Indian Economy-News & Updates

[wtf]

Inflation < 0% is by definition deflation. Luckily government has a lot of room to cut interest rates and usually an interest rate cut causes inflation (lots of free money in the economy, which causes price of goods to go up and causes inflation).

Deflation is considered bad because price of goods keep falling and hence people refuse to spend any money (buying tomorrow is perceived cheaper than buying today). A good example is the housing sector in many cities in India - prices are falling and hence no one is buying!!

 

[Gabbar]

Budget to grow by Rs 50,000 crore, windfall for education

In a cementing of the government&#8217;s plans to reinvent India, Rs 50,000 crore more has been allocated for education, health, urban infrastructure and other core sectors.

This increase, likely to be announced in Budget 2009-10, is over the Rs 2,85,000 crore plan allocation announced in the interim budget presented in February.

Finance minister Pranab Mukerjee will present the budget in the first week of July.

Plan allocation is the budget portion that provides for new schemes and expenses in government programmes.

President Pratibha Patil, in her address to Parliament on June 4, had laid stress on education, health and urban infrastructure as the focus of the new UPA government.

A meeting of finance ministry and Planning Commission officials on Friday decided that a special allocation of Rs 8,500 crore would be made in the budget for setting up eight new Indian Institutes of Technologies and 16 new central universities announced by the government in 2008.

The total allocation for education is expected to be about Rs 49,500 crore &#8212; a four-fold increase since 2006-07.

In the interim budget, the sector had got Rs 34,000 crore.

The allocation for higher education would go up from last year&#8217;s Rs 11,340 crore to Rs 21,679 crore. The HRD ministry will also get Rs 7,000 crore more for setting up model schools and colleges in educationally backward areas and the expansion of the Sarva Siksha Abhiyan to the upper primary level.

&#8220;The proposed increases could mean a jump in fiscal deficit by 1 per cent,&#8221; said a senior government official. The interim budget had projected a fiscal deficit of 5.5 per cent.

Saumitra Chaudhuri, a Planning Commission member, said the fiscal deficit could be managed if government could generate resources through disinvestments. &#8220;Our revenue generation should improve with the economy showing signs of revival,&#8221; he said.

To give a boost to low-cost housing and modern public transport systems such as the Metro in urban areas, the government is set to increase the budget of the urban development ministry by about 80 per cent. The interim budget had allocated Rs 4,724 crore for the ministry. Allocations are likely to be increased for rural development and power.

Delhi will get Rs 2,000 crore for Commonwealth Games 2010 &#8212; up from the Rs 500 crore promised in the interim budget.

 

[white_pawn]

Rel Infra plans to raise $1bn​

13 Jun 2009, 0118 hrs IST, PTI

NEW DELHI: Anil Ambani group firm Reliance Infratel is looking to raise about Rs 5,000 crore through sale of shares, for which it is in talks with a
number of private equity firms.

Reliance Infratel, a subsidiary of the group's telecom arm RCOM, is looking to dilute 10-15% stake in a private placement of shares with the PE firms, investment banking sources said. The company had last year scrapped plans to raise about Rs 6,000 crore through sale of about 10% stake in an IPO due to adverse market conditions.

The company, which owns telecom towers of its parent RCOM, is looking to raise up to $1 billion dollars through the placement of shares and might finalise on the names of potential investors in the coming days, they added. When contacted, a group spokesperson declined to comment.

The equity sale could value the company at close to $7 billion. In a previous private placement of shares, Reliance Infratel had raised Rs 1,400 crore, wherein it diluted 5% stake to a host of overseas investors.

Recently, shareholders of RCOM and Reliance Infratel have approved a proposal wherein RCOM would transfer its optic fibre business to Reliance Infratel, to create a single telecom infrastructure entity.

The restructuring exercise, the two companies have said, was aimed at cutting down operating costs and identifying actual economic value arising from infrastructure business and telecom services businesses.

Due to adverse market conditions, Reliance Infratel had last year scrapped its plans for an IPO, wherein it had proposed to raise about Rs 6,000 crore by sale of about 10% stake to fund development of passive infrastructure and general corporate purposes.

The IPO was announced in February 2008 and got the go-ahead from Sebi in May last year. However, the Sebi nod lapsed in August since then there has been no official word on revival of the public offer. RCOM shares on Friday fell by about 4% to Rs 333 at the BSE. The shares had rebounded sharply in the past few weeks after hitting a 52-week low of Rs 131.35. The shares were trading at about Rs 550 level about a year ago.

Rel Infra plans to raise $1bn - India Business - Business - The Times of India

 

[white_pawn]

Taj group buys Sea Rock for Rs 680cr​

13 Jun 2009, 0124 hrs IST, Reeba Zachariah, TNN

MUMBAI: For years, two marquees of the Mumbai hospitality scene Sea Rock Hotel and Taj Lands End have stood facing each other in a cozy, sea-facing
corner of the city's Bandra suburb. On Friday, in a Rs 680-crore landmark deal, the Tata-run Taj group took under its wings the former, which has been virtually closed since bombs ripped through it in 1993.

TOI had reported about the impending Taj-Sea Rock deal in its edition dated April 23. The acquisition bolsters Taj's position in the city: it now has a 1,425-room capacity in four properties. Though the hospitality sector isseeing fewer number of tourists checking in, the financial capital of India tops the average room revenue chart at Rs 10,000. Mumbai is the largest contributor to the Taj group's revenues of over Rs 2,700 crore.

Taj plans to demolish the 440-room Sea Rock and redevelop the site into an integrated complex consisting of hotel rooms, a large convention centre and retail outlets housing well-known brands.

Besides the Rs 680 crore for an 85% stake in ELEL, the holding company of Sea Rock, Taj will invest another Rs 500 crore to redo the site. After the redevelopment, Taj will overtake the 547-room Grand Hyatt at Santa Cruz in terms of room capacity in north Mumbai. The Taj Lands End has 480 rooms. IHCL vice chairman R K Krishna Kumar said, "Within days of the Bandra-Worli sea link being to open, we are delighted to announce that we are able to propose a world class convention and hospitality centre that Mumbai so richly deserves.'' IHCL is the holding company of the Taj group.

Taj is funding the acquisition from the rights issue proceeds and internal accruals. The Sea Rock Hotel, spread over six acres of prime seafront, was bought by the Nandas of Claridges Hotel for Rs 330 crore in 2005 from the Luthria brothers, who started it in the late 1970s. Back then, Sea Rock had a tie-up with ITC hotels and was known as Sea Rock Sheraton.

After the blasts, the hotel was never fully functional, partly because of differences among the Luthria brothers. Claridges had initially planned to hand over the management of the hotel to a foreign operator, and had almost decided on Mandarin Oriental.

The Nandas will continue their association with the Sea Rock, with a 25% stake. Krishna Kumar said the Taj group had the option to buy out their stake. This is the second time the Sea Rock was offered to Taj.
Some nine years ago, Taj was not interested in the prime property due to the legal squabbles between the Luthrias. It later picked up the Regent (now the Taj Lands End) from the Lokhandwalas. Referring to the deal, Kumar said, "Opportunities like this come rarely.'' Negotiations for a controlling interest in Sea Rock began after the Taj entered into a technical and management arrangement for the property's restoration and operation early this year.

Taj group buys Sea Rock for Rs 680cr - India Business - Business - The Times of India

 

[white_pawn]

Industrial growth turns positive​

13 Jun 2009, 0108 hrs IST, TNN

NEW DELHI: The worst is over and the economy is rebounding. After months of contraction, industrial production turned positive and grew 1.4% in
April on the back of a pick-up in domestic demand an outcome of stimulus packages and a good harvest.

The positive April figure is a recovery from negative 0.7% growth in February and 0.8% in March. The March data is a revised figure from -2.3% announced earlier. Considering month-to-month growth (seasonally adjusted), industrial production rose 1.8% in April over March compared to a 0.5% decline in March over February.

However, problem areas remain. The government data released on Friday showed crucial sectors such as consumer non-durables, including processed food products and capital goods, posting negative growth. However, the contraction in the capital goods sector decelerated to 1.3% in April from 8.4% in March. This clearly suggested that investments in the industry has started picking up. Citigroup and Goldman Sachs in their reports said that investments are likely to pick up in the coming months.

The 1.4% growth in April is way behind the 6.2% expansion in industrial activity clocked in the same month last year. No wonder, the good news on industrial production failed to buoy stock markets. The benchmark sensex was down 174 points.

But slowdown in industrial growth, as measured by the Index of Industrial The Economic Times (IIP), appears to be bottoming out. Provisional figures showed industrial contraction for almost every month, after Lehman Brothers filed for bankruptcy in mid-September last year, which started the global financial crisis.

The biggest surprise in IIP data was electricity generation which grew by 7.1% in April against 1.4% in the same month a year ago. Manufacturing, which has a weight of around 80% in the IIP, grew by 0.7% from 6.7% in the corresponding period last year. Mining grew by 3.8% in the month against 6.1% in April 2008.

In contrast, consumer non-durable output shrunk by 10.4% in the period against 10% growth in the same month a year ago. As against this, consumer durable expanded by 16.9% as against 3.2% in the same period last year. The Economic Times of capital goods slid 1.3% against growth of 12.4%. Industry had grown by merely 2.6% last fiscal against 8.5% in the previous year.

As many as 11 out of 17 industry groups posted growth. However, food products continued to contract drastically by 34.4% in April, production of another employment-generating sector, leather, decelerated by 12.4%.

Earlier, six core sectors, which together have a weight of around 27% in IIP, grew by 4.3% in April against 2.3% a year ago.

Industrial growth turns positive - India Business - Business - The Times of India

 

[Rajkumar]

Industrial growth turns positive​

13 Jun 2009, 0108 hrs IST, TNN

NEW DELHI: The worst is over and the economy is rebounding. After months of contraction, industrial production turned positive and grew 1.4% in
April on the back of a pick-up in domestic demand an outcome of stimulus packages and a good harvest.

The positive April figure is a recovery from negative 0.7% growth in February and 0.8% in March. The March data is a revised figure from -2.3% announced earlier. Considering month-to-month growth (seasonally adjusted), industrial production rose 1.8% in April over March compared to a 0.5% decline in March over February.

However, problem areas remain. The government data released on Friday showed crucial sectors such as consumer non-durables, including processed food products and capital goods, posting negative growth. However, the contraction in the capital goods sector decelerated to 1.3% in April from 8.4% in March. This clearly suggested that investments in the industry has started picking up. Citigroup and Goldman Sachs in their reports said that investments are likely to pick up in the coming months.

The 1.4% growth in April is way behind the 6.2% expansion in industrial activity clocked in the same month last year. No wonder, the good news on industrial production failed to buoy stock markets. The benchmark sensex was down 174 points.

But slowdown in industrial growth, as measured by the Index of Industrial The Economic Times (IIP), appears to be bottoming out. Provisional figures showed industrial contraction for almost every month, after Lehman Brothers filed for bankruptcy in mid-September last year, which started the global financial crisis.

The biggest surprise in IIP data was electricity generation which grew by 7.1% in April against 1.4% in the same month a year ago. Manufacturing, which has a weight of around 80% in the IIP, grew by 0.7% from 6.7% in the corresponding period last year. Mining grew by 3.8% in the month against 6.1% in April 2008.

In contrast, consumer non-durable output shrunk by 10.4% in the period against 10% growth in the same month a year ago. As against this, consumer durable expanded by 16.9% as against 3.2% in the same period last year. The Economic Times of capital goods slid 1.3% against growth of 12.4%. Industry had grown by merely 2.6% last fiscal against 8.5% in the previous year.

As many as 11 out of 17 industry groups posted growth. However, food products continued to contract drastically by 34.4% in April, production of another employment-generating sector, leather, decelerated by 12.4%.

Earlier, six core sectors, which together have a weight of around 27% in IIP, grew by 4.3% in April against 2.3% a year ago.

Industrial growth turns positive - India Business - Business - The Times of India

 

[Neo]

Cash-strapped Air India defers salary payments ​

Tuesday, June 16, 2009

MUMBAI: Air India, India’s national carrier, will defer salary payments for its 31,000 employees by two weeks due to a cash crunch born of tepid demand and overcapacity, the company said on Monday.

“We are in a low-fare regime. The fuel tax is going up. The number of passengers is not that high. There is excess capacity in the market,” Air India spokesman Jitender Bhargava said in an interview on Monday. “The situation is not peculiar to Air India. It goes across the board in India and globally.”

Bhargava said the carrier, which is entirely owned by the government of India, lost about 40 billion rupees ($800 million) in the fiscal year ended March 31 and would pay 3.5 billion rupees ($70 million) worth of June salaries on July 15 instead of July 1.

He said passenger volumes have remained steady, but the airline has added a net of 20 new planes to its fleet in the last 18 months, cutting into profitability.Civil Aviation Minister Praful Patel told the Press Trust of India on Sunday that a government bailout for Air India was being considered “very actively”.

“I think it will happen because as the owner of the airline, the government has its responsibility to put in equity, like private airlines where their promoters put in money,” he told the news agency.

“Air India is in a state of crisis,” Kapil Kaul, chief executive of South Asia operations for the Center for Asia Pacific Aviation, said in an e-mail. “Delaying salaries, a first for AI, reflects the state of the carrier’s finances. It is continuing to induct new planes while it has no money to pay for the salaries. The state of AI is a national issue and needs urgent attention.”

Domestic air travel in India fell by 15 per cent in April from the same month a year ago, the 11th consecutive monthly decline, according to the center.Shares in Indian carriers Kingfisher Airlines, Spice Jet and Jet Airways rose after national elections last month, on speculation that the ruling Congress party coalition would relax foreign investment rules in the sector. Currently, foreign airlines cannot acquire stakes in domestic carriers, cutting off a potential source of funding for cash-strapped carriers.

“Allowing foreign airlines will help in accessing capital and strategic expertise,” Kaul said. “However, we might not see some immediate deals happening as the global aviation industry is facing grave economic challenges.”

Jet Airways reported a net loss of 9.6 billion rupees ($192.3 million) for the year ending March. Kingfisher Airlines reported a net loss of 4.1 billion rupees ($82 million) for the quarter ending December, according to the latest available data.

Spice Jet reported a net loss of 179.6 million rupees ($3.6 million) for the quarter ending December, according to the latest data available.Airline unions called an emergency meeting on Monday, but don’t currently have any plans to go on strike, said Sanjay Lazar, general secretary of the All-India Cabin Crew Association, which represents 2,214 Air India employees and is affiliated with Shiv Sena, a hard-line Hindu group.

“The employees should not be made to pay for mismanagement,” the Federation of Nacil Employees, a union group that says it represents 10,000 Air India employees, said in a statement on Monday. It vowed to oppose the deferral, but did not specify how.

 

[Jako]

My dad's in air india!!!

 

[PeacefulIndian]

My dad's in air india!!!

Is he a pilot?

 

[Jako]

Is he a pilot?

nope,he is an engineer....i think in avionics department....

 

[Screaming Skull]

India is UK's second largest source of investment in FY'09​

17 Jun 2009,

LONDON: India has become the UK's second largest source of investment in 2008-09 with 108 foreign direct investment projects.

This marks a quantum jump from the sixth position it held in the previous year with 75 projects, Britain's Trade, Investment and Business Minister Lord Davies told newsmen today.

The new investments included that of GTL Communications, Times of India Group's tie up with Virgin Radio, and in the fields of Science, Engineering and Dynamatics, he said.

There were as many as 1,744 investment projects locating and expanding in the UK and as many as 53 countries had invested here "with investment projects from India increasing by 44 per cent in the past year to become the UK's second largest source - 108 FDI projects," he said.

The USA remained the first source of investment - which this year rose by 30 per cent to 621 projects. Other nations providing increased investment into the UK this year were Italy (up 45 per cent), France (up 15 per cent), Canada (up 25 per cent) and The Gulf (up 25 per cent).

The Hindustan Aeronatical Ltd, which already has a tie-up with UK for the manufacture of HAWK, has evinced interest for more collaborations, Lord Davies said. Details are being worked out.

Lord Davies said investments this year created over 35,000 jobs (over 78,000 jobs created or safeguarded). In the past six years, over 215,000 new jobs have been created due to inward investment projects (almost 500,000 jobs created or safeguarded).

Lord Davies, who was in India last week and had a meeting with the new Commerce Minister Anand Sharma, said, "We have historic link with India which is a huge market and there is substantial scope for increase in two-way investment."

He said, "We do expect more and more inward and outward investment from India in the fields of science, engineering and dynamatrics."

Lord Davis said that international trade and investment is vital to the long-term economic health of the UK. Today's results illustrate strong international confidence in the UK economy and the contribution of this investment will be critical to our ability to compete and succeed as a country in the future."

He said, "Investment increased across a range of sectors such as advanced engineering, the creative industries, software computer and other business services - and the financial services."

Investment projects in the UK's high tech manufacturing sector have increased this year by 18 per cent - reinforcing the fact that the UK is the sixth largest manufacturer in the world.

Speaking of the financial services, Lord Davies said: "The City of London remains fundamentally strong and attractive to overseas investors - a leading global hub for financial services and an unrivalled gateway to world markets for international companies looking for a place to grow."

 

[Screaming Skull]

^^ Bet the Brits didn't see this coming way back in the 40s and 50s Talk about 'Neo Colonization'

 

[PeacefulIndian]

^^ Bet the Brits didn't see this coming way back in the 40s and 50s Talk about 'Neo Colonization'

And same goes for British borrowing money from IMF, India donating!!

 

[Joshi]

And same goes for British borrowing money from IMF, India donating!!

And Indian companies buying big British marquees like Tetley Tea, Jaguar, Land Rover, Corus, Arcelor, Aegis, and an Indian as the richest man of UK and buying it's most expensive house.

Anil Ambani was about to buy Newcastle United. And Manchester United approached Tata for shirt sponsorship.
Man Utd sound out Tata on sponsorship

Indian companies should also hang boards outside their offices reading
"Brits and dogs not allowed inside".
As they did in Colonial times with Indians.

 

[spsk]

And Indian companies buying big British marquees like Tetley Tea, Jaguar, Land Rover, Corus, Arcelor, Aegis, and an Indian as the richest man of UK and buying it's most expensive house.

Anil Ambani was about to buy Newcastle United. And Manchester United approached Tata for shirt sponsorship.
Man Utd sound out Tata on sponsorship

Indian companies should also hang boards outside their offices reading
"Brits and dogs not allowed inside".
As they did in Colonial times with Indians.

But our culture does allow us to that We should welcome all people even if they are enemy. Don't think like this