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Industry disappointed over repo rate hike
CCEA okays Rs 2.19 lakh crore IT investment plan for Hyderabad
Cabinet clears HPCL’s Rs 37,229-cr refinery in Rajasthan
Rajan for ‘bullet-proof’ shield to deal with US Fed tapering
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Railways considering use of LNG as fuel for locomotives
NBFCs to facilitate purchase of Hero cycles
India gets ‘authorising nation’ status under CCRA
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Industry disappointed over repo rate hike
New Delhi, September 20 “The increase in the repo rate by 25 basis points has come as a surprise to us. The RBI has admitted that industrial activity continues to remain sluggish and even consumption demand is now starting to weaken in the economy. In such a scenario, a positive signal by way of a cut in the repo rate, would have helped perk up sentiments. Entrepreneurs are holding on to their investment plans pending any relaxation in monetary policy by the RBI", she said. The change of guard at the RBI did not change the stance much which remained hawkish. While the US Fed had surprised with a dovish stance, RBI surprised with a hawkish stance and unexpectedly raised the policy rate by 0.25 per cent as it kept its focus on controlling inflation, which it felt would be above the expected levels in the current fiscal. “The increase in repo rate could have been avoided as the industry is already reeling under pressures of high cost of capital and low availability in a tight liquidity situation. Industry would have liked reduction in headline rates,” CII Director-General Chandrajit Banerjee said. PK Ghose, executive director and CFO, Tata Chemicals, said the main area of concern for the industry is the external sector which will remain volatile due to oil prices and reduced demand from global markets. Analysts said the RBI stance has been influenced by the recent hike in inflation. Sunil Kumar Sinha, director, Public Finance, India Ratings, said in the evolving growth-inflation dynamics, RBI’s current stance clearly reflects its intention to anchor both — as well inflationary expectations — in the economy. “The key reason for such policy stance has been triggered by the reversal in the declining trajectory of WPI inflation, high retail inflation and the presence of suppressed inflation in the economy on account of recent depreciation in the rupee”. Real estate players said the wait for respite in interest rates has got longer. Harindra Nagar, MD, Paras Buildtech, said the real estate market has had huge expectations from the RBI but it seems the central bank wants to create a conducive environment before pushing for growth in the overall economy. The increase in repo rate could have been avoided as industry is already reeling under pressures of high cost of capital and low availability in a tight liquidity situation. Industry would have liked reduction in headline rates.
— Chandrajit Banerjee, Director- General, CII Contrary to expectations, the RBI has chosen to further tighten the monetary stance giving a clear signal that fighting inflation is its core priority. RBI Governor Raghuram Rajan has acted in a cautious manner, the financial markets were perhaps expecting too much from him. —
Rana Kapoor, President, Assocham The RBI has admitted that industrial activity continues to remain sluggish and even consumption demand is now starting to weaken in the economy. In such a scenario, a positive signal by way of a cut in the repo rate would have helped perk up sentiments. — Naina Lal Kidwai, President, Ficci |
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CCEA okays Rs 2.19 lakh crore IT investment plan for Hyderabad
New Delhi, September 20 Hyderabad, already a home to some of the biggest IT brands in the world, has been witnessing a slowdown in recent years due to an impasse over Telangana state. The new proposal would help generate 15 lakh direct jobs, the government said. The clearance came at the meeting of the CCEA chaired by Prime Minister Manmohan Singh. "The CCEA has approved setting up of ITIR near Hyderabad subject to fulfilling certain conditions...The total investment for the ITIR will be around Rs 2.19 lakh crore," Information and Broadcasting Minister Manish Tewari told reporters after the meeting. Of the total investment, the IT/ITeS sector is to attract investments of Rs 1.18 lakh crore and the electronic hardware manufacturing (EHM) sector Rs 1.01 lakh crore. The ITIR would be a combination of production units, logistics, public utilities, environment protection mechanism, residential areas and administrative services. The move would come as a major boost to the city as a large number of companies have even downsized their operations in Hyderabad because of frequent bandhs and processions by pro and anti-Telangana activists. Some are threatening to shift their base or operations to neighbouring Bangalore or Pune. The government has also proposed upgrade of three radial roads and extension of the metro rail from Falaknuma to Shamshabad international airport at a cost of Rs 3,275 crore as part of the project. The Andhra Pradesh government has delineated an area of 202 sq km for the proposed ITIR in three clusters - Cyberabad Development Area and its surroundings, Hyderabad Airport Development area and Maheshwaram in the south of Hyderabad and Uppal and Pocharam areas in eastern Hyderabad. The ITIR will be implemented in two phases. It is expected to develop into a key industrial region for IT, ITeS and electronic hardware manufacturing sectors. Special consideration will be given to SMEs. It would include SEZs, industrial parks, free trade zones, warehousing zones, EOUs, growth centres, existing settlements and industries. It will also include estates and services.
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Cabinet clears HPCL’s Rs 37,229-cr refinery in Rajasthan
New Delhi, September 20 The refinery will be set up in a joint venture (JV) with the Rajasthan Government under the name HPCL-Rajasthan Refinery Limited (HRRL). UPA chairperson Sonia Gandhi will lay the foundation stone of the project on Sunday. The proposed refinery will be a subsidiary of HPCL with its equity of 74 per cent to be held by HPCL and 26 per cent to be held by the Rajasthan Government. The cost of the project is estimated at Rs 37,230 crore. The total equity component is Rs 14,892 crore and debt is Rs 22,338 crore. HPCL’s equity contribution is Rs 11,020 crore while the state government will contribute Rs 3,872 crore. HPCL has signed a memorandum of understanding in March this year with the state government. Chief Minister Ashok Gehlot has said this will be the biggest investment in Rajasthan. He said industries will be set up and people will get employment on a large scale. Gehlot said it will pave way for the refinement of crude oil explored in the state as Rajasthan shares 20 per cent of the total crude oil produced in the country. According to a Cabinet statement, there shall be a direct and indirect economic benefit to the economy of Rajasthan, which shall, besides industrialisation, result in substantial increase in income, output, employment and tax earnings of the state. The project is likely to provide employment to 1 lakh people directly or indirectly and is proposed to be completed
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Rajan for ‘bullet-proof’ shield to deal with US Fed tapering
Mumbai, September 20 "What we need to do is put our house in order before it (tapering) comes back. The postponement of tapering is only that, a postponement. We must use this time to create a bullet-proof national balance sheet and growth agenda, which creates confidence in citizens and investors alike," he said. The US Federal Reserve Wednesday decided against tapering its monetary stimulus under which it has been buying assets worth $85 billion every month. In view of the US Fed's crucial meeting on Wednesday, Rajan had postponed the mid-quarter policy announcement from September 18. "I do think, short-term, it (tapering) has in a sense postponed some of the concerns. My sense is that the markets were quite prepared for a moderate tapering. And, what this has done is, in a sense, it has again created the possibility of uncertainty down the line," the Governor said. — PTI
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Railways considering use of LNG as fuel for locomotives
New Delhi, September 20 The Research Design & Standard Organisation (RDSO), a research wing of the Ministry of Railways based at Lucknow, is working on development of a prototype of locomotive based on Liquefied Natural Gas (LNG). Once the prototype is proven on field, the Railways plans to build 20 LNG-based locomotives. The technology will help 50 per cent reduction in operating cost of locomotive even at the current enhanced LNG prices. In addition, there is an elimination of visible smoke from these locomotives and significant reductions in other regulated and unregulated emissions. Once Indian Railways switches over completely to natural gas as fuel for its diesel locomotives, it would amount to only 2.2% of India’s annual natural gas consumption of 81 million tonne and will, therefore, be commercially feasible. At present, Indian Railways is running its fleet of locomotives on predominantly two fuels — diesel and electricity. Prices of both these fuels have been rising rapidly due to increasing prices of crude oil/imported coal, devaluation of rupee. Natural gas is emerging as a promising fuel of the future and LNG being available in the form of conventional natural gas, shale gas, gas hydrates, the introduction of economical processes of extraction of shale gas, exploitation of shale gas reserves has become a commercial reality. India also has substantial reserves of natural gas in the form of conventional natural gas, shale gas and gas hydrates. According to an estimate, India has 1,241 billion cubic metres of conventional gas, 7462.5 billion cubic metres of recoverable shale gas reserves and 1,890 trillion cubic metres of gas hydrates. The US and Canada have become the world’s highest exporters of natural gas on account of their shale gas reserves. To make use of global reserves of natural gas, India is setting up infrastructure for import of LNG into the country. Even LNG terminals are in various stages of set-up on the east and west coasts of the country, all with rail connectivity.
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NBFCs to facilitate purchase of Hero cycles
Ludhiana, September 20 The company has launched a pilot project in Maharashtra and Gujarat where it has entered into a strategic tie-up with Fullerton India. The company will soon extend this facility across the country. |
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India gets ‘authorising nation’ status under CCRA
New Delhi, September 20 India has become the 17th nation to earn such recognition among the 26-member CCRA countries. The other countries include the US, Britain, Germany, South Korea, France, Japan, Canada, Australia, Turkey and Malaysia, the Communications and Information Technology Ministry said here yesterday. So far India was having the status of ‘Consuming Nation’ with respect to certification of electronics and IT products. The status of ‘Authorising Nation’ will enable India to test IT and Electronics products and issue certificates which will be acceptable internationally. The recognition would also enable investment in setting up infrastructure and labs in public and private sectors in India for testing electronics and IT products. It would also remove the bottleneck which as of now had prevented international companies from submitting their products for testing and certification in India. For the last 5-6 years, Standardisation Testing and Quality Certification (STQC) Directorate of the Department of Electronics and Information Technology (DeitY) has been operating the Common Criteria Certification (CC Certification) scheme. Under it, STQC undertakes certification of electronics and IT products after evaluation of the products at its lab in Kolkata. The certificates issued by STQC Directorate shall now be acceptable internationally by all CCRA member countries.
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