Govt would require to borrow 120 billion rupees per week

The Government official said today that the borrowing in the closing weeks of September could be 110 billion rupees or less.

Earlier, a central bank deputy governor said the government would borrow an additional 1.1 trillion rupees ($22.6 billion), taking the total to 2.99 trillion between April and September, a central bank deputy said on Thursday.

The additional borrowing excludes 120 billion rupees of bond sale scheduled for Friday.

Indian Economy to grow 7% this fiscal says Rangarajan

The economy is expected to grow at a moderate level of around 7 per cent in the current and the next fiscal, but would bounce back in
2010-11, noted economist and Rajya Sabha member C Rangarajan said on Thursday.

"The growth rate for 2008-09 would be about 7 per cent and for the next fiscal also it will be around 7 per cent. In 2010-11, it will pick up, depending on the global scenario," Rangarajan told reporters here.

On recovery of industrial growth to 2.4 per cent in November from a dismal negative growth of 0.3 per cent in the previous month, Rangarajan said it would be around 5 per cent for the current fiscal.

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"There may be some improvement from January onwards but over the year Industrial growth would be low... around 5 per cent," said Rangarajan, who headed the PM's Economic Advisory Council earlier.

Industrial growth stood at 3.9 per cent during April- November, 2008.

Rangarajan said the fiscal stimulus packages given by the government is adequate for the current fiscal and due to the liquidity injection into the system by the RBI, the banking system has enough fund.

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The Prime Minister's Economic Advisory Council Chairman Suresh Tendulkar had also said the current fiscal is likely to end with a minimum GDP growth rate of 7 per cent, down from 7.7 per cent projected earlier by PMEAC.

posted under - economy of india, indian economy trends, indian gdp , Indian economy updates, indian rupee updates
source - www.economictimes.com

Manmohan Singh lures NRI's giving sops for investing in India

At the start of 7th Pravasi Bhartiya Divas (PBD) in Chennai on Thursday, Prime Minister Manmohan Singh announced a slew of policy measures for the benefit of overseas Indians. These included allowing overseas Indian citizenship (OCI) card holders to practise in India, launching a global Indian knowledge network as a virtual think tank, issuing smart card to all overseas Indian workers.

The prime minister said the overseas Indian citizenship scheme announced in 2006, got an overwhelming response. He also announced that OCI card holders — who are qualified professionals such as doctors, dentists, pharmacies, engineers, architects and chartered accountants — can practise unhindered in India. Further details to operationalise the benefits are being worked out.

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Dr Singh also launched a new initiative called “The global Indian knowledge network”. It will connect people of Indian origin from a variety of disciplines to users at the national, state and local levels in India. “My hope is that the network will facilitate transfer of knowledge and serve as a virtual think tank to generate new ideas on issues such as development, education and healthcare,” he said.

He also referred to the contributions of about five million Indian workers in the Gulf countries. “I have seen their contributions when I recently visited Oman and Qatar. I was amazed to see their grit, their determination and how they are contributing magnificently to processes of wealth creation in these countries,” he said.

He said: “We are there concerned at the rise of tensions in the region as a result of the attack in Gaza that has led to the needless loss of lives of many innocent men, women and children. India has strongly condemned these incidents and it is our hope that the international community would get together and help to restore peace in the region as soon as possible. I wish to reiterate our unstinted and unwavering support for the just Palestinian cause.”

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“We have put in place several measures for better protection and welfare of our workers overseas, including entering into inter-government agreements,” he added.

He also said India had launched a comprehensive e-governance project on migration. Under this project, every worker will be issued a ‘a smart card’ that will contain all details of the worker like his work contract, his employer, his insurance and the like.

The data will also be available to the government as well as its missions overseas. The objective is to transform emigration process into a simple, transparent, orderly and humane one.

posted under - Indian economic updates, 7th Pravasi Bhartiya Divas ,Pravasi Bhartiya Divas , PM updates, economy of india updates, indian rupee updates
source - economictimes.com

india's economy growth to be among strongest

India's economic growth would be one of the strongest in the world despite the the global meltdown, RBI Deputy Governor Usha Thorat said on Thursday. "Although the International Monetary Fund(IMF) had scaled down growth forecasts of nations, India's growth would be one of the strongest in the world," Thorat said at an interactive session organised by ICC here.

She said that the although incremental growth rate would be lower, the actual growth this fiscal which India would achieve would be nothing to scoff at.

"India had recorded a growth of three per cent for many years. It is only for the last few years the rate had touched nine per cent," she said.

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deflation in world economy, deflation threat, economy of india, global recession updates, indian economy updates, world economy updates

On foreign exchange volatility, she said that India's exchange rate policy had served well and ruled out going back to the fixed exchange rate regime.

She said that the cost of funds would come down, but it would take some time. "It all depends on the inflationary expectations of the bankers."


published under - Indian economy, economy of india, indian economy updates, Indian rupee updates, economy india

Economy of India to grow slower this year

"Companies across sectors have begun announcing plant shutdowns and delays in project implementation. The negative factors appear to more than offset the possible lagged impact of aggressive monetary easing and lower commodity
prices," Citi said in a report.

It said reduced domestic investment on the back of tighter credit standards and external weaknesses should slow GDP growth to 6.8 per cent in the current fiscal and 5.5 per cent in the next fiscal.

In its report on Financial Markets prospects in 2009, Citi said its forecasts factor in a further 200 basis point reduction in policy rates by the RBI.

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With inflation down to 8.40 per cent, the Reserve Bank is expected to cut policy rates, repo and reverse repo, along with a fiscal stimulus package by the Government, to spur economic growth.

The Indian economy grew by 7.8 per cent in the first half of the fiscal from 9.3 per cent a year ago, and analysts predict further slowdown in the remaining period of this fiscal.

According to official sources, over 65,000 employees have lost jobs during the three-month period ending October in India on account of the economic slowdown.

"A sample survey of 21 companies found that 65,507 jobs were lost in the country in various sectors between August and October," a source said.

Besides, exporters have lost orders worth Rs 1,792 crore on account of the slowdown in global trade and lack of demand from the US and European markets, the main destinations of Indian products.

Citi further said that due the global recession, India's export growth would slow to 5.9 per cent in the next fiscal.

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However, lower oil prices, coupled with new oil and natural gas discoveries, will likely result in an improvement in the trade and current account deficits in that year, it added.

India's exports declined by over 12 per cent to $12.8 billion in October against $14.5 billion a year ago.

As such, the export target for this year is expected to be cut to USD 175 billion this fiscal against the earlier projection of $200 billion.

- source www.economictimes.com

- posted under economy of india, india economy updates, india economy growth, economy of india 2008-09

RS v/s US $ - December updates - India economy

Indian economy trends are very important for those who are into economic analysis in India, 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$ November 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 | Remarks with respect to US $)

31/12/2008 | 48.50 | Up^0.26 | Rupee (INR) grew stronger by 26 paise wrto US $

30/12/2008 | 48.76 | Down(-0.87) | Rupee fell by 87 paise wrto US $

29/12/2008 | 47.89 | Up^1.10 | Rupee (INR) grew stronger by 110 paise wrto US $

17/12/2008 | 47.33 | Up^0.49 | Rupee (INR) grew stronger by 49 paise wrto US $

16/12/2008 | 47.98 | Up^0.58 | Rupee (INR) grew stronger by 58 paise wrto US $

15/12/2008 | 48.52 | Up^0.19 | Rupee (INR) grew stronger by 19 paise wrto US $

12/12/2008 | 48.52 | Up^0.60 | Rupee (INR) grew stronger by 60 paise wrto US $

10/12/2008 | 49.22 | Up^0.47 | Rupee (INR) grew stronger by 47 paise wrto US $

8/12/2008 | 49.69 | Up^0.10 | Rupee (INR) grew stronger by 10 paise wrto US $

6/12/2008 and 7/12/2008 saturday and sunday resp (8/12/2008 rates are wrto 7/12/2008)

5/12/2008 | 49.69 | Up^0.21 | Rupee (INR) grew stronger by 21 paise wrto US $

4/12/2008 | 49.90 | Up^0.62 | Rupee (INR) grew stronger by 62 paise wrto US $

3/12/2008 | 50.52 | Down(-0.43) | Rupee fell by 43 paise wrto US $

India Economy would be hit more in 2009 - thanks to Global crises

The global downturn will pressurise the Indian economy more next year and the government has to speed up reforms and boost investment to sustain high growth rates.

The report jointly prepared by World Economic Forum and Confederation of Indian Industry also said India could see a sharp outflow of capital, and a fall in share and asset prices due to the global financial crises. The report was released ahead of the annual India Economic Summit starting Nov. 16 in New Delhi, where top government officials are expected to interact with heads of global firms.

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"India's dependence on capital flows to finance its current account deficit is a macroeconomic risk and the global crisis could generate a sharp increase in capital outflows and a reduction in the availability of finance,Clearly, the global economic picture will be harsher next year and there will be greater pressures on Indian economy." it said

"It (global crisis) could also weaken the balance sheets of the financial institutions, cause a further fall in share and asset prices, and challenge the macroeconomic situation due to shrinking global growth," WEF said.

Indian policymakers expect a moderation in economic growth to less than 8 percent in the year to March 2009, compared with 9 percent recorded in 2007/08 fiscal year.

Earlier this month, Prime Minister Manmohan Singh cautioned that the global financial crisis could be more severe and prolonged, and the government would take all necessary steps monetary and fiscal to protect growth.

"A tighter environment may also help speed reforms and encourage greater efficiency," WEF said, adding a great deal of political will and dialogue with

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different stakeholders would be required to take reforms forward.

However India economy will be less affected when compared to global economies. The growth of Indian economy would be strong for coming decade that's for sure.

Rupee may return to strength by early to mid 2010

Worried over the sharp depreciation of the rupee? Here's some solace for you. Risk management consultancy major Mecklai Financial has predicted the rupee will begin to rise again by late 2009 and could return to strength by early to mid 2010.

In its latest research report, Mecklai has said that capital flows will take some time to return to 'normal'. However, "we believe that by late 2009, we should see investment flows resume, which should be the trigger for some modest strength in the rupee ...which could return to strength by early to mid 2010."

Even today "the silver lining for India is that the sharp depreciation of the rupee has rendered exports much more competitive. So, too, the dramatic fall in oil will make the trade balance much more manageable," the report says.

Of course, capital flows remain a major negative for the rupee. After having more than quadrupled to $108bn over the previous two years, capital inflows are expected to fall to $31bn in 2008-09. Portfolio flows are forecast to decrease by $10bn, as compared to an increase of $29bn in the previous fiscal, while borrowings are expected to fall from $41bn to $15bn. FDI has been the only bright spot this year, doubling to $10bn for Apr-Aug 2008; despite the crisis, the net figure should easily surpass last year's level of $15bn.

However, with equity prices having fallen 60% this year, as a result of which many, many companies are cheap even compared to their cash assets, and the credit market slowly on its way to normalcy, "we would expect capital flows to begin to show improvement by the second half of 2009," the report says.

The RBI's recent decision to reverse all restrictions it had placed on ECBs, NRI deposits, and FII flows through participatory notes is timely and will boost flows as and when the environment improves. Interestingly, one of the fallouts of this crisis is that "we will have a more liberal external account when the smoke clears."

Of course, the overall balance of payments is expected to be negative in fiscal 2009 and has already resulted in a substantial drawdown of reserves. However, in view of the factors listed above, "we believe fiscal 2010 should see a surplus of around $20bn, which should support a return to a modestly stronger rupee," the report says.