India to face 2.5 M tonne diesal shortage

India is likely to face a shortage of 2.5 million tonne of diesel during the November-March period, which would have to be met either through imports or from Reliance Industries' only-for-exports refinery.

"The companies have told us that they will have a deficit of 2.5 million tonne from now till March," Ministry of Petroleum and Natural Gas Additional Secretary S Sundareshan said here.

State-run Indian Oil, Bharat Petroleum and Hindustan Petroleum have projected a cumulative diesel requirement of 1.05 million tonne for December to March, comprising 2,40,000 tonne of Euro-III diesel and 8,10,000 tonne of Euro-II grade fuel.

If these quantities are not tied up with Reliance, the oil companies would have to turn to imports in order to meet the demand in the country.

However, diesel from Reliance's Jamnagar refinery can be bought only if government does away with double taxation, he said.

Since Jamnagar has turned into an Export-Oriented Unit, any supplies to domestic tariff area was levied with dual basic customs duty and a double levy of special additional excise duty. These duties are over-and-above the normal excise duty payable by any other refinery in the country.

For diesel these work out to Rs 6 a litre more in duties, which the oil companies say they cannot absorb given the fact that they already are losing over Rs 7 a litre on the sale of the fuel.

"The matter is under examination and we hope a decision will be taken (in time)," Sundareshan said.

- source economictimes.indiatimes.com

Rs v/s US $ - Daily updates

Indian National rupee popularly known as INR in international market is following a downward trend due to global financial turbulance. As volume of US dollars (USD) in international markets is on a decline so the value of US $ is growing up, well indian IT industrycan feel better to some extent and is the only industry which would be getting a plus from current market scenario.

The post would include (US$ v/$ rupee) daily trends the rate shown of Indian rupee would be as displayed at time of stock markets closure(mainly BSE and NSE) you can also see daily Stock market live rates and closing rates.

INR(Indian National rupee) v/s US$ October trends/updates are as follows:

format for display of rs v/s $ would be in following order:
(date | RS v/s $ | rate | Daily trends updates)


(October 31,2008) | RS v/s $ | 49.77 | Down(-49.77)


(October 30,2008) | RS v/s $ | 49.67 | Up^0.21


(October 29,2008) | RS v/s $ | 50.09 | Down(-0.14)


(October 27,2008) | RS v/s $ | 49.95 | Down(-0.16)

India chasing 49 countries in Global Competitivenesss

The United States, tops the overall ranking in The Global Competitiveness Report 2008-2009 again, released recently by the World Economic Forum. However Our India is still chasing 49 countries in the race of global competitiveness. We have improved a lot on various aspects like we enjoy advantages not only from its market size (ranked 4th for its domestic market size and 5th for its foreign market size), but also from its strong business sophistication (ranked 27th) and innovation (ranked 32nd), however our overall competitive position is weakened by its macroeconomic instability (109th), with the government running one of the highest deficits in the world (ranked 127th), unsustainable levels of government debt (ranked 113th), and fairly high inflation.

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The list goes as shown below:

Country: US

Rank: 1

Score: 5.74


Country: Switzerland

Rank: 2

Score: 5.61


Country: Denmark

Rank: 3

Score: 5.58


Country: Sweden

Rank: 4

Score: 5.53


Country: Singapore

Rank: 5

Score: 5.53


Country: Finland

Rank: 6

Score: 5.50


Country: Germany

Rank: 7

Score: 5.46


Country: Netherlands

Rank: 8

Score: 5.41


Country: Japan

Rank: 9

Score: 5.38


Country: Canada

Rank: 10

Score: 5.37
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Country: India

Rank: 50

Score: 4.33

World Prosperity Index - India 70th

Quality of secondary education, cost of starting a business and the lack of government effectiveness have led India to rally ahead of many South Asian nations ranking at 70 positon among 104 nations on the World Prosperity Index (WPI) 2008.

"India has a relatively entrepreneurial culture. It requires government effectiveness and tackling corruption," Legatum Institute Managing Director Alan McCormick said.

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Increase in capital and education contribute directly to the value of physical and human capital and thus directly increase economic output. Poor governance and excessive bureaucracy impose costs on business and thus restrain growth, the report released last week said.

The Institute also ranks India 10th on its 'Who's Going Places' list, with China on number six.

"These countries have the best context right now within which to create wealth," McCormick said.

Both the economies have recently grown faster than almost any country in the rich world. Being the home of more than two billion people, these improvements in competitiveness have brought about a dramatic lessening of the global wealth gap, a good news for global prosperity, the report said.

"India outstrips many South Asian nations in various aspects of wealth creation. It ranks stronger with reference to other Asian countries in terms of avoiding dependence on commodity exports and foreign aid," McCormick said.

- Source -PTI

Indian Agriculture Growth pegged at 3 percent

Planning Commission member Abhijit Sen today sounded more optimistic than the PM's Economic Advisory Council with his projection that the agriculture growth would not be less than three per cent this year.

The Prime Minister Economy Advisory Council (PMEAC) has projected a mere two per cent growth in the sector for the current year.

"Considering the first advance agriculture estimates of the current year along with the final estimates of last year, agriculture growth this year should not be less than three per cent," Sen said after releasing a report on food prices compiled by an international agency Oxfam India.

Earlier in August, PMEAC had projected the agriculture production to grow at a lower pace of two per cent in the current year as against 4.5 per cent in 2007-08. The reasons for the slackening projections were higher base and uneven spread of the South-West Monsoon in July.

Noting food production, Sen said as per the first estimates, rice and soybean output is expected to be more, while other cereals lower than last year.

"Overall, agriculture growth during the 11th Plan period would be fairly good at around four per cent," Sen, who is also an agriculture economist, said.

In the last three years, the average agriculture growth has stood at 4.2 per cent and "we will achieve more than the set target of four per cent by the end of the 11th Plan," he noted.

On huge hike in minimum support price (MSP) under UPA government, Sen said MSP was increased at a lower rate by Rs 10 to 20 per quintal by the last government because stocks were high. Whereas now, MSP is increased as stocks are very low.

Source - Agencies

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Govt may relax foreign investment norms in banking, telecom

Government is considering relaxing norms for foreign investment in sectors like banking and telecom by treating portfolio FII investment outside the sectoral cap.

At present, foreign direct investment (FDI) and foreign institutional investments (FII) are added to determine sectoral foreign investment cap in banking, credit information companies, broadcasting, commodity exchanges and telecom.

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But, with RBI allowing FIIs to acquire shares in companies under the Portfolio Investment Scheme (PIS), the government is now likely to mandate that sectoral caps would henceforth be for FDI investment only, official sources said.

In sectors with caps, the balance equity would specifically be beneficially owned by/held with/in the hands of resident Indian citizens and Indian companies, owned and controlled by resident Indian citizens.

FIIs investing under PIS shall not seek a representation on the board of directors and they will have to give a self- declaration whenever they act in concert with any of the companies that they have invested in.

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Sources said investments by registered FIIs under PIS are made under Schedule 2 of the Foreign Exchange Management Regulations and are distinct from FDIs which are made under Schedule 1. FIIs are also permitted to make investments under FDI Scheme under Schedule-1.

PIS cannot cross 24 per cent in any company. At present, banking and telecom have 74 per cent foreign investment cap (FDI plus FII), which would, after the policy is accepted by the Cabinet, be changed to 74 per cent FDI.

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Similarly, 20 per cent FDI plus FII limit in FM radio would now be 20 per cent FDI cap, while 49 per cent FDI plus FII in cable network, direct-to-home commodity exchange and CIC would be changed accordingly.

Indian Government to inject more money into market

Finance minister P Chitambaram said that government of india is ready to inject more money into tumbling share markets as indian stock markets took a blood bath during intraday trading. sensex closed 3.9% down after falling a whopping 9% in intraday trading.

Also read : The hidden story behind US recession

Panic gripped the stock and foreign exchange markets on Wednesday as a global financial turmoil intensified worries of a recession and sent stocks reeling worldwide. India's main BSE share index fell more than 8 percent at one stage to its lowest in two years, but recouped partly to be down 3.8 per cent by 0911 GMT.

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Foreign funds have pulled out a net $9.9 billion from Indian shares this year, after ploughing in a record $17.4 billion in 2007.

"I am hopeful investors will start coming to the market," Chidambaram said. On Monday, the Reserve Bank of India announced a surprise half a percentage point cut in the proportion of deposits that banks must keep with the central bank.

Also read : The hidden story behind US recession

The reduction, which is expected to release Rs 20000 crores ($4.1 billion) into the banking system, was intended to alleviate pressures on local markets due to the global financial crisis, RBI said. The government eased norms for foreign borrowings by companies, while the capital market regulator relaxed rules for indirect investments by foreign institutions in stocks.

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Indian and Gulf real estate market is best

According to a survey conducted all over world on real estate market the following results were taken:

The real estate markets in the Middle East will outperform all other regions in the world while India and China will be the key drivers of the sector in the Asia-Pacific region, according to a new survey.

The 'Investor Survey Sentiment', conducted by global real estate consultancy Jones Lang LaSalle in association Cityscape 2008, the real estate exhibition currently under way here, found that while the UAE will offer the best performing real estate market in the next couple of years, Saudi Arabia will be the next best performer.

The results of the survey were arrived at after taking the views of 350 developers, sovereign wealth funds and high net worth investors, Jones Lang LaSalle said in a statement.

Over 50 percent of the respondents believe the real estate markets in the Middle East will see the strongest performance of any region worldwide over the next two years.

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India and China, too, have a strong outlook with 20 percent of the respondents believing these two markets will make the Asia Pacific the best performing market.

"Sentiment is a critical component when considering the health of any market," Blair Hagkull, Jones Lang LaSalle's managing director for the Middle East and North Africa (MENA), said in the statement.

"It is an important barometer, a key assessment criteria for any investor and the ideal gauge for considering future prosperity," he added.

The survey, according to the consultancy, is the most up-to-date as it was conducted after in the aftermath of US investment bank Lehman Brothers' collapse.

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According to the survey, investors in the region are least positive towards west European real estate markets, with only 3 percent expecting this to be the strongest performing region.

Most Middle Eastern investors do not believe the US and European markets will witness a major improvement in performance in the short term.

The Middle East is expected to be one of the regions least affected by current global economic turmoil.

The survey found that though North America would be most affected by the crisis, it could also provide the most opportunities for value purchases over the next two years.

"There is a clear inverse relationship between strongest performing real estate markets and those economies expected to be most impacted by current global economic environment," the Jones Lang LaSalle statement said.

Investors also believe that, apart from MENA, emerging markets like Asia-Pacific and Eastern Europe will also be least affected by economic crisis.

With UAE expected to be the best performing market, investors remain particularly confident of growth in Abu Dhabi.

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Almost a quarter of the respondents said Saudi Arabia would offer the strongest performing real estate markets, driven by a large and rapidly urbanising population and new legislation, which is opening up of real estate market.

Apart from the UAE and Saudi Arabia, Qatar emerges as the best performing market in the Gulf Cooperation Council (GCC) with less investors expecting Bahrain, Kuwait or Oman markets to perform the most strongly.

"The Gulf region offers strong relative international value with active buyers in the region generally looking to transact at 8-8.5 percent yields for prime commercial operating assets and slightly higher for hospitality products," Ian Ohan, head of investment transactions in MENA at Jones Lang LaSalle said in the statement.

"Investors are looking for strong capital growth in Abu Dhabi, the kingdom of Saudi Arabia and Qatar, reflecting their robust economic potential and more nascent stages in the real estate cycle."

He, however, added that though this was consistent with recent market evidence, it was likely to bow to upward pressure as the cost of debt rose.

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According to Ohan, asset pricing in the region is increasingly being underpinned by cash flow valuation, reflecting a shift from development-led to capital-based real estate markets.

"We are anticipating greater transaction activity as sellers' value expectations begin to more closely resemble income valuations as debt markets tighten and speculative exit opportunities decline," he said.

India's Forex reserves in trouble - Goldman Sachs

Decline in capital inflows as a result of ongoing global financial turmoil may see India's foreign exchange reserves depleting by $ 39 billion during 2008-09, says a report by global banker Goldman Sachs.

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India's foreign exchange reserves, which were around $ 310 billion in March 2008, have been declining steadily and may go down to $ 271 by the close of current financial years, the report said.

The decline would mainly be on account of rising current account deficit, it said, adding "capital inflows fell to $ 13.2 billion (in Q1 2008-09) from $ 17.3 billion in Q1 of 2007-08 and $ 25.4 billion in the previous quarter (Jan-March)."

As per the latest RBI data, the country's foreign exchange reserves declined to $ 292 billion as on September 19, 2008, which can be attributed to higher trade deficit and declining portfolio investment.

Pointing out that the current account deficit will remain high during the year, the Goldman Sachs report said, "it would be a bigger concern with oil at $ 150 a barrel than at current prices."


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It further added, "with oil prices coming off substantially, one of the biggest threats to the current account deficit has been alleviated."

Even in the event of a sudden stop in capital flows, the report said, country's buffer of forex reserves would be sufficient to fund the current account and external debt payments.

At $ 271 billion in March 2009, the report said, the country would have sufficient reserves to meet 10.3 months of import bill, down from 15 months of imports in March 2008.


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