Indian Economy: News and Discussion

Discussion in 'Economy & Infrastructure' started by sagar, Feb 17, 2009.

  1. sagar

    sagar Regular Member

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    Sanjay Verma, Executive Managing Director- South Asia, Cushman & Wakefield believes that given the current financial and economic scenario globally, its difficult to assess how much further downside is there from a global perspective and how much time will the recovery take.
    He says that a lot depends on the commitment demonstrated by the new government, post elections in April-May 2009, towards reforms, liberalization and infrastructure spending, in an interview to Praveen K Singh.

    Excerpts:


    •How do you assess the current market scenario when the global meltdown erodes the market capitalisation of Indian real estate companies?

    The severe beating that real estate stocks have taken in the public equity markets could be attributed to three main reasons. Firstly, the global financial crisis led by the sub-prime issue caused major international investors to cut exposure to the real estate sector globally. Secondly, due to the severe economic downturn, demand has slowed down and hence profitability and in turn, stock values have taken a hit. Last but not the least, many of these listed real estate companies are overly leveraged and their ability to service that debt is under question. This has further eroded their stock value as it creates a question on the survival of these companies. Given the current sentiment, the prospects are expected to continue to be bleak for some time to come as there has been a structural negative change in the perception.


    What sense you are getting from international investors about the current scenario in India?

    International investors have made strong commitments to India in the last three years. However, in wake of the current global financial melt down with real estate values taking significant beating in western world, general sentiment in the international investment community is that they should focus on their core markets such as US and Europe where they are getting deals that offer much higher returns than ever before. Hence, on a risk adjusted basis, their return expectations from emerging markets like India have gone up (say from 20-25 per cent to 30-35 per cent.)


    •Is it the right time to scale up investment activities in India, as valuations are expected to be down to more realistic levels?

    The market is currently in a flux with clear slowdown in demand. While the values have dipped to some extent, investors will have to be very selective in choosing their investment targets. Investors with a long term focus will tend to benefit more that those with shorter horizons as the fundamentals are strong but short term uncertainties create challenges for investors.


    •When do you think situation will improve?

    Given the current financial and economic scenario globally, its difficult to assess how much further downside is there from a global perspective and how much time will the recovery take. Yet, on basis on economic growth potential, India is expected to fare much better that most other economies. There are number of factors which make India a unique and attractive case for investment.

    Some of those include the demographic advantage (young middle class), very low mortgage to GDP ratio, significant demand for infrastructure and room for policy level intervention to stimulate demand. A lot depends on the commitment demonstrated by the new government, post elections in April-May 2009, towards reforms, liberalization and infrastructure spending. If all goes well, we expect 2010 to see at least the beginning of the recovery process.

    ‘We expect 2010 to see at least the beginning of the recovery process’
     
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  3. sagar

    sagar Regular Member

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    Bangalore : Infosys Technologies has set up Infosys Science Foundation, a not-for-profit trust to promote research in sciences and honour
    outstanding contributions and achievements by Indians.

    The foundation will be funded by a corpus of Rs 21.5 crore and give out annual awards under different categories. The prize money under each will be Rs 50 lakh, one of the highest in the country for research.

    Speaking at a media conference here on Tuesday, N R Narayana Murthy, chief mentor of Infosys, said: "India needs bright minds across all areas of academics, government, business and society to strive for global excellence. We need to encourage research in the country to address our developmental problems. This award will honour outstanding researchers who will make a difference to our future.''

    The jury panel for each area will consist of eminent international personalities and will be selected by the trustees of the foundation.

    Infosys had earlier instituted a global award for computing excellence with a cash prize of $ 150,000. The annual award, instituted through the Association for Computing Machinery (ACM), comes out of a corpus of $4 million given by Infosys.

    Awards in five categories:

    l Physical sciences (physics and chemistry)

    l Mathematical sciences (mathematics and statistics)

    l Engineering sciences (all branches of engineering)

    l Life sciences (biology and medicine)

    l Social sciences and economics (economics, history, sociology, political science and other social sciences)


    Infy to promote science research-Bangalore-Cities-The Times of India
     
  4. nitesh

    nitesh Mob Control Manager Stars and Ambassadors

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    Why India's Economy Will Keep Growing | Newsweek Enterprise - Global Business | Newsweek.com

    Isolated from world trends, India's aspiring middle will help it grow through the credit storm.

    Though it may not look it on the ground at times, India is one of the few bright spots in a global economy with decidedly dim prospects in 2009. It is forecast to grow at 5 to 6 percent this year—which is more than it averaged in the 1990s. Yes, its stock market has crashed, unemployment is spiking, swaths of the real-estate market have more than a passing resemblance to Miami Beach and it now turns out that Satyam Computer Services—one of the country's top five IT companies—has been cooking its books. But a one-off incident of fraud in the flagship IT sector won't knock the country off the rails. India boasts an unlikely growth driver all its own: legions of poor whose incomes have risen just enough in recent years to create powerful demands for basic goods and services.

    The rise of India's aspiring middle—a group that lives above the poverty line but hasn't yet attained true membership in modern consumer society—is hardly a new story. But what's surprising is the resilience of this cohort, and the extent to which it has counterbalanced the global credit crisis and the slump in the global export economy of which India is a key player. In part, this is a consequence of New Delhi's past failures; policymakers were never able to make India the export powerhouse that China has become over the past three decades, so now they don't rely nearly as heavily on growth driven by demand from foreign markets.

    The idea that Indian backwardness is a plus may sound absurd. But it is always easier to grow from a poor base, so the fact that India is not yet a major economy is an advantage in a downturn. Such a large population subsisting at so low an economic base is a powerful economic driver if it can be mobilized—and for India this group is proving resilient to the prevailing headwinds in the global economy. "It's kind of a self-sustaining process," says Subir Gokarn, chief economist at Crisil, the Indian arm of Standard & Poor's. "There's a huge underpenetration of most commodities and services, and you have enough people at the bottom experiencing enough of an increase in income to sustain growth."
    Quantcast

    So even as middle-class consumption wanes in India—signified by a sharp drop in auto sales, airline travel and fine-restaurant dining since mid-2008—demand for basic goods and services remains strong thanks to aspiring consumers, many still tied to the farms, who spend their rupees on essentials like soap, medicine and the shoes and clothing that they wear to work. As Gokarn puts it: "If you go back to the economic textbooks, they will tell you that the poorer you are, the stronger your propensity to consume."

    The contrast with China, Asia's other economic giant, is stark. Domestic demand makes up three quarters of the Indian economy, compared with less than half for China, which is "why, relative to East Asian economies, India is somewhat insulated from the global trade slowdown," says Shankar Acharya, a former chief economic adviser to the government. Another Indian mainstay—agricultural growth—should remain steady this year, and the services sector, which now accounts for about 55 percent of India's GDP, is expected to be "more resilient" than manufacturing, says Acharya. And despite the financial crisis, the nation's IT sector managed to grow some 20 percent in 2008, according to India's National Association of Software and Services Companies, and IT firms have already extended 100,000 job offers for 2009. "China has been highly focused on the export market, while Indian businesses have been highly focused on the domestic market, and their exports have been incidental," says Saumitra Chaudhuri, chief economist at ICRA, an Indian creditratings agency affiliated with Moody's. That makes India, more than China, a master of its own destiny.

    The biggest risk to India in 2009 at this point may not be the global economy but domestic politics. Prime Minister Manmohan Singh's United Progressive Alliance will see its term expire in May, and India's election rules mean that he can no longer enact any significant policies—a measure adopted to prevent incumbents from stacking the deck with populist sops. That means as much as five months of paralysis, precisely when speedy, creative action is the order of the day. Moreover, though the nemesis of Singh's Congress party—the Bharatiya Janata Party—mostly favors similar policies, a change in government would likely result in some further slowing of infrastructure projects that are already running behind schedule. And elections in India can be tricky. In the last one, the BJP-led National Democratic Alliance lost despite rapid economic growth, because poor voters rejected the BJP's campaign claims of an "India Shining."

    With the light bulb flickering, Singh's Congress may face an even bigger challenge winning them over. The poor don't care how much faster than other nations India is growing, only whether their lives are better than they were five years ago.
     
  5. A.V.

    A.V. New Member

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    Capitalism is reinventing itself

    As the recession deepens, people across the ideological spectrum declare that capitalism has failed. Almost every economic news report carries words
    like 'crisis' and 'disaster'. Yet, recessions are not aberrations of capitalism but an intrinsic part of it.

    Markets create boom and bust cycles, arising from human tendencies to swing from euphoria to fear and back. A bust is an occasion for cleaning out deadwood and failed experiments, and re-inventing capitalism.

    In my youth, the Communist Party politburo would meet after every recession and declare "capitalism is now in its final death throes." In fact, capitalism re-invented itself and grew constantly stronger, while the recession-free communist system collapsed.

    Two decades ago, economist Jerry Muller chronicled never-ending predictions of the demise of capitalism, by its friends as well as foes. In the 1850s, Karl Marx claimed capitalism was dying. Rosa Luxemburg wrote in The Accumulation of Private Capital (1913), "Though imperialism is the historical method prolonging the career of capitalism, it is also a sure means of bringing it to a swift conclusion." Lenin harboured similar illusions: his 1916 book was titled Imperialism: the Last Stage of Capitalism.

    The Great Depression of the 1930s provoked further predictions of capitalism's demise. Ferdinand Fried, of the German radical right, made waves with his 1930 book The End of Capitalism. In the US, Howard Scott's technocracy movement predicted the replacement of market prices by central planning. British sociologist Karl Mannheim asserted in Man and Society in An Age of Reconstruction (1940) that democracy could survive only by delinking from capitalism.

    World War II came and went, but obituaries of capitalism continued. Historian AJP Taylor declared on BBC in 1945 that "Nobody believes in the American way of life, that is, private enterprise. Or rather, those who believe in it are a defeated party, and a party which seems to have no more future than the Jacobites in England after 1688."

    Economist Joseph Schumpeter, a great protagonist of entrepreneurship, nevertheless suggested in Capitalism, Socialism and Democracy that capitalism could die through self-inflicted wounds. Nikita Krushchev was certain history was on his side: "We will crush you".

    All capitalist nations became welfare states after World War II, devoting unprecedented sums to the sick, aged and poor. This was interpreted by some as meaning that capitalism was fading away. The stagnation of capitalist economies in the 1970s fuelled new hopes in the European Left, and Francois Mitterand came to power in France on a platform of breaking with capitalism. He nationalised major French industries, raised taxes, shortened working hours and lengthened holidays. He would not, he said, take the Thatcher-Reagan path to disaster. But soon France was in even deeper recession than the US or Britain. A disillusioned Mitterand later re-privatised nationalised companies.

    Why have so many intelligent, learned people been constantly wrong about capitalism? First, the word capitalism has been used by some people to mean a system with no role for governments at all, whereas modern capitalism is very much a government-business joint venture. Second, critics have constantly underestimated capitalism's ability to re-engineer itself and evolve into new forms that get rid of some of the old defects.

    The current bust certainly calls for some re-engineering of markets. Yet, economists and politicians have been quicker to condemn existing flaws than propose comprehensive reforms that will nip financial crises in the bud. Ever since the Asian financial crisis, we have heard much talk about a new financial architecture, yet in practice that has not gone much beyond suggesting higher IMF quotas for developing countries, which is desirable but of marginal importance.

    We hear talk of doubling or tripling the lending power of the IMF. That will enable the IMF to rescue some developing countries or East Europeans, but not to end the housing and credit busts in the US and EU.

    Everybody agrees that financial markets need more regulation. We will doubtless see more controls on financial derivatives and stricter lending norms. Yet, recessions and financial crises occured in earlier decades when lending controls were much stricter, and financial derivatives did not exist.

    After having demanded for decades a greater say in the global financial system, developing countries now have a chance to actually press for reforms. They now have unprecedented clout: Asian forex reserves greatly exceed those of the IMF. The world is looking seriously for new ideas, and wants to hear from Asia. Yet, developing countries — including India — have little to suggest except larger quotas for themselves in the IMF, and bigger IMF lending. So sad. If you have nothing to say, why demand a greater say? Montek Singh Ahluwalia, here's your big chance.
     
  6. A.V.

    A.V. New Member

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    No slowdown, pay to rise 8.2 per cent in India

    New Delhi: After all the news of corporate frauds, economic slowdown and recession, finally there is some good news for Indian employees.


    Salaries would continue to rise and lay-offs are not on employer's mind says the latest survey by Hewitt, an HR consultancy firm.


    Salaries are projected to rise at an average of 8.2 per cent in 2009, down though from 13.3 per cent at which they grew in 2008 according to the Hewitt survey.


    India could be the safest bet for employment as only 16 per cent Indian companies are considering lay-offs as an option against 55 per cent companies in the United States of America and 30.6 per cent Chinese companies.


    In more good news, 60 per cent companies are still considering hiring new employees and nine out of 10 companies are still giving promotions to deserving candidates.


    So how are these companies going to cope with the current economic slowdown?


    "I think organisations are going to be far more strategic in the way they provide salary increases across levels of management and definitely more stringent in the way they evaluate performance to increase salaries," says Sandeep Chaudhary, Business Leader at Hewitt.


    Junior managerial employees can expect a maximum salary growth with a projected increase of 8.8 per cent against 14.3 per cent which they achieved in 2008.


    Top management can expect a relatively slower growth at 7.4 per cent against 12.4 per cent growth registered in 2008.


    Sector wise, pharma is expected to see maximum salary growth with an average projected increase of 13 per cent followed by telecom services at a distant second with 11.3 per cent and FMCG coming third with 11 per cent.


    http://ibnlive.in.com/news/slowdown-not-affecting-india-pay-to-rise-82-pc-survey/85851-3.html
     
  7. A.V.

    A.V. New Member

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    India may sign free trade agreement with Asean.

    NEW DELHI: India on Friday said it is likely to sign the free trade agreement with Asean during the summit to be held in April.


    Asked when the pact will be signed, commerce and industry minister Kamal Nath said, "Maybe at the Asean Summit in April."

    He also said there are certain issues that need to be settled before the trade pact with the ten-nation economic bloc could be inked.

    Asked whether India will be signing the Asean FTA in February, a senior official had said, "We do not know at this point of time ... if things get solved in the next couple of days, we might sign it."

    If the agreement, seeking to make 95 per cent goods to be traded between India and Asean duty-free, were to be signed later this month, the first phase of reduction would start in June, to be followed by another one in January 2010. It would mean India would cut duties twice in six months.

    "We have said we can take up one cut annually, and not two in six months," the official had said.

    Currently, trade between India and Asean is close to 40 billion dollars and the target is to touch 50 billion dollars by 2010.

    India may sign free trade agreement with Asean in April-India-The Times of India
     
  8. nitesh

    nitesh Mob Control Manager Stars and Ambassadors

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    Delhi Metro gets UN certificate for preventing carbon emission

    http://www.hindu.com/thehindu/holnus/004200902221155.htm

    Delhi Metro gets UN certificate for preventing carbon emission

    New Delhi (PTI): Adding yet another feather to its cap, Delhi Metro has become the first rail network in the world to get a UN certificate for preventing over 90,000 tonnes of carbon dioxide from being released into the atmosphere, doing its bit to fight against global warming.

    The certification report, given by Germany-based validation organisation TUV NORD which conducted an audit on behalf of the UN Framework Convention on Climate Change Change (UNFCCC), found that the DMRC stopped the emission of 90,004 tonnes of carbon dioxide from 2004 to 2007 by adopting regenerative braking systems in the metro trains.

    "The UN certificate was given to the DMRC for preventing over 90,000 tonnes of carbon dioxide from being released into the atmosphere by deucing its power requirement, thus contributing to the fight against global warming," Delhi Metro spokesperson Anuj Dayal said onSunday.

    Under regenerative braking process for which DMRC earned carbon credits, whenever trains on the Metro network apply brakes, three phase-traction motors installed on them act as generators to produce electrical energy which goes back into the Over head Electricity (OHE) lines.

    The regenerated energy that is supplied back to the OHE is used by other accelerating trains in the same service line, thus saving overall energy in the system as about 30 per cent of electricity requirement is reduced.

    The DMRC saved 1,12,500 megawatt hours of power generation by restricting and reusing power on its trains through regenerative braking, thus saving the emission of 90,0004 tonnes of CO2 into the atmosphere from 2004 to 2007.

    It is estimated than in 2008, 39,000 tonnes of carbon dioxide were prevented from being emitted and this figure will increase to over 100,000 tonnes per year once phase-II of the Metro is fully operational.

    The DMRC can also claim 400,000 carbon credits for a 10-year crediting period beginning December 2007 when the project was registered by the UNFCCC.

    The money available from the sale of carbon credits will be used to offset the additional investment and operational costs incurred due to the implementation of the project activity, to stimulate research and development activities by DMRC to develop technology to reduce emission of green house gases and to give extensive training to train operators for optimum regeneration.

    Delhi Metro is the first railway project in the world to be registered for carbon credits by the United Nations. It is also the first rail network to have a museum on an existing station. The Delhi Metro Museum at the Patel Chowk station was inaugurated on January 1, 2009.
     
  9. A.V.

    A.V. New Member

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    cheers to the delhi metro.:D
     
  10. A.V.

    A.V. New Member

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    Indian Economy

    India is sitting on unutilised foreign assistance of whopping Rs 78,000 crore and paying commitment charges to the World Bank and Asian Development Bank for not using the sanctioned amount.
    "Since the external assistance is precious and commitment charges are being paid by the government, initiatives need to be taken to address the issues being faced by...Sectors for not utilising available funds," the Comptroller and Auditor General (CAG) said in its report, which was tabled in Parliament recently.

    "As on March 31, 2008, unutilised committed external assistance was of the order of Rs 78,037 crore", the report said, adding the government during 2007-08 paid a commitment charge of Rs 124.54 crore for un-drawn assistance, mainly to the World Bank and Asian Development Bank.

    The commitment charges, which are paid on the amount of principal rescheduled for drawal on later dates, points to "continued inadequate planning resulting in avoidable expenditure", the report added.

    Inadequate utilisation of foreign assistance assumes significance in view of declining foreign exchange reserves, which slipped by over USD 60 billion during the current year and efforts are being made by the government at the cost of fiscal prudence to boost the economy reeling under the impact of global financial meltdown.


    India sitting on unutilised foreign aid of Rs 78,000 crore - Hindustan Times
     
    Last edited by a moderator: Mar 22, 2011
  11. thakur_ritesh

    thakur_ritesh Administrator Administrator

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    i think the govt needs to get its priorities right. they just cant be sitting on such huge reserves of aid/loans at a time when the country is staring at the prospects of a bigger slowdown in 2009-10 fiscal. the economy has to be infused with huge cash and i am sure 78,000crores is no less money that we sit on it with out putting the same amount of money in the market. this if put to use will go to quite an extent in increasing the consumption appetite of indian economy, or are they waiting for the elections to be announced and then do the needful, and then they cant do much as code of conduct would be in force.

    time for the government to wake up, if this money is there in the market then i am sure india could have a very good first quarter for the next fiscal, at least better than what has been repeatedly projected, and who knows we could extend the very symbolic greater gdp growth rate figs than the chinese for the most part of this year.

    its a luxury we can ill afford, why cant our mantris and babus ever understand the significance of time and timing or were they taught its never a bad time to start any thing and that time is eternal, both in the same breath.
     
  12. LETHALFORCE

    LETHALFORCE Moderator Moderator

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    better to sit in cash during this worldwide economic downturn then make a poor decision,opportunities will present themselves just need to be patient and in cash exactly the right thing done by the government.
     
  13. nitesh

    nitesh Mob Control Manager Stars and Ambassadors

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    BHEL outbids Chinese companies to bag Rs3,150-crore mega project
    23 February 2009

    State-run power equipment maker Bharat Heavy Electricals (BHEL) once again outbid Chinese companies in an international competitive bidding to secure contracts worth Rs3,150 crore in Madhya Pradesh

    BHEL has won an order for the main plant package at the upcoming Malwa Thermal Power Project (TPP) in Madhya Pradesh, involving two new-rating units of 600 MW each.

    The order for the greenfield power project has been placed by Madhya Pradesh Power Generating Company Limited (MPPGCL).

    This is the first order secured by BHEL for the new-rating units of 600 MW in Madhya Pradesh and the project will significantly augment the existing generating capacity in the state.

    BHEL's scope of work in the contract includes design, engineering, manufacture, supply, erection and commissioning of steam turbines, generators, boilers and associated auxiliaries, including transformers, busducts and state-of-the-art controls and instrumentation, in addition to civil works for the main power block.

    While the first set is scheduled to go on stream in a tight schedule of 39 months, the second set will be commissioned in 43 months from the zero date of contract, the company said in a release.

    BHEL has the technology for the manufacture of thermal sets up to 1,000 MW rating suited to Indian conditions using Indian as well as imported coal. The company has also introduced new rating thermal sets of 270 MW, 525 MW and 600 MW to meet customer demand.

    It has already won orders for 85 units of 500-600 MW rating sets so far.


    BHEL has built manufacturing capacity of up to 10,000 MW for meeting the power forecast for the 11th Plan and beyond. The company will enhance capacity further to 15,000 MW per annum by December 2009 and to 20,000 MW by December 2011.

    Manpower is also being ramped up. Besides, the company has taken steps like shift in operational focus from product to project and implementation of effective project management systems.

    http://www.domainb.com/companies/co...y_Electricals/20090223_chinese_companies.html
     
  14. Singh

    Singh Phat Cat Administrator

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    Defying global trends ONGC sees 3.5 pc rise

    New Delhi (PTI): State-run Oil and Natural Gas Corporation (ONGC) has defied global trends of alarming decline in crude oil production from the ageing fields in non-OPEC countries during the current decade and has seen a 3.5 per cent rise in output, CMD R S Sharma has said.

    Sharma said globally oil production from mature fields has been declining as has been brought out by a Washington-based international energy research agency PFC Energy in its report.

    PFC Energy in its report has analysed declining oil production trend in non-OPEC (Organisation of Petroleum Exporting Countries)countries. It says non-OPEC fields were declining at an average rate of 9.4 per cent a year. "The decline rate has been increasing steadily in the past five years, evidence of the industry's inability to arrest decline in mature fields," it said.

    ONGC defied the trend and has been successful in arresting the decline. 15 major fields, which are producing with an average field life span of 25-30 years, and account for 77 per cent of total ONGC's production, registered an 1.6 per cent increase in 2007-08 over what they were producing in 2000-01.

    The 15 fields produced 19.99 million tonnes of crude oil in 2007-08 as against 19.56 million tonnes in 1999-2000.

    The cumulative production of ONGC at 25.94 million tonnes during 2007-08 was 3.5 per cent more than production of 25.04 million tonnes in 2000-01, he said.

    The PFC analysis concludes: "The inability to arrest decline rates over the last few years demonstrates that higher oil prices, whatever the positive economic impact on new projects or to the attractiveness of reworking older projects, were able to reverse or even arrest growing decline rates around the world.

    In fact, decline rates seem to be uncorrelated with oil prices or technology at least on an aggregate level." Sharma said the correlation between oil prices, investment and technology, however, did not extend to ONGC. "Even in the high oil price regime, ONGC's crude oil price realisation was much less due to subsidy sharing."

    "However, with internal accruals it could mobilise more than Rs 20,000 crore exclusively towards improved oil recovery (IOR) and enhanced oil recovery (EOR) schemes to maintain reservoir health and to arrest the natural decline," he said.

    Systematically, ONGC has been investing in intensive field development, technology, production systems and renewal and revamping of old infrastructure to sustain production levels.

    "Without this, ONGC too would have followed the global trend of oil production declining at an accelerating pace year-on-year, as brought out by PFC Energy and other agencies in their analysis," he added.

    http://www.hindu.com/thehindu/holnus/006200902231732.htm
     
  15. pyromaniac

    pyromaniac Founding Member

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    India’s deficit disorder a major concern?

    The parliament has passed the finance bill, but the condition of the fiscal deficit gives nightmares.
    S&P downgraded India's ratings to negative on Tuesday, all because of a runaway fiscal deficit.
    And now, the same concerns have been flagged off by none other than C Rangarajan, who till some time back was virtually the chief economic advisor to Manmohan Singh.

    After the huge tax cuts announced by Pranab Mukherjee only on Tuesday, other members of the parliament have done some plain speaking. One such voice is that of C Rangarajan, raising a red flag on the position of the fiscal deficit.
    “In a situation that we are placed today, a high level of fiscal deficit may be justified. But this is not a sustainable level of fiscal deficit. This is not a kind of fiscal deficit which we can allow to continue over the years. Therefore, I would urge that early action be taken by the government, as soon as the economy appears to recover,'' he said.

    One of the biggest indicators is the government's interest payments.

    In FY07-FY08, the government spent 31 per cent of its net revenue receipts in interest payments. In FY09-FY10, it is likely to spend 37 per cent of its net revenues as interest payments.

    '' When fiscal deficit is rising and government borrowing keeps increasing, it will also put pressure on interest rates,'' Rangarajan said.

    India suffered the first fallout of bad deficit numbers on Tuesday, when S&P downgraded the country's ratings. Meanwhile, in the coming days, one has to watch out what will be the other implications of a rising deficit.


    http://profit.ndtv.com/2009/02/25232054/Indias-deficit-disorder-a-maj.html
     
  16. LETHALFORCE

    LETHALFORCE Moderator Moderator

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    SP ratings don't mean anything because no one has money to invest it is more of a political pressure move Obama is testing indian reaction and his brilliant idea of elimiating tax credit to outsourced jobs will only increase cost of IT for corporations during the worst economic time since the depression.
     
  17. pyromaniac

    pyromaniac Founding Member

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    BAE Systems May Set Up Export Base in India

    BAE Systems, the world's third-largest defence company in terms of revenue, wants to set up shop in India, instead of opting for the conventional route of selling military equipment from the US or UK or produce defence systems along with a local partner for the armed forces. It seeks to develop technology to meet Indian needs and create an export base for India as its long-term goal. Also, this company will be run and managed by Indians.

    However, with the 26-per cent cap on FDI, there is no incentive for a global company to bring its best technology and expertise to India, BAE Systems India President, Julian Scopes, told Business Standard.

    The government had turned down BAE's bid to own 49 per cent shareholding in a joint venture with Mahindra Defence Systems. Last month, BAE and Mahindra entered in a JV where BAE now has a 26 per-cent stake. Scopes said the company is satisfied with its current shareholding, but would continue to argue the case that the present FDI cap is bad for India.

    "We are talking to all the relevant government departments regarding this," said Scopes.

    For now, BAE has to operationalise the JV with Mahindra. It is also bidding to provide towed 155-mm howitzers and to develop a tactical communication system for the Army.

    Also, India has an additional need for 57 Advanced Jet Trainers (Hawk). Under an earlier collaboration with Hindustan Aeronautics (HAL), BAE has delivered 23 jets and 42 jets would be produced by HAL under licence. However, Scopes said there have been a few glitches, such as time delays, in operationalising this project.

    Citing the example of the company's set-up in the US, where due to a "Special Security Agreement" with the US government, BAE's top-level management in the US is staffed by Americans, US national security interests are supreme for the company and top-level managers from other countries are not privy to classified information.

    BAE has a similar arrangement with Australia, which has become the largest defence company. India and BAE must sign a similar agreement, said Scopes.

    With this set-up, the issue of technology transfer due to any international restrictions will not arise as the aim here is to create technology based in India. Another advantage is building a local supply chain, which will eventually become a part of global supply chain, will address self-sufficiency issues, he said. It would also allow BAE to "become part of the landscape" in India's defence market, he added.

    BAE has a global spread with its "home markets" in the US – which accounts for 59 per cent of its revenue — Australia, Sweden, Saudi Arabia and South Africa. Last year, $1 billion was invested in Australia. This shows BAE's desire and willingness to make large investments, he said. It is also ready to work with Indian firms, PSUs and Defence Research Development Organisation. With $1.6 billion spent on R&D every year, there is scope for collaboration with the DRDO and IITs.


    http://www.india-defence.com/reports-4251
     
  18. Singh

    Singh Phat Cat Administrator

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    A clustering of activity

    According to Unido’s recent report, the world’s poorest countries need to move beyond the export of raw materials to manufacturing

    Paul Krugman won the 2008 Nobel Prize in economics for his contributions to new trade theory, which offers a new explanation of what is produced where. One of Krugman’s most important contributions to our understanding of economic activity is his analysis of why certain activities tend to cluster in certain areas—finance in New York, software outsourcing in Bangalore and design in certain Italian towns.

    A new report by a United Nations (UN) agency reminds us of the importance of nurturing such clusters, not through subsidies but through better infrastructure and research networks. The report mentions the leather cluster at Chennai as one of the 10 most dynamic clusters in the world.
    Global manufacturing is in a state of crisis. Industrial output is either falling or stagnating in most major economies. Job losses are growing.
    This can be terrible news for the world’s poor—and the countries they live in. The United Nations Industrial Development Organization (Unido) said in a report released on Monday that the world’s poorest countries need to move beyond the export of raw materials to manufacturing.

    Most countries recognize this challenge, though their usual response is unthinking industrial policy to protect and subsidize certain industries that are either prestigious or deemed to be of strategic importance. The UN agency points to the need for a more subtle approach.

    It calls for a focus on tasks rather than products. “In some manufacturing activities, a production process can be decomposed into a series of steps, or tasks. Many countries may be manufacturing the same product, but each is working on a different step in the process,” says Unido. The challenge is to understand which task a country can have comparative advantage in.
    The agency cites the example of a cluster of button producers in Qiaotou, a town in China’s rice belt that makes two out of every three buttons produced in the world. “The economies of scale in buttons are, to a large extent, not a matter of hard technology, but of production sophistication, including design and marketing. Buttons are only one small input into the consumer product of garments, but they have provided a sufficient niche for Qiaotou to prosper,” says Unido.

    The data for the Unido report ends in 2005, much before the current recession brought China’s famed export engine to a halt. But there is an implicit lesson to be learnt by policymakers across Asia, including India.

    http://www.livemint.com/2009/02/24213500/A-clustering-of-activity.html
     
  19. sagar

    sagar Regular Member

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    Tata to Launch Nano On March 23

    MUMBAI -- Tata Motors Ltd. has set March 23 as the launch date for its 100,000 rupees ($2005) minicar, about three months behind initial schedule after the auto maker had to relocate its factory late last year.

    View Full Image

    Associated Press
    In this Jan. 10, 2008 file photo, members of the media look at the Tata Nano car at the 9th Auto Expo in New Delhi, India.
    Bookings for the Nano -- the world's cheapest passenger car -- will begin in the second week of April, India's largest auto maker by sales said in a statement Thursday. Booking process and other details will be announced at the time of launch, it added.

    Tata Motors had originally planned to launch the Nano in the fourth quarter of 2008. But, it had to relocate its factory in the eastern state of West Bengal in October following violent protests from a political party and farmer groups over the farmland taken over for the plant.

    The auto maker -- which had invested about 15 billion rupees for the factory at Singur in West Bengal -- subsequently said it will invest about 20 billion rupees on a factory to produce the Nano in the western Indian state of Gujarat.

    The new factory will have an initial capacity to produce 250,000 cars per year, which can be doubled at a later stage, Tata had said. However, the status of the new factory in Gujarat isn't currently known.

    Earlier, the company had said it will explore the possibility of manufacturing the initial batches of Nanos at its existing factories at Pune in western India and Pantnagar in northern India.

    Tata Motors currently produces passenger vehicles such as the Indica small car and Indigo sedan in Pune. It also has factories in the northern state of Uttar Pradesh and the eastern city of Jamshedpur.

    Ratan Tata, who heads the diversified conglomerate Tata group, wanted to produce the Nano to provide an affordable and safe means of transportation to millions of motorcyclists in India

    http://online.wsj.com/article/SB123563219509880187.html?mod=googlenews_wsj
     
  20. Singh

    Singh Phat Cat Administrator

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    Sagar why don't you introduce yourself to the board at http://www.defenceforum.in/forum/forumdisplay.php?f=5
     
  21. A.V.

    A.V. New Member

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    India may challenge Obama's move against outsourcing

    NEW DELHI: India on Thursday indicated that the US move against outsourcing may be contested in the World Trade Organisation, stating New Delhi will
    take up the issue with Washington.

    "We have to ensure what they (US) are doing is WTO compatible when we are talking about trade, movement of goods, movement of people and movement of services," commerce and industry minister Kamal Nath said.

    "Yes, of course," he said when asked if India will take up the issue of outsourcing with the US administration.

    In his first address to the joint session of the US Congress on Wednesday, Obama stated his administration would end tax breaks for corporations that ship the US jobs overseas.

    Nath said, "One has to see how the US companies using India as a base for technological development respond to their own government." Outsourcing of technology development by large companies cannot be switched on and off, he added.

    About 1,000 American firms, which have moved their jobs abroad, are expected to be affected by the proposed Obama move against outsourcing.

    Among the major US companies, which have shipped jobs to other countries like India include General Electric, Microsoft, Hewlett-Packard, Motorola, Pepsico and Proctor & Gamble.


    http://timesofindia.indiatimes.com/...e-against-outsourcing/articleshow/4197278.cms
     

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