Given that savings are above 30% of GDP and given the normal incremental capital-output ratio...the measures that we have taken will yield results and we will get back to the high-growth path... The movement will be visible in 2014 — P Chidambaram, Finance Minister

Mumbai, November 15
With the green shoots of recovery visible, Finance Minister P Chidambaram today exuded confidence that the economy will pick up in the second half and record a growth of 5-5.5% in 2013-14.

He, however, sounded a note of caution for investigative authorities, saying all commercial decisions should not be seen as "motivated or malicious." "I am confident that the greenshoots that are visible here and there will multiply and that the economy will revive.

green shoots of recovery Exports grew 13.4% in October, the fastest pace in two years The eight core sector industries expanded by 8% in September, the highest rate in 11 months Index of Industrial Production (IIP) rises to 2% in September as compared to 0.43% in August

There will be an upturn in the second half of this year," Chidambaram said in an address to bankers at Bancon 2013.

"It's quite possible that the estimates made by the RBI or the Prime Minister's Economic Advisory Council or the government about growth being between 5 and 5.5% will be realised," he said.

GDP growth fell to a decade-low of 5% in 2012-13 as investments slowed and factory output decelerated. In the April-June quarter, the growth rate was 4.4%.

Chidambaram said the government will be able to contain the fiscal deficit at 4.8% of the GDP and narrow the current account deficit (CAD) to less than $56 billion, though inflation continues to be worrisome. Chidambaram asked the bankers to deal firmly with wilful defaulters and support those who are reeling under the impact of the economic slowdown.

"As far as government is concerned, I assure you as long as you take decisions based on facts and circumstances available to you at that time and do it at an appropriate level and an appropriate committee or an appropriate forum and exercise your best judgement, we will defend you and stand by you", he said. India’s exports grew 13.4% in October, the fastest pace in two years.

The eight core sector industries expanded by 8% in September, the highest rate in 11 months. This pulled up the Index of Industrial Production for the month to 2% compared with 0.43% in August.

Chidambaram said it was a pity that a country of India's size could not achieve its potential growth rate of over 8%.

"Given that savings are above 30% of GDP and given the normal incremental capital-output ratio...the measures that we have taken will yield results and we will get back to the high-growth path. Movement towards the high-growth path will be visible in 2014," Chidambaram said.

He said inflation was "the most difficult challenge." "We were able to contain WPI inflation for most part of this year until the recent spurt...We haven't been able to contain CPI-based inflation mainly because it is driven by food items, especially fruits, vegetables, eggs, meat and other items," he said.

While WPI-based inflation rose to an eight-month high of 7% in October, retail inflation was at a seven-month high of 10.09%.

"We will do whatever it takes to contain the fiscal deficit in the current fiscal to 4.8% of GDP. It is a red line, a red line which we can breach only at our peril. We will not breach that red line and we will contain the fiscal deficit," he said. — PTI

Mumbai, November 15
Praising industrialist Ratan Tata, Finance Minister P Chidambaram today described him as the Sachin Tendulkar of corporate India.

Chidambaram was speaking after honouring the Chairman Emeritus of the Tata Group with the first CII President's award for his contributions to industry and society.

With a large gathering of corporate leaders in attendance at the function in Mumbai even as the master blaster played his last test match at the nearby Wankhede Stadium, the Finance Minister said, "Ratan (Tata) is as big a draw as Sachin." Among those honouring the legendary entrepreneur were ONGC chief Sudhir Vasudeva, Kris Gopalakrishnan of Infosys, ITC's YV Deveshwar, Azim Premji of Wipro, Rahul Bajaj, Adi Godrej and S Ramadorai of TCS.

Tata said he was humbled by the honour and recalled how late Prime Minister Rajiv Gandhi had appreciated the role of the CII in transforming the country.

Recalling his statement about not wanting to be taken out of Bombay House, the Tata Group headquarters, in a coffin as there is life beyond the boardroom - the reason for his decision to retire at 75 - Tata said he is happy he could meet his commitment to call it a day when he was in good health.

Even after pleas by shareholders to reverse his decision, Tata stood his ground and retired as Chairman of the salt-to-software group on December 28, 2012.

Stating that Tata was the most suitable candidate for the award, Chidambaram said it's a no-brainer that the jury chose the renowned industrialist as such an award can only be given to Tata.

"I admire Ratan for his frugality...I admire him for his few words, for creating millions of jobs in the country and thousands abroad...I admire Ratan for drawing a sand line between corporate management and control. Industrial houses should emulate what Ratan has established in his Group." — PTI

We will introduce new variants of interest rate futures and products like inflation indexed certificates, and work to improve liquidity in derivative markets — Raghuram Rajan, RBI Governor

Mumbai, November 15
RBI Governor Raghuram Rajan today called for purposeful and effective action to counter the atmosphere of cynicism, which has slowed down the decision-making process, and to tap growth opportunities. "We are going through a period of great cynicism about what India can do. That cynicism does not just permeate the foreign press and their audiences, but also infects our domestic debate. Every policy is greeted with suspicion and scrutinised for evidence of malfeasance.

"With no upside to making decisions, it is no wonder that decision making has slowed. The solution, however, cannot come through inaction but through action, action that is, and is seen to be, purposeful, unbiased, and effective," he said while addressing the Bancon 2013 here.

He further said there would be mistakes, but if the weight of clean actions builds up, the suspicion that pervades in the society will ebb.

Referring to five pillars of the financial sector policy of the central bank, Rajan said in the next few weeks measures will be announced to incentivise banks for early detection of bad loans and better resolution and fair recovery of non-performing assets.

For the benefit of customers, he said the RBI has set up committees, like the B Sambamurthy Committee, to advise it on how to expand mobile banking in India through encrypted SMS-based funds transfer in any type of handset.

Emphasising that liquid markets will help banks offload risks, Rajan said it will also allow banks to sell assets such as long-term loans to completed infrastructure projects. — PTI

New Delhi, November 15
The government is finalising a new National Steel Policy (NSP) focusing on infrastructure development, securitisation of raw materials and human resource development for growth of the steel industry.

This was announced by Steel Minister Beni Prasad Verma while inaugurating the Assocham’s 7th India Steel Summit here today.

Verma said the need for utilisation of iron ore, improving product mix and better logistics are some of the key areas. He said the product basket offered by Indian steel manufacturers must be enlarged, keeping in view the changing requirements of customers. He said the steel industry needs to invest more in research and development.

BRIEFLY

Wipro Continental Europe biz head
New Delhi: Software services major Wipro on Friday said it has appointed Ulrich Meister as senior vice-president and head of its Continental Europe business. Meister will be based in Frankfurt, Germany, and report to CEO TK Kurien, the company said. — PTI

Vedanta plunges into $217 m loss
London/Delhi: Mining conglomerate Vedanta Resources plunged into a $217 million loss for the six months ended September 30 amid lower metal prices and currency losses. The London-listed company had reported a profit of $173.6 million in the corresponding period of 2012-13. Core profit, or earnings before interest, tax, depreciation and amortisation (EBITDA) declined 14% to $2.207 billion from $2.571 billion a year earlier. — PTI