Economy To Grow 6.5-7.5 Per Cent In FY10: ICRA - April 29, 2009

The Indian economy is likely witness a growth in the range of 6.5 to 7.5 percent in FY10, if there is a recovery in the global economy from the slump later this year and as government stimulus starts working, ICRA, the rating agency said in a report.

Moreover, ICRA assumes a normal monsoon and the new government puts in place a "coherent and supportive" policy after the April/May elections. In line with this, ICRA said that the growth of India''s economy could be 6.5 percent in the first half of FY10, with a expansion of 4 percent in industrial output and close to 9 percent growth in services sectors. It also added that the economy could later zoom to 7.5 percent growth in the second half of FY10.

Govt Considers Import Duty On Paper Products - April 29, 2009

The government is considering for further import duty of 20 per cent on some paper products. The planning is aimed to guard domestic manufacturers like JK Paper, Ballarpur Industries and ITC from rise in imports of the product.

The Directorate General of Safeguards (DGS) under the Ministry of Finance has suggested imposition of safeguards duty, after domestic producers complained to it. These products include coated and uncoated paper, paper board and copy paper.

The domestic producers, who had complained, comprise around 80 per cent of the total production of the item. The domestic manufacturers told the DGS that the surge in imports of these products have impacted their sales, production and profitability. Imports of these products have been proceeding from China, Indonesia, Finland, Sweden, Germany and the US.

Rupee Split Ends Worse By 28 Paise At 50.51 - April 29, 2009

The rupee closed lower by 28 paise at 50.51/52 against the dollar due to weakness in the equity markets that amid sustained demand from oil companies for the US currency.

At the Interbank Foreign Exchange (Forex) market, the rupee resumed lower at 50.42/44 from its earlier close of 50.23/24. Later it moved in a range of 50.56 and 50.29 a dollar before closing at 50.51/52, a drop of 0.56 per cent over its revious close. The month-end dollar demand from oil refiners mainly weighed on the rupee, a forex dealer said. The Reserve Bank of India (RBI) fixed the reference rate for the US dollar at Rs 50.44 and the euro at Rs 65.68.

The benchmark six-month forward dollar premium payable in October closed at 73-75 paise as against 72-74 paise on Monday and the far forwards maturing in April ended at 115-117 paise. The rupee moved down further against the pound sterling to close the day at Rs 73.63/65 from its previous close of Rs 73.19/21 and also dropped against the Japanese yen to Rs 52.44/46 per 100 yen from previous close of Rs 52.00/02. However, it recouped against the euro to conclude the day at Rs 65.57/59 from the previous close of Rs 66.00/02.

Direct Tax Collection Stood In Financial Year In 09 - April 28, 2009

The direct tax collection of India stood at Rs 3.37 lakh crore during the fiscal year 2008-09 against Rs 3.12 lakh crore in financial year of 2007-08, a top revenue official said on Monday.

"The tax collection was, however, short of budgetary estimates of Rs.3.45 lakh crore. Similarly, the indirect tax collection was Rs 2.65 lakh crore as against Rs 2.81 lakh crore in previous year, Secretary, Department of Revenue, New Delhi, P V Bhide said.

The target for direct tax collection was revised down from budget estimates of Rs 3.65 lakh crore for 2008-09. However, the actual collections were 8 per cent up over Rs 3.12 lakh crore in 2007-08.

Indirect tax collections stood at Rs 2.65 lakh crore against revised target of Rs 2.81 lakh crore for 2008-09. The indirect tax collections were also revised downwards from Rs 3.21 lakh crore in the budget estimates.

The actual collections for indirect taxes were lower than Rs 2.81 lakh crore realized in 2007-08.

Reversal Of Financial Plan Most Important Dispute: RBI - April 28, 2009

One of the biggest challenges to deal with the Reserve Bank of India (RBI) in the coming days is a reversal of fiscal policy measures without any run over effects.

Fiscal aids given by governments are likely to put pressure on public debt over a period of time, having consequences on inflation and within various sectors of the economy.

"Unwinding of fiscal stimulus in an orderly manner is one of the major challenges going forward," RBI governor D Subbarao said in his statement to the International Monetary Fund on Saturday.

Fiscal stimulus packages have already above doubled the fiscal deficit projected for FY09 (Apr-Mar) from less than 2% of GDP to almost 3%.

Higher deficit financing tends to have an inflationary impact on the economy. Moreover, a reversal of tax sops could upset the pace of growth in the real sector. Therefore, turnaround of fiscal policy needs to be handled carefully.

Government Clears 22 Foreign Direct Investment Proposals - April 28, 2009

The government has approved 22 foreign direct investment (FDI) proposals that valued Rs 541.25 crore. Yamaha and Nokia are also included in the list of cleared projects on the recommendation of FIPB.

Nokia is planning to set up at single-brand retail joint venture with HCL Infosystems to sell handsets and accessories. The JV would invest Rs 25 lakh in the retail business. Yamaha''s proposal to transfer its business operations to a new company in India, Yamaha Motor, was also given the FIPB nod.

Tikona Digital Networks will attract the maximum FDI of Rs 237.26 crore. However, Al Khaleej''s plans to set up a sugar refinery, have been rejected. FIPB postponed Vijay Mallya-promoted United Breweries request for a post-facto approval for issue of warrants to overseas investors.

RBI Postpones The Time Line For NBFCS To Raise Cap - April 27, 2009

The Reserve Bank of India has extended the deadline for Indian non-banking financial institutions which hava a deposit base of 1 bn rupees to meet new Reserve Bank of India (RBI) guidelines on capital adequacy, the bank said. As per the revised norms, the capital adequacy rules for such firms have been revised to 12 percent by end of March 2009 while up to 15 percent by end of March 2010 from 10 per cent currently.

Election Commission Obstructs Service Tax Sops For Units - April 27, 2009

The Election Commission (EC) obstructs service tax sops for SEZ units. Now, developers of special economic zones (SEZ) and units operating in them will have to wait until a new government is formed for exemption on service tax payments for services availed inside the zones.

EC is not ready to permit the finance ministry to pass a notification allowing the exemption while elections are on because it could result in direct benefits to a section of the electorate, a government official has said. It will be the new elected government which will bring out the notification, the official said.

Consequently, these units will have to pay the service tax and claim refunds, until the elections are over.

Initially, SEZ units and developers had been allowed exemption on service tax on services availed within the boundaries of the zone, but were made to pay tax on services enjoyed outside the zone.

RBI Extends Time Period For Realization Of Bad Assets - April 25, 2009

On Friday, the Reserve Bank extended the period for final realization of bad assets from the existing five to seven years to decrease the pressure of NPAs rising on companies.

The Bank increased the time limit for reconstruction and securitisation companies (SCs/RCs) for realisation for reconstruction of assets taken by it.

"As an interim measure, the Bank has accorded permission to give an extension of two more years for realisation of the assets in respect of the security receipts (SRs) issued by SCs/RCs which have completed five years," said the Reserve Bank in a notification

The Central bank had received representations from many asset reconstruction and securitisation companies which had not been able to realize the financial asset acquired within the given time frame.

Merger And Acquisition Activity Declines 60 Per Cent In Jan-March - April 25, 2009

Merger and acquisition (M&A) activity dropped by around 60 per cent during the quarter ended March as compared to the corresponding period last year, according to a study.

Indian companies were involved in overall 54 M&A deals, including cross-border and domestic transactions, in the March quarter as against 135 deals during the same quarter in 2008 and 89 deals during the immediate preceding quarter, according to a study by the Chennai-based Venture Intelligence. Venture Intelligence is a research service that focuses on private equity and M&A activity in India.

The first quarter of 2009 witnessed 26 deals with an announced value of $4.6 billion. There were 15 inbound and outbound deals each with the rest being domestic acquisitions. Manufacturing was the most active industry with 10 deals, followed by IT & ITES with seven. Healthcare and life sciences, food & beverages, telecom and agri-business were the other industries that witnessed significant M&A activity.

Banks May Have To Share Client Data With Auditors - April 25, 2009

Banking and market regulators are taking into consideration a proposal to authorize auditors to straightforwardly verify financial information of their clients with banks where they hold accounts, a source said.

At present, rules of the Institute of Chartered Accounts of India require auditors to actually verify the cash and bank balances of companies they audit, and not merely rely on statements provided by the company secretary or the chief financial officer. However, at present banks are not obliged legally to share such information with auditors.

Auditors of Satyam Computer had not verified bank account statements and fixed deposit certificates of the company with the respective banks, which lead to the Rs 7,000-crore accounting fraud. The IT firm supplied wrong information to its auditors about available cash balances by forging the letterhead of one of its banks.

Govt To Move SC On Service Tax On Commercial Rent - April 24, 2009

The Delhi High Court has struck down the levy of service tax by the Centre on rented property for commercial use. The Court holds that renting the real estate for commercial use by itself is not a service and that''s why it cannot be taxed. This verdict will put an impact on similar cases filed in other high courts across the country.

The finance ministry has imposed service taxes on the rented property in order to add revenue. The move will give a major relief to realtors and all companies operating from rented space, particularly retailers and call centres. However, the Supreme Court will now look after this battle.

Indian Ordered Funding Issuance Amount Drop 18 Per Cent - April 24, 2009

On Thursday, credit rating agency ICRA said the structured financial instrument market dropped by an 18 % to Rs 52,000 crore during the financial year ended March 31, 2009. At the same time as the structured financial instrument market observed an 18% decline in value terms, transactions were lower 30% as against the previous fiscal.

Securitisations, including rated bilateral assignments of retail assets, together observed a 47 % fall in volume, the rating agency said on Thursday. According to ICRA, the Indian structured finance market was not harshly impacted by the global credit crisis, mainly due to the absence of transactions involving complex derivatives, revolving structures, and credit default swaps.

"The tight liquidity conditions during the third quarter of FY 2009, however, led to significant redemption pressure on mutual funds," Mr P K Choudhury, vice chairman and group CEO, ICRA. stated in the release.

Price Rises Surged Toward 0.26 Per Cent For The Week - April 23, 2009

The wholesale price index rose 0.26 per cent in the 12 months to April 11 as against the previous week''s annual rise of 0.18 per cent, government data showed on Thursday. However, the annual inflation rate was 7.95 per cent during the corresponding week of the previous year.

The WPI for primary articles shot up 0.5% to 248.9 (provisional) from 247.6 (provisional) for the last week. In line with this, the index for food articles group grew 0.5% to 246.8 (provisional) from 245.6 (provisional) for the last week due to higher prices of tea (5%), bajra and jowar (3% each), fruit & vegetables (2%) and mutton and maize (1% each). The index for fuel, power, light and lubricants remained unchanged at its previous week''s level of 322.6 (provisional).

India, Spain Indication Operate Agreement - April 23, 2009

In order to boost the bilateral ties, India and Spain signed a trade agreement on April 22, which is expected to give more scope in six crucial sector. The sectors are infrastructure development as well as renewable energy, agriculture, research and development, tourism, and cooperation in Latin America, where Spain has a sphere of influence. However, the focus is on technological exchange as well as tapping each other''s areas of expertise.

The agreement was done in the presence of President Pratibha Patil and Spanish Prime Minister Jose Luis Rodriguez Zapatero, and the respective government and trade representatives. In that business meeting, Ms. Patil noted that the bilateral trade was growing and crossing $ 4.5 billion mark. She also said that the Spanish enterprises are known for executing large-scale infrastructure projects and invited them to make use of the opportunities India presents, in particular through small and medium enterprises.

On the other hand, Ashwani Kumaar, Minister of State for Industrial Policy and Promotion, while addressing Indian mediapersons, described the presidential visit as highly successful. However, three framework agreements were signed in the fields of renewable energy as well as agriculture and tourism.

RBI Progress Resolve Banks Near Lending Charge - April 23, 2009

There is optimism in market that Reserve Bank of India''s cut in repo and reverse repo rates by 25 basis points each will pressurize financial institutions to slash interest rates to provide some relief. Mr Venugopal Dhoot, Chairman of Videocon Industries, said, "Although I welcome this move I expected a rate cut of 100 basis points. RBI must give same directions to other banks."

He said unless the commercial banks reduce interest rates, funding for projects and new ventures will not be easy.

The JSW Steel Vice-Chairman and Managing Director, Mr Sajjan Jindal, said repo and reverse repo rates should have been cut by 50 basis points, to bring down PLR to a single digit rate. "But I feel even 25 basis point cut, will send some signals to commercial banks to lower interest rates," he added.

Mr Pradeep Jain, Chairman, Parsvnath Developers Ltd, said the RBI has been taking all possible steps to infuse additional liquidity in the current cash-strapped market.

Since October last year, RBI has cut its short-term lending rate repo rate by 425 bps and reverse repo rate by 275 bps in different phases. "The RBI must also communicate to the PSU banks and financial institutions to lower the rate of interest further for providing loans to home buyers and companies as well," Mr Jain added.

Economy To Raise By 5.5-7.5 Pct, Says Chief Financial Adviser - April 22, 2009

The growth rate of Indian economy would be between 5.5 per cent and 7.5 per cent depending on when the US economy bottoms up, according to the Chief Economic Adviser Arvind Virmani. However, the economy would grow in the range of 6.5 to 7 per cent this fiscal in case the US economy bottoms out by September this year, otherwise, it would expand in the range of 5.5 to 6.5 per cent, Virmani told.

Meanwhile IMF has projected a growth rate of 5.1% in 2009-10 for Indian economy. In line with this, the World Bank forecast growth rate of four per cent, while ADB has pegged the country''s GDP expansion rate at five per cent.

Rupee Dips Through 15 Paise To 50.45 Dollar - April 22, 2009

The rupee on April 21 closed at 50.45/47 against the dollar, cheaper by 15 paise from its previous close. The rupee resumed weak at 50.50/52 a dollar against its earlier close of 50.30/31 a dollar and later moved in a range of 50.24 and 50.62.

The dealers at the Interbank Foreign Exchange (forex) market said the strengthening of dollar overseas as well as fears of a slowdown in capital inflows and the buying of dollars from the oil refiners for their monthly import also weighed on rupee sentiment.

RBI in its annual monetary policy on Tuesday reduced the short-term lending (repo) and borrowing (reverse repo) rates by 25 basis points, paving the way for further lending rates cut by banks for retail and industrial borrowers.

The Reserve Bank of India fixed the reference rate for the US dollar at Rs 50.36 and for the euro at Rs 65.08. The benchmark six-month forward dollar premium payable in September closed at 62-1/2-64-1/2, down from 65-67 paise on Monday and the far-forwards maturing in March also closed lower at 102-104 paise from 104-106 paise previously.

Banks, Industry Cheer Charge Scratch - April 22, 2009

RBI in its annual monetary policy on Tuesday reduced the short-term lending (repo) and borrowing (reverse repo) rates by 25 basis points to 3.25% and 4.75% respectively and this has been cheered by markets and industry.

RBI said that it expects FY10 GDP growth to be at 6% The Central bank in its annual policy review statement said that the credit growth in FY 2010 could touch 20% while the deposit growth is estimated at 18%. On the top of this, it has said that there is enough room for the banks to cut lending rates and has asked banks to review their benchmark prime lending rates (BPLR). However, a committee has now been formed to review the BPLR system.

Moreover, RBI has also gave emphasis on the need for maintaining the credit quality through the downturn. It has warned that the slowdown could lead to an increase in the non performing loans for banks. The banks have been reluctant to lend unsecured loans to consumers in the last 2-3 quarters.

"Like all emerging economies, India too has been impacted by the crisis, and by much more than what was expected earlier", the RBI statement said. The markets seem to have welcomed the move by RBI as the Sensex gained nearly 250 points or 2% from the low of the day. The banking stocks also gained and the BSE bank index gained over 2% after the RBI announcements.

The private banks have not followed the government banks, focusing on profitability.
Housing Finance company HDFC''s Vice Chairman and MD Keki Mistry welcomed the RBI move. "Risk aversion has crept into the system," he said, and also added that if the cost of funds come down, the company would look at the option to pass on the benefits of lower rates to its customers.

RBI''s macro economic policy review had said that the economic indicators continued to look weak and the business confidence was weakening further. That has led to some expectations that RBI may go for an aggressive cut in the reverse repo rate.

After the repo rate and reverse repo rate cut by RBI in March, the government-run banks had cut interest rates.

Fuel Sales Rise 6.6 Per Cent During Election Season - April 21, 2009

India’s fuel spending reported sharp increase of 6.6 per cent in March to reach 11.6 million tonnes mainly due to rise in vehicle movement during election season. “Growth has picked in March... Looks like electioneering has had its impact,” Petroleum Secretary R S Pandey said. Petrol sales jumped 13.2 per cent to 1.05 million tonnes in March, while diesel consumption was up 8.6 per cent to 4.79 million tonnes.

The world’s largest democracy is holding the general elections to elect a new government. Polling for the first of the five phase elections was held on April 16. Electioneering for the Lok Sabha polls has seen increased vehicle movement.

RBI Expects Inflation To Rise Around 4 Per Cent In March - April 21, 2009

Keeping in view the global trend in commodity prices and demand supply balance, RBI''s projected WPI inflation to be around 4% by the end of March 2010. Moreover, it expects the WPI inflation to be in the negative territory in the early part of 2009-10.

However, the policy review of RBI 2009-10 stated that this expected negative inflation in India has only statistical significance and is not a reflection of demand contraction as is the case in advanced economies. This transitory WPI inflation in negative zone may not persist beyond the middle of 2009-10. The consumer price inflation as reflected in various indices is expected to moderate from its present high level but would continue to remain in positive territory through 2009-10 unlike WPI inflation.

India Meteorological Department in its forecast of South-West monsoon expects a normal rainfall at 96 per cent of its long period average for the current year.

Moreover the policy review added that it would be the endeavour of the Reserve Bank to ensure price stability and anchor inflation expectations. Towards this objective, the Reserve Bank will, as always, continue to take into account the behaviour of all the price indices and their components. The conduct of monetary policy would continue to condition and contain perception of inflation in the range of 4.0-4.5 per cent so that an inflation rate of around 3.0 per cent becomes the medium-term objective.

RBI Proposed Record In The Once A Year Plan Evaluation - April 21, 2009

RBI proposed the following in the RBI''s annual monetary policy review 2009-10: To constitute a Working Group to review the present BPLR system and suggest changes to make credit pricing more transparent. The Working Group would consult all the stakeholders and submit its report by end-August 2009.

Payment of interest on savings bank accounts by scheduled commercial banks (SCBs) would be calculated on a daily product basis with effect from April 1, 2010.

To extend this special refinance facility up to March 31, 2010.

To extend the time for availability of this special term repo facility to banks up to March 31, 2010.

To conduct these 14-day term repo auctions on a weekly basis.

To review the ECR limit in March 2010.

To identify and address the macro-prudential concerns arising from the current framework in consultation with SEBI

Any new issuance of floating rate bonds would be in terms of the revised issuance structure.

Auction Process of Government of India Securities

Any new issuance of floating rate bonds would be in terms of the revised issuance structure.

To issue revised guidelines on repo accounting, taking into account comments on the draft guidelines earlier placed on the Reserve Bank''s website, by end-June 2009 for implementation from April 1, 2010

To extend the relaxation in all-in-cost ceilings until December 31, 2009

Indian companies may, henceforth, be permitted, under the approval route, to buy back FCCBs out of internal accruals with a minimum discount of 25 per cent of book value for redemption amount of up to US $ 50 million, 35 per cent of book value for redemption amount more than US $ 50 million and up to 75 million; and 50 per cent of book value for redemption amount more than US $ 75 million and up to US $ 100 million.

To enhance the cap of Rs.20 lakh to Rs.1 crore with immediate effect.

To constitute a Task Force to look into all the issues that have arisen with regard to the G-20 Working Groups and the report of the CFSA and suggest follow-up actions relevant for the Reserve Bank in the domestic context on an on-going basis, for every quarter;

In consultation with all regulators and the Government to consider the setting up of a Working Group to implement the recommendations of the CFSA;

To set up a Financial Stability Unit in the Reserve Bank drawing upon inter-disciplinary expertise from supervisory, regulatory, statistics, economics and financial markets departments for carrying out periodic stress testing and for preparing financial stability reports.

Credit Delivery Mechanism and Other Banking Services

To issue guidelines to banks based on the recommendations of the Group, by April 30, 2009.

To ask the Standing Advisory Committee on MSEs to review the Credit Guarantee Scheme so as to make it more effective.

To work out a roadmap for achieving this objective in a non-disruptive manner in consultation with NABARD.

To introduce CRAR for RRBs in a phased manner, taking into account the status of recapitalisation and amalgamation.

To work out, in consultation with NABARD, the manner of providing assistance to RRBs adopting ICT solutions for financial inclusion in districts identified as having high level of exclusion by the Committee on Financial Inclusion.

To allow scheduled commercial banks (SCBs) to set up offsite ATMs without prior approval subject to reporting.

To constitute a Group to review the extant framework of branch authorisation policy with a view to providing greater flexibility, enhanced penetration and competitive efficiency consistent with financial stability.

To issue further detailed guidelines on mitigating procyclicality later this year after FSB, BCBS and Committee on Global Financial System (CGFS) finalise their recommendations in this regard.

The Reserve Bank will liaise with SEBI on the issue of rating agencies'' adherence to Code of Conduct Fundamentals of the International Organisation Securities Commissions (IOSCO).

To prepare a draft circular detailing the modalities for adopting the integrated liquidity risk management system as also the guidance note on ''Liquidity Risk Management'' based on Basel Committee''s ''Principles for Sound Liquidity Risk Management and Supervision'' brought out in September 2008 as well as other international best practices which would be placed on the Reserve Bank''s website by June 15, 2009.

To constitute a Working Group to examine the experience to date of the business correspondent (BC) model and suggest measures, to enlarge the category of persons that can act as BCs, keeping in view the regulatory and supervisory framework and consumer protection issues.

To increase the maximum distance criterion for the operation of the BC for rural, semi-urban and urban areas from the existing 15 kms. to 30 kms.

The margin amounts/collaterals maintained with the CCPs will attract risk weights appropriate to the nature of the CCP. For CCIL, the risk weight will be 20 per cent and for other CCPs.

To issue a paper on prudential issues in banks'' floating and managing private pools of capital for eliciting public comments which will form the basis for finalising regulatory guidelines by September 30, 2009.

To prescribe a minimum lock-in-period and minimum retention criteria for securitising the loans originated and purchased by banks.

To permit SCBs which comply with the eligibility criteria to issue all categories of prepaid payment instruments;

Eligible non-bank entities, including NBFCs, will be permitted to issue semi-closed instruments, which can be used to purchase all types of goods and services at an identified network of establishments.

Banks should undertake a comprehensive review of all such outsourced arrangements including on-site inspections of critical service providers and ensure that adequate fallback arrangements are put in place.

Banks are advised to migrate to the MPLS system on a time bound basis.

To permit extension of area of operation of Tier II UCBs in Grade I to the entire State of registration with the prior approval of RBI.

To review the existing instructions and issue appropriate guidelines to UCBs on internal controls, risk management systems, ALM and disclosure norms;

To apply capital charge for market risks in respect of large-sized and systemically important UCBs with effect from April 1, 2010.

To defer the implementation of CRAR of 12 per cent to March 31, 2010 and of 15 per cent to March 31, 2011.

To give an extension of two more years for realisation of the assets in respect of the security receipts (SRs) issued by SCs/RCs which have completed five years.

IMD Forecasts Near-Normal Monsoon Rains - April 20, 2009

The India Meteorological Department (IMD) today, 17 April 2009, forecast a near-normal monsoon in this year, raising prospects of bumper harvests. The IMD said rainfall in the June-September 2009 monsoon season is expected to be 96% of the long-term average.

The outlook is among the nation's most widely watched indicator as monsoon rains are a major influence on output of key crops, economic activity and also affects sentiment in the country's financial markets.

India To Regain 8 To 9 Per Cent Growth - April 20, 2009

By giving a shy of relief, Indian Prime Minister Manmohan Singh said that the Indian economy should regain its annual growth rate of 8 to 9 per cent due to start in recovery of the world economy from September. "I expect the world economy will recover at least partially by September this year.

And if that happens we can hope to go back to the growth rate of 8 to 9 per cent which has been the growth rate of India in last five years," Singh said.

Singh also added that the growth rate of the country was close to 7.1 per cent in the financial year ending March 31, while in the current fiscal it will be between 6.5 per cent to 7 per cent. He also said that the global economic crisis was caused due to ''mishandling of the financial system by the major developed countries''. ''From financial crisis, it became a credit crisis. It has affected a large number of developed countries,'' he said.

RBI Is Expected To Put A Hold On The Policy Rates - April 18, 2009

India''s Central bank i.e. Reserve Bank of India (RBI) is expected to put a hold on the key policy rates at its annual monetary policy review scheduled next Tuesday, Securities Trading Corporation of India (STCI) said in a note on Friday.

The RBI has cut its main lending rate by 400 basis points to 5 percent since mid-October while the reverse repo by 250 basis points to 3.5 percent since early December. Moreover, a 4 percentage point cut since early October, the CRR is currently stood at 5 percent and the SLR stood at 24 percent, after it was slashed by 1 percentage point effective Nov 8.

Rupee At 49.76 Against US Dollar - April 17, 2009

The Indian rupee on April 16 dropped by 10 paise to 49.76/77 against the US currency due to sharp decline in the equity markets in which the key benchmark index plunged 337 points on Thursday to end at 10,947. The benchmark six-month forward dollar premium payable in September closed at 62-64 paise down from 64-66 paise on Wednesday and the far-forwards maturing in March also dropped further to 101-103 paise from its last level of 103-105 paise.

The rupee closed at Rs 74.13/15 against the pound sterling from its previous close of 74.40/42. It moved up further against the euro to Rs 65.57/59 from last close of Rs 65.67/69 on April 15. However, the rupee fell against the Japanese yen to Rs 50.35/37 per 100 yen from Rs 49.97/99 per 100 yen on April 15.

Finmin Offers Salary Per Month For Insurance Ombudsman - April 17, 2009

The government has suggested Rs 80,000 a month salary for insurance ombudsmen on the pattern of high court judges, whose pay was revised previous year.

"Ombudsman shall be allowed a fixed pay of Rs 80,000 per month and any pension to which he is entitled from the Central Government or a state Government or any other organisation or institution shall be deducted from his salary," the Finance Ministry said in a draft. Suggestions or any objections to the proposal are invited by 19th May of current year.

The Insurance ombudsmen are entitled to get a salary, which is equal to the salary of a judge of a high court, as per the Redressal of Public Grievances Rules, 1998. Though, the salary of judges of the High Courts and the Supreme Court was revised last year. According to the revised pay scales, Judges of the High Courts will draw a salary of Rs 80,000 per month along with Dearness Allowance.

India Is Less Affected In Global Turmoil: Fidelity''s Bolton - April 17, 2009

India''s economy is mainly domestic consumption-led and consequently it has been less affected by the deceleration in global growth. As an economy that has continued to grow despite the unprecedented turmoil in the global economy, "I think India is well placed to benefit from an improving global environment," Anthony Bolton, President, Investments at Fidelity International, said on Thursday.

Commenting on next market bull run, Bolton said, "the market is bottoming out. It is underlined by attractive valuations, market sentiment and by looking at current market conditions in relation to the historical bear and bull market cycles. I would be overweight consumer cyclicals, technology, financials and value stocks."

He added, valuations of shares are particularly attractive and investor sentiment is so poor at the moment that I believe the long bear market is over.

Montek To Head Selection Panel For New NSC Chief - April 16, 2009

The government has selected a search committee to select a new chief for the National Statistical Commission (NSC). The committee is headed by Planning Commission Deputy Chairman Montek Singh Ahluwalia. Other members of the committee will include a Reserve Bank of India (RBI) deputy governor and two renowned economists.

According to a government official, the appointment of the chairman is expected to be decided by the new government as any result before that may need the Election Commission''s consent.

Eminent economist Suresh D Tendulkar, who was the first chairman of NSC, retired in February this year and the post is lying vacant since then. Another member, Padam Singh, former additional director general of the Indian Council for Medical Research, had also leave as contesting the coming general elections.

Builders Body Looks For Ban On Cement Export - April 16, 2009

On Wednesday, the Builders'' Association of India called for a full ban on exports of cement due to frequent price hikes led by shortages in the local market. The association also asked the government to set up a regulatory authority to control high cement prices.

"An important factor affecting the building industry is the fact that after December 2008, the government levied an 8 per cent duty on imports. This indirectly helped cement manufacturers and led to unjust price hikes," said association secretary Anand J Gupta.

The ongoing increase in cement price has hit the construction industry hard. At present, the housing sector consumes 55 per cent of cement while infrastructure sector uses 35 per cent, with the remaining 10 per cent going towards other products.

Bond Prices Close Higher On The Support Of Prospect - April 16, 2009

Bond prices closed on a steady note on the back of expectations that there could be some action by the Reserve Bank of India in the Credit Policy, next week. The action may not necessarily be a cut in interest rates. It could be a cap on the funds banks can park in RBI through reverse repo, the source said.

The trading activity in the bond market was high, due to which the yields on the 10-year benchmark government security fell, said a bond dealer with a private bank. The total traded volumes on the order matching system were at Rs 12,980 crore (Rs 9,340 crore).

The 6.05 per cent-10-year-2019 paper opened higher at Rs 95.25 (6.72 per cent YTM) and closed at Rs 96.06 (6.60 per cent YTM). The 7.56 per cent-2014 paper, opened at Rs 105.05 (6.46 per cent YTM) and closed at Rs 105.7 (6.32 per cent YTM), against the previous close of Rs 104.86 (6.50 per cent YTM).

Higher Interest Rates Hindering Growth - April 15, 2009

ASSOCHAM, a leading representative of the Indian industry, believes that the small and medium enterprises and the rural sector will play an important role to give a boost to the Indian economy.

The rural area starts rebuilding and then the industry starts rebuilding, said Assocham president Sajjan Jindal. However, in this sector, the high interest rates are a deterrent to growth that mirroring the problems faced by the industry as a whole. Despite the several interest rate cuts by the banks, the sector is still starved of funding because of the high interest rates.

The SME sector is suffering from the high interest rate which is as high as 20 per cent and that is the stumbling block and also for sectors like real estate and infrastructure. Those are not even getting funds for the business, said Jindal.

PE, VC Funds Expect Big On Education To Cash Murk - April 15, 2009

Education and healthcare segments are supposed to be recession resistant as even in slowdown, private equity (PE) and venture capital (VC) funds are investing on them. More than 80 per cent of PE and VC investors seem to planning to increase investments in companies in the education sector.

A report "Private Equity Pulse-Education" released by Venture Intelligence, a firm that tracks VC and PE activity, has found that over 80 per cent of fund managers were game for investing in education companies over six to eight months.

"In the current uncertain economic environment, the attractive and predictable rates of return of the education industry, is serving as a magnet for PE investors," Arun Natarajan, CEO of Venture Intelligence said.

SEBI Requests Authorized View On NSDL Order - April 14, 2009

The Securities and Exchange Board of India (Sebi) on Monday said it will look for an external legal opinion on whether the board of Sebi has the right to scrutinize the orders of special committee passed after the quasi-judicial proceedings against NSDL. The board has decided to keep back the committee''s orders till opinion. The committee was set up after CB Bhave, former NSDL chairman, took over at Sebi.

The case deals with Sebi''s investigations into 21 IPOs between 2003 and 2005. Sebi''s investigate revealed that the shares, which was reserved for retail investors were illegally acquired by various entities through untrue applications. SEBI want the advice of legal counsel on whether the committee has acted within the “framework and terms of reference” established by the board resolution.

G K Pillai: Exports Clear-Cut 31 Per Cent In Stride - April 14, 2009

India''s exports declined for a sixth straight month according to the latest provisional estimate for March, and are likely to extend the fall till September before recovering, commerce secretary G K Pillai said on Monday. India''s imports also continued to slip in the last month of 2008-09, dropping by 37%.

"In March we have the provisional (exports) figures. It is under $12 billion," he said. "So we are seeing the same trend of decline," he added.

The demand for Indian goods in Latin America and South-east Asia remains quite high, but it needs to rise up in US and Europe, which consume about 35% of Indian exports, he said. The final figures for 2008-09 exports is seen touching a lower revised annual target of $170 billion and may remain flat at that level in 2009-10 , he added.

High Confidence On FDI May Slow Down Increase Prospects - April 14, 2009

High dependence on FDI may slow down India Inc''s growth prospects. Though, Collective FDI inflows increased 30% in 2007 over 2006. During January-July 2008, FDI inflows have increased more than two and a half times over the same period in 2007.

But these data speak about the period when the financial crisis was not completely active. In fact, the RBI''s recent release shows that the inflow of ECB and foreign currency convertible bonds (FCCBs) has hindered significantly in October 2008, lower 60% from Rs 283.49 crore in September to Rs 112.52 crore.

The fall in ECB is raised worries to affect the investment plans of the companies. The domestic funds alternatively also have become inadequate and gradually more dearer following rise in interest rate.

Anti-Dumping Investigates Commenced In Industrial Products - April 13, 2009

India has initiated maximum number of anti-dumping investigations, which is 197, on a range of imported industrial products in 2008-09, against 151 in 2007-08, in a bid to protect domestic industry from cheap imports during the time of recession.

Official sources said that in WTO parlance, where one such check out of a product against three countries is considered as three investigations, India had set off 197 anti-dumping investigations last fiscal. In this, findings issued by the Directorate General of Anti-Dumping & Allied Duties (DGAD) were against 65 countries, while there were 35 countries which were subject to assessment after the existing duration of the anti-dumping duty was over or about to be end.

In addition, out of the 43 findings issued by DGAD on fresh and review cases in 2008-09, 31 cases were against China. The Designated Authority in DGAD and Additional Secretary in the Commerce Ministry, Mr R. Gopalan, said the perceptible spurt in anti-dumping duty during the second half of the last fiscal was in response to the felt concerns of domestic industry when it was under the blow of a downturn.

Local Demand On Gold Rises Marginally - April 13, 2009

The gold prices continued its rise for the second straight day in the bullion market in New Delhi on April 11 as it rose by Rs 15 to close at Rs 14,465 per ten gram due to increased buying for the on going marriage season. The marketmen said that the increased demand from jewellery fabricators and local parties for the ongoing marriage season mainly pushed up the prices of precious metals.

The standard gold and ornaments grew by Rs 15 each to Rs 14,465 and Rs 14,315 per ten gram, respectively. However, the sovereign continued to be asked at last level of Rs 12,200 per piece of eight gram. However, the silver also witnessed the similar trend as ready variety rose further by Rs 30 at Rs 20,780 and weekly-based delivery by Rs 15 to Rs 20,480 per kg. The silver coins remained unchanged at Rs 27,800 for buying while Rs 27,900 for selling of 100 pieces.

RBI Modifies Loan Structuring Formula For Computing Diminution - April 13, 2009

The Reserve Bank of India (RBI) Saturday, 11 April 2009, modified the formula for computing diminution in the fair value of restructured advances relieving banks in their accounts for the financial year ended 31 March 2009.

RBI also directed banks to make disclosures in their annual balance sheets for 2008-2009 on the amount and number of accounts in respect of which applications for restructuring are under process, but for which the packages have not yet been approved.

The erosion in the fair value, according to the RBI, should be computed as the difference between the fair value of the loan 'before' and 'after' restructuring. Further, banks will have to make provision for the difference.

This move is likely to benefit banks on provisioning front as the present value of future cash-flows arising out of principal and interest will be discounted at different rates.

India Inc Mops Up Rs 31,000 Crore Via Rights Issue - April 11, 2009

India Inc has mobilized Rs 31,069 crore through rights issue in 2008, a double-fold rise over last year, as fund raising from the debt market and through IPOs dried up amid the global economic crisis. During the calendar year 2008, Rs 31,069 crore funds were raised through rights issue, as against Rs 14,085 crore last year, as per data compiled by brokerage firm SMC Capital. Some of the big rights issue in 2008 includes Tata Motors'' over Rs 4,000 crore issue to fund acquisition of British marquee brand Jagaur Land Rover (JLR) and Rs 5,000 crore Hindalco rights issue.

Forex Reserves Grow By $2.834 Billion - April 11, 2009

The foreign exchange reserves of India shot up by $2.834 billion for the week ended April 3, as per the figures released by the Reserve Bank of India''s weekly statistical supplement. However, the reserves had dipped by $1.5 billion to $253.326 billion for the week ended March 27. The foreign currency assets expressed in dollar terms include the effect of appreciation or depreciation of non-US currencies. The Foreign currency assets grew by $3 billion to $244.597 billion.

The reserves grew due to the revaluation effect as the dollar weakened against the euro and the pound in the overseas markets, said a dealer with a private bank. The dollar weakened against the euro and in line with this the pound touching a low of 1.340 against the euro and 1.469 against the pound. The Gold reserves declined by $169 million to $9.57billion. However, the SDRs remained unchanged at $1 million while the reserve position in the IMF surged $3 million to $985 million.

India’s Imports Fell 32 Per Cent In March - April 10, 2009

The directorate general of foreign trade provided the quick estimates for the imports of India, which are falling at a faster pace than the exports. The quick estimates for March 2009 as per the directorate general of foreign trade (DGFT), show a fall of 32% to $16.05 billion compared to imports valued $23.57 billion in March 2008. However, the imports fell 16% in January 2009 and 23% the preceding month.

However, as import figure for the fiscal will be $288 billion, a growth of 14.5% over the last year’s $251 billion. However, the exports recorded an even lower growth of 4% at $169 billion.

However, the government will officially announce the revised trade figures for March 2009 either at the end of the month or early next month.

Government Announces The Sale Of Two Dated Securities - April 10, 2009

The Government of India have announced the sale (re-issue) of "7.56 per cent Government Stock 2014" for a notified amount of Rs. 8,000 crore (nominal) and "8.24 per cent Government Stock 2027" for a notified amount of Rs. 4,000 crore. Both the Government Stocks will be sold through price based auctions using the uniform price method. The auctions will be conducted by the Reserve Bank of India on April 17, 2009.

Upto 5% of the notified amount of the sale of both the stocks will be allotted to eligible individuals as well as institutions as per the Scheme for Non-Competitive Bidding Facility in the Auction of Government Securities.

The bids in the prescribed form should be submitted to the RBI on April 17, 2009. The result of the auctions will be announced on April 17, 2009 and the payment by successful bidders will be during banking hours on April 20, 2009.

Moreover, the stocks will qualify for the ready forward facility. The underwriting of the Government Securities under auctions by the ''Primary Dealers'' will be as per the "Revised Scheme of Underwriting Commitment and Liquidity Support" announced by the Reserve Bank vide circular RBI/2007-08/186 dated November 14, 2007.

Bids for underwriting of the Additional Competitive Underwriting (ACU) portion can be submitted by ''Primary Dealers'' up to 12.30 P.M. on April 16, 2009 (Thursday) using PMO module of NDS.

Moreover, the Stocks will be eligible for "When Issued" trading for a period commencing from April 13-17, 2009.

Inflation At 0.26 Per Cent On Week Sharp Decline In Wholesale Price - April 10, 2009

The week on week sharp decline in wholesale price is more than the RBI's expectation of 3% set for the March 2009. However on year on year basis inflation has moved up from 4.67% in April-March 2007-08 to 8.37% in April-March 2008-09.

The annual rate of inflation, calculated on point-to-point basis, stood at 0.26% for the week ended 28 March 2009 as compared to 0.31% for the previous week and 7.75% during the corresponding week of the previous year.

The manufactured products major contributor in total WPI with 63.75% weight rose by 0.2% to 200.3 from 200.0 for the previous week. The food product, chemical and chemical product and textile group recorded rise for the week ended 28 Mach 2009 compared with previous week.

The index for textiles group rose by 1.2% to 140.6 from 138.9 for the previous week due to higher prices of cotton yarn-cones, hessian cloth and cotton yarn-'hanks (3% each) and hessian & sacking bags and other cotton yarn (2% each).

The index for food products group also rose by 0.05% to 218.9 from 218.8 for the previous week due to higher prices of imported edible oil (6%), malted food and rice bran oil (2% each) and oil cakes, gingelly oil and groundnut oil (1% each).

However, the prices of sugar (1%) declined. On a flip side the index for paper and paper products group declined by 0.1% to 204.0 from 204.2 for the previous week due to lower prices of newsprint (1%).

A primary article, which is another major contributor to WPI declined by 0.3% to 245.0 from 245.7 for the previous week. Among them index for food and non-food articles registered an increase for week ended 28 March 2009 as against a week ago.

The index for food articles group rose by 0.3% to 242.6 from 241.8 for the previous week due to higher prices of barley (5%), ragi, bajra and fruits and vegetables (2% each) and maize (1%). However, the prices of tea (1%) declined.

The index for non-food articles group rose by 0.5 % to 227.0 from 225.8 for the previous week due to higher prices of raw rubber (8%), raw cotton (2%) and castor seed and gingelly seed (1% each). However, the prices of linseed (2%) and copra and fodder (1% each) declined.

The index for fuel power light and lubricants group remained unchanged at its previous week's level of 320.9.

The week on week fall in inflation construct a way for disinflation where there is a slowing of the rate at which prices increase. The sharp fall in global commodity and crude oil prices have resulted into lower inflation at 0.26% for the week ended 28 March 2009 from the peak of 12% growth recorded in August 2008. The fluctuations in the price levels have added stress on real interest rate to move downwards.

The spread between inflation and PLR (prime lending rates) has significantly become wider due to sharp fall in inflation and comparatively negligible reduction in lending rates from banks. At this background there is immense pressure on RBI to slash the interest rate, which will facilitate economy growth but higher CPI number, create anxiety for policymakers to review the interest rate structure.

Bond Prices Surged On April The Back Of Expectation - April 09, 2009

The Bond prices surged on April 8 on the back of expectation that the Reserve Bank of India will reintroduce the cap on the reverse repo window, considering the huge amounts that the banks are parking in the window. The banks this week have parked an average of Rs 1,25,000 crore in the reverse repo window with the RBI under the liquidity adjustment facility.

Moreover, the RBI is scheduled to auction securities worth Rs 12,000 crore on Thursday. The total traded volumes on the order matching system were at Rs 9,285 crore (Rs 9,625 crore). The 6.05 per cent-10-year-2019 paper opened at Rs 93.5 (6.97 per cent YTM) and and closed at Rs 94.26 (6.86 per cent YTM) as compared to the previous close of Rs 93.30 (7 per cent YTM). In line with this, the 7.56 per cent-2014 paper opened at Rs 104.70 (6.53 per cent) and closed at Rs 104.64 (6.54 per cent YTM).

Rupee Loses 14 Paise Against US Dollar - April 09, 2009

Following with the domestic equity market, the Indian rupee on Wednesday recovered a major part of its early losses to close at 50.18/19 against the greenback, snapping three sessions of rally. At the Interbank Foreign Exchange (Forex) market, the rupee resumed sharply lower at 50.40/42 a dollar from its earlier close of 50.04/05.

Later, it touched a low of 50.70 a dollar as the benchmark Sensex was down by nearly 3.45 per cent in late morning deals. Moreover, a stronger dollar against its major rivals also weighed on the rupee. But, a sharp turnaround in the Sensex to settle the day up by1.97 per cent, helping the rupee to bounce back from the day''s low and it touched a high of 50.16. It ended at 50.18/19 a dollar.

Old Prices Soared By Rs 315 On Firming Overseas Trend - April 09, 2009

The gold prices soared by Rs 315 to Rs 14,735 per 10 gram in the national capital on Thursday due to buying by stockists for the current marriage season and firming overseas trend. On the other hand, silver eased by Rs 20 to Rs 20,930 per kg. The buying activity picked up as some investors shifted their funds from volatile stock markets to bullion as safe haven.

The gold in London gained $7.91, or 0.9 per cent to $89.15 an ounce as compared to $876 in the previous session. The Standard gold and ornaments shot up by Rs 315 each to Rs 14,735 and Rs 14,585 per 10 gram, respectively.

Simultaneously the Sovereign prices increased by Rs 200 to Rs 12,300 per piece of eight gram. However, the silver ready eased by Rs 20 to Rs 20,930 per kg and weekly-based delivery by Rs 110 to Rs 20,670 per kg on the lack of support from speculators. However, the silver coins reported Rs 27,800 for buying while Rs 27,900 for selling of 100 pieces.

India To Witness 7.25 Per Cent Increase In Salaries This Year - April 08, 2009

India is probable to see a modest rise in salary of 7.25 per cent this year after registering double-digit growth in past. At present recession is affecting the pay, benefit and job prospects for employees, global human resource consultancy firm Hay Group has said.

“Overall, the picture for India has deteriorated...Now, with large numbers of organizations freezing pay, and predictions overall of median pay inflation of around 7.25 per cent after years of double-digit growth, there is evidence that organizations are having to tighten their belts,” Hay Group said in a report.

The report further said “the biggest concern for Indian companies is still the attraction and retention of talent as opposed to managing downsizing.”

This means that Indian organizations may carry on investing in competitive salaries for high performing and high potential employees. At the same time, companies need to get more creative in developing a work culture and leadership style that enables them to become employers of choice without having to resort to the check-book, Hay Group said.

Montek: More Stimulus Packages Needed - April 08, 2009

The Planning Commission Deputy Chairman Montek Singh Ahluwalia on April 7 said that there is need for more stimulus package for the country to revive the sagging economy. If this year''s fiscal deficit comes out to be 6.8 per cent including off-budget items, what do you think the next year''s fiscal deficit will be...same or lower?

Now, I would not recommend it to be lower. Nobody is talking about throwing fiscal caution to the winds," he said. He also said that there is need to have fiscal stimulus to generate demand as the export growth would be bad in 2009-10. Regarding inflation he said it is going to be under control, Inflation is not going to break through the roof, he said.

Asia-Pacific In India May See Highest Pay Hikes - April 08, 2009

Despite the global economic crisis, India is expected to witness the highest salary increases of around 10.8 per cent this year among nations in the Asia Pacific region, due to the huge talent demand in the country, a study says.

According to the Salary Trends survey by global HR consultancy ECA International, the pay hikes in the Asia-Pacific region are expected to average at 4.8 per cent in 2009, which is a fall of 30 per cent from 6.9 per cent increases last year. The study revealed that the falling overall trend in pay hikes notwithstanding, some Asian countries, including India, Vietnam and Indonesia, may still see big increases in 2009.

Wage increases in India are expected to be the highest at 10.8 per cent, followed by Vietnam (10.6 per cent), the only location in the region where rises are still higher than last year, and Indonesia (9 per cent), the global HR consultancy ECA survey stated.

"There is still a huge demand for talent in India (that) is keeping pay increases high despite (the) current economic situation. While, in Vietnam and Indonesia persistently high levels of inflation are keeping increases up" said ECA Regional Director Asia, Lee Quane.

Gold Tumbles By Rs 340 On Global Cues - April 07, 2009

old tumbles by Rs 340 on global cues: The marketmen said that the selling pressure also gathered momentum due to the fall in gold prices in London to a 10-week low on speculation that the world financial crisis might be easing, reducing the precious metal''s appeal.

The gold in the last five trading sessions lost Rs 1,020 per 10 gram. The Marketmen said that the weakening trend in the overseas market mainly prevailed on hopes that the global economy will revive soon following the G-20 leaders meet last week.

The Standard gold and ornaments declined by Rs 340 to Rs 14,420 and Rs 14,270 per 10 gram respectively. However, the Sovereign held steady at Rs 12,100 per piece of eight gram. On the other hand, silver ready fell by Rs 450 to Rs 20,950 per kg and weekly-based delivery by Rs 760 to Rs 20,780 per kg. However, its coins remained unchanged at Rs 27,800 for buying while Rs 27,900 for selling of 100 pieces.

India May See 7 Per Cent Rise In Pay - April 07, 2009

India is likely to witness a moderate increase in salary of 7.25 per cent this year due to the global economic recession, which is affecting the pay as well as benefit and job prospects for the employees, said Hay Group, the global human resource consultancy firm.

Overall, the picture for India has deteriorated...Now, with large numbers of organisations freezing pay, and predictions overall of median pay inflation of around 7.25 per cent after years of double-digit growth, there is evidence that organisations are having to tighten their belts, Hay Group said in a report.

Moreover, the report further said the biggest concern for Indian companies is still the talent attraction as well as retention as opposed to managing downsizing. This means that the Indian organisations would continue to invest in the competitive salaries for high performing and high potential employees, Hay Group said.

Regarding the public sector companies in India, Hay Group said "pay in the public sector remains relatively modest, even after these changes (even after implementing pay reviews), but increases of this magnitude will clearly skew Indian pay market data for some time to come."

The survey that covered 2,000 organisations from 88 countries across six continents, said "executive pay is likely to rise even less than that of their employees - and in practice many executives will receive significantly less than in previous years, as bonus pay-outs drop and the value of share-based payments is hit by stock market falls."

Subbarao Cautions Against Populist Fiscal Measures - April 07, 2009

The Reserve Bank Governor D Subbarao admitted that interest rates are not falling because the government is unable to bring down the small savings rates in an election year. Lending rates have come down, but not as much as warranted by the policy rates. There are some issues that can be addressed by the new government such as the adjustment on small savings. Small savings and bank rates have to be comparable, Subbarao said.

The government keeps the small savings rates at 8 per cent which becomes the floor on deposit rates, as bankers fear going below this rate will lead to losing deposits. That''s why the lending rates refuse to fall even though there was cut in policy rates by the RBI.

Regarding more monetary and fiscal stimulus, Subbarao was cautious hinting that the easy promises of more fiscal stimulus being doled out by political parties may fade under the governance pressures. You have to keep in mind, the long term impact of policies as Milton Freidman once said there is nothing more permanent than temporary government policies, Subbarao said.

IMF Says No Talks On Selling More Gold - April 06, 2009

The International Monetary Fund said that there have been no talks about selling additional gold than the proposed a year earlier. The leaders from the Group of 20 said that the revenue from the previously proposed IMF gold sales will be used to help the poorest countries to stimulate the world economies.

The board of IMF approved a proposal in April 2008 to sell 403.3 tons of bullion as part of a plan to close the Washington-based lenders annual deficit. "The gold sales are part of what we have already announced a year ago," IMF spokesman Bill Murray said.

Moreover, there have been no talks about sales of additional gold and the proposal is subject to the approval of US Congressional, he said. However, a decision to sell the gold requires the majority support of the executive board of IMF and the board representative from the US needs the approval of Congress to vote in favor of any sales, according to the bank.

India''s Exports Likely To Decline - April 06, 2009

The downward trend of India''s exports is likely to continue in 2009-10 due to the contraction in demand in the developed markets such as the US and the EU, an industry survey said. "More than 61% of the exporters expect either a decline or flat growth in exports in 2009-10," industry body FICCI said in a survey.

The outlook of the exporters for the fiscal is based on the current position of their order books and the experience in the second half of the last fiscal, it said. For this purpose, around 125 entities were surveyed. After posting an impressive growth of more than 30% in the first six months of 2008-09, the exports started dwindling in October and fell by 12.1% for the first time in five years.

The exports ever since are continuing this downward rally and in February it fell by 21.7%. Moreover, the engineering goods as well as gems and jewellery, chemicals, marine products, tyres and to some extent leather are among the sectors that anticipate negative or zero growth.

Economic Panel Lowers GDP Forecast To 6.5-7 Per Cent - April 06, 2009

While the demand hitting badly than anticipated, the Prime Minister''s economic advisory council (PMEAC) has lowered India''s growth rate forecast to 6.5-7 per cent from previous projection of 7.1 per cent for 2008-09.

"It (growth rate for 2008-09) may go somewhere around 6.5-7 (per cent), that is the current estimate... 7.1 per cent was earlier estimate, obviously it has to be lower. Because the contraction of trade turned out to be much greater than it was anticipated," said, PM''s Economic Advisory Council (PMEAC) Chairman Suresh Tendulkar.

The PMEAC in January revised down its growth projection to 7.1 per cent for 2008-09 as against 7.7 per cent projected earlier due to "painful adjustments to the abrupt changes in the international economy".

Tendulkar said that the Indian economy was affected by the global crisis through the export and export-related industries and capital outflows. "There was deeper than expected recession in advanced countries. The psychology of gloom and doom that was essentially pervaded in the industrialized countries was imported to this country," Tendulkar said.

In order to deal with this and to give a boost to the economy, the government came out with three stimulus packages by providing incentives to various sectors. Besides this, the Reserve Bank of India also took monetary easing measures by infusing more than Rs 4,00,000 crore since October.

The industrial growth turned negative in October and December and the industrial output again fell in January, despite the stimulus packages. The exports also fell for the fifth consecutive month in February after it had a good run in the first half of 2008-09.

Bond Prices Rise Marginally - April 03, 2009

The bond prices on Wednesday shot up after the announcement by the Reserve Bank of India for the buyback of Rs 6,000 crore worth Government securities and the Market Stabilisation Scheme unwinding of Rs 33,000 crore. However, the volumes were low in the bond market because of the auctions lined up, said a dealer with a private bank. The total traded volumes on the order matching system were at Rs 8,640 crore.

The 6.05 per cent-2019-10-year benchmark paper closed at Rs 93.57 (6.96 per cent YTM) against Tuesday''s close of Rs 93.24 (7.01 per cent YTM). Moreover, the 7.46 per cent- 2017- eight-year paper opened at Rs 101.8 (7.17 per cent YTM) and closed at Rs 102.4 (7.07 per cent YTM).

Inflation Rises Marginally To 0.31% - April 03, 2009

The inflation grew marginally to 0.31 per cent for the week ended March 21 as the prices of certain food items like tea, gur, aerated water and imported edible oil shot up. The inflation was 0.27 per cent for the week ended March 14 and 7.8 per cent in the corresponding period a year ago.

The price of blended tea went up by 48 per cent while that of packaged tea and aerated water grew by 22 and 10 per cent, respectively. However, the items that became dearer were soft drinks as well as oil cake, bajra, condiments and spices while among non-food items cement, rubber, plastic products and PVC fittings became expensive.

On the other hand, fruit and vegetables, barley, jowar, raw silk, khandsari, salt, mustard and coconut oil became cheaper. Meanwhile, the inflation for the week ended January 24 has been revised downwards to 4.7 per cent from 5.07 per cent.

Rupee Rallies By 36 Paise To 50.34 - April 03, 2009

The rupee on Thursday strengthened further by 36 paise to close at 50.34/35 against the greenback due to the sharp rise in the equity markets and expectations of more capital inflows. At the Interbank Foreign Exchange (Forex) market, the rupee opened higher at 50.30/32 a dollar against its previous close of 50.70/71 and closed at 50.34/35.

The rupee moved in a range of 50.24 and 50.42 a dollar. Mainly the continued rally at the equity markets supported the rupee as the Sensex on Thursday closed with handsome gains of 447 points or 4.51 per cent.

The fresh capital inflows on April 1 as per provisional figures, also boosted the market sentiment. A weak dollar in Asian trade on Thursday against its major rivals also helped the rupee rally.

However, the Reserve Bank of India fixed the reference rate for the dollar at Rs 50.30 and the euro at Rs 66.90. The benchmark six-month forward dollar premium payable in September closed lower at 68-70 paise from 77-79 paise on Wednesday and far-forwards maturing in March also closed down at 107-109 paise from 119-121 paise previously.

Trade Deficit Up To $115 B In April-Feb - April 02, 2009

New Delhi: The country''s exports have suffered a serious jolt with a sharp fall by 22 per cent at $11.9 billion in February 2009 as compared to $15.2 billion in the corresponding month last year. With imports too declining by 23.3 per cent at $16.8 billion, ($21.9 billion), India''s foreign trade front groans under the declining exports and imports with cumulative massive trade deficit of $115 billion in the first 11 months of the current fiscal as against $82.2 billion for the whole of 2007-08.

The cumulative exports in the first 11 months of 2008-09 have come to a grinding halt slowing down to 7.3 per cent at $156.6 billion as against $145.87 billion in the corresponding months of 2007-08. But the depreciation of the Indian rupee vis-À-vis the US dollar gives a bit of relaxation, in which a major portion of the export receipts is received, the export growth in rupee terms has swollen substantially to a growth of 20.3 per cent. India''s exports during April-February 2008-09 registered a growth of 19.1% in dollar terms at $271.7 billion ($228 billion) and 33.4 per cent growth in rupee terms at Rs 12,23,213 crore (Rs 9,17,179 crore).

Increase In Tax Collection Of 19.4 Per Cent - April 02, 2009

Kerala has registered a record tax collection with a total estimated mop-up of Rs.14,789 crore as on March 31. According to tentative estimates of the Finance Department, the total revenue earned by way of VAT and non-VAT levy was Rs.11,565 crore as on March 31 and this was Rs.1,880 crore (19.4 per cent) more than the collection last year. The 19.4 per cent increase in tax collection has been estimated with reference to the department''s figures pertaining to 2007-08 which stood at Rs.9,685 crore.

The Excise Department also chipped in well with a total excise duty collection of Rs.1,359 crore, which is 15 per cent more than the total excise duty collection during 2007-08.

Past one year had seen stringent measures on the Finance Department part to plug the loopholes as well as widen the tax net with attractive incentives for the tax payer and intensified intelligence initiatives to unearth evasion. Moreover the computerisation of all offices of the Taxes Department, have helped the government to take its tax effort to newer levels.

Gold Remains Steady On Lack Of Support - April 02, 2009

The gold prices on Wednesday held steady at Rs 15,260 per ten gram on the bullion market due to lack of buying support following bank closure for public dealings on the first day of the fiscal year. However, on the other hand, the silver gained Rs 100 at Rs 21,800 per kg on fresh buying by industrial units and silver coins manufacturers.

The buying activity in the bullion was also restricted as some investors preferred shifting their funds in rising equity market for quick gains. The Standard gold and ornaments held steady at Rs 15,260 and Rs 15,110 per ten gram respectively. The sovereign also traded around Rs 12,200 per piece of eight gram.

On the other hand, the silver ready recovered by Rs 100 to Rs 21,800 per kg on retailers buying. It had lost by Rs 470 per kg in the previous session. However, the silver weekly-based delivery fell further by Rs 310 to Rs 21,670 per kg. Its coins held unchanged at Rs 28,200 for buying while Rs 28,300 for selling of 100 pieces.

Exports May Grow By Merely 3% This Year - April 01, 2009

The growth of India''s export could be as low as 3 per cent in 2009-10, the Planning Commission said in its report to the Prime Minister Manmohan Singh. "If we assume that India''s exports depend on (the) growth rate of advanced economies rather than on the growth rate of the world economy, our export growth rate in 2009 can be only 3 per cent", said a report on the prospects of the Indian economy in 2009-10.

The report said that in the best-case scenario the exports would register a growth rate of 6 per cent in the next fiscal. This, however, would be much lower than the average export growth rate of 21 per cent during 2006-07 and 2007-08. The report further said that one per cent fall in the global output results in 4.4 per cent decline in exports. According to the assessment, with global output falling by 0.9 per cent in 2009, India''s exports could further dip by four percentage points during the year.

RBI Wants To Regulate NBFC Holding Companies - April 01, 2009

The Reserve Bank of India (RBI) has decided regulate domain holding companies floated by business groups and also the companies that own non-banking finance companies (NBFC). The move was a consequence of the fact that NBFCs had regularly complained about the acute shortage of funds and some had received liquidity support from the government in consultation with RBI as a result, said sources close to the development.

But the central bank’s own inspection and tax reports from the income tax department and registrar of companies have shown that many of these NBFCs have transferred surplus funds earned in good times to their holding companies, at present which are regulated under the Companies Act, in the form of loans or dividends.

Therefore, this mechanism acts as a tax haven for the income of the entire business group. Dividend is taxed as dividend distribution tax at 15 per cent in the hands of the company offering the dividend. If the same company retains the amount as profit, it will have to pay tax at 30 per cent.

India Inc Thinking Beyond Balance Sheets - April 01, 2009

The economic slowdown that is taking its toll on all the industries has forced India Inc to think beyond balance sheets. The fall in earnings along with consumer holdings on to their wallets and not so encouraging customer confidence, India Inc needs more than just great financial results in order to stay alive.

This deadly combination has forced India Inc to think beyond balance sheets and instead shows case their non-business initiatives. One such example is Wipro, which has published its first sustainability report. Anurag Behar, Corporate VP of Social & Community Initiative at Wipro, said, "It''s simply this-you see the financial and economic crisis in your line of sight here and now. But this issue of sustainability is an issue threatening the very survival of humanity over the next 50-70-100 years-whether it''s climate change, water scarcity or increasing inequality in society."

In fact, ITC has expanded its social as well as environmental activity in the slowdown. On the other hand, the pharma companies have come out with an ecological report because it wanted to get enlisted on the NYSE. The IT sector came out with such reports because of pressure from the clients. In the recession hit market, where most clients are looking at link benefits of reporting to balance sheet, that''s why want to shift from brand value to cost savings.