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SC cancels all 2G licences issued by Raja
Updated on Thursday, February 02, 2012, 11:44

New Delhi: In a historic verdict, the Supreme Court on Friday cancelled all 122 2G telecom licences granted during the tenure of former telecom minister A Raja in 2008.

An apex court bench comprising of Justices G S Singhvi and A K Ganguly held that 122 licences for 2G spectrum were granted in ‘arbitrary and unconstitutional manner’.

Companies which stand to lose their licences include Videocon, Swan, Idea, Tata and Loop.

However, affected companies have been given four months to enter into talks with government and renegotiate spectrum cost based on current market rates.

The court directed TRAI to make fresh recommendation on grant of 2G licences, while making it clear that the allocation of spectrum will be done through auction.

And proceeds from the sale will go to the public exchequer so as to recover the loss that occurred due to faulty sale of spectrum.

The bench had earlier issued notices to 11 private telecom companies, which were granted licences despite allegedly being ineligible to secure them or had failed to launch services within stipulated time-frame.

The private telecom companies which were issued notices included Etisalat, Uninor, Loop Telecom, Videocon, S-Tel, Allianz Infra, Idea Cellular, Tata Teleservices, Sistema Shyam Teleservices, Dishnet Wireless, Vodafone-Essar along with TRAI.

No SIT but CVC to keep tab of CBI probe

The court while dismissing the plea for constitution of a Special Investigation Team (SIT), directed the CBI, which is probing the 2G case, to give status report on its investigation to the Central Vigilance Commission (CVC).

The CVC would in turn keep appraising the apex court of the progress in investigations.

Trial court to decide on Chidambaram

SC while refusing to direct the CBI to probe the alleged role of P Chidambaram in the 2G case said that the trial court will decide on probe against the Home Minister. The court of Judge OP Saini is scheduled to reconvene on Feb 4.

Finally some sense prevailed
 
Respect to our Supreme Court.

BTW, does it mean, we will resale these license and obtain money which we weren't able due to scam?
 
Respect to our Supreme Court.

BTW, does it mean, we will resale these license and obtain money which we weren't able due to scam?

maybe, but most probably we will ask for the extra money according to current rates from the companies that purchased these licences. Read the middle...

However, affected companies have been given four months to enter into talks with government and renegotiate spectrum cost based on current market rates.
 
Good verdict by Supreme court. Heard some experts on TV debate today that the 2G spectrum auction at current market price can fetch about $20 bn (540 Mhz @ 179 crores per MHz) and bring fiscal deficit down next year to less than 3.5% GDP.
 
SC order will be conducive for telecom growth: Industry groups
Updated on Thursday, February 02, 2012, 21:05


New Delhi: Cancellation of telecom licences by the Supreme Court will help create conducive environment for foreign investors and facilitate growth of the sector which was hit by uncertainty, industry groups said on Thursday.

At the same time, they have extended support to the government and telecom regulator Trai in working out a mechanism which ensures that telecom subscribers are not inconvenienced by the development.

"With this crucial judgement, the sector will be restarting the process of receiving clarity in terms of policies and next steps...The uncertainty currently prevailing in the sector will be eliminated," industry chamber Ficci said in a statement.

"In the new environment, India is expected to invite and attract large scale domestic and foreign investment afresh. This may take some time but is an improvement over an environment that mirrors uncertainty," it said.

CII also said that the judgement will remove the uncertainty that was affecting the telecom sector over the last year and more.

"This (decision) should now facilitate the acceleration of growth of this sector and we look forward to conducive government policies and actions to encourage the required investments in telecom infrastructure and services," CII said in a statement.

It said the judgement would affect less than five percent of 900 million mobile subscribers in India.

Assocham said the verdict will be in the interest of serious and long-term investors both domestic and foreign.

It is clear that the Supreme Court judgement underlined the need for a pro-reform, competitive and market-based process for allocation of scarce national resources such as spectrum, FICCI said.
 
http://img4.bbs.**********/uploadfiles/images/2012/02/03/0203071628719.JPG


(2012) Brazil, it seems to be overtaking India ?

3 Feb, 2012

- India or Brazil? Listen to what Gerard Lyon, the respected chief economist of Standard Chartered has to say, "I visited Latin America recently. Despite growth concerns in Brazil, it seems to be overtaking India in terms of perception.

- India always over-performs at Davos but underperforms every other week of the year. Countries like Indonesia could replace the 'I' in the BRICS and Brazil could also well take a big lead." Ian Bremmer, president of Eurasia Group said.

- The slugfest now is no longer India versus China, it's India versus Brazil. For global investors, China is now TINA (there is no alternative).

Is India versus Brazil replacing India versus China for global investors? - The Economic Times
 
^^^ Nothing good from China's side either... :rofl:

China factory activity falls for third month - HSBC PMI

BEIJING (Reuters) - China's factory activity shrank for a third successive month in January, a private-sector survey of purchasing managers showed on Wednesday, reinforcing views that Beijing's pro-growth policy stance will stay despite some signs of improving demand.
The HSBC final manufacturing purchasing managers index (PMI) stood at 48.8 in January, a reading signalling contraction albeit at the slowest pace in three months. It confirmed an initial reading taken just before China's Lunar New Year holiday and was a slight improvement on the 48.7 recorded in December.
Turnarounds in sub-indexes measuring new export orders and backlogs of work showed strengthening activity, while new orders overall ticked to a three-month high -- failing by only a narrow margin to get back above the 50 level which demarcates expansion from contraction.
But the areas of concern overshadowed the bright spots, with the overall output index pointing to contraction at a faster rate in January than December -- a trend reflected in quantities of purchases which sank to a near three-year low.
"The final results of January's PMI survey confirmed the still weak growth momentum of manufacturing activities into the New Year," Qu Hongbin, chief China economist at HSBC said in a statement accompanying the index.
"This calls for more aggressive easing measures to support growth, given that inflation is no longer a concern," he added.
Front-loading production ahead of the early Lunar New Year break has led to some suspicion of the immediate durability of the rebound in new orders.
A surprising uptick in hard economic data showing industrial output growth accelerated by 12.8 percent in December 2011 from a year ago and a year-on-year 18.1 percent jump in retail sales are widely attributed to the holiday effect.
Those figures are at odds with deteriorating demand from China's biggest trading partners in the European Union and the United States that helped drag growth in the world's second-biggest economy down to its lowest in 2-1/2 years in the final quarter of 2011.
EXPORT SENSITIVE
The HSBC PMI index, compiled by UK-based data provider Markit, is regarded as being particularly sensitive to the demand trends for China's massive exporting sector as it captures data mainly from the small and medium-sized private sector enterprises that drive it.
The official PMI, from the China Federation of Logistics and Purchasing, gathers data from bigger, state-backed firms.
The consensus view is that things will have gotten worse across the economy in the first three months of 2012, dragged down by a fall in fixed-asset investment growth and a further slowdown in the rate of property investment that are key drivers of expansion in the world's second biggest economy.
HSBC's Qu believes annual Q1 growth could be as low as 8 percent. A Reuters poll of economists forecasts expansion of 8.2 percent in Q1, which is expected to be the low point of a full year's growth that is likely to be China's slowest in a decade.
The pullback in activity has fuelled expectations the government will take more forceful measures to bolster growth and save jobs, beyond the so-called fine-tuning it began to implement in October, in the face of a festering European debt crisis and a sharp slowdown in the domestic property sector.
Beijing reduced the amount of cash that banks have to hold as reserves in November for the first time in three years in a bid to shore up cooling economic activity and maintain a steady supply of credit to companies and consumers.
That 50 basis point cut to 21 percent is forecast by economists to be followed by up to 200 bps more throughout the course of 2012, according to a Reuters poll.
"Once filtering through, the policy easing should secure a soft-landing in 2012," HSBC's Qu said.

China factory activity falls for third month - HSBC PMI - Reuters -

---------- Post added at 09:29 AM ---------- Previous post was at 09:27 AM ----------

On a serious note,

India: Factory output, exports show signs of life

An uptick in India's factory output suggests that the economy may be bouncing back from the year-end doldrums that drove down the benchmark Sensex. And Indian vacationers will be as pleased as the country's economic planners to note that the strong signals have had a salutary effect on the value of the rupee.

According to the HSBC manufacturing purchasing managers' index (PMI), India's manufacturing sector grew at its fastest pace in eight months in January as factory output surged the most on record on increased domestic and foreign demand, India's Economic Times reported.

However, India's exports rose a “dismal” 6.7 percent in December to $25 billion, which together with a 20 percent increase in imports resulted in a trade deficit of $12.8 billion, according to Business Standard.

That said, the manufacturing data is likely to be enough to drive the rupee above 49 to the dollar, according to Reuters.

What's it all mean? In mid-December, Indian economists were worried about a rupee crisis, in which a spiraling currency would have widened the trade gap and made the country's high deficit too expensive to be tenable.

Now, analysts have cut growth forecasts for the Indian economy to around 6.9 percent (from once lofty territory around 9 percent). But with manufacturing making a comeback and inflation gradually moderating, it looks like the worst may be over before it really got started.

India: Factory output, exports show signs of life | GlobalPost
 
India Prepared for Rate Cut on Visible Easing Inflation: Economy

Feb. 3 (Bloomberg) -- Reserve Bank of India Deputy Governor Subir Gokarn said the monetary authority will cut interest rates once it’s confident inflation will keep slowing.

“The stance now is that we have reached the peak and any further action will be toward easing,” Gokarn, 52, said in an interview at his office while discussing the rupee, the government’s budget deficit and bond repurchases. The central bank isn’t concerned about the currency’s record monthly advance in January “because in a sense it’s a correction,” following last year’s 16 percent decline, he said.

Emerging-markets have stepped up efforts to shield growth from the impact of Europe’s debt crisis, with Brazil, Russia and the Philippines cutting rates in recent months. The Indian government can help reduce borrowing costs by narrowing its budget deficit as the pace of price increases slows to 7 percent by March from 9.68 percent a year earlier, according to Gokarn.

Once the central bank has confidence that the “direction will continue, that’s really going to be the trigger,” Gokarn said in the interview yesterday. “The visibility of the decline, I think, is the most important indication.”

Higher government spending on subsidies in the run-up to federal elections in two years threatens to stoke prices and limit the scope for monetary policy easing to support growth in Asia’s third-largest economy. The nation’s budget deficit reached 92.3 percent of the fiscal-year target in the nine months through December, a report showed this week.

“The comments clearly indicate the direction of the monetary policy is towards reducing rates,” said Shubhada Rao, Mumbai-based chief economist at Yes Bank Ltd. “The timing and the quantum of rate cuts will still be dependent on the cut in the budget deficit.”

Asian Stocks Slip

Asian stocks fell as Greece and its creditors struggled to reach an agreement on a debt swap and companies from Mazda Corp. to Nippon Sheet Glass Co. forecast losses. The MSCI Asia Pacific Index declined 0.21 percent as of 12:23 p.m. in Tokyo.

Elsewhere in Asia, a gauge of China’s non-manufacturing industries expanded at a slower pace in January, a report showed today. The non-manufacturing purchasing managers’ index fell to 52.9 from 56 in December, the National Bureau of Statistics and China Federation of Logistics and Purchasing said in a statement in Beijing. A reading above 50 indicates an expansion.

Australia’s services industry expanded in January, snapping three straight months of declines, a report showed today. The performance of services index advanced 2.9 points to 51.9 in January, the highest reading since August, Commonwealth Bank of Australia and the Australian Industry Group said in Sydney today. Fifty is the dividing line between expansion and contraction.

Sri Lanka Raises

The Central Bank of Sri Lanka unexpectedly boosted interest rates today for the first time since 2007 to curb credit growth and ensure inflation stays low. It raised the reverse repurchase rate to 9 percent from 8.5 percent and the repurchase rate to 7.5 percent from 7 percent. All seven economists in a Bloomberg News survey predicted rates would be unchanged.

In Indonesia, growth probably exceeded 6 percent for a fifth quarter, a Bloomberg survey showed ahead of a government report due Feb. 6. Gross domestic product increased 6.45 percent in the fourth quarter from a year earlier, compared with a 6.5 percent pace in the previous three months, according to the median of 17 estimates.

In Europe, a rescue plan for Greece may be completed in coming days, European officials and creditors say. The plan may include a loss of more than 70 percent for bondholders in a voluntary exchange and loans likely to exceed the 130 billion euros ($171 billion) now on the table.

Fastest in BRIC

In the U.S., Federal Reserve Chairman Ben S. Bernanke said the central bank will seek to keep prices rising at a 2 percent rate and rejected suggestions that it would sacrifice its inflation goal to boost employment.

India’s benchmark inflation rate of 7.47 percent is the fastest among the so-called BRIC nations, even as it slowed to a two-year low in December. Consumer prices rose 6.5 percent in Brazil, 6.1 percent in Russia and 4.1 percent in China the same month.

“While we have a medium-term goal of 4 to 4.5 percent for inflation, that’s not a threshold that we have to reach before we consider action,” Gokarn said in his office, adorned by photographs and books, including a biography of Apple Inc. founder Steve Jobs. “It’s the directionality.”

Maruti Suzuki India Ltd., maker of half the cars sold in India, has raised prices of all its models this year, citing higher raw material costs and the decline in the currency.

Indian Bonds Climb

The yield on the 8.79 percent government bonds due November 2021 declined one basis point, or 0.01 percentage point, to 8.12 percent in Mumbai today, according to the central bank’s trading system.

The rupee plunged 16 percent last year, making it the worst performing currency in Asia and prompting the central bank to clamp down on speculation. It rose 0.1 percent to 49.10 against the dollar today after gaining 7.3 percent in January.

The central bank last year tightened rules on trading in the domestic currency-forwards market and said it will reduce the amount of open positions dealers can maintain overnight.

“The measures we have taken always come at a cost,” Gokarn, a former Asia-Pacific chief economist with Standard & Poor’s, said. When markets return to “normality, then of course these measures will be considered and taken back.”

Yesterday the central bank asked lenders to “rigorously evaluate” risks from their clients’ unhedged foreign-exchange positions. Gokarn in the interview said the central bank wants to encourage hedging.

Cash Injection

To control inflation, the Reserve Bank raised borrowing costs by a record 375 basis points in 13 moves from mid-March 2010 before pausing for a second straight meeting in January. Last month, it cut India’s growth forecast to 7 percent in the year through March from the 7.6 percent predicted in October. It kept the inflation estimate at 7 percent.

The central bank lowered the cash reserve ratio to 5.5 percent from 6 percent, reducing the amount of deposits lenders need to set aside as reserves for the first time since 2009 in a move it estimated would add about 320 billion rupees ($6.5 billion) into the banking system.

In an indication of cash shortages, banks borrowed 1.3 trillion rupees on average a day from the monetary authority in January, compared with 1.16 trillion rupees in December, according to data compiled by Bloomberg. Overnight rates surged to 9.45 last week, near a three-year high.

To ease the cash squeeze in the banking system, the Reserve Bank resumed open-market purchases of government notes after 10 months in November and has so far purchased 719 billion rupees of the securities in auctions, official data show.

Indian bonds fell the most in 26 months on Jan. 24 on speculation the central bank will halt buying government bonds after reducing reserve requirements for banks.

“To the extent that pressures remain, we are always open to carrying out” bond repurchases, Gokarn said. “The other form of liquidity infusion is to buy dollars. If circumstances are right, we’ll certainly consider it. When we’ll have those circumstances is difficult to say.”

--With assistance from Arijit Ghosh in Mumbai, Abhay Singh in New Delhi, Karl Lester M. Yap in Manila, Yanping Li in Beijing, Michael Heath in Sydney, Anusha Ondaatjie in Colombo, Novrida Manurung in Jakarta, Jonathan Stearns in Brussels and Joshua Zumbrun in Washington. Editors: Shamim Adam, Sunil Jagtiani

India Prepared for Rate Cut on Visible Easing Inflation: Economy - Businessweek
 
Services sector expands at fastest pace in 6 months
Updated on Friday, February 03, 2012, 11:07

Bangalore: India's services sector grew at its fastest pace in six months during January as new business swelled, extending the previous couple of months' positive trend into the new calendar year, a survey showed.

The HSBC Business Activity Index, compiled by Markit and based on a survey of around 400 firms, bounced to 58.0 in January from 54.2 in December.

That was the third month the index has been above the 50-mark separating growth from contraction.

"Activity in the services sector rebounded in January at the fastest pace since July 2011 led by the financial intermediation and hotels and restaurant sub-sectors, and new business also flowed in at a faster pace," said Leif Eskesen, economist at HSBC.

Improving global market conditions contributed to accelerated demand and led to a rise in the pace of new orders flowing into the services sector, the survey showed.

The new business sub-index surged to 58.2 in January from 55.7 in December.

India's services sector should benefit further from expectations for improving global growth and abundant liquidity from loose central bank policies, which led to a slight uptick in sentiment among investors earlier this year.

January's jump in new orders pushed expectations for the future to their highest level since June 2011.

Despite the sustained struggle in Europe to avoid messy fallout from its debt crisis, the global manufacturing sector expanded at a slightly faster pace in January.

India's factory output recorded its biggest monthly rise last month, resulting in the fastest growth in eight months for the manufacturing sector, a sister survey showed on Wednesday.

However, growth forecasts for the Indian economy in the fiscal year to March have been reduced from 7.6 percent to 7 percent, a Reuters poll in January showed.

While input prices in India's services sector rose at their slowest pace since October last month firms increased their prices charged at a faster rate.

Wholesale inflation, which has remained stubbornly high in India, slowed to a two-year low in December as food price pressures decreased substantially.

India's central bank, the Reserve Bank of India (RBI), which hinted at policy easing last month after nearly two years of successive hikes, has also shifted its focus to reviving growth instead of battling inflation.

The RBI left interest rates on hold at its last meeting but cut the cash reserve ratio (CRR) by 50 basis points.

The cut in the CRR, which is the share of deposits that banks are mandated to hold as cash with the central bank, resulted in the release of 320 billion rupees into the banking system.

---------- Post added at 11:35 PM ---------- Previous post was at 11:35 PM ----------

http://zeenews.**********/business/...xpands-at-fastest-pace-in-6-months_38246.html
 
RBI: Forex Trading Curbs Temporary

MUMBAI – The Reserve Bank of India could reverse its recent curbs on currency trading once markets stabilize as they run counter to its capital account management strategy, a top official said Friday, indicating that the central bank is now more comfortable with the rupee's trading range.

There will be a situation when the restrictions will no longer be necessary and "we will take the situation back to where it was," RBI Deputy Governor Subir Gokarn told reporters after a conference, without disclosing any specific timeline for reversing the measures.

In December, the RBI placed limits on unhedged foreign currency positions that banks can hold overnight and also banned companies from cancelling and rebooking forward contracts with the same underlying exposure as part of measures to prop up the local currency.

"The whole purpose of our capital management strategy is to bring as much liquidity into the market as possible, as many legitimate participants as possible, and when we impose curbs, we are actually restricting the space," Mr. Gokarn said.

The RBI imposed the curbs after the rupee slumped to a record low of 54.2925 to a U.S. dollar on Dec. 15. The local unit, which dropped 16% versus the greenback in 2011, has jumped more than 11% from its record low and is up about 9% in 2012 thanks to the RBI's curbs and direct intervention, as well as improving global risk appetite and India's measures to boost capital inflows.

Friday afternoon, the dollar was at 48.88 rupees.

Partha Mukherjee, president of treasury and international banking at Axis Bank, said that even though the central bank might not reverse the curbs immediately, Mr. Gokarn's comments are positive for the markets as they indicate that the RBI is increasingly at ease with the rupee's level.

Separately, Mr. Gokarn told the CNBC-TV18 television channel that, unlike in 2008, the RBI doesn't currently have room for aggressive rate cuts as commodity prices remain high.

Slowing economic growth and easing inflation have fuelled hopes that monetary easing is imminent. The RBI raised rates 13 times over the past two years, but left them unchanged at its last two rate-setting meetings.

Mr. Gokarn also said the liquidity deficit in the banking system remains above the central bank's comfort zone of 600 billion rupees, and that the RBI would continue to consider open market operations such as bond buybacks to ease the cash crunch.

RBI: Forex Trading Curbs Temporary - WSJ.com
 
Rupee at new 3-month high on inflows, shares - Reuters -

The rupee climbed to a three-month high on Friday, propelled by dollar inflows and gains in the local share market.
* At 3:02 p.m. (0932 GMT), the rupee was at 48.73/74 to the dollar, close to the day's high of 48.72, a level not seen since October 31. It at 49.15/16 on Thursday.
* Traders said U.S. jobs data at 1330 GMT would be crucial in deciding the direction of the rupee next week as the data is expected to offer clues on global growth and appetite for risk.
* The U.S. economy is expected to have generated 150,000 jobs in January, keeping the unemployment rate steady at 8.5%.
* The BSE Sensex was up 1% in afternoon trading.
* Foreign funds have bought Indian shares worth USD 2.6 billion so far this year, while investing USD 3.2 billion in debt, data from the Securities and Exchange Board of India shows.
 
goody, i sent quite a bit of funds back home when rupee was low.
personally glad to see Rs. getting stronger now:yahoo:
 
India Inc for no change in tax rates in 2012-13 Budget



New Delhi: Reeling under the impact of global slowdown and a high interest rate regime, India Inc on Friday demanded that tax rates be retained at existing levels even as Finance Minister Pranab Mukherjee expressed concerns about challenges facing the economy.

In their customary pre-Budget meeting with Mukherjee, industry leaders also demanded that healthcare services be kept outside service tax ambit, and privatise coal mines.

"There are various challenges before us, including keeping inflation and fiscal and revenue deficit to manageable levels... which we all have to address collectively," Mukherjee said in his address to the industry leaders.

At the meeting, business leaders suggested that service tax base may be widened with a negative list, besides exempting infrastructure companies and SEZ units from MAT.

"We have made a case for retaining tax rates at the present level. There should be no increase in corporate tax, service tax and excise," Ficci President R V Kanoria said in the Budget expectation.

Mukherjee is likely to unveil the Budget proposals for 2012-13 mid-March in Lok Sabha.

He also made a case for privatisation of coal mines, stimulating demand through fiscal measures and revisiting the concept of dividend distribution tax (DDT).

CII National Committee on Healthcare Chairman Naresh Trehan sought infrastructure status for the healthcare sector as that would encourage companies in setting up hospitals in smallers cities and towns.

Besides finance and commerce ministry officials, the meeting was attended by ITC Ltd Chairman Y C Deveshwar, HUL MD and CEO Nitin Paranjpe, Suzlon Energy Founder Tulsi Tanti and representatives of industry chambers.
 
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