New Delhi, June 12
Bringing cheer to the government struggling to arrest rupee's slide, global rating agency Fitch today revised India's sovereign credit outlook to stable from negative.

Taking a note of the government's efforts to contain fiscal deficit, Fitch Ratings revised India's outlook to stable from negative and affirmed 'BBB-' rating.

"The revision of the outlook to stable reflects the measures taken by the government to contain the budget deficit, including the commitments made in the FY14 budget, as well as some, albeit limited, progress in addressing some of the structural impediments to investment and economic growth," the agency said in a statement.

Fitch further said it expects the economy to recover after real GDP grew just 5 per cent in 2012-13 versus 6.2 per cent in the year ago period.

India's economic recovery, however, is likely to remain slow until a healthier investment climate is created, which helps lift potential growth again, it said.

"As a result, Fitch is forecasting only a modest recovery with real GDP expected to expand 5.7 per cent and 6.5 per cent in FY14 and FY15 respectively," Fitch said.

Fitch along with Standard and Poor's had earlier threatened to downgrade India's rating to junk grade in absence of steps by government to contain deficits and promote investment.

Rupee yesterday touched historic low of 58.96 against the dollar.

However, it recovered by 19 paise to 58.20 against the dollar in early trade today after the RBI announced steps to check free fall in the rupee, raising the limit for online repatriation of export proceeds by over three-fold to $10,000.

A concerned government has given indications to investors that it would take more steps to increase foreign investments in the country to stabilise the rupee.

Fitch also affirmed its Long-Term Foreign- and Local- Currency Issuer Default Ratings (IDRs) at 'BBB-'.

"The agency has also affirmed the Country Ceiling at 'BBB-' and the Short-Term Foreign-Currency IDR at 'F3'," it said.

It said the outlook revision and the affirmation of India's investment-grade ratings reflect that the authorities were successful in containing the upward pressure on the central government's budget deficit in the face of a weaker-than-expected economy.

The fiscal deficit was 4.9 per cent of GDP in 2012-13, compared with 5.7 per cent in the previous year.

"The authorities have also begun to address structural factors that have weakened the investment climate and growth prospects, notably regulatory uncertainty, delays in government approvals of investment projects and supply bottlenecks, for example, in the power and mining sectors," it said.

The establishment of the Cabinet Committee on Investment should help to fast-track infrastructure-related projects and the government has made it easier for FDI to access a range of industries.

"Nonetheless, the investment climate could benefit from further reforms, such as the new land acquisition bill, some liberalisation of insurance and pension provision and public procurement, which are pending parliamentary approval," Fitch said.

It said addressing the structural issues in the power and mining sectors would further boost investor confidence.

Referring to inflation, Fitch said the pressures have begun to show more pronounced signs of easing in response to weaker economic conditions and the tightening of monetary conditions by the RBI.

"The recent weakness of the exchange rate may, however, complicate policy management and limit the scope for further cuts in RBI policy rates," it added. — PTI

New Delhi, June 12
Showing no signs of recovery, the industrial output slipped further to a 'disappointing' 2% in April increasing the clamour for rate cut by the RBI and speedy clearances of projects to boost investment.

The Index of Industrial Production (IIP) in April has moderated from 3.4% in March on account of dismal performance of manufacturing and mining sectors, although it is better compared to a contraction of 1.3% in the same month of last fiscal.

Describing the IIP in April as ‘disappointing’, Planning Commission Deputy Chairman Montek Singh Ahluwalia said: “The growth rate that has come out today is low...there is a slight upturn, but its not strong enough.” The decline in factory output has mainly been on account of dismal performance of key sectors like manufacturing, mining, power and capital goods sectors.

The manufacturing sector, which constitutes over 75% of the index, grew by a meagre 2.8% in April. In the year-ago period, however, it had declined by 1.8%.

Power generation grew by just 0.7% in April this year compared to a growth of 4.6% in same month last year. The mining sector output contracted by 3% in April this year compared to a decline in the production by 2.8% in April 2012.

Capital goods output saw a growth of just 1% in April, compared to a decline in production by 21.5% in the year-ago period.

Worried over slow growth, CII Director General Chandrajit Banerjee pressed for an "accommodative" monetary policy from the Reserve Bank to stimulate investment.

Alhuwalia too said “ The RBI is watching the situation ...and I hope that they will make a sensible decision.”

Meanwhile, a decline in wholesale as well as retail inflation has raised the hope of rate cut by the central bank which is scheduled to announce mid-quarter monetary policy review on June 17.

The consumer goods output also saw a meagre growth of 2.8% in April, compared to 3.7% in same month last year.

Commenting on the IIP data for April, Ficci president Naina Lal Kidwai said: “Overall, the investment sentiment remains subdued in manufacturing and infrastructure and unless we see speedy implementation of projects stuck due to inter-ministerial clearances, industrial growth is likely to remain moderate.” She expressed concerns over the power sector, saying that “It would impact further the growth of manufacturing and has wider implications for competitiveness of the sector.”

Meanwhile, the IIP growth rate for March this year has been revised to 3.4% from the provisional estimates of 2.5% released last month.

Industrial growth for 2012-13 fiscal has also been revised slightly upwards to 1.1% from provisional estimates of 1% released in May. IIP growth in 2011-12 was 2.9 per cent .

Overall, 13 of the 22 industry groups in manufacturing sector showed positive growth during April.

The consumer goods output also saw just 2.8 per cent growth in April, compared to 3.7 per cent in same month last year.

The decline in the output of consumer durables stood at 8.3 per cent in April, from a growth of 5.4 per cent in the same month of 2012.

The consumer non-durables output grew by 12.3 per cent in April, as against 2.3 per cent in the same month last year.

The intermediate goods production grew by 2.4 per cent in April, compared to a decline in output by 1.8 per cent in the year-ago period.

The basic goods output grew by 1.3 per cent in April, as against 1.9 per cent in April 2012.

However, there has been some relief on the inflation front. Retail inflation has dropped for the third straight month to 9.31 per cent in May.

According to the data released today, the retail inflation measured in terms of Consumer Price Index (CPI) stood at 9.39 per cent in April.

The data for Wholesale Price Index-based inflation for May is expected on Friday. The WPI in April had eased to over 3-year low of 4.89 per cent.— PTI

Consumer durables segment registered one of its highest falls since 2009 and calls for moderation in interest rates to stimulate demand

— Naina Lal Kidwai , Ficci president

We are looking forward to accommodative monetary policy announcement on June 17 to stimulate investments.

— Chandrajit Banerjee, CII Director General

The stubborn nature of the slowdown can be helped only by some bold measures by government in terms of providing an enabling environment for investment.

— Rajkumar N Dhoot , Assocham president

This is very worrisome ... I think the industrial sector needs attention and the IIP growth at 2% for April, (while) we have been expressing satisfaction that GDP growth is at 5%,"

— Pratip Chaudhuri , SBI chairman

Mumbai, June 12
With gold imports showing signs of moderating, the Indian government is not planning any further curbs, Economic Affairs Secretary Arvind Mayaram said here today.

Speaking to reporters on the sidelines of an investors' meet here, Mayaram said the government was also looking at the sharp fall in the rupee to issue infrastructure bonds for overseas investors.

Mayaram ruled out issuing bonds for NRI investors to mobilise foreign exchange.

Speaking on the sharp fall in the rupee, Mayaram blamed it on global developments. “What we are seeing on rupee today is primarily on account of global developments and not so much due to domestic issues. The currency will correct itself soon as our fundamentals are strong, and the economy is on the right-track,” Mayaram said.

He further said the economy was showing signs of growth with inflation also moderating. “I think the moderation in Current Account Deficit (CAD) will take place very soon,” he said.

Mayaram also ruled out any government intervention to arrest the fall of the rupee. "We don't believe there should be an intervention to support the rupee. Fiscal deficit is completely under control, though CAD is an issue. I think the measures taken to boost exports should help moderate the current account deficit ," he added.

The official went on to say that the government was working to strengthening macroeconomic parameters which would help improve the value of the rupee.

New Delhi, June 12
India’s Sun Pharmaceuticals and Israel’s Teva will pay a sum of $2.15 billion to Pfizer and Takeda as part of patent infringement settlement for acid reflux medicine Protonix in the US.

“Under the terms of the settlement, Teva and Sun will pay a total of $2.15 billion to compensate Pfizer’s subsidiary Wyeth and Takeda for the damages they suffered when Teva and Sun launched ‘at-risk’ generic versions of Protonix prior to the January 2011 expiry of the patent for pantoprazole, the active ingredient in Protonix,” Pfizer said in a statement.

As part of the agreement, Teva will pay Pfizer and Takeda $1.6 billion and Sun will pay $550 million, it added.

“Teva will pay $800 million in 2013 and the remaining $800 million by October 2014; Sun’s entire payment will be made in 2013,” the company said.

Both Teva and Sun have admitted that their sales of generic pantoprazole infringed the patent that was held valid by a jury in New Jersey federal court.

Reacting to the development, Sun Pharma said: “Under the terms of the litigation settlement between Sun Pharma, and Wyeth, (now a division of Pfizer Inc.,) and Altana Pharma AG, (now known as Takeda GmbH) the parties have dismissed all their claims. Sun Pharma will pay a lump-sum $550 million as a part of this settlement.” In 2005, Wyeth and Altana had filed a patent infringement suit against Sun Pharma after the Indian firm filed its abbreviated new drug application for pantoprazole. Sun Pharma launched its generic pantoprazole in the US on January 30, 2008. In April 2010, a jury had determined that Altana's patent was valid.

On June 3, 2013, the court began a jury trial to assess the amount of past damages that Sun Pharma owed for infringing Altana’s now expired patent.

“This settlement now culminates the ongoing litigation,” Sun Pharma said, adding that it can continue to sell its generic pantoprazole in the US. The settlement comes after a nearly 10-year legal battle in which Pfizer and Takeda sought to enforce the patent its acid reflux medicine. — PTI

New Delhi, June 12
The Supreme Court today directed 10 cement manufacturing companies to pay Rs 630 crore by June 24 as a pre-condition for hearing their appeals against a penalty of Rs 6,300 crore imposed on them for artificially hiking cement prices by forming a cartel.

A vacation Bench comprising Justices Gyan Sudha Misra and SJ Mukhopadhaya asked the companies to deposit the amount, representing 10 per cent of the penalty, with the Competition Appellate Tribunal (COMPAT) which would hear their appeal against the order of the Competition Commission of India (CCI).

The CCI had slapped the penalty on the 10 companies following a complaint by the Builders Association of India. It was alleged that the companies formed a cartel for under-utilisation of capacity to jack up prices during the period of peak demand. The companies are ACC, Ambuja Cements Ltd, Ultratech Cements, JK Cements, India Cements, Madras Cements, Century Textiles, Binani Cements, Lafarge India and Jaiprakash Associates Ltd (JAL).

The COMPAT had directed them to deposit 10 per cent of the penalty by June 16 to facilitate hearing of their appeal, prompting them to challenge this order in the SC. Affirming the tribunal's order on the amount, the SC however extended the deadline for payment.

Counsel for the companies contended that the CCI had wrongly calculated the penalty amount by taking into account the profits of several cement companies, instead of restricting the exercise to the 10.

The 10 per cent of the penalty amount should be deposited with a nationalized bank until the disposal of their appeal, the SC said.

The cement companies were fined 50 per cent of their average profit for 2009-11 representing the period that had been subjected to investigation.

New Delhi, June 12
The government has decided to sell 9.33 per cent stake in MMTC on Thursday and has fixed the floor price at Rs 60 apiece, which will fetch the exchequer about Rs 600 crore.

“We will divest 9.33 per cent in MMTC through OFS route," said Disinvestment Secretary Ravi Mathur.

The Empowered Group of Ministers (EGoM), headed by Finance Minister P Chidambaram, has fixed the base price at Rs 60 apiece for MMTC disinvestment, an official said. The stake sale in MMTC, said a top Commerce Ministry official, would fetch the government around Rs 600 crore.

MMTC disinvestment would be the first stake sale of the government in the current fiscal. The government aims to raise Rs 40,000 crore from PSU stake sale in 2013-14.

There is a huge difference between the floor price and the market price of MMTC as the scrip is illiquid, an official in the disinvestment department said.

The government currently holds 99.33 per cent stake in state-run trading giant and the stake sale would help the company to meet SEBI's minimum public shareholding norm. The stake sale, which was originally slated to take place in March, was deferred on valuation concerns. — PTI