Mumbai, October 28
The RBI has warned of continuing inflationary risk to the economy even as it reduced the growth forecast for the current financial year to 4.8% from 5.7%.

In its macroeconomic report released here ahead of the monetary policy review tomorrow, the central bank warned that both wholesale and consumer price inflation are likely to remain high during the rest of the current fiscal year.

The RBI raised the WPI forecast to 6% from 5.3% for FY14 while it lowered WPI forecast for FY 15 to between 5.5% and 5.7%.

The RBI in its report also lowered FY15 growth forecast to 5.8% from 6.5%.

"Both WPI (wholesale price index) and CPI (consumer price index) inflation may stay range-bound around the current levels that remain above comfort levels," RBI said.

The central bank noted that a drop in food inflation was required in order to bring down broader consumer price inflation. "However, pending sufficient supply responses, it is important that monetary policy keeps a tight leash to prevent relative price shocks in the current year from getting generalised," RBI said.

Meanwhile, RBI Governor Raghuram Rajan today hinted at increasing the key rate at the second quarter monetary policy review tomorrow, citing urgency to anchor inflationary expectations.

"With the normalisation of exceptional monetary measures under way, incremental calibration will be shaped by changes in the growth-inflation balance, keeping macroeconomic stability in consideration," he said in the Macroeconomic and Monetary Developments report on the eve of the policy announcement.

However, the report adds, "Macroeconomic risks still exist with some upward pressure on inflation and the possibility of fiscal slippage, thus posing new challenges." Acknowledging that growth has dipped below potential, Rajan said a revival will require "complementary monetary, fiscal and regulatory policies," apart from increasing fuel prices to contain demand, productivity enhancement and quick project implementation.

The report said "we can expect a modest recovery in growth in the second half on good monsoon, and an uptick in exports and industrial production." Rajan, who took over as head of the central bank last month, warned there is a risk of fiscal slippage due to the widening revenue deficit and high capital expenditure by the government in the first half, which has exhausted over 74.6% of the fiscal deficit target already.

High food prices, especially of onion and some other vegetables, pushed up September inflation to a seven-month high of 6.46%.

Inflation as measured by the wholesale price index (WPI) rose for the fourth month in a row. Inflation was 6.1% in August and 5.85% (revised upward from 5.79%) in July. In September last year, it was 8.07%.

The sharpest increase was in onion prices, which jumped 322.94% in September, over the same month last year.

New Delhi, October 28
The government is likely to carry out stake sale in Coal India Ltd (CIL) either in November or December.

The Coal Ministry has sought the approval of the Cabinet Committee on Economic Affairs (CCEA) for the disinvestment and would work out the modalities for the 5% stake sale in the coming two months.

Coal Minister Sriprakash Jaiswal said, "It is likely that it (stake sale in CIL) may happen either in November or December".

The minister added the CIL chairman was abroad with a team of officers to woo the foreign investors to pick up stake in the country’s largest coal producer.

The disinvestment department (DoD) has been holding roadshows spanning across five nations, including Germany and the UK, with the idea of wooing the prospective investors.

The government is looking forward to divesting 5% of its stake in CIL which is expected to bring in over Rs 10,000 crore to the national exchequer.

The government has reportedly selected seven merchant bankers for the stake sale - Goldman Sachs, Credit Suisse, Deutsche Bank, SBI Capital Markets, Kotak Mahindra Capital, JM Financial and Merrill Lynch.

The government currently holds 90% stake in CIL, which is valued at Rs 1,88,227 crore, while FIIs hold 5.51%, DIIs 2.34% and the remaining 2.15% is with other shareholders. 

New Delhi, October 28
Diesel prices should be immediately hiked by Rs 4-5 per litre, the Kirit Parikh Committee has recommended while favouring continuation of existing pricing principles for controlled petroleum products.

The expert group, which was tasked to suggest a methodology for pricing of diesel and cooking fuel, will submit its report on Wednesday.

Sources said the committee has suggested that trade parity pricing formula for diesel, kerosene and cooking gas (LPG) be retained.

It suggested an increase in its retail price by Rs 4-5 per litre immediately and the remaining subsidy recovered from consumers through a monthly price hike of Re 1 per litre or oil companies be paid a fixed subsidy of Rs 6 per litre.

The government is looking to alter the way diesel and cooking fuels are priced to reduce its subsidy burden, which appears to be spiralling out of hand.

Since the last fiscal, the Finance Ministry has pushed for refiners to be paid the equivalent of rates they would have realised if diesel, kerosene and LPG were exported.

A departure from the import parity price (import price plus duties and transportation) mechanism would have shaved off Rs 17,618 crore from last fiscal's Rs 1,61,029 crore subsidy bill.

Sources said the panel has declined the Finance Ministry's demand for doing away with import parity pricing of diesel, kerosene and LPG. — PTI

Mumbai, October 28
A severe shortage of gold in the wake of tight controls on the import of the yellow metal has hurt jewellers across the country who are now turning away customers.

With Dhanteras considered auspicious for purchase of gold falling on November 1, jewellers are turning away customers. "We do not have gold jewellery to sell, so we are advising customers to buy silver jewellery," said Anmol Jain, a jeweller at Zaveri Bazaar in south Mumbai.

Most jewellers are banking on diamond jewellery to protect their margins since the amount of gold required to make these ornaments is lesser. A number of jewellers in Mumbai have also come up with various schemes under which customers are encouraged to bring in their jewellery for refurbishing and re-setting.

As per sources, gold imports have fallen sharply after the government ruled that only exporters who can re-export 20% of the gold imported by them are allowed to bring in the yellow metal. As a result, only a handful of big exporters are bringing in gold and they are selling jewellery under their own brand names.

Small jewellers simply do not have any gold to sell. "There is simply no gold in my shop," says Ramakant Raikar, a small jeweller at Borivali in north Mumbai.

Customers looking to buy gold will thus have to return disappointed.

New Delhi, October 28
Maruti Suzuki India today said its net profit surged nearly three-fold at Rs 670.23 crore for the second quarter ended September 30, 2013.

The company had posted a net profit of Rs 227.45 crore in the corresponding period last fiscal.

Net sales during the quarter under review stood at Rs 10,211.83 crore as against Rs 8,070.11 crore in the same period a year ago, the company said.

In terms of volumes, sales were up by 19.6% to 2,75,586 units compared to 2,30,376 in the year-ago period.

New Delhi, October 28
Voicing concerns over "the discriminatory measures" in the US immigration legislation, Commerce and Industry Minister Anand Sharma today said the Bill will undermine competitiveness of the Indian IT services industry.

Sharma raised these concerns in a meeting with Steve Van Andel, chairman of the Board of Directors, US Chamber of Commerce, here today.

Sharma asserted the fact that Indian IT companies have contributed enormously to the US economy through job creation, local hiring, and enhancing the competitiveness of their clients, who included some of the US's largest businesses.

"Indian companies support more than 280,000 jobs in the US and have contributed more than $15 billion to the US Treasury in the past five years. Investments of more than $5 billion have been made in the past five years alone, by way of acquisitions", Sharma said.

Andel conveyed that the US Chamber is on the "same page" on the issue and there is need to be more vocal about the ill effects of the proposed legislation.

Highlighting the Delhi-Mumbai Industrial Corridor (DMIC) and National Manufacturing Investment Zones (NMIZs) as "path-breaking initiatives which will pave the way for a new age partnership between our two countries", Andel evinced US' interest in investment in these regions. Sharma said the DMIC, which passes through six Indian states, accounts for 43% of national GDP, half of industrial output and exports and employs 40% of total workforce.

Sharma also pitched for National Manufacturing Policy announced by Indian Government which has taken cognisance of the serious challenge of reviving the growth of manufacturing and raising its share in gross domestic product (GDP).

New Delhi, October 28
Vodafone India today launched discounted international roaming packs for both post-paid and pre-paid customers travelling abroad.

Covering 53 countries, including popular business and tourist destinations such as the UK, the USA, the UAE, Thailand and Singapore, these packs offer 95% discount on data and up to 78% discount on outgoing local and international calls as compared to prevailing rates.

The international roaming packs are available for a rental of Rs 599 and Rs 1,499 and come with a validity of 10 and 30 days, respectively.

For the list of applicable countries and networks, a subscriber needs to SMS Pack<space>country to 111.

Outgoing local and international calls will be charged at Rs 15/min and Rs 30/min, respectively, a discount of almost 78% over prevailing rates. Incoming calls will cost Rs 30/min (over 50% discount on prevailing rates).

The Rs 1,499 plan offers 30 minutes of additional free incoming calls.

Chandigarh, October 28
Gionee Mobile is looking at garnering 1% market share of smartphone market, especially in tier 2 and tier 3 towns, by the end of its first year in operations.

With a wide product portfolio and targeting smaller towns and cities, the company is hopeful of achieving its target. The company will also expand its retail network across the country.

Talking to The Tribune, Arvind Vohra, India head of Gionee, said the company is already selling 2,700 units across India everyday. “The total smartphone market in India is 220 million units per annum. Though we are selling well in the country, my focus is presently on getting more share in terms of value. Presently, we are focused on creating brand awareness of our products through an advertising blitzkrieg and strengthening our retail network,“ he said. Gionee has also tied up with four leading import and distribution partners based in Chandigarh, Jaipur, Kolkata and Bangaluru.

Gionee currently sells over 23 million handsets per year in China mainland and has been ranked number 2 brand in the GSM market. It has annual production capacity of 40 million units, which the company hopes to double soon.

“We have started at the bottom of the pyramid, and are first targeting the small towns. So far, we have not started retailing in big cities and metros. We have been concentrating on establishing a spare parts warehouse and creating a network of after sales service, before we go ahead and launch retail operations on a pan-India basis,” he said. 

New Delhi, October 28
Mobile ecosystem generated approximately 5.3% of GDP for India, directly supported 7,30,000 jobs and an additional two million jobs when points of sale and distributors are included during 2012.

According to an analysis of the socio-economic impact of the mobile industry in India, which has been brought out in the form of a report, “Mobile Economy India 2013”, by the GSM mobile operators worldwide umbrella body, GSMA in collaboration with the Boston Consulting Group, by 2020, mobile economy will contribute almost $400 billion to India’s GDP.

It would also create 4.1 million additional jobs and invest $9 billion in India’s infrastructure, with $34 billion contributed to public funding.

India is already the second largest market in the world in terms of mobile connections and unique subscribers, with nearly 900 million mobile connections and 350 million subscribers.

With improved spectrum pricing and management, growth of mobile broadband services is expected to continue, with 3G and 4G adoption projected to increase by 31% - from 107 million 3G and 4G connections in 2013 to 409 million connections in 2017.

The report, however, says the Indian mobile industry still lags behind most major economies in terms of mobile maturity and penetration.

“The Indian mobile industry is fast paced and innovative, but it currently lacks the regulatory environment to support its ambitions,” said Anne Bouverot, Director-General, GSMA.

New Delhi, October 28
Global merger and acquisition (M&A) deal volume has reached $2.3 trillion so far this year, registering an increase of 9% from last year levels, Dealogic said in a report.

According to the global deal tracking firm, global M&A volume has reached $2.30 trillion in 2013 year-to-date, up 9% from the $2.10 trillion in the corresponding period last year.

The M&A deal volume of $2.3 billion so far this year was the highest year-to-date total since 2008, when deals worth $2.77 trillion were announced. — PTI