago. However it had been growing with 9 per cent or higher pace in the past three fiscals.
Subbarao said in an interview of Japan''s Nikkei newspaper that the next fiscal period of "2009-10 will be a more challenging year.” He also added, emerging economies should have a stronger voice in multilateral organizations such as the International Monetary Fund and the World Bank to "reflect the new realities of the global economy."
Indian economy expanded by 5.3 per cent, slowest speed in around 6 years, during December quarter as compared to corresponding period a year ago. However it had been growing with 9 per cent or higher pace in the past three fiscals.
Tuesday, March 10, 2009
Negative Growth In World Trade Led Drop In Indian Export - March 10, 2009
India reported its first year-over-year decline in exports due to negative growth in world trade in the last quarter of 2008. This fall in world trade raised fears of a protectionist reaction, according to a new World Bank report.
Worsening growth in global trade is in progress for some time, said the bank in a paper for next Saturday''s meeting of the Group of 20 finance ministers and central bank’s governors. Making a note that of the 51 economies reporting fourth quarter data for 2008, 36 show double-digit declines in nominal exports relative to a year ago, the paper said many European countries, including the United Kingdom and Spain, as well as developing countries registered a drop in exports of 20 percent or more.
In October, India registered its first every year-over-year decline in exports (of 15 percent), following growth of 35 percent in the previous five months.
Worsening growth in global trade is in progress for some time, said the bank in a paper for next Saturday''s meeting of the Group of 20 finance ministers and central bank’s governors. Making a note that of the 51 economies reporting fourth quarter data for 2008, 36 show double-digit declines in nominal exports relative to a year ago, the paper said many European countries, including the United Kingdom and Spain, as well as developing countries registered a drop in exports of 20 percent or more.
In October, India registered its first every year-over-year decline in exports (of 15 percent), following growth of 35 percent in the previous five months.
Gold Extended Its Losses - March 10, 2009
Gold extended its losses and lost another Rs 40 to close at Rs 15,375 per ten gram in the bullion market in New Delhi on selling influenced by weakening global trend. Silver also followed the same trend and lost Rs 300 to settle the day at Rs 21,800 per kg as as metel prices continued to slide in overseas market.
Market men said stockists relieved of part of their holdings in line with weakening trend in overseas markets mainly put pressure on the precious metal prices. They said reduced off take by retailers due to off-marriage season further fuelled the down-trend. Standard gold and ornaments lost Rs 40 each to Rs 15,375 and Rs 15,225 per ten gram respectively. However, sovereign remained steady at Rs 12,400 per piece of eight gram. In a similar way, silver ready dropped by Rs 300 to Rs 21,800 per kg on poor off take by industrial units and weekly-based delivery by Rs 140 to Rs 22,460 per kg. Besides, silver coins continued to be asked around previous level of Rs 28,400 for buying and Rs 28,500 for selling of 100 pieces.
Market men said stockists relieved of part of their holdings in line with weakening trend in overseas markets mainly put pressure on the precious metal prices. They said reduced off take by retailers due to off-marriage season further fuelled the down-trend. Standard gold and ornaments lost Rs 40 each to Rs 15,375 and Rs 15,225 per ten gram respectively. However, sovereign remained steady at Rs 12,400 per piece of eight gram. In a similar way, silver ready dropped by Rs 300 to Rs 21,800 per kg on poor off take by industrial units and weekly-based delivery by Rs 140 to Rs 22,460 per kg. Besides, silver coins continued to be asked around previous level of Rs 28,400 for buying and Rs 28,500 for selling of 100 pieces.
Monday, March 9, 2009
No Tax For Expatriate For Work Discrete - March 9, 2009
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) informed that if the expatriate employee will be able to authenticate that while working outside India, he has not involved in any activity relating to Indian operations, the salary for that time period would not be taxable here.
As per Income Tax Act, if an individual has been in India during that year (the year for which tax liability is being calculated) for 182 days or more, is a resident in a previous year. He is also treated as a resident if he is in India for 60 days or more in a year provided that he has also been in India for 365 days or more in the prior four years.
Vikas Vasal, executive director (tax and regulatory services), KPMG, said, based on this ruling a position could be taken that individual is not taxable for the period for which he has rendered service outside India. But, the documentary proof would be critical for taking this position.
As per Income Tax Act, if an individual has been in India during that year (the year for which tax liability is being calculated) for 182 days or more, is a resident in a previous year. He is also treated as a resident if he is in India for 60 days or more in a year provided that he has also been in India for 365 days or more in the prior four years.
Vikas Vasal, executive director (tax and regulatory services), KPMG, said, based on this ruling a position could be taken that individual is not taxable for the period for which he has rendered service outside India. But, the documentary proof would be critical for taking this position.
Indian Corporates Had Dropped Down Their Revenue Forecast - March 9, 2009
Most of the Indian corporates had dropped down their revenue forecasts for this year. Along with this they were also looking aggressively at cutting their operational expenses through cost-cutting measures, including lesser increase in salary, according to a study by Watson Wyatt. Watson Wyatt is a global firm that is dealing with people and financial issues.
The survey affirmed that 57 per cent of the respondents had brought down their revenue forecast for 2009, while 13 per cent were considering a downgrade.Furhter, 27 per cent were still maintaining their earlier estimates but only a three per cent had raised their estimates for the year, the Watson Wyatt study said.
The survey affirmed that 57 per cent of the respondents had brought down their revenue forecast for 2009, while 13 per cent were considering a downgrade.Furhter, 27 per cent were still maintaining their earlier estimates but only a three per cent had raised their estimates for the year, the Watson Wyatt study said.
Saturday, March 7, 2009
Growth In Infrastructure Industries - March 7, 2009
Growth in infrastructure industries like steel, coal, crude oil, electricity and petroleum and refinery products has dropped to 1.4 per cent in January this year from 3.6 per cent in the same month last year. The fall is on account of fragile performance of other sectors. Crude oil was the worst performer with decline in production by 8.1 per cent during January. Petroleum refinery products also declined by 2.6 per cent against a growth rate of 5.4 per cent in January 2008.
Analysts feel that this trend is likely to continue in view of the dismal show by almost all the sectors except the cement industry. It has not performed as badly as the manufacturing sector...weakness will continue. The economy may start picking up from the second half of 2009-10, CRISIL Principal Economist D K Joshi said.
Cement production grew by 8.3 per cent for the month under review against 5.6 per cent in January last year. For the April-January period this year, consolidated growth slipped to 3.2 per cent from 5.7 per cent a year ago. After contracting for the first time in 15 years in October, the index of industrial production (IIP) again crashed by two per cent in December against a growth rate of a whopping 8 per cent a year ago.
Analysts feel that this trend is likely to continue in view of the dismal show by almost all the sectors except the cement industry. It has not performed as badly as the manufacturing sector...weakness will continue. The economy may start picking up from the second half of 2009-10, CRISIL Principal Economist D K Joshi said.
Cement production grew by 8.3 per cent for the month under review against 5.6 per cent in January last year. For the April-January period this year, consolidated growth slipped to 3.2 per cent from 5.7 per cent a year ago. After contracting for the first time in 15 years in October, the index of industrial production (IIP) again crashed by two per cent in December against a growth rate of a whopping 8 per cent a year ago.
Thursday, March 5, 2009
Gold Prices Dropped - March 5, 2009
On 4th March, gold prices dropped for the second straight day on the bullion market due to fresh offerings led by weakness in overseas markets. Silver also continued to exhibit a downward trend on lack of demand at higher levels.
The market fell as illiquid cash market forced investors to reduce other asset exposure in order to meet margin commitments a dealer said. Gold was little changed in Europe as traders stuck to the sidelines ahead of a rate-setting announcement from the European Central bank and key US jobs data later in the week.
Investors are concerned over the lack of fresh inflows into gold backed exchange-traded funds in recent sessions. Spot gold was quoted at $915.00/916.20 an ounce as against $915.70 an ounce late in New York yesterday. Turning to the local market, standard gold (99.5 purity) dropped further by Rs 260 per ten grams to Rs 15,075 from Rs 15,335 yesterday. Pure gold (99.9 purity) also fell to Rs 15,140 from Rs 15,400 previously.
Silver ready (.999 fineness) moved down by Rs 130 per kilo to Rs 21,915 from Rs 22,045.
The market fell as illiquid cash market forced investors to reduce other asset exposure in order to meet margin commitments a dealer said. Gold was little changed in Europe as traders stuck to the sidelines ahead of a rate-setting announcement from the European Central bank and key US jobs data later in the week.
Investors are concerned over the lack of fresh inflows into gold backed exchange-traded funds in recent sessions. Spot gold was quoted at $915.00/916.20 an ounce as against $915.70 an ounce late in New York yesterday. Turning to the local market, standard gold (99.5 purity) dropped further by Rs 260 per ten grams to Rs 15,075 from Rs 15,335 yesterday. Pure gold (99.9 purity) also fell to Rs 15,140 from Rs 15,400 previously.
Silver ready (.999 fineness) moved down by Rs 130 per kilo to Rs 21,915 from Rs 22,045.
SEZ To Claim Service Tax Refund - March 5, 2009
The government has permitted companies situated in Special Economic Zones (SEZs) to claim service tax refund for services done outside the tax-free export zones too. SEZ developers are also permitted to do the same. The benefit would flow in the shape of "refund of service tax" and not through an exemption.
As per previous norms, if a unit was transporting raw material from a port located outside the SEZ, service tax would have to be paid. Now the unit will be able to apply for refund. The refund will be allowed only for services that are related to authorized operations like activities within SEZs.
Along with this, there is one more change regarding services provided between units located within an SEZ. Earlier, this was exempted but now firms have to claim refund instead of blanket exemption.
L B Singhal, director general of Export Promotion Council for Export Oriented Units (EoUs) and SEZs, greeted the decision and said to reveal some issues, "Service tax has to be paid first and then refund has to be claimed. It would result in unnecessary blockage of funds, paper work and transaction costs. Hence it would be appropriate if exemption could be provided."
As per previous norms, if a unit was transporting raw material from a port located outside the SEZ, service tax would have to be paid. Now the unit will be able to apply for refund. The refund will be allowed only for services that are related to authorized operations like activities within SEZs.
Along with this, there is one more change regarding services provided between units located within an SEZ. Earlier, this was exempted but now firms have to claim refund instead of blanket exemption.
L B Singhal, director general of Export Promotion Council for Export Oriented Units (EoUs) and SEZs, greeted the decision and said to reveal some issues, "Service tax has to be paid first and then refund has to be claimed. It would result in unnecessary blockage of funds, paper work and transaction costs. Hence it would be appropriate if exemption could be provided."
RBI Announced The Cut In Repo - March 5, 2009
On 4th March 2009, the Reserve Bank of India announced the cut in repo and reverse repo rates by 50 basis point each with immediate effect. Along with this, the repo, the rate at which the RBI lends short-term funds to banks, currently stands at 5 per cent from 5.5 per cent and the reverse repo, the rate at which the RBI borrows from banks, at 3.5 per cent from 4 per cent.
Now the banks are likely to cut both lending and deposit rates. This is the second rate cut by the RBI this calendar year. With ease in inflation rate to 3.36 per cent for the week ended February 14, 2009 and GDP growth falling to 5.3 per cent for the third quarter, rate cut by RBI was broadly expected. RBI has also cautioned banks to monitor their assets and take timely action to prevent defaults. The average PLR for most public sector banks is now 12.5 per cent.
Now the banks are likely to cut both lending and deposit rates. This is the second rate cut by the RBI this calendar year. With ease in inflation rate to 3.36 per cent for the week ended February 14, 2009 and GDP growth falling to 5.3 per cent for the third quarter, rate cut by RBI was broadly expected. RBI has also cautioned banks to monitor their assets and take timely action to prevent defaults. The average PLR for most public sector banks is now 12.5 per cent.
Wednesday, March 4, 2009
Exports Fall For Fourth Month - March 4, 2009
The Indian exports for the fourth month in a row contracted, reflecting the dismal demand conditions in key markets like the US and Europe. The exports in the month of January fell by 15.9 per cent to $12.3 billion, which is the worst performance since June 1998. With the weakness expected to continue through the fiscal year, the government also cut its export target from $200 bn earlier to between $170 bn and $175 bn.
The consumer- driven segment like gem and jewellery is the worst hit among all the categories. While the exports continue to take a knock, the trade deficit narrowing in the month of January. The trade deficit narrowed to $6.1 bn from $7.6 bn in December, mainly on the back of fall in imports of oil by 47 per cent to $4.4 billion. The overall imports in January were also lower by 18 per cent at $18.4 bn, reflecting the lower oil import bill. The reports of a continued fall in exports comes just days after the government announced another package of Rs 325 crore for the exporters by providing them the cheaper as well as easier access to capital.
The consumer- driven segment like gem and jewellery is the worst hit among all the categories. While the exports continue to take a knock, the trade deficit narrowing in the month of January. The trade deficit narrowed to $6.1 bn from $7.6 bn in December, mainly on the back of fall in imports of oil by 47 per cent to $4.4 billion. The overall imports in January were also lower by 18 per cent at $18.4 bn, reflecting the lower oil import bill. The reports of a continued fall in exports comes just days after the government announced another package of Rs 325 crore for the exporters by providing them the cheaper as well as easier access to capital.
Indian Workers Have Greater Sense Of Pride - March 4, 2009
According to a workforce survey by human resources solutions company Kelly Services, most of the Indian workers have a preference of meaningful jobs over income and status even during the time when the job market is dwindling on account of the global financial crisis.
Out of almost 3,500 workers surveyed in the country, around 62 per cent said that they will give up income or status to do something more meaningful. Along with this, 60 per cent of female workers and 62 per cent of male workers are concerned about career prospects and are looking for another option. Kelly Services, which surveyed almost 100,000 people in 34 countries, said employees in India derive a greater sense of pride and self-confidence in their jobs than workers in any other country.
Kelly Services Asia-Pacific senior vice-president Dhirendra Shantilal said, "A significant number of people are actually prepared to give up some of their salary and their position if they can do something that is important and meaningful to them and their organization."
Out of almost 3,500 workers surveyed in the country, around 62 per cent said that they will give up income or status to do something more meaningful. Along with this, 60 per cent of female workers and 62 per cent of male workers are concerned about career prospects and are looking for another option. Kelly Services, which surveyed almost 100,000 people in 34 countries, said employees in India derive a greater sense of pride and self-confidence in their jobs than workers in any other country.
Kelly Services Asia-Pacific senior vice-president Dhirendra Shantilal said, "A significant number of people are actually prepared to give up some of their salary and their position if they can do something that is important and meaningful to them and their organization."
Tuesday, March 3, 2009
Postal Department Of India Has Signed An Agreement With CSO - March 3, 2009
On 2nd March 2009, postal department of India said that it has signed an agreement with the Central Statistical Organization (CSO) for collection of data on prices of consumer commodities in selected villages.
The Central Statistical Organization will use network of postal department for collection of the data, which will be used for compilation of Consumer Price Index (CPI) for rural areas, the DoP said in a statement.
In the process, DoP will first identify shops and outlets in selected villages using its infrastructure and manpower, from where data would be collected. Further, the department would collect the prices of items specified by the CSO every month, it added.
A group will be constituted including the members from the DoP and the Ministry of Statistics and Programme Implementation headed by the Additional Director General (National Accounts Division). The group would be responsible for monitoring the quality, timelines of the regular price data, procedures and other related issues.
The Central Statistical Organization will use network of postal department for collection of the data, which will be used for compilation of Consumer Price Index (CPI) for rural areas, the DoP said in a statement.
In the process, DoP will first identify shops and outlets in selected villages using its infrastructure and manpower, from where data would be collected. Further, the department would collect the prices of items specified by the CSO every month, it added.
A group will be constituted including the members from the DoP and the Ministry of Statistics and Programme Implementation headed by the Additional Director General (National Accounts Division). The group would be responsible for monitoring the quality, timelines of the regular price data, procedures and other related issues.
India Had Banned The Import Of Chinese Toys - March 3, 2009
On 2nd March 2009, India lifted ban on import of Chinese toys in return of providing confirmation of international safety norms by China. Earlier on 23rd January, India had banned the import of Chinese toys for six months on grounds of public health and safety.
As per a public notice by the Commerce Ministry, the import of toys from China will be allowed if they conform to the standards prescribed in "ASTM F963" or "ISO 8124 (parts I - III) or IS 9873 (parts I - III)". These regulations mainly deal with protection and health exposures.
The toys market in India is approximated at Rs 2,500 crore while the volume-driven, price-competitive Chinese toys are estimated to control 70 percent of the global toys market
Further the Indian government said that the imports from China will have to be accompanied by a obligatory certificate from laboratories ascribed to the International Laboratory Accreditation Cooperation.
As per a public notice by the Commerce Ministry, the import of toys from China will be allowed if they conform to the standards prescribed in "ASTM F963" or "ISO 8124 (parts I - III) or IS 9873 (parts I - III)". These regulations mainly deal with protection and health exposures.
The toys market in India is approximated at Rs 2,500 crore while the volume-driven, price-competitive Chinese toys are estimated to control 70 percent of the global toys market
Further the Indian government said that the imports from China will have to be accompanied by a obligatory certificate from laboratories ascribed to the International Laboratory Accreditation Cooperation.
Imports And Exports Fell Sharply - March 3, 2009
Imports and exports fell sharply by 18 per cent 16 per cent respectively in dollar terms, as a impact of global slowown. Also, continuation to this the trade deficit also moderated to $6 billion in January 2009. Provisional trade figures compiled by the DGCI&S and released by the Department of Commerce here on Monday show exports in January at $12.38 billion were 15.9 per cent down than $14.71 billion in the corresponding month of 2008, while imports at $18.45 billion were 18.2 per cent lesser than $22.56 billion in the comparable month. As a result of the slowdown, the trade deficit for January is the lowest in recent months at $6 billion, against $9.9 billion in January 2008.
Because of the constantly constructive trends in exports during the first half of the current fiscal, the overall exports during the first 10 months at $144.26 billion show a relatively high growth of 13.2 per cent compared to $127.45 billion in the corresponding month of 2007-08. The deceleration in export juggernaut traction began in October 2008 and every month since then growth has been negative with the worst fall of 16.2 per cent in January 2009. Exports in rupee terms witnessed a modest 4.3 per cent increase at Rs 60,460 crore against Rs 57, 948 crore.
On the import front, cumulative value of imports in April-January 2008-09 at $243.35 billion ($194.28 billion) was 25.3 per cent higher. In rupee terms, the growth in import was 39.4 per cent up at Rs 10, 90,182 crore (Rs 7, 82,207 crore). Oil imports during January 2009 were lower by 47.5 per cent at $4.46 billion ($8.50 billion), reflecting the steep drop in global crude prices. Nevertheless, overall oil imports during the first 10 months of the current fiscal at $83.29 billion ($62.92 billion) were 32.4 per cent higher.
Non-oil imports at $13.99 billion in January 2009 ($14 billion) were 0.5 per cent lower. However, overall non-oil import growth during April-January 2008-09 at $160 billion ($131.35 billion) was 21.9 per cent higher. With overall import growth registering a 25.3 per cent surge in the first 10 months of the current fiscal and exports growing at 13.2 per cent, the trade deficit has zoomed to $99 billion, against $66.83 billion in the equivalent months of 2007-08.
Because of the constantly constructive trends in exports during the first half of the current fiscal, the overall exports during the first 10 months at $144.26 billion show a relatively high growth of 13.2 per cent compared to $127.45 billion in the corresponding month of 2007-08. The deceleration in export juggernaut traction began in October 2008 and every month since then growth has been negative with the worst fall of 16.2 per cent in January 2009. Exports in rupee terms witnessed a modest 4.3 per cent increase at Rs 60,460 crore against Rs 57, 948 crore.
On the import front, cumulative value of imports in April-January 2008-09 at $243.35 billion ($194.28 billion) was 25.3 per cent higher. In rupee terms, the growth in import was 39.4 per cent up at Rs 10, 90,182 crore (Rs 7, 82,207 crore). Oil imports during January 2009 were lower by 47.5 per cent at $4.46 billion ($8.50 billion), reflecting the steep drop in global crude prices. Nevertheless, overall oil imports during the first 10 months of the current fiscal at $83.29 billion ($62.92 billion) were 32.4 per cent higher.
Non-oil imports at $13.99 billion in January 2009 ($14 billion) were 0.5 per cent lower. However, overall non-oil import growth during April-January 2008-09 at $160 billion ($131.35 billion) was 21.9 per cent higher. With overall import growth registering a 25.3 per cent surge in the first 10 months of the current fiscal and exports growing at 13.2 per cent, the trade deficit has zoomed to $99 billion, against $66.83 billion in the equivalent months of 2007-08.
Monday, March 2, 2009
ADB Is Planning To Invest Rs 13.71 Billion - March 2, 2009
The Asian Development Bank (ADB) is planning to invest Rs 13.71 billion for developing urban facilities and solid waste management in the capitals of five under-developed states, officials said on Sunday.
The ADB-assisted North Eastern Region Urban Development Programme will be executed over six years and will cover Agartala (Tripura), Shillong (Meghalaya), Aizawl in Mizoram, Kohima (Nagaland) and Gangtok (Sikkim). "The central government has approved the ADB-assisted programme," said Tripura Urban Development Minister Manik Dey.
"The ADB''s technical and programme appraisal teams had visited the five capitals a number of times to finalise the scheme, which is scheduled to be completed by 2015," the minister told.
The ADB-assisted North Eastern Region Urban Development Programme will be executed over six years and will cover Agartala (Tripura), Shillong (Meghalaya), Aizawl in Mizoram, Kohima (Nagaland) and Gangtok (Sikkim). "The central government has approved the ADB-assisted programme," said Tripura Urban Development Minister Manik Dey.
"The ADB''s technical and programme appraisal teams had visited the five capitals a number of times to finalise the scheme, which is scheduled to be completed by 2015," the minister told.
Gold Prices Snapped - March 2, 2009
On Saturday gold prices snapped its three days losing streak and went up by Rs 175 to close at Rs 15,475 per ten gram in the bullion market in New Delhi. The surge was backed by aggressive buying by stockists and jewellers influenced by a firming global trend.
Buying activity in the precious metal gathered momentum after reports that the metal rebounded in international markets. Gold recorded a rise of 18.20 dollar to $963.70 an ounce. Standard gold and ornaments increased sharply by Rs 175 each to Rs 15,475 and Rs 15,325 per ten gram respectively and sovereign gained Rs 100 at Rs 12,400 per piece of eight gram. A similar firming trend was observed in silver as its prices in domestic market rose by Rs 100 at Rs 21,550 per kg and weekly-based delivery by Rs 155 to Rs 21,815 per kg. Silver coins also surged by Rs 300 to Rs 28,600 for buying and Rs 28,700 for selling of 100 pieces.
Buying activity in the precious metal gathered momentum after reports that the metal rebounded in international markets. Gold recorded a rise of 18.20 dollar to $963.70 an ounce. Standard gold and ornaments increased sharply by Rs 175 each to Rs 15,475 and Rs 15,325 per ten gram respectively and sovereign gained Rs 100 at Rs 12,400 per piece of eight gram. A similar firming trend was observed in silver as its prices in domestic market rose by Rs 100 at Rs 21,550 per kg and weekly-based delivery by Rs 155 to Rs 21,815 per kg. Silver coins also surged by Rs 300 to Rs 28,600 for buying and Rs 28,700 for selling of 100 pieces.
Growth In The Fourth Quarter To Be Much Better - March 2, 2009
Though the economy is struggling with the global economic slowdown but the Commerce and Industry Minister Kamal Nath is still confident that the growth of the country would pick up momentum in the last two months of this fiscal. Nath said "I believe the worst is over," by adding that the last two months of this fiscal would be much better in terms of growth.
Nath also said that the government was aware of the sluggish growth in the economy during the quarter ended December and that''s why the stimulus packages was announced. "We were seized... We did not know the figures but certainly we were seized that there is a sharp decline, that is why we did announce a stimulus package," said Nath adding that the measures have started yielding results.
The economy of India grew 5.3% for the quarter ended December from a year earlier, slowing from 7.6% in the previous quarter. The annual growth of India''s fiscal third quarter was lower than upwardly revised 8.9% annual expansion in the same quarter a year ago. The farm output in the December quarter fell an annual 2.2% as compared to a rise of 2.7% in September quarter. The manufacturing slipped an annual 0.2% in December quarter as against a growth of 5% in the September quarter. The construction grew 6.7% in December quarter as compared to 9.7% September quarter. The trade, hotels, transport and communication advanced 6.8% in December quarter vs 10.7% in September. The financing, insurance, real estate and business services gained 9.5% in Oct-Dec vs 9.2% in July-September.
Nath also said that the government was aware of the sluggish growth in the economy during the quarter ended December and that''s why the stimulus packages was announced. "We were seized... We did not know the figures but certainly we were seized that there is a sharp decline, that is why we did announce a stimulus package," said Nath adding that the measures have started yielding results.
The economy of India grew 5.3% for the quarter ended December from a year earlier, slowing from 7.6% in the previous quarter. The annual growth of India''s fiscal third quarter was lower than upwardly revised 8.9% annual expansion in the same quarter a year ago. The farm output in the December quarter fell an annual 2.2% as compared to a rise of 2.7% in September quarter. The manufacturing slipped an annual 0.2% in December quarter as against a growth of 5% in the September quarter. The construction grew 6.7% in December quarter as compared to 9.7% September quarter. The trade, hotels, transport and communication advanced 6.8% in December quarter vs 10.7% in September. The financing, insurance, real estate and business services gained 9.5% in Oct-Dec vs 9.2% in July-September.
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