Washington, February 2
The US economy suffered 17,000 job losses in January, marking the first monthly losses since 2003, according to a government report which highlighted fears that America is sliding into recession.

The surprise loss in non-farm payrolls caught most economists off guard as many had expected employment growth to continue in January.

Economists had anticipated that the world's biggest economy would create 70,000 new jobs in January, but the Labour Department yesterday said payrolls fell for the first time since August 2003 in a report President George W Bush called "troubling." "We should expect to see more bad news on the labour market, at least through the middle of the year, before the heavy doses of monetary and fiscal stimulus begin to kick in," said Nigel Gault, an economist at Global Insight.

The government revised December's job growth significantly higher to show 82,000 new posts were created compared with an initial estimate of 18,000 positions.

The national unemployment rate, based on a separate survey, declined slightly to 4.9 per cent last month compared with 5.0 per cent in December. Economists said this was partly because fewer people were seeking work.

"Ultimately, it means the Fed has got to keep cutting (interest) rates," said Ian Morris, a chief US economist at HSBC North America.

The monthly job survey was released after the government reported Wednesday that US economic growth slowed dramatically to a 0.6 per cent annualised crawl in the fourth quarter of 2007 from a blistering 4.9 per cent in the prior quarter.

The Federal Reserve has launched an aggressive rate- cutting drive to shore up growth amid increasing worries that the economy is on the verge of a recession.

Congress is, meanwhile, debating an economic stimulus plan worth around 150 billion dollars amid rising political angst about the state of the economy.

A persistent housing slump is threatening to derail growth as well as triggering job losses.

A total 27,000 jobs were shed in the construction industry in January, partly as home builders cut back on new developments.

The manufacturing sector cut 28,000 jobs while professional and business services companies laid off 11,000 white-collar employees. — AFP

Chennai, February 2
Korean car major Hyundai Motor Co today said it will invest $1 billion in India by 2013, strengthening its bid to make the country a global small car manufacturing hub.

The company today inaugurated its second plant at Sriperumbudur, set up with a total investment of $528 million (Rs 2,429 crore). It is also investing $263 million on a new engine and transmission plant with a capacity of 3 lakh units a year, besides investing $40 million on a research and development centre at Hyderabad.

With the commissioning of this plant, Hyundai Motor India is capable of producing 600,000 units per year, doubling its present capacity of 300,000 units per annum. The new plant is located within the same 525-acre plot in Sriperumbudur, 70 km from here, adjacent to the first plant.

Hyundai Motor chairman & CEO Mong-Koo Chung said: "We have recorded huge success in India in the past 10 years, since we started operations in this country in 1996. Our new plant will be the platform for future growth. I'm sure Hyundai Motor India will play its role perfectly as a global manufacturing hub for all of Hyundai's small car models.”

The new plant will be dedicated largely to the production of the company’s latest offering — the i10.

Hyundai Motor India's export destinations are expected to increase from 73 to 90 countries by the end of 2008.

Construction of the second plant began in November 2005 and was completed within 19 months. With the commissioning of the new plant, the company has set a manufacturing target of 5.3 lakh units for 2008.

Asked about the details of the $1 billion investment, Hyundai Motor India president Ashok Jha said most of it has already gone into the second plant and remaining would be invested on it, which will mark the next phase of expansion till 2013.

"With exports being a main focus we expect 50 per cent of our total production to be used for overseas markets," he added.

On plans to strengthen its position in the small car segment, HMIL senior vice-president for sales and marketing Arvind Saxena said the company was mulling over a new small car, which could be placed lower than its flagship model Santro.

"As of now it is just in the thought process. It may take another three years to develop this," he said, adding there was no plans to phase out the Santro.

On the sedan segment, Saxena said the company was studying the feasibility of bringing Avante as a replacement to Elantra.

The company's R&D centre in Hyderabad would undertake computer-aided design activities along with other research on low-cost materials.

"Right now, we are not looking at competing with Nano in pricing," Hyundai Motor chairman Mong-Koo Chung told reporters after the inauguration of the company's second manufacturing plant here. — PTI

The search, at least on paper, for the new chief of the National Aviation Company of India (NACL) has begun. But it seems the chairman and managing director V. Thulasidas may continue for at least a year as a strong lobby, inclusive of some senior politicians, are supportive of him.

The lobby comprising politicians and bureaucrats are advancing the reasoning that since Thulasidas is already at the helm until March 31, he should be continued until 'image building exercise' is completed after the turbulance that merger of Air India and Indian has unleashed.

Whatever Thulasidas's credentials, there is a section of officials who feel that superannuated bureaucrat should not continue as such a move chokes promotion of several others, who have worked diligently and aspired for higher positions.

The fact is that Thulasidas is desperately trying to stay on and the minister for civil aviation Praful Patel is not opposed to his continuation.

What are the chances of Vishwapati Trivedi being promoted from managing director to CMD? The aviation analysts say: "Very slim after the exposure of his sanctioning 116 passages to his family members".

As many as seven officials of the status of Lieutenant General and equivalent have applied for the coveted post.

If any one of them is eventually chosen, maybe, he will be able to reinduct work culture in the organisation, which is besieged with many problems pertaining to seniority, promotion and postings abroad. One official, who is still facing 'molestation' allegations in London, continues in the organisation. He moves from Delhi to Mumbai in ground handling department.

If any Services official takes over, he will be the second personnel to do so. The first was Air Marshal Shashi Ramdas, who was CMD of the Indian Airlines in early 1990s. He was both pilot and engineer.

As many as eight from the Indian Administrative Service (IAS) are candidates for the airline post. If, by chance, Thulasidas does not get it, there is a touch and go between Services personnel and IAS.

The cabinet secretary A.M. Chandrashekhar's screening committee has already started the 'process'. Then the short-listed candidates will be further screened by the Public Enterprises Selection Board (PESB). The chosen three will then be under the scanner of the Appointment Committee of the Cabinet (ACC), headed by the Prime Minister.

The situation in the NACL is very vex and there is some unrest among 'Indian' officials for not receiving their due promotion, positions and financial dues.

New Delhi, February 2
The country's largest car maker, Maruti Suzuki Ltd, today raised prices of its models by Rs 1,000-11,000, mainly owing to the higher raw material prices.

''We have increased the prices in a range of Rs 1,000-11,000 (ex-showroom, Delhi) and it will be effective in all the cities and is applicable to most of the models,'' said a company statement.

The price of Maruti 800, Wagon R Lx and Lxi (LPG) has been increased by Rs 1,000, while Zen Estilo Lxi and Vxi will become dearer by Rs 2,000.

Prices of Alto Lx and Lxi, and Omni (five-seater, eight-seater and Cargo LPG) have risen by Rs 2,500 and that of Wagon R Lx Lxi and Vxi has increased by Rs 3,500.

Versa (Standard and Dx2) prices have been escalated by Rs 4,000, Gypsy King by Rs 10,000, while the cost of SX4 Vxi, Zxi and Zxi models have been increased by Rs 11,000, the statement added.

The company accounts for around 50 per cent of all passenger car sales in the country, where robust demand is predicted to result in automobile sales tripling to three million units by 2015. — UNI

New Delhi, February 2
A day after major domestic steel makers raised prices of their products, the government has warned the steel industry to rein in prices saying that failure in doing so could attract a price regulatory mechanism.

"We have taken it (rise in steel prices) seriously. We want to increase the per capita consumption of steel and as such rise in prices will have to be reasonable," steel minister Ram Vilas Paswan said here today.

He pointed out that the usual alibi given by steel makers for raising the prices is that the rates have shot up globally. "We will meet the steelmakers within a week to ascertain the reasons behind this price rise," he pointed out.

Domestic steel majors like Tata Steel and SAIL yesterday increased prices of their various products by Rs 1,500-2,500 per tonne, citing rise in input costs and increase in global steel prices.

"If we realise that despite our deliberations, they continue to increase prices, we will have no options except to tell the government to install a mechanism to contain steel prices," Paswan said. — PTI

Q: I have a power of attorney of my son, who is an NRI. I am a senior citizen living alone and have no other family members. From my investments, I earn around Rs 90,000. Recently, I have deposited Rs 15 lakh in a Senior Citizens Savings Scheme (SCSS) in my name. The 9 per cent assured rate of interest on this scheme is excellent for my son. I have withdrawn this amount from my son’s NRE account and will treat this as a loan given to me by my son at 9 per cent interest. Will I have any problem with the income tax authorities?

— K Habbu

A: NRIs cannot directly or indirectly invest in SCSS. You will have to show this income as belonging to you. This amount will have to be shown as a gift to you from your son. To safeguard against any hassles, it is advisable to follow proper gift procedure. All that is required is an offer by the donor and acceptance thereof by the donee in black and white. The donee should request the donor for a gift and then the donor should remit the amount to the donee. Alternatively, the donor can offer the gift. In either case, it is necessary for the donee to accept the gift in writing (maybe through a thank you note). Only then it would be considered as a gift in India. It is preferable to mention the relationship between the donor and the donee.

Unfortunately, if you pay interest to your son, it will not be allowed as a deduction from your income. This interest will have to be credited to his NRO account. The interest on this account is fully taxable and suffers a TDS of 30.9 per cent, even if the amount is small.

Along with the interest of Rs 1,35,000 on SCSS, your total income will rise to Rs 2,35,000. The tax threshold for you is Rs 1,95,000. You will have to pay tax at the rate of 20.6 per cent on the excess income of Rs 40,000. This works out at Rs 8,240. If you desire to save this tax, you may open a PPF account and contribute Rs 40,000 to it. Alternatively, you can deposit the same amount in ELSS of MFs.