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RBI credit policy makes FM, India Inc happy
Uttaranchal seeks $ 800-m grant from ADB
Remove farm subsidies: Nath
Porsche tests Indian waters with three car models
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Petroleum sector propels infrastructure growth
Refund migration fee, orders Trai
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RBI credit policy makes FM, India Inc happy
New Delhi, October 26 “I am very happy with the RBI’s projections and policy stance. I think this is a measured and balanced approach to the situation. By and large, it is a very good policy,” Mr Chidambaram told newspersons here after the credit policy was announced by the RBI Governor Y.V. Reddy. Stating that the RBI was in “broad agreement” with the approach adopted by the government, Mr Chidambaram said such an approach would not hamper investment or growth. Non-food credit has grown by more than double to reach a level of Rs 92,000 crore and this was indicative of a spur in investment. “Nothing has been done to hamper growth... Investment growth momentum will continue,” he said. On the hike in repo rate, which has been increased by the 25 basis points, the Finance Minister said this was a “marginal adjustment” perhaps to reduce excess liquidity in the system. “Repo Rate hike is a marginal adjustment presumably because RBI thinks that there is excess liquidity that needs to be sucked out and the government is happy with the stance,” he said even as he added that the hike in Repo rate may increase the cost of borrowing “marginally” as it could affect the yields on government securities. “I go (to the market) and borrow. We have to borrow at whatever rate market decides. The cost of borrowing may go up marginally.” Mr Chidambaram said the lowering of the GDP growth rate projections to 6-6.5 per cent for the current fiscal in the present context of rising oil prices, “anything is a guesstimate.” “If monsoons are deficient by 13 per cent and global oil prices at $ 56 a barrel, one would not have to be extremely optimistic that this will not have an impact on growth rate. I am a realist. In the beginning of the year, the Met department had projected 102 per cent monsoon but it turned out to be 87 per cent. We have no quarrel (over the projections). We have to live with that,” he said.
Industry upbeat
Captains of Indian industry today reacted positively to the measures announced in the credit policy by the Reserve Bank of India (RBI) even as they said that the RBI has signalled a possible tightening of the monetary condition by in the coming months by raising the repo rate by 0.25 per cent. President of the Confederation of Indian Industry (CII) Sunil Kant Munjal welcomed the move of the RBI to leave the bank rate unchanged and added this would help sustain growth momentum in the industry. This industrial growth momentum is reflected in the sharp increase in the off-take of non-farm credit, which has increased by 11.5 per cent in the first half of this year, which is nearly double the increase in the previous year. However, by raising the repo rate by 25 basis points, the RBI has rightly signalled a possible tightening of the monetary condition in the coming months which is in keeping with its careful stance on keeping the inflationary expectations in rein. President of the Federation of Indian Chambers of Commerce and Industry (Ficci) Y K Modi said that the credit policy announcement reflects RBI’s commitment towards maintaining a stable interest rate regime. “But a 25 basis point increase in the repo rate is an indication of likely increase in the bank rate in the near future. This should help industry prepare for the future,” Mr Modi said. Mr Modi also said that RBI seems to be extremely cautious on the government borrowing programme and a check on this is indeed a step in the right direction. Welcoming the announcements made by the RBI, PHDCCI President Ravi Wig said the overall stance of the monetary policy to have appropriate liquidity to meet credit growth and support investment and export demand in the economy while placing equal emphasis on price stability is a step in the right direction. However, Mr. Wig has reiterated that RBI needs to continue to pursue its objective of reducing CRR to its statutory minimum of 3 per cent from the present limit of 5 per cent. This is required to increase the liquidity in the system as credit needs especially in the manufacturing sector will witness higher growth than in the past. Assocham President M K Sanghi said the policy pronouncements are on expected lines. He expressed happiness that the GDP growth target as projected by the RBI will be exceeded despite adverse developments like late arrival of monsoon and drought conditions in some parts of the country.
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Uttaranchal seeks $ 800-m grant from ADB
Dehra Dun, October 26 The package would broadly include $ 300 million for the energy sector, $ 250 million for roads and over $ 200 million for infrastructure development, officials say.. The state government is in dialogue with the ADB through the economic affairs department to get the assistance, which, considering the special category status of the hill state would be 90 per cent grant and 10 per cent loan, Additional Chief Secretary and Infrastructure Development Commissioner M. Ramachandaran says. The government is working on the feasibility and project reports to speed up the sanction apart from talking to Indian finance institutions like Industrial Development Finance Corporation and IL&FS. Consultants like PowerGrid have been hired to conduct studies, indicating potential and requirements of these sectors. The state had earlier appointed Crisil to conduct comprehensive analysis to identify the growth potential and investment requirement of major sectors in the state. Based on its recommendations, a 10-year infrastructure vision document has been drawn up to bring out a roadmap for the state. Industrial investments have begun to pool in already with big names investing in the state including Hindustan Lever and LG. The state has attracted investments worth Rs 8,300 crore so far, officials say.
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Remove farm subsidies: Nath
New Delhi, October 26 Inaugurating the three-day Consultation on the WTO Framework Agreement of July 2004: The Way Forward, organised by the United Nations Conference on Trade and Development (Unctad) here today, Mr Nath gave a clear indication of India’s approach in the post-Framework WTO negotiations that are to commence shortly, particularly in the key areas of non-agricultural market access (Nama) and services, besides agriculture. “We need to safeguard our concerns and identify our offensive interests, and our needs and priorities in these areas. We need to deliberate on what is suitable in the Indian context, what kind of ambition level we should have when we talk of taking on commitments and how to dovetail our ongoing autonomous policies and programmes in the context of the WTO negotiations. We need to assess what would help our business, trade and industry. The window of opportunity cannot be successfully exploited without concrete inputs of business, trade, industry and civil society in general,” he said. On Agriculture, Mr Nath said there should be effective and substantial reductions in domestic support provided by developed countries to their farm sector, which distorted production and prices. He also called for setting an early date for complete elimination of export subsidies in any form, without resorting to the tactic of back loading the commitments or creating loopholes in the guise of food aid concerns. Agricultural subsidies in all OECD countries put together amounted to $1billion a day, while a developing country like India was able to provide a meagre $1 per month per farmer in the form of minimum agricultural support, he pointed out.
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Porsche tests Indian waters with three car models
New Delhi, October 26 The sport utility vehicle comes in three versions — S, V6 and 'Turbo — which have been priced at about Rs 61 lakh, Rs 47 lakh and Rs 86 lakh, respectively, Porsche Middle East and Africa Managing Director Mark M. Bishop told a news conference here. Sport car Boxter S will cost Rs 47 lakh while Carrera Rs 63 lakh and Carrera variant S will come with a price tag of Rs 71 lakh. The niche vehicles will be imported from Porsche's plant in Germany. The company plans to sell 100 units till July next year. “We recognise we are going to start small in India. We have no finite targets... India is one of the few markets in the world which offers enormous potential and we believe them to be immense for Porsche...I believe India is ready for Porsche,” Mr Bishop said. The Porsche cars will be imported through Delhi-based Exclusive Motors and Sheryan Motors of Mumbai and both importers plan to open Porsche Centres by the end of this year in the two cities. The SUV and sport cars will be imported through JNPT port of Mumbai and Indira Gandhi International Airport of Delhi from Germany. The two importers claimed they have received a decent number of orders for the cars but refused to give details. ”Cayenne will form major chunk of our sales in India,” he said dubbing Porsche vehicles as ‘aspirational cars.’
— PTI
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PNB to clear cheques with ECPIX
Chandigarh, October 26 The Executive Director of the bank, Mr K.C Chakrabarty, today launched the electronic cheque presentment with image exchange (ECPIX) system here to be operative in the three cities of Chandigarh, Ludhiana and Jalandhar for faster clearance of intra-bank cheques. The system would subsequently be extended to the inter-bank clearances after getting the necessary approval from the Reserve Bank of India. He later inaugurated the main system installed at the PNB MICR Centre, Sector 17-B, here. At the launch Mr Chakrabarty said the system would be implemented in phases throughout the country. It would be introduced in seven more cities after this pilot run — Lucknow, Nagpur, Kanpur, Jaipur , Agra, Allahabad and Varanasi — to be followed by other cities. All other nationalised and private banks, which are a part of the clearing house at the these places, will also be able to provide this facilities to their customers. He said the transaction costs would come down significantly if more and more people utilise this facility. Explaining the concept he said image-based cheque truncation means that the electronic image of the cheque rather than the paper cheque is used for clearing and further processing. This would reduce the clearing time, provide customers an early access to their cash money and reduce processing costs for banks.
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Petroleum sector propels infrastructure growth
New Delhi, October 26 However, a slump in the performance of the six major infrastructure industries last month was a matter of concern as it fell from 7.9 per cent in September 2003 to 5.9 per cent. These industries had been maintaining a growth rate since July on a month-to-month basis. Among the performance of various sectors, official figures show the production of finished steel came down drastically to 3 per cent during the first six months as against 11.9 per cent during the first half of last fiscal. However, crude petroleum output rose to 4.2 per cent during the first half of current fiscal as against -1.5 per cent during the same period of last fiscal. Similarly, petroleum refinery products output grew 7.4 per cent as against 6.1 per cent during the first half of 2003-04 financial year. Cement sector growth came down marginally to 4.8 per cent during April-September 2004 as against 5.6 per cent during the comparable period of 2003.
— PTI
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Refund migration fee, orders Trai
New Delhi, October 26 Bharti, which provides cellular services under the Airtel brand, has been charging Rs 50 and Rs 200 from its pre-paid and post-paid mobile subscribers, respectively, for migration. Idea Cellular has been charging Rs 249 for migrating the subscribers of post-paid Plan Buzz-99 to Plan Buzz-199 in the Gujarat circle. Trai asked Bharti to report compliance within 15 days and gave 20 days’ time to Idea for the same. Bharti Cellular said it would comply with the Trai directive, even though the order does not take full facts into account. “We believe that Trai’s directive does not take into account the complete facts of the present case. However, since the directive comes as a benefit to the existing Airtel customers we have decided that while we will place the full facts in front of the Trai, Bharti Cellular will proceed forthwith to comply with the directive of Trai,” a statement here said.
— UNI
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