Indian Economy: News and Discussion

[ejazr]

Indian business woos Qatar

http://www.gulf-times.com/site/topi...=430300&version=1&template_id=36&parent_id=16

By Ramesh Mathew
Eyeing opportunities in diverse areas of businesses, India is exploring chances to increase its trade volume with Qatar considerably in the next five years.
Members of a trade delegation, co-ordinated by Confederation of Indian Industry (CII), a non-government, non-profit, industry led and managed organisation told this to Gulf Times yesterday at an interaction as part of their visit that began yesterday.
A meeting of the visiting entrepreneurs was held at Ramada Plaza Hotel yesterday in the presence of Indian Ambassador Deepa Gopalan Wadhwa. Among others present was local entrepreneur and Padma Shri recipient C K Menon of Behzad Group of Companies.
Established more than 116 years ago, the CII is a frontline organisation with a direct membership of more than 8,100 business entities spread all over the Asian country.
While trade between Qatar and India was around $882.30mn in 2004, with India importing goods worth $672.90mn, the trade figures reached $4.17bn in 2009. While the Indian exports to Qatar was worth $674mn, Qatar exported to India goods worth $3.498bn in the same year. India's trade with the Arab region was worth $113.95 in 2009.
CII deputy director Pantheeradi Haridas, who is also the manager of the current business mission, said in view of the growing opportunities in the GCC states, Indian companies are accelerating their efforts to explore more business opportunities, especially in a rapidly developing economy such as Qatar.
"Compared to any other places in the region, we are aware that Qatar is recording a much faster economic growth, backed by a progressive government that has development as its key focus. Perhaps few other countries of the region have initiated as many economic reforms as Qatar has introduced in the last one decade," said Haridas.
Inquiries with the mission members found that the UAE contributed as much as 42% of the whole Indian business with the Arab region, with India exporting goods worth more than $24bn to that country in 2009. Indian imports from the UAE were worth more than $23.8bn the same year.
Next to the UAE, Saudi Arabia is the second largest regional trade partner of India, accounting for 22% of the South Asian nation's business with the region.
"In view of the massive developments going on in Qatar, we hope to expand businesses with Qatar considerably in the next few years and trade equations are hence bound for a major change during the period," said Haridas.
The efforts made by India to host a trade conclave with the GCC countries in Mumbai in 2004 has helped India to increase businesses with the region's countries in the last few years, noted the CII official. Each of the GCC states has affected a major hike in its spending on various sectors, notably in infrastructure and utilities, pointed out Haridas.
Recalling the visit made by HH the Emir Sheikh Hamad bin Khalifa al-Thani, to India, the CII official said the Qatar delegation that accompanied HH the Emir has made a detailed study on the growing opportunities in India during the visit.
The current delegation, mobilised by the CII, has as members entrepreneurs representing such areas as turnkey construction and other infrastructure projects, automobiles auxiliaries, polymer, facilities management, LED based applications, science and technologies, finance, tourism, hospitality, stainless steel and valve and damper automation among others.
K K M Kutty (South West Group), Tej Prakash (Abhijeet Infrastructure Ltd), Debtosh Chatterjee (Chatterjee Cleaning Arts Services Private Limited), Tulika Mehta Agarwal (De Core Sciene & Technologies Ltd), Haresh Khushalani (Jaguar Overseas Ltd), Gauravi Soni (JRG securities), Jay S Damodaran (MIR Projects & Consultants), Tejaswi Bhargava (Qauality Foils India Pvt Ltd), and Amit Mathur (Soma Entreprises Ltd) are the members of the group.

 

[SHASH2K2]

India set for ninth rate hike to cool inflation​

India, which has the highest inflation of any large Asian economy, looks set this week to hike interest rates for a ninth time despite mounting concern over the impact of monetary tightening. The central bank has raised rates eight times since March 2010, albeit in gradual, quarter-point steps to mi


nimise the impact on economic growth.
But inflation has remained high and some economists expect Reserve Bank of India (RBI) policymakers to move more aggressively when they meet on Tuesday.

"A 50-basis-point rate rise wouldn't surprise me -- inflation is proving stubbornly difficult to reduce," Deepak Lalwani, head of London-based India investment consultancy Lalcap, told AFP.

"It's time to step it up," agreed HSBC chief India economist Leif Eskesen.

Others bet the bank will stick to its "slowly, slowly approach" and only hike by a quarter point as it seeks to balance growth and inflation concerns.

The RBI meeting comes after data in April showed inflation had surged to nearly nine percent.

The Asian Development Bank has said controlling inflation must be the Asian region's top priority as strong growth, turmoil in the Middle East and Japan's nuclear crisis drive up food and oil prices.

Asian economies from South Korea, Indonesia, Taiwan to China are all battling inflationary pressures.

But some economists are concerned that India's central bank may push too hard on the brakes.

The benchmark repurchase, or repo rate, at which the bank lends to commercial banks, is 6.75% while the reverse repo, paid to banks for deposits, is 5.75%.

"The bottom line is the central bank needs to act but it should not go overboard," said CLSA economist Rajeev Malik. "It must avoid a repeat of the mid-1990s outcome of killing inflation by crippling growth."

The government has said it expects the economy to expand by nine percent in the current fiscal year, returning to levels it reached before the global financial crisis.

But there are already fears that Asia's third-largest economy will undershoot the target because of interest rate increases.

Investment house Goldman Sachs has already slashed its growth forecast for the year to March 2012 to 7.8% from 8.7%. Credit Suisse economist Robert Prior-Wandesforde has trimmed his expansion forecast to 7.5%.

The economy is already showing signs of slowing with an 18% year-on-year drop in capital goods output in February, trimming industrial production growth to 3.6%.

Inflation, fed by food and fuel price rises, has been one of the biggest headaches for the Congress-led government headed by Premier Manmohan Singh, whose coalition is also reeling from a string of corruption scandals.

Reducing prices is a political priority even as higher growth is seen as key to reducing crushing poverty in the nation of 1.2 billion.

Poorer households, the backbone of the party's support, have been especially hard hit by inflation, a traditional lightning rod for political discontent.

"Inflation is the most important short-term problem," said Montek Singh Ahluwalia, deputy head of India's influential economic Planning Commission, who has urged the central bank to use "all the flexibility" at its disposal.

Former central bank governor YV Reddy said the Reserve Bank cannot afford any let up in its anti-inflation fight -- even if it means slower growth.

"Tell me any single period when we have had higher growth and higher inflation. It just does not happen that way and it is a wrong policy. What we need is low inflation and if it demands low growth, so be it," Reddy said.

 

[Rage]

Final ok for Posco plant

After years of wrangling, this has finally got its deal.

3 May 2011 Last updated at 00:24 ET


India's environment ministry has given final clearance to South Korean company Posco's plan to build a steel plant in the eastern state of Orissa.

Environment Minister Jairam Ramesh gave the state permission to divert 3,100 acres of forest to the $12bn plant.

The plant has faced stiff opposition from the local people, campaigning to save farmland and forests.

A government panel had earlier said the plant's environmental clearances should be scrapped.

But it was given conditional approval in January. The environment ministry had spelt out 28 "extra conditions" for the steel plant and 32 conditions for the port.

Critics say the project will exhaust iron deposits in 20 years.

Mr Ramesh said the approval was conditional on Posco regenerating an equal area of forest in an area decided by Orissa state, as well as paying for the land.

The plant had "considerable economic, technological and strategic significance," news agency AFP quoted the minister as saying.

"At the same time, laws on the environment and forests must be implemented seriously," he added.

Orissa Chief Minister Naveen Patnaik said "appropriate action" would be taken on the project after receiving the environment ministry order.

Officials at Posco have welcomed the order, while those opposed to the plant have described the government's order as "deeply unfortunate".

The conditions set by the government in January included the company spending a share of profits on corporate social responsibility, ensuring green cover at the plant site, and restrictions on construction of the port in sensitive coastal areas.

The project was conceived in 2005 and is India's single biggest foreign investment.

Based in the port city of Paradip, it is expected to create nearly 50,000 jobs.

But it has been opposed by many groups who argue that Posco will exhaust Orissa's iron ore resources in two decades while creating lasting environmental damage.

Following protests, the environment ministry set up a panel to investigate if Posco's project had been complying with the country's green law, including rehabilitating and resettling local people displaced by it.

Three of the panel's four members recommended that environmental clearances for the project be cancelled, saying there were flaws in the manner in which it was being implemented.


http://www.bbc.co.uk/news/world-south-asia-13263586

 

[plugwater]

 

[nitesh]

Govt to sell off entire stake in Scooters India

Tehelka - India's Independent Weekly News Magazine

 

[thakur_ritesh]

India's GDP grows at 8.5% in FY-2011, Q4 growth at 7.8%​

NEW DELHI: Confirming fears of a slowdown, India's economy grew by just 7.8 per cent in the fourth quarter ending March this year, mainly due to poor performance of the manufacturing sector, as against 9.4 per cent in the same three-month period of the previous fiscal.

However, economic growth, as measured by the Gross Domestic Product, improved to 8.5 per cent in 2010-11 from 8 per cent in 2009-10 due to better farm output and construction activities and financial services performance.

Meanwhile, the GDP growth figures for the first and third quarters of FY'11 have been revised upward. While the GDP growth figure for Quarter 1 has been pegged at 9.3 per cent -- as against the earlier estimate of 8.9 per cent -- the Q3 GDP growth has been revised upward to 8.3 per cent from 8.2 per cent.

During the quarter ending March 31 this year, growth in the manufacturing sector slowed down to 5.5 per cent from 15.2 per cent in the same quarter of 2009-10.

In addition, the mining and quarrying sector grew by only 1.7 per cent during the quarter under review, as against 8.9 per cent in the fourth quarter of the previous fiscal.

Furthermore, the trade, hotels, transport and communications segment grew by 9.3 per cent in the March quarter this year, as against 13.7 per cent expansion in the same the period of 2010.

JPMorgan said that GDP numbers were below expectations and global growth will slowdown in next few quarters.

However, services including banking and insurance grew by 9 per cent in the March quarter this year, compared to 6.3 per cent in the corresponding period last year.

Farm output showed tremendous improvement, growing at 7.5 per cent during the quarter under review, compared to a meagre 1.1 per cent in the same three-month period last year.

Though economic expansion slowed down in the fourth quarter, overall GDP growth touched the 8.5 per cent mark in 2010-11, as against 8 per cent in 2009-10, due the smart recovery in farm output.

The agriculture and allied sectors grew by 6.6 per cent during the fiscal, as against a meagre 0.4 per cent in the previous year.

The growth of services, including banking and insurance, improved to 9.9 per cent in 2010-11 from 9.2 per cent in the previous fiscal.

The trade, hotels, transport and communication segment grew by 10.3 per cent in FY'11, as against 9.7 per cent last fiscal, while growth of the construction sector stood at 8.1 per cent, as against 7 per cent in the previous financial year.

However manufacturing sector growth slowed down to 8.3 per cent in the 2010-11 financial year from 8.8 per cent in 2009-10.

Growth of the mining and quarrying sector also slowed to 5.8 per cent in 2010-11 from 6.9 per cent in 2009-10.

The electricity, gas and water supply segment grew by 5.7 per cent last fiscal, compared to 6.4 per cent in 2009-10.

India's economy is still clocking robust growth, second only to neighbouring China among major economies, as domestic demand continues to grow on the back of rising income.

Economists and government officials have recently revised downward their expectations for the current financial year, citing rising crude oil and other commodity prices and doubts about economic recovery in developed nations.

Prime Minister Manmohan Singh said at the weekend he was confident that India would achieve 8.5 percent growth this year, helped by expectations of a normal monsoon which is crucial to economic expansion.


--------------------------------

Per capita income in 2010-11 at Rs 54,835, Economy at Rs 73,06,990 crore​

NEW DELHI: Per capita income of Indians grew by 17.9 per cent to Rs 54,835 in 2010-11 from Rs 46,492 in the year-ago period, according to the revised data released by the government today.

The new per capita income figure estimates on current market prices is over Rs 8,000 more than the previous estimate of Rs 46,492 calculated by the Central Statistical Organisation .

Per capita income means earnings of each Indian if the national income is evenly divided among the country's population.

However, the increase in per capita income was only about 6.5 per cent in 2010-11 if it is calculated on the prices of 2004-05 prices, which is a better way of comparison and broadly factors inflation.

Per capita income (at 2004-05 prices) stood at Rs 35,917 in FY11 as against Rs 33,731 in the previous year, the latest data on national income said.

The size of the economy at current prices rose to Rs 73,06,990 crore in 2010-11, up 19.1 per cent over Rs 61,33,230 crore in FY10.

The country's population increased to 121 crore at the end of March 2011, from 117 crore in fiscal 2009-10.

 

[nitesh]

now what you guys say about this

India to become $30 tn economy: Ambani - Indian Express

 

[sukhish]

now what you guys say about this

India to become $30 tn economy: Ambani - Indian Express

This guy is becoming a laughing stock now a days.

 

[sukhish]

now what you guys say about this

India to become $30 tn economy: Ambani - Indian Express

This guy is becoming a laughing stock now a days.

 

[utubekhiladi]

now what you guys say about this

India to become $30 tn economy: Ambani - Indian Express

i think he meant INR instead of USD

 

[utubekhiladi]

now what you guys say about this

India to become $30 tn economy: Ambani - Indian Express

i think he meant INR instead of USD

 

[thakur_ritesh]

i think he meant INR instead of USD

indian economy is well past rs30trillion long back and is worth Rs73trillion today.

mr ambani is talking in USD terms but he could possibly he hinting at rupee consolidating over the next 9 years else the figures dont quite add up. possibly one of the most optimistic take on nominal gdp growth over an extended period of time should be around 13-14% yoy and if that is to be taken as a base with constant exchange rate then he is off mark by at least 5 yrs. devil lies in the details, so it would be best mr ambani spells out those details which makes him think what he has spoken.

that said, in the mid to long term horizon rupee is bound to appreciate, much like yuan, the currency is undervalued.

 

[Pintu]

India approves 16 FDI proposals worth $207 mln | Reuters

India approves 16 FDI proposals worth $207 mln

MUMBAI, June 7 | Tue Jun 7, 2011 9:47am EDT

(Reuters) - India on Tuesday approved 16 foreign direct investment (FDI)proposals worth 9.24 billion rupees ($207 million), including financial services firm L&T Finance Holdings' plan to raise 4 billion rupees in a pre-share-sale placement.

India received $3.4 billion worth of FDI in the first quarter of this calendar year, about a third lower than the $5.1 billion it attracted in the year-ago period , government data showed.

The government has approved a proposal by L&T Finance Holdings, a unit of the country's largest engineering and construction firm Larsen & Toubro , to raise 4 billion rupees in a placement of shares prior to its initial public offering (IPO), the statement said.

L&T Finance Holdings raised its planned IPO size by $59 million to $392 million in March and said it would raise funds via a pre-IPO placement.[ID:nL3E7EV2VB]

The government also approved a 37.5-million-rupee proposal of Vivimed Labs , which makes ingredients for the personal care industry, to undertake the manufacturing of organic chemicals and pharmaceuticals.

The government deferred a decision, without giving any reason, on 14 proposals including that of BNP Paribas' plan to set up a wholly owned subsidiary to act as an investing company.

CALS Refineries' proposal to raise 14.25 billion rupees via a global depository receipts issuance against supply of refinery equipment has been referred to a cabinet committee, the statement said.

The proposals to raise FDI by PTC Financial Services and Tata Steel were withdrawn by the applicants, the statement added, without giving details.

($1=44.7 rupees) (Reporting by Nandita Bose; editing by Malini Menon)

 

[Pintu]

Direct tax mop-up falls 48% in Apr-May - The Times of India

Direct tax mop-up falls 48% in Apr-May
TNN | Jun 7, 2011, 01.59am IST

NEW DELHI: Net direct tax collection fell by 48% April and May, the first two months of the current fiscal as a result of high income tax refunds amounting to more than Rs 37,000 crore during this period.

Though the total tax collection stood at Rs 50,405 crore in April-May 2011, the net collection plunged to Rs 12,954 crore due to clearance of at least 40 lakh refunds amounting to Rs 37,451 crore. The collection during the same period in the previous year was Rs 24,878 crore.

"The decline in net direct tax collection was on account of an increase of 217% in tax refunds," a press note from the Central Board of Direct Taxes (CBDT) said.

Historically, refunds have never been so high in the beginning of the financial year. As against Rs 37,451 crore this year, the figure for the year-ago period was Rs 11,824 crore. While CBDT has cleared 40 lakh refunds in just the first two months, the agency had issued 85 lakh refunds in the entire 2010-11 financial year.

Despite high refunds, CBDT claimed it will achieve the budget estimates for direct tax collections of Rs 5,32,651 crore for 2011-12.

Last year, it had exceeded the revised target of Rs 4,46,000 crore.

 

[Pintu]

Refund of tax deducted at source - Economic Times

Refund of tax deducted at source
Jun 6, 2011, 03.05am IST

Interest earned from deposits with banks and non-banking finance companies are paid out only after tax deducted at source (TDS). TDS is applicable if the interest income exceeds a specified level. Currently, this is Rs 10,000 for deposits with banks and Rs 5,000 for deposits with NBFCs.

The investor discloses TDS paid at the time of filing returns, by submitting the certificate of deduction which is received from each entity that has deducted TDS. The individual has to then apply for a refund of tax paid as TDS. The reduced income due to the TDS and the delay in receiving refunds may be difficult for people who depend upon the income from fixed deposits to meet their regular income needs.

For such investors, TDS on interest receipts can be avoided by submitting a declaration in forms 15H or 15G, as applicable, to the entity that is deducting the tax.

 

[Someoneforyou]

India's inflation accelerates to 9.06% in May

India's inflation accelerates to 9.06% in May
India - 14 June 2011

MUMBAI – India's annual inflation accelerated a faster-than-forecast 9.06 percent in May, official data showed on Tuesday, increasing pressure on the central bank to raise interest rates further.

The rise in the wholesale price index -- the government's preferred measure of the cost of living -- was much higher than April's provisional 8.66 percent, the ministry of commerce said.

Economists had forecast inflation in May to be 8.70 percent.

Finance Minister Pranab Mukherjee said that core inflation, excluding food, fuel and power price rises, showed no sign of easing.

"This poses some concerns, which will have to be addressed," he told reporters.

Soaring prices are one of the biggest problems for India's government and inflation is the highest among all major Asian economies.

India's central bank, the Reserve Bank of India (RBI), has been among the most hawkish in the region, having increased key interest rates nine times in the past 16 months.

Economists expect the RBI to raise them again at its next monetary policy meeting on Thursday.

"We expect the RBI to stay hawkish," said Siddhartha Sanyal, chief India economist with Barclays Capital, who expects a 25 basis points hike this week and again in July.

Economists now say inflation, initially fuelled by spiralling food prices, has spilled over into the general economy, pushing up wages and other costs.

Price rises are a major political headache for the embattled Congress-led government, which is also reeling from a spate of corruption scandals.

Poorer households -- the backbone of the party's support -- have been especially hard hit by inflation, which is a traditional lightning rod for political discontent in the country of 1.2 billion.

"I think the RBI will probably look at the inflation issue more seriously and will take some action," the Prime Minister's Economic Advisory Council chairman C. Rangarajan told reporters in New Delhi.

Tuesday's data showed prices of non-food articles rose 22.35 percent in May from a year earlier, led by a rise in prices of fibres.

The cost of fuel and power climbed 12.32 percent year-on-year, while food rose 8.37 percent, the commerce ministry data showed.

"Inflation spilt over from commodities to core inflation, which has led the RBI to maintain its anti-inflation bias," said Nick Paulson-Ellis, country head of Espirito Santo India.

The global investment bank expects the RBI to raise rates by 25 basis points three times between now and September.

RBI governor Duvvuri Subbarao has said he is prepared to act to tame inflation even at the expense of short-term growth. India's industrial activity has already slowed

Meanwhile, the Organisation for Economic Cooperation and Development (OECD) urged India to redouble efforts to tackle inflation, calling for economic growth to be more inclusive.

"In the near term, the authorities need to remain vigilant against the risks of high inflation and volatile capital flows," the Paris-based organisation said in its latest economic survey of India, published Tuesday.

Economists say that taming inflation will be tough, with rising commodity prices and costlier fuel likely to keep inflation well above the RBI's comfort level of between 5.0 and 6.0 percent.

A government panel is likely to decide soon on future possible price hikes of diesel and cooking fuels to help oil retailers cut their revenue losses from selling at discounted prices.

The ministry also revised upwards the inflation rate for March to 9.86 percent from the provisional 9.04 percent reported earlier.

The RBI expects the cost of living to remain at elevated levels through the first half of the year before moderating.

Photo: Indian labourers unload mangoes at the Gaddiannaram Fruit Market on the outskirts of Hyderabad. India's annual inflation accelerated above market forecasts to 9.06 percent in May, official data shows, increasing pressure on the central bank to raise interest rates further.

Source: AFP

 

[nitesh]

well, it finally begins

India's answer to Visa from today

 

[Someoneforyou]

Food inflation climbs to 9.13 percent
India - 23 JUNE 2011

India's food inflation rose to 9.13 percent for the week ended June 11, compared to 8.96 percent recorded in the previous week, official data showed Thursday.

The high inflation figures comes a week after the Reserve Bank of India hiked interest rates again -- the 10th time since March 2010.

As per data released by the commerce and industry ministry, the primary articles index fell to 12.62 percent compared to 12.86 percent in the previous week.

The index for fuels and power was unchanged at 12.84 percent.

The following are the yearly rise and fall in prices of some main commodities that form the sub-index for food articles:

Onions: 11.89 percent

Vegetables: (-) 9.27 percent

Fruits: 28.66 percent

Potatoes: 0.71 percent

Milk: 15.3 percent

Eggs, meat, fish: 10.56 percent

Cereals: 4.32 percent

Rice: 1.82 percent

Wheat: (-) 1 percent

Pulses: (-) 10.34 percent


Source: Indo-Asian News Service

 

[Pintu]

India's unemployment rate falls: Data

India's unemployment rate falls: Data

25 June 2011
statesman news service
NEW DELHI, 25 JUNE: The latest data by the National Sample Survey Office (NSSO) says the unemployment rate in the country dropped to 2 per cent in 2009-10 (July-June period) from 2.3 per cent in 2004-05.
The unemployed labour force fell to 20 per 1000 in 2009-10 in comparison to 23 in 2004-05, the data shows.
The Ministry of Statistics and Programme Implementation has released the key indicators of Employment and Unemployment in India, generated from the data collected in its 66th round survey during July 2009 - June 2010. NSS surveys on employment and unemployment are conducted quinquennially starting from 27th round (October 1972 – September 1973).
The indicators are based on the Central Sample of 1,00,957 households (59,129 in rural areas and 41,828 in urban areas) surveyed from 7,402 sample villages in rural areas and 5,252 urban blocks spread over all States and Union Territories except in (i) interior villages of Nagaland situated beyond five kilometres of a bus route (ii) villages in Andaman and Nicobar Islands which remain inaccessible throughout the year and (iii) Leh, Kargil and Poonch districts of Jammu and Kashmir.
Significantly, the data reveals that more than half the country's workforce is self-employed and women receive less pay than men for similar jobs, latest government data shows. While 51 per cent of the country's total workforce are self-employed, only 15.5 per cent are regular wagers or salaried employees and 33.5 per cent casual labourers. The number of self-employed people is higher in rural areas at about 54.2 per cent, against 41.4 per cent in urban areas. The ministry of statistics and programme implementation said the highlights of the 66th round of the NSSO survey have been released for use in planning, policy formulation, decision support and as inputs for further statistical exercises by the government.
A total of 51 per cent workers were self-employed in 2009-10. While the number of unemployed people in relation to the labour force fell 13.04 per cent, the economy grew at a much faster rate of 51.23 per cent during the period. In rural areas, nearly 63 per cent of the male workers were engaged in the agricultural sector while in the secondary and tertiary sectors nearly 19 per cent and 18 per cent of the male workers were engaged. There was a higher dependence of female workers on agricultural sector: nearly 79 per cent of them were engaged in agricultural sector while secondary and tertiary sectors shared 13 per cent and 8 per cent of the female workers, respectively.
The industry-wise distribution of workers in the urban areas was distinctly different from that of rural areas. In urban areas the share of the tertiary sector was dominant followed by that of secondary sector while agricultural sector engaged only a small proportion of total workers for both male and females. In urban areas, nearly 59 per cent of male workers and 53 per cent of the female workers were engaged in the tertiary sector. The secondary sector employed nearly 35 per cent of the male and 33 per cent of the female workers. The share of urban workforce in agriculture was nearly 6 per cent of male and 14 per cent for female workers.
While the average earnings every day for male workers was Rs 249, it was only Rs 156 for women, indicating a female-male wage ratio of 0.63. The ratio was 0.82 in urban areas, with males earning Rs 377 and women Rs 309. While 41.4 per cent of the urban workforce earned regular wages, it was only 7.3 per cent in rural areas.

 

[Pintu]

India, several nations may be downgraded: S&P - Business News - IBNLive

Business
India, several nations may be downgraded: S&P

Press Trust Of India
Posted on Aug 08, 2011 at 03:43pm IST

New Delhi: Ratings agency Standard & Poor's on Monday cautioned that it could lower the sovereign ratings of countries like India, Japan and Malaysia, which are still to come out of the economic meltdown of 2008.

"The implications for sovereign creditworthiness in the Asia-Pacific would likely be more negative than previously experienced and a larger number of negative rating actions would follow," S&P said in its report on Asia-Pacific Sovereigns.

"Fiscal capacities of Japan, India, Malaysia, Taiwan and New Zealand have shrunk relative to pre-2008 level," it said, adding that these countries continue to bear the scars of the downturn.

Standard & Poor's says India, Japan and Malaysia are still to come out of the economic meltdown of 2008.

The governments, it said, would be required to use their own revenue streams to support their economies and financial sector once again.

It further said that if a renewed slowdown comes, it would create a deeper and more prolonged impact.

At the time of the global financial crisis in 2008, several countries, including India, had rolled out stimulus packages facilitating monetary expansion and lower taxes to mitigate the impact of the slowdown.

At that time, India had provided three fiscal stimulus packages totalling Rs 1.86 lakh crore, which helped the economy clock a growth of 8 per cent in 2009-10, as against 6.8 per cent in 2008-09.

Prior to the crisis, the Indian economy had been expanding at a growth rate of over 9 per cent over a three-year period.

Late on Friday, global ratings agency S&P downgraded its US sovereign rating to AA+ from AAA, with a negative outlook.