Singapore, January 28
Shares in Asia fell 3 per cent on Monday as concerns over the health of the global economy returned to haunt stock markets, sending investors to seek safe haven government bonds.

The yen rose against other currencies as investors shunned riskier bets and unwound currency carry trades, while oil drifted back down below $90 a barrel with traders saying Friday's $1.30 surge might have been overdone after Wall Street ended the week on a down note following two days of sharp gains.

Europe's stock markets were tipped to fall, with financial bookmakers predicting Britain's FTSE 100, Germany's Dax and France's CAC-40 to open around 2 per cent lower.

Investors resumed selling after last week's nerve-wracking rollercoaster, which saw global equity markets toppled by growing despair over the US economy earlier in the week and then lifted by a $150 billion stimulus plan agreed by US legislators and the White House.

"The sell-off is hitting all sectors regardless of each company's earnings and outlook," said Kim Joong-hyun, an analyst at Goodmorning Shinhan Securities.

"Although last week's US rate cut has calmed down panic selling, a recovery from the economic woes and the financial sector's debt problems should take a long time."

Seoul's KOSPI index shed almost 4 per cent. Foreign investors continued their selling spree for the 18th straight session, dumping 268 billion won ($283 million) in net value on the main board.

Japan's Nikkei benchmark ended down 4 per cent. Goldman Sachs said Japan's economy may be already in recession, due partly to weaker exports and sluggish consumption.

Australia's market was shut for a public holiday. Hong Kong's Hang Seng slid 3 per cent, while MSCI's index of Asia-Pacific stocks excluding Japan fell 3.4 percent by 0700 GMT, taking year to date losses back above 12 per cent.

Shanghai suffered the worst losses, falling 7 per cent, dented by heavy snow across central and eastern China, which is seriously disrupting food and energy supplies.

Traders were eyeing this week's Federal Reserve meeting, at which the bank is set to cut US interest rates again, having slashed them in an emergency move last week. — Reuters

Mumbai, January 28
Recession in the US and Europe may prove to be a big opportunity for Indian IT companies, Infosys chief mentor N R Narayana Murthy said here today.

"The fact that there may be a slowdown in the US means people will become much more concerned over better value for money," Murthy told reporters at a function.

He noted that Indian IT companies were well placed to withstand shocks in the global economy. Murthy said the focus on better allocation of money means a greater opportunity for India.

New York, January 28
People of Indian origin seem to have developed a habit of making it to the Forbes magazine — this time it is for making investments in start-up companies and then selling off their stakes with handsome gains.

As many as 12 Indian-origin persons have made it to a list of 100 dealmakers with 'midas-touch' prepared by the renowned business magazine, based on the value of the companies these people have taken public or sold in the past five years as well as the capital and involvement it took to get there.

Ram Shriram, a founding board member of internet search giant Google, has been named at the third position in the renowned US-based business magazine's Midas 100 List.

The list has been topped by L John Doerr of Kleiner Perkins Caufield & Byers, whom Forbes has described as the "mentor and money man to founders of Google, Amazon, Intuit and Sun Microsystems."

Shriram, who currently runs venture capital firm Sherpalo and made a fortune by making early investment in Google, has moved up one position from his fourth rank last year. He has also invested in travel portal Cleartrip and internet-based photo service provider Xoom.in, in addition to online money management firm Mint.com.

Shriram is accompanied by 11 other persons of Indian origin on the list, including Navin Chaddha (10th) — an IIT graduate who heads India investments of Mayfield Fund, and well-known venture capitalist Vinod Khosla (70th).

Chaddha, ranked 58th in the previous year's list, has successfully managed deals like IL&FS Investsmart and India Infoline in financial services space and Provogue in fashion.

Others on the list are Aneel Bhusri (16th), Parag Saxena (31st), Arjun Gupta (51st), Rob L Soni (58th), Deepak Kamra (69th), Raman Khanna (74th), Ravi Adusumalli (77th), Shirish Sathaye (82nd) and Rob S Chandra (96th).

Vedanta Capital's Parag Saxena has invested in sectors ranging from wireless to biotech and has successfully raised $1.4 billion fund - New Silk Route. — PTI

New Delhi, January 28
The Indian industry is hopeful that there would be a reduction in interest rates by the Reserve Bank of India, which will review the credit policy tomorrow. The industry honchos demanded policy support that would help in retaining the growth the country has been witnessing, according to a survey conducted by industry body Assocham.

Majority of the 285 CEOs surveyed by the Assocham Business Barometer (ABB) felt that the Indian economy caught between early but tentative signs of sluggish domestic growth and weakening global demand would require policy support to retain the growth achieved consistently for the past three years.

As many as 84 per cent of the respondents of ABB done prior to the RBI policy review hoped for a cut in the repo rate by the Reserve Bank in view of the 75 basis points reduction in the Federal reserve rate.

The corporate heads felt that the interest rates have reached their peak and are in fact hurting the industrial growth.

Around 90 per cent of them said the continuous policy inaction of the regulator may hurt the confidence of the business community.

While 70 per cent of the respondents felt that ideally there should be 50 basis points cut in the repo rate, 51 per cent said the reduction could be only 25 basis points.

"The industry expects the central bank to undertake moderation in interest rates under the global as well as domestic compulsions," Assocham president Venugopal Dhoot said.

In view of the bleak outlook for the US economy, currently undergoing slump in housing market, strained financial markets, rising unemployment rate, softening in overall economic activity, the Federal Reserve has reduced its interest rate by 75 basis points.

"A possibility of further reduction is not ruled out," Assocham said.

Further slashing in Fed rate would create the situation of "arbitrage opportunities" for the global investors wanting to shift their funds from the low yield US and other developed markets, to high-return Indian market "This would lead to surge in the capital inflows and aggravation of the problem of rupee appreciation," it said.

The RBI has been following the tight monetary policy to avoid the inflationary pressures built up with around 9 per cent growth in the economy and major supply constraints.

The CEOs poll cited rise in global food and oil prices as the major impediment to a move by the central bank for a rate cut.

The rise in borrowing cost coupled with rise in exchange rates in favour of rupee has led to slowing down in the export-oriented manufacturing and construction which have a bearing on employment, the chamber said.

It said, while the the overall growth rate of manufacturing has come down to 9.8 per cent for the period April-November 2007 as compared to 11.8 per cent a year ago, the consumer durables sectors have recorded a decline of 1.7 per cent for the eight month period against of 12.4 per cent.

As many as 92 per cent of the respondents believed that there is no absolute "de-coupling" of Indian economy with that of the US. "RBI Governor has given an indication that the monetary policy will take into consideration the global situation," Assocham said.

New Delhi, January 28
The official committee on value added tax today said the proposed goods and service tax (GST)rates, slated to be introduced from April 1, 2010, would be few and common between the Centre and states "as far as possible".

"So far as the empowered committee of state finance ministers is concerned, we have reached a convergent position among ourselves... There would be few rates... and common rates between the Centre and states as far as possible,encompassing both goods and services," panel chairman Asim Dasgupta said.

He said the panel would submit its recommendations to finance minister P Chidambaram this fiscal.

However, Dasgupta refused to answer any further query on GST, citing the approaching budget sessions of many state assemblies and the union budget. GST is proposed to be introduced from April 1, 2010, to integrate all indirect taxes on goods and services, except customs duties, at the state and central level.

Earlier last month, the committee had accepted a recommendation by a working group to have "dual" GST structure at the Centre and state level. This means there would be two chains of tax structures. Dasgupta had earlier stated that the GST model is being formulated in a manner that would bring down the overall incidence of taxes. — PTI

New Delhi, January 28
Even as economy and capital markets exhibit strong fundamentals-led growth and vibrancy, their sustained growth hinges on the ability of the market regulator and the players to cope with five key challenges, including political uncertainties till the general elections are over, a Ficci-Ernst & Young paper has warned.

The paper on ‘Capital markets - Sustaining growth and the challenges ahead’ lists pressure on exchange rate, interest rates and inflation; rising oil prices; subprime crisis, US slowdown and other global economic dynamics as other challenges.

Some of the global challenges that India will need to manage in the near term are fallout of subprime and its impact on the US economy, which is believed to be inching towards a slowdown.

Rising oil prices, the paper points out, continue to remain a concern for India. In order to address this, India needs to be more proactive and opt for energy efficiency, which will also help in reducing global warming.

The paper states that retail investors have seen increased participation directly and through financial assets such as mutual funds and unit-linked plans. Institutional investors — both domestic and foreign — have huge funds, which is flowing into the markets.

The investor classes, however, require a strong impetus to expand flows into the markets. The retail investors are an expanding class as the per capita income is on rise. However, only a small portion is in the markets.

The paper suggests that in order to improve the financial depth in the market through domestic institutions, relaxation of asset allocation norms is important and these should be supported by improved risk management capability to manage portfolio risk and provide investor protection.

Chandigarh, January 28
The indirect tax structure is stalling growth of the Rs 600 crore-premium and luxury watch industry in the country. With a custom duty of almost 40 per cent on these watches, the year-on-year growth is 25 per cent. This could go up to 100 per cent, if the tax structure is reduced to 20 per cent.

The All India Federation of Horological Industries (AIFHI) has urged the finance minister to replace indirect tax structure with a goods and services tax. They have also demanded that the basic duty on these watches be reduced from the present 10 per cent to 7.5 per cent. The reduced tax structure would also help in curbing smuggling of watches in the country.

Industry sources say 60 per cent of the four crore watches sold in India are either smuggled or made of smuggled parts. This hurts the interests of Indian companies who work within a strictly legal framework, and also encourages an illegal parallel market. Talking to The Tribune here on the sidelines of the launch of a new line of watches by Seiko, Yashovardhan Saboo, vice-president, AIFHI, said though custom duty on these premium and luxury watches was reduced by 5 per cent last year, a further reduction would help accelerate sales in the country.

“With the sales going up, a number of these watch manufacturers could turn to India for setting up their manufacturing base,” he said, adding that with a high tax structure, India cannot compete with countries like Dubai and Singapore where the custom duty is negligible.

Premium watchmakers from Japan, Seiko, which started its operations in India seven months ago, see a huge potential in the Indian market.

Atsushi Kaneko, managing director, Seiko Watch (India), said sales volumes had grown beyond their expectations in the past six months, and they were now amongst the top three watch brands in premium category.

New Delhi, January 28
They may not see eye to eye on many issues and clash in Parliament on many others, but on minimum support price (MSP) and farm credit issue both the Left and the right are on the same side.

Both the BJP and the Left parties have demanded enhancing the MSP of paddy to Rs 1,000 per quintal and have sought slashing of interest rate on farm loan to 4 per cent.

The main opposition party and the Left have also demanded implementation of the Swaminathan Committee report.

In a resolution adopted at the national council meeting here, the BJP has demanded that the Centre should take immediate steps to see that the farmers be given loans at not more than 4 per cent interest for agriculture and allied activities. It has also demanded allowing the farmer to migrate his private loans to the banks.

Seeking implementation of the recommendations of the National Commission on Farmers, the BJP asked the Centre to assure the farmer of actual cost of production plus 50 per cent over the above as the MSP for his produce.

While releasing an Assocham study on ‘Agricultural scenario: Agenda for farmers’ prosperity’ here yesterday, CPM leader Sitaram Yechury also made a similar demand on MSP and farm credit.

Besides, the BJP also demanded that the Centre should immediately announce loan remission policy and write off loans up to Rs 50,000 as one time measure and create an agri risk fund.

It also sought amendment to the present Land Acquisition Act in consultation with all states. “As a general rule, the government should not acquire fertile, irrigated agriculture land for private and public sector without exhausting the option to acquire non-agriculture land,” it said.

The BJP also demanded making crop income insurance farmer friendly and mandatory for all states and the adivasis (scheduled tribes) should be given forestland ‘pattas’, instead of ‘adhikar patra’, to enable them to have ownership right and avail credit from banks and other financial institutions.