New Delhi, March 3
India's exports showed a healthy growth of 20.47 per cent in January this fiscal over the same month last year, but expanded by a single digit figure of 7.66 per cent in rupee terms due to pricey domestic currency.

Exports increased to $13.14 billion in January 2008 from $10.9 billion a year ago, while imports grew by a huge 63.57 per cent to $22.50 billion, leaving a trade deficit of $9.36 billion.

With only two months to go for conclusion of the current financial year, exports during April-January period amounted to $124.19 billion, leaving a balance of $35.81 billion to meet the $160 billion target.

"We hope to achieve exports in the range of $150 to 155 billion in the current fiscal," commerce secretary G K Pillai said.

Imports for the April-January period of 2007-08 stood at $191.6 billion, registering a growth of 29.63 per cent from $147.81 billion in the year-ago period.

Trade deficit for the 10-month period amounted to $67.4 billion, higher than the $45.7 billion in April-January 2006-07.

Presenting the Budget 2008-09, finance minister P Chidambaram had said: "Merchandise exports have come under some pressure due to the appreciation of the rupee and may fall just short of the target of $160 billion, although the growth rate was strong at 21.8 per cent during April-December 2007-08".

During the fiscal, rupee has appreciated against major currencies, including that of the US, UK, Japan, Euroland, China and Hong Kong. It rose by 9.8 per cent against the US dollar between April 3, 2007 and January 16, 2008.

Oil imports during January 2008 were valued at $7.7 billion, up 60.8 per cent from the $4.8 billion in the corresponding month last year.

For the April-January period of the current fiscal, India's oil imports stood at $57 billion, which was 16.49 per cent higher than $48.9 billion a year ago.

Non-oil imports during the month stood at $14.7 billion, up 65 per cent from $8.96 billion. For the 10-month period, non-oil imports grew by 36.13 per cent to $134.58 billion. — PTI

Mumbai, March 3
Investors wealth today plummeted by as much as Rs 2.73 lakh crore in a day, led by giants like RIL and DLF, as the benchmark Sensex nosedived by 901 points.

The combined market capitalisation of all the listed companies on the Bombay Stock Exchange dropped to Rs 56,14,884.87 crore from Rs 58,87,846.18 crore on Friday.

The BSE Sensex settled at 16,677.88 points as against 17,578.72 on Friday last. Analysts attribute the meltdown to weak global cues and the Budget after-effects.

"The downfall was mainly because of global cues on concern of US recession, besides budget also had its negative impact. Concerns over uncomfortable US data and a further interest rate hike in the Fed meet on March 10, suggests that US is going towards major recession," Taurus Mutual Fund managing director R K Gupta said.

The 30-share index, Sensex, accounted for nearly 42 per cent of the total market cap. The combined market valuation of the 30-blue chips also decreased by Rs 1,27,343 crore to Rs 23,18,914.14 crore.

Among the blue chip stocks, corporate behemoth Reliance Industries was the biggest loser with the firm's market cap falling over Rs 22,000 crore to Rs 3,35,029 crore. The RIL scrip ended down 6 per cent at Rs 2,304.75.

Other major losers include — country's largest real estate firm DLF, State Bank of India, NTPC as their market value decreased between Rs 11,000 to 10,000 crore.

DLF's marketcap decreased to Rs 1,21,844 crore, losing over Rs 11,200 crore. Sectorwise, the banking stocks suffered the brunt of the meltdown with the BSE Bankex settling down 6.72 per cent at 9,434.44. — PTI

Mumbai, March 3
Anil Ambani group's financial services arm Reliance Capital today launched its microfinance initiative here with tie-ups for two states, which it said would be followed by a national rollout soon.

Reliance Capital said it is joining hands with two Gujarat-based microfinance institutions — MAS Financial Services Ltd and Vardan Trust — as part of its initiative to enhance penetration of microfinance in the country.

The initiative was launched by group chairman Anil Ambani's wife Tina Ambani, who handed over the first disbursement cheques.

Reliance Capital said it plans to fund MFIs in Gujarat and Maharashtra in the first phase, and subsequently have a national presence.

"Our vision is to provide access to finance at the grassroot level by partnering with MFIs serving the rural and semi-urban areas. This initiative is in line with the groups commitment to play a serious role in bringing value to the lives of the underprivileged and the aged in India," Tina Ambani told reporters.

"The initiative envisages lending to MFIs, which would then be on-lending finances to Self Help Groups, Individuals and Joint Liability Groups as per their norms," Reliance Consumer Finance' deputy CEO K V Srinivasan said. — PTI 

New Delhi, March 3
State-run Sutlej Jal Vidyut Nigam (SJVN) has bagged a contract to develop a 402-MW hydro power project in Nepal.

The development comes within two months of GMR Group winning a contract to set up 300-MW Upper Karnali project in Nepal.

"The contract for setting up Arun-III project has been given to SJVN. An agreement to this effect was signed yesterday in Nepal," a source said.

SJVN agreed to offer 21.9 per cent (about 88 MW) free electricity from Arun-III project. It will also have to give a guarantee of Rs 5 lakh a unit for obtaining a power generating licence, besides Rs 1 lakh per unit for a survey licence, the source said.

The company would develop the project in five years and operate it for 30 years on build-own-operate-transfer basis.

It would also have to lay transmission lines for evacuating power from the project.

SJVN had earlier offered 4.5 per cent free electricity from Arun-III. However, it raised the quantity to 21.9 per cent after the Nepal government made free power as the main criteria for awarding the projects.

In all, nine companies, including GMR Energy, Jindal Steel and Power, Reliance Energy and JP Associates were believed to be in the fray for Arun III. However, GMR did not qualify for the project as the government decided that one bidder would get only one power project.

A consortium of GMR and Italian-Thai Development Project Co of Thailand in January secured the contract for setting up Upper Karnali project. — PTI

New Delhi, March 3
India today exuded confidence that the new government in Islamabad will take immediate steps to implement the South Asian Free Trade Agreement (SAFTA) with New Delhi and take necessary measures, including duty changes, to facilitate trade.

"We are looking toward the new government in Pakistan to take more positive steps in fulfilling the agreement in SAFTA, which it has acceded to but not implemented. We are looking at the new administration in Pakistan to look at this positively because it is an advantageous situation for them," commerce and industry minister Kamal Nath told reporters here after the third meeting of the SAFTA Ministerial Council.

Pakistan, a signatory of SAFTA, has maintained that with India it will implement the agreement only in line with its existing bilateral trade policy. Currently Pakistan's trade with India is restricted to about 1,076 items. India wants the neighbouring country to implement SAFTA in 'true letter and spirit'.

Speaking on the occasion, Pakistan's commerce secretary Syed Asif Shah said his country has been looking at ways of expanding trade within SAARC and SAFTA member countries, including with India.

"We believe in consistency and continuity of policies in Pakistan and as and when the new government comes in, which would be very soon, they will get their briefings and position papers and then move on from there," Shah said.

Nath further said that members of the SAFTA are keen to include services in the overall trade agreement.

"The regional study on trade in Services has been completed. This will now give the government an opportunity for an effective Services agreement among SAARC countries. As services begin to take a much more important role in our economies, this becomes even more critical," he said.

At about $20 billion, intra-SAARC trade has remained at around five per cent of the total trade of the region.

India has also decided to bring down items in the negative list with regard to the least-developed countries — Bangladesh, Nepal, Bhutan and Maldives — in the SAARC region to around 500 from 744. — PTI 

New Delhi, March 3
As the debate rages on the waiver of farmers’ loan worth Rs 60,000 crore, there is a likelihood that the government’s own income may dwindle in future.

The issue, at large, is that the government, who is the stake owner in the public sector banks, will on a later date get less income when the bonds it issues fetch less value in the markets they are traded in. The bonds, which will be issued to the PSU banks in lieu of farm loan waiver, will be traded in the bond market. These bonds can’t be liquidated since they do not have an SLR status. SLR is the percentage of total deposits that the banks have to maintain in the form of cash, gold or approved securities. At present, the minimum SLR is 25 per cent. Having the disadvantage of SLR status, these bonds trade at a discount and do not give the desired returns to the issuer of the bond.

To give an example, a Rs 100 bond will be traded at Rs 97, and there will be a fixed interest rate on the same, which is slightly higher than the interest rate on SLR securities. Since these bonds do not have the lustre of SLR securities, only provident funds and gratuity funds subscribe to them.

One of the argument that is given for these bonds by oil and fertliser companies is that at least some money is coming instead of losses that would incur due to various circumstances. But, marketmen have a different view than PSUs. They say that since these bonds are not as vibrant as the government securities are, they will not fetch good returns and as a result, the PSUs, to whom these are issued, suffer by getting lower return.

Taking the argument forward, marketmen are of the opinion that the bond market should be freed and securities like these should be given an SLR status so that they trade well and get good returns, both for the issuer and for the trader. Unfortunately, India’s bond market is not as developed and vibrant as the US or UK bond market.

However, economists like Dr Mukesh Anand of NIPFP, says that a debt waiver as it looks now, besides being an election gimmick, is going to actually bail out the public sector banks, who would anyway be saddled with bad debts, sooner than later.

On the one hand, the intent of the government is good that it wants financial inclusion of this weak section of the society who are saddled with loans. But on the other hand, the problem will still remain because nearly 27 per cent of the farmers go to moneylenders for their loan requirement, who, charge a hefty interest rate.

London, March 3
Global banking giant HSBC said today that it had to take a massive $17 billion hit on its exposure to the collapsing US housing market and the resulting global credit crunch.

The bank said it was taking losses of $17.24 billion in 2007, with total impairment charges jumping 63 per cent last year.

Europe's largest bank, however, said net profit still managed a gain of 21 per cent to $19.13 billion as total income increased 25 per cent to $8,760 billion.

"2007 was a year when large parts of the international financial system came under extraordinary strain," HSBC group chairman Stephen Green said in comments accompanying the earnings release.— AFP