No debt waiver for farmers this time - FM

With fiscal deficit increasing and adding to the government woes is deficit monsoon in almost entire country still Finance minister said that no proposal for farm debt waiver this time around.

"There is no such proposal," Finance Minister Pranab Mukherjee said when asked if the government was considering a fresh debt waiver scheme to give relief to farmers.

The UPA government had last year announced a nearly Rs 71,000 crore farm loan waiver scheme to offer relief to small and marginal farmers and one-time settlement scheme for large ones.

Talking to reporters after holding a review meeting of Regional Rural Banks, he exuded confidence that the economy would clock over six per cent growth despite weak monsoon.

"No doubt, this year we are not expecting to reach nine per cent growth. This year we are projecting six per cent plus growth," he said, adding that the full impact of drought will be known to all as and when it is felt.

Meanwhile, Planning Commission Deputy Chairman Montek Singh Ahluwalia said the poor monsoon will adversely impact farm production and eat into economic growth.

"The existence of drought by itself can lead to some shaving" off of the growth projections. - said Ahluwalia

Indian exports might be +ve in december - FICCI

In a survey conducted by Federation of Indian Chamber of Commerce and Industry, majority of respondents said exports are expected to be in positive terrain by December this year.

The chamber expects an improvement but only in terms of stemming the falling exports on a year-to-year basis in the months ahead.

"Exports are likely to register a reasonable positive growth but we will have to wait at least till the end of this year," the survey said.

Exports have declined by 26 per cent in June for tenth month in a row due to less demand from the global markets.

Countries like Hong Kong, Germany and France are showing fresh signs of global recovery, with the European economy recording marginal GDP growth of 0.3 per cent and Asian economy expanding 3.3 per cent in the second quarter of 2009.

The survey said, "While orders are not coming in thick and fast, still some foreign clients have started placing some new orders or at least reduced the pace of order cancellation."

Ficci surveyed 316 exporters in different sectors such as automotive, gems and jewellery, textiles, handicrafts, leather and marine IT products during June and July 2009.

However, in May exports declined to USD 11.01 billion, down 29.2 per cent year-on-year.

As such, sequentially there is a growth of about 16.4 per cent.

However, Prasad hastened to caution that it is too early to come to any conclusion about export growth.

"The next two months are deciding months. We have to see whether there will be real recovery in trade sector or only changes due to the base effect for the coming months," he added.

However, Federation of Indian Export Organisations (FIEO) Director-General Ajay Sahai said the declining trend is likely to continue for some more months.

The exporters' body acknowledged that the government cannot increase demand in the global markets but it should give incentives to exporters so that they do not lose orders.

"The government should take short-term measures first and then come out with long-term policies after the global commerce shows improvement," Sahai said.

The Government is slated to unveil Foreign Trade Policy, which spells out the segments of priority in external trade and also gives incentives and disincentives, depending on the country's needs.

source - economictimes.com

India's arms imports to touch $30 bn by 2012

India's arms imports are expected to touch $30 bn by 2012 even as the domestic defence market is poised to grow to $700 mn in five years, according to an industry lobby report.

The report submitted to the defence ministry by the Associated Chambers of Commerce and Industry (Assocham) said: "India's arms imports alone would rise to $30 bn by 2012."

"The Defence Offset Facilitation Agency (DOFA) and the armed forces in consultation with India Inc should work out a comprehensive strategy to ensure that defence imports happen at extremely competitive rates," Assocham president Sajjan Jindal said.

DOFA, under the Department of Defence Production, is a single window agency to implement the government's defence offset policy.

Assocham has urged the government to allow India Inc to participate in defence deals as the domestic defence market would expand to over $700 million in four-five years.

According to the chamber, if the Indian economy grows at a steady rate of 7 percent, the defence spending would exceed 3 percent of the gross domestic product (GDP) in future.

"This could be used to finance additional capital outlays for modern equipment," the Assocham report said.

Currently defence expenditure accounts for around 2.5 percent of the gross domestic product (GDP). India has upped its defence expenditure by 34 percent to Rs.141,703 crore ($28 billion) for the fiscal 2009-10.

India is the world's largest importer of defence articles with its armed forces buying over $6 billion worth of military hardware every year.

The paper also called for raising the foreign direct investment (FDI) limit in the defence sector to 49 percent from the current 26 percent.

Higher FDI will help procurement of latest technologies as per provisions of the latest defence offset policy, Assocham said.

-source-economictimes.com

Govt steps up efforts to attract Foreign Direct Investors (FDI)

(posted under - FDI updates - Economy updates) - Transport Minister Kamal Nath had said all impediments would be removed to get foreign investment in the roads and highways sector.

He added that the roads sector is expected to attract USD 10 billion of FDI in the next two years.

The government is also making efforts to bring in foreign investment in the textiles sector, the largest employer after agriculture in the country.

Textiles Minister Dayanidhi Maran had led a business delegation to Japan last month to woo foreign investors in the labour intensive sector.

FDI inflow in January-May period of 2009 was USD 10.58 billion compared to USD 19.56 billion in the same period previous year, a dip of 46 per cent.

The government also proposes to raise the FDI cap in private insurance firms from 26 to 49 per cent and a bill to give effect to the proposal is pending in the Rajya Sabha.

CRISIL Principal economist D K Joshi said by taking the steps government is building pipeline to attract FDI.

Economy Updates - Forex reserves at $271.239 billion down YoY

India's foreign exchange reserves fell for the week ended August 7 to $271.239 billion compared to $271.641 billion in the year-ago period.

India's gold reserves and special drawing rights (SDR), during the week, stood unchanged at $9.671 billion and $1-million respectively, the central bank said.

India's reserve position in the International Monetary Fund (IMF) marginally rose to $1.348 billion compared to $1.338 billion in the previous week, RBI said.

Reserves had risen by $3.930 billion for the week ended July 31, compared to $267.711 billion in the previous week.

Foreign currency assets, during the week, fell to $260.219 billion, against $260.631 billion in the previous week, RBI said in its weekly report.

Inflation at 1.74 percent YoY

The wholesale price index (WPI) is forecast to have fallen 1.74 per cent in the 12 months to August 1, steeper than the previous week's decline of 1.58 per cent, a poll showed on Wednesday.

It would be the ninth straight annual fall in the wholesale price based index, but this is widely seen as a statistical effect caused by sharply higher prices a year earlier.

The index has been rising on a weekly basis since March and analysts said it probably climbed in the week ended Aug. 1, mainly due to rising food prices.

The central bank has also said price pressures are building up, suggesting there was little chance for rate cuts. Weak monsoon rains are also expected to put upward pressure on prices.

source - economictimes

Indian Economy to grow at 7.8 percent in 2009-10

India's economy will likely grow at 7.8 per cent in fiscal year 2010/11, higher than a previous forecast of 6.6 per cent due to an improved investment outlook, better external environment and a recovery in consumption demand, Goldman Sachs said in a note on Monday.

But it kept its growth estimate for the current year ending March 2010 at 5.8 per cent citing a poor monsoon and the follow-on negative impact on rural demand in the near-term.

Goldman's fiscal year target for wholesale price index-based inflation as of end-FY10 is 6.5 per cent with an upside risk, and expects the central bank to tighten policy rates by 300 basis points in calendar year 2010.

Govt applies for $3.2 billion loan for capitalising PSU banks

The government has sought a $3.2 billion loan from the World Bank to infuse capital into public sector banks, the Lok Sabha was informed on Friday.

Minister of State for Finance Namo Narain Meena today responded in the affirmative, in a written reply to the Lok Sabha to a query on whether loans from the multilateral lending agency contain a proposed $3.2-billion for recapitalising state-run banks.

"To enable the PSBs to meet credit requirements of the economy while maintaining a healthy and comfortable level of regulatory capital to risk-weighted assets ratio, a proposal has been sent to the World Bank," he said.

However, on whether the government proposes to borrow funds from the World Bank to prop up the banking system, he said, "The assessment of the Indian financial system during 2007-08 done by the Reserve Bank of India shows that the banking sector in India continues to be healthy, sound and resilient."

Meena further said that India is taking loans from the International Bank for Reconstruction and Development (IBRD) and credit (soft loan) from the International Development Association (IDA).

"The cumulative commitment of the World Bank (IBRD and IDA) loans to India till June 2009 is $73.93 billion (IBRD $37.68 billion and IDA $36.25 billion)," he said.

Foreign Direct investors can invest upto $10 bn for building roads

India is likely to attract foreign direct investment of about USD 10 billion for the roads sector in the next two years.

The Transport Minister Kamal Nath said all imediments would be removed to get the foreign investment in the roads and highways sector.

Govt set to raise $3.2 billion by selling stake in steel companies

In yet another news of selling stake in sick cos the indian government is all set to sell stake in steel companies which might help in raising money, in future we can see more disinvestment news from the government of india, The details are as follows :

The government may raise 150 billion rupees ($3.2 billion) by selling up to 20 percent stake in state-run firms, Steel Minister Virbhadra Singh said on Friday.

The minister said the government was in the process of choosing companies for divestment.

Inflation at -1.58 percent but prices still rise

As per latest official data, annual inflation based on Wholesale Price Index stood at - 1.58% for the week ended July 25, 2009, while it was at 12.53% a year ago. The latest inflation number shows a steeper fall in annual inflation recorded at the end of the previous week at -1.54%.

Government data showed on Thursday that price level for all commodities stayed below zero for the eighth straight week, but prices of

food items continued to surge, signaling political trouble for the Centre and three states preparing for local elections in a few months. Maharashtra is facing assembly polls in October-November, while Haryana that is supposed to go to the polls next year is likely to advance it to this year-end. Jharkhand, now under the President’s rule, is also likely to go to polls later this year.

Finance Minister speaks about Fiscal Consolidation

It's official that government will not induce money into unproductive sectors in a bid to consolidate the fiscal deficit which will touch 6.8% of Gross Domestic Product(GDP) for this financial year finance minister Pranab Mukherjee said today.

India's fiscal deficit is projected to swell to a record 6.8 percent of gross domestic product in the fiscal year 2009/10 (April-March) that has to be funded by a record high borrowing of 4.51 trillion rupees ($95 billion). that's a whopping amount of borrowing.

A report from finance ministery said that - "Government will continue to take necessary measures to moderate inflation, prune unproductive expenditure and closely monitor FRBM (Fiscal Responsibility and Budget Management) targets," so lets see whether these statements turn to reality or it's just an answer to opposition questions in parliament.

Hurray ! We got richer by Rs 4207 per annum per person

Finally IT'S OFFICIAL !! Indian have grown richer by rupees 4207 per annum per person . Thanks to growing economy from the last 3 years or so and still growing although slowed down due to ongoing economic crises through out the world.

Let me tell you about the news of increase in per capita income in some more detail,

An average indian or a normal indian's annual income has increased by INR 4207 per annum, the news were told in parliament today that means the annual per capita income of indian has reached a figure of Rs 37490, that sounds nice but in reality much of the growth in annual income is restricted to bigger cities where as cities of bihar , UP are still underdeveloped and average income is much lower then this figure of rupees 37490 annually.

According to data released by the Central Statistical Organisation, the per capita income of people has increased by over one-third from Rs 26,003 in 2005-06 to Rs 37,490 in 2008-09. The per capita income was Rs 33,283 in 2007-08 so there is a growth in indian economy however the pace of growth has slowed down when compared to previous financial year.

Top 10 most admired companies of world

Here is the list of top 10 companies of the world which are most admired across the globe No indian company features in the prestigeous list-

RANK 1 - APPLE Inc (of USA)

RANK 2 - BERKSHIRE HATHWAY - incorporated by legendary billionaire investor Warren Buffett

RANK 3 - TOYOTA MOTOR

RANK 4 - GOOGLE Inc (Search engine Marketing)

RANK 5 - JOHNSON & JOHNSON ltd

RANK 6 - PROCTER and GAMBLE

RANK 7 - FED EX

RANK 8 - SOUTH WEST AIRLINES

RANK 9 - GENERAL ELECTRIC Ltd

RANK 10 - MICROSOFT Inc

OOPS!! looking for some indian companies.... no one is there...may be in future some indian company would make into it..

Govt invests to bring dead PSU's to life again WILL IT HELP?

Looks like our government is very keen to revive the already dead PSU's like Hindustan Machine Tool, National Instruments Ltd, Cement Corporation of India ltd to name 3 out of the 15 PSU's shortlisted for revival by infusing a whopping 7128 crores of rupees put together. The first impression which cam to my mind after reading this news was that WILL IT REALLY HELP? and the answer i got from my brain was that probably ministers would earn a lot from the granted money and would purchase land and fill their bank accounts...

The PSU's which are already dead was because there was no good leaders to make it a profitable investment the employees of these PSU's were doing their job thinking that it's a government job so they need not work...(typical attitude of a government employee in india).. Companies doesn't work like this at all.. PSU's can only come in profit if it's employees think and work like it is their own company not by thinking that it's a government enterprise so it's a social company rather then a business enterprise.

PSU's like Air India is already begging for funds and what more the third biggest employer BSNL recently showed results and there was a whopping 97 % decline in profits from 2700 crores to meager 102 crore so in next six month BSNL (PSU) will also be running in loss (THAT IS REAL SHAME FOR THE GOVERNMENT AND THE EMPLOYEES OF BSNL) .

There is a similarity in working of the PSU's at time when there was no other such enterprise , i am just going back to pre economic liberalisation era of Economy of India all the PSU's were in profit , the reason for profit however was that people of India did not have any other choice take example of BSNL earlier there was no AIRTEL, Essar, Spice telecom, IDEA cellular etc and BSNL was enjoying it's monopoly in telecom sector employees didn't work at that time too... but customers had no other option so the number of subscribers went on increasing... things changed when Indian Economy was liberalized there were more choices for the people and alltogether competition between PSU's and Private companies increased , but PSU employees didn't change change their way of working and are still sleeping This was the time when Private companies ate up PSU's share and overtook almost all the PSU's in terms of revenue and profitability.

So according to me accompanied with the history of working of PSU's this funding to revive the PSU's will not be beneficial and the scenario and outlook for PSu's would not change at all. THEY ARE ON A STEADY DECLINE and would eventually vanish one day... that's the HARD TRUTH...which we all have to admit until the employees of these PSU's do not change their attitude towards working.

- Himanshu Sharma