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.