London, November 7
European leaders will propose a new global financial framework after the International Monetary Fund (IMF) warned the world's richest economies face their first year of contraction since World War II. South Korea lowered interest rates by 25 basis points, its third cut in a month, after a deep rate cut by Britain and one by the European Central Bank on Thursday.

Central banks around the world have stopped worrying about inflation and are reducing borrowing costs to try to prevent the global financial crisis from turning into a deep downturn.

That risk was underlined by the IMF, which warned that developed economies in 2009 faced their first full-year contraction since the 1940s.

"Increasingly, the signs point to a deep and synchronised global recession that began last quarter and has gathered momentum," said Bruce Kasman, an economist at JPMorgan Chase in New York.

The IMF cut its 2009 global growth forecast to 2.2 per cent from 3 per cent, a prediction made only last month, and urged governments to boost spending to support their economies.

British Prime Minister Gordon Brown backed the call.

US President-elect Barack Obama has proposed a stimulus package that some experts estimate could cost up to $190 billion. Germany has approved measures designed to give its economy a 50 billion euro ($64 billion) boost.

Corporate woes

Governments around the world have pumped trillions of dollars into saving a banking system poisoned by the spread of bad debts or "toxic" loans.

The crisis is now hurting a growing number of businesses as debt-laden consumers curb spending and companies find it harder to access funds.

Banks have significantly tightened credit standards for euro zone businesses and toughed lending terms for households, the European Central Bank said. In Asia, shares in the world's biggest automaker, Toyota, fell as much as 12 per cent after it slashed its profit forecast.

BMW, the world's largest premium carmaker, and archrival Mercedes-Benz posted sharp unit sales declines in October on weakness in US and western European markets.

Air travel is also suffering as companies cut costs.

British Airways Plc said October passenger numbers fell 4.4 per cent compared to the same month last year, but this included a 9 percent fall in business travel — the main source for BA profits.

European shares traded 1.3 percent higher while most Asian shares fell as investors sought to balance economic worries with a new era of lower interest rates.

US stocks were forecast to trade higher after suffering their worst two-day slide since October 2007. — Reuters 

New Delhi, November 7
Industrial production continues to be dismal and any amount of fiscal measures is not really bringing a spring in the growth rate. The figures of industrial production released by commerce and industry ministry show that the index of six core infrastructure industries in September grew by 5.1 per cent, marginally lower than the 5.8 per cent rise recorded in the same month last year.

However, the September growth in the index was better than the 2.7 per cent rise seen in the previous month of August, which had sunk to 1.3 per cent.

In the April-September period, the index of six core infrastructure industries increased by 4 per cent as against 7 per cent recorded in the same period last year.

“The core sector growth figures is another affirmation of Ficci’s repeated industrial surveys that have shown that the growth momentum has been weakening and that slowdown in growth has been spreading from light to heavy industry,” said Dr Amit Mitra, secretary-general, Ficci.

Data showed that in September, coal production grew by 10.7 per cent, as against 6.3 per cent in the corresponding month of the previous year.

“With overall industrial production figures also showing a declining trend, it is now imperative that boosting growth becomes the focus of all policy actions,” Dr Mitra added.

Growth in electricity production during September was flat at 4.4 per cent, compared to a 4.3 per cent rise in the year-ago month. Crude oil production growth in September dipped by 0.4 per cent in September, against a decline of 0.7 per cent in the year-ago month.

Production in oil refineries grew by 3 per cent, compared to a 7 per cent increase in the same month last year. Cement production in the month under consideration expanded by 8 per cent, as against 5.5 per cent in September, 2007.

Finished carbon steel production grew by 5.8 per cent, which was lower than the 9.5 per cent increase in the same month last year.

Due to apprehensions of this nature, Ficci argues for a sizable reduction in interest rates and for pump priming the economy through expeditious implementation of large-scale integrated infrastructure projects.

The core infrastructure industries have a share of 26.7 per cent in the Index of Industrial Production (IIP). The September growth figures of the core infrastructure industries is likely to add to the growth in IIP, which expanded by a dismal 1.3 per cent in August, 2008.

Houston, November 7
In order to slash its costs by $1.8 billion in 2009, major US credit card group American Express, will lay off 7,000 of its employees, amounting to around 10 per cent of its worldwide workforce. The company is also planning to suspend management salary increases, put a freeze on new hires, slash investment spending and cut expenses for consulting, travel and entertainment.

Earlier this month, the company has reported a 24 per cent drop in third-quarter profits as cardholders cut spending.

American Express is also shrinking the credit limits and has already started notifying its card members that it will initiate a broad-based interest rate hike - not a cut.

Fidelity to slash 1,300 jobs

Boston: Fidelity Investments has said it will cut nearly 1,300 jobs this month, and more layoffs are coming early next year in response to declining markets that have eroded mutual fund assets, along with the fees Fidelity earns from its core business.

Layoff notices will go out later this month to about 2.9 per cent of Fidelity's overall work force of 44,400. The cuts will be spread across the company's far-flung US operations, affecting management positions as well as lower-level jobs, said Anne Crowley, a spokeswoman for Boston-based, privately held Fidelity, yesterday .

Corus to lay off 400

New Delhi: British steel giant Corus, part of Indian conglomerate Tata Steel, will cut 400 jobs in its distribution business due to the global economic recession, which has led to a steep slump in demand for steel.

"It is true that we are to lose about 400 employees in the distribution business because of the global financial downturn," a company spokesperson told PTI on the phone from London today.

Mattel to fire 1,000 persons

New York: Toy maker Mattel Inc has said it is cutting about 1,000 positions worldwide in response to the economic downturn. The El Segundo, California-based company, which makes Barbie, American Girl and Fisher Price products, among others, said yesterday the positions amount to 3 per cent of its worldwide work force and will reduce its professional and management staff by 8 per cent. 
— Agencies

New Delhi, November 7
The government today refuted the charges levelled by the CPM that the allocation of radio frequency to mobile telecom operators had resulted in 60,000-crore loss to the country, and said promoters of the contract winners, Swan Telecom and Unitech, had not sold out but had merely issued new shares and brought foreign investment into the country.

"Regarding the sale of shares by Swan and Unitech, the foreign buyers have entered into agreements to subscribe to the new equity shares of the company and no share of the founding promoters of this company has been sold," communications and IT minister A. Raja told reporters here.

Swan Telecom and Unitech had sold stakes in their companies even before starting operations in the country and booked huge profits after successfully bidding for new spectrum.

In a statement yesterday, the CPM had alleged that the "first-come-first-served" principle adopted by the UPA government had also resulted in a loss of Rs 60,000 crore to the exchequer.

It said while the mobile phone licences were priced at 2001 levels to keep the costs low for the consumers, this was not ensured through the licence terms, due to which successful parties sold their shares at huge profits. However, the telecom minister said the new Telecom Policy of 1999 has been the bedrock of issuance of licence and allocation of spectrum.

Jalandhar, November 7
With a view to check levying of unreasonable charges by scheduled commercial banks and other banks operating in the country, the RBI has fixed charges for outstation cheque-collection service and providing electronic payment mode.

An order has been issued in this regard for outstation cheque-collection service and for providing the electronic payment mode.

According to sources, the RBI has issued instructions following complaints made to it by customers against banks charging heavy fees for providing cheque-collection service or for transfer of money from accounts of the customers.

For inward Real Time Gross Settlement (RTGS), National Electronic Fund Transfer (NEFT) and Electronic Clearing System (ECS), no charges will be levied by banks. For outward transactions under RTGS, Rs 25 will be charged for transactions up to Rs 5 lakh, and for transactions above Rs 5 lakh, it will not exceed Rs 50.

For outward transaction under NEFT, charges up to Rs 1 lakh will not exceed Rs 5 per transaction and for Rs1 lakh and above, it will not exceed Rs 25 per transaction. These charges will also be applicable in case of inter-bank funds transfer.

For outstation collection of cheques, the RBI has fixed Rs 50 for a cheque up to Rs 10,000 and Rs 100 for a cheque worth up to Rs 1 lakh. Charges for cheque worth above Rs 1 lakh will not be more than Rs 150 per instrument.

Chandigarh, November 7
A high-level delegation from Punjab is visiting Bangalore for a study of the IT industry there and to promote its IT/ITeS policy, which is being developed through a strategic and focused process.

The delegation comprising of industry minister Manoranjan Kalia, chairman of Punjab Infotech, H.S. Grewal, principal secretary, industries, Dr S.S. Channy; and other officials held one-to-one discussions with senior representatives of the Bangalore's key IT majors —Microsoft, Satyam, Infotech and Cordys and also visited L&T Infocity, Raheja IT Park, Satyam and Infotech.

They also met potential investors to gain insights on 'best practice' in IT infrastructure development. 

BRIEFLY

Mumbai
Rupee gains 8 paise: Indian rupee on Friday appreciated by eight paise at 47.64/65 against the US currency in sync with a bounce in local stocks on hopes of revival in capital inflows. In active trade at the Interbank Foreign Exchange (forex) market, the domestic currency resumed lower at 47.95/96 a dollar from its previous close of 47.72/73, but gradually recovered as equity markets turned firm following a rise in infrastructure output, which partly offset concerns about economic slowdown.— PTI

Corporation Bank CMD: The government has appointed J.M. Garg as the chairman and managing director of state-owned Corporation Bank. Prior to this appointment, he was the executive director of Punjab National Bank, Corporation Bank informed the Bombay Stock Exchange on Friday.— PTI

IDBI Bank cuts BPLR: Keeping in tune with the cut in benchmark prime lending rates by other banks, IDBI Bank today announced a 0.75 per cent reduction in its BPLR, effective from Saturday. The revised rate, keeping in view the current interest regime, would be 13.5 per cent, the bank said in a release. The reduction of 75 bps would be applicable to housing and education loans also (instead of 50 bps announced earlier), the bank said. — UNI

Chennai
Reliance to set up 55 stores: Mukesh Ambani-led Reliance Retail on Friday said it would set up 55 stores for home appliances and electronic goods across the country over the next two years.This was announced by Reliance Retail president (consumer durable, IT and telecom) Ajay Baijal. — PTI