Mumbai, November 19
The Indian rupee today closed at its all-time low of 50.02/03 against the greenback after losing 35 paise on relentless capital outflows, sustained demand for US dollar and weak equity markets.

The domestic unit had first breached the psychologically crucial 50-level nearly a month back on October 24. The rupee which has been on losing-spree for the past two days has fallen by a hefty 101 paise or 2.06 per cent.

However, the loss is a mind-boggling Rs 10.61, or 26.92 per cent, since January this year.

Rupee's continuing weakness is in sharp contrast to its gaining strength — to the level of below 40 — barely a year ago. Riding on strong capital inflows, the key driver of the local currency, it had closed at 39.41/4 on December 31, 2007.

However, the global scenario has changed since then and rupee started weakening after capital begun flowing out following the breaking out of the global economic crisis.

Foreign Institutional Investors have pulled out nearly $13 billion so far in the current calendar year. On the other hand, they had pumped in more than $17 billion in 2007.

Dealers in foreign exchange said there was strong demand for the US currency today from oil refiners for their import payments against very little dollar sales.

Dollar supply was scarce for the past one year or so, it has been further squeezed ever since the economic crisis emerged in the US.

Though dollar has been on a declining trend against its major rivals, experts were baffled as its appreciation even took a heavy toll on US economy.

The domestic currency moved in a wide range between 49.54 and 50.04 during the day after early signs of a recovery in sync with an initial surge in equity markets on fresh hopes of further monetary measures by the central bank.

The Indian unit was steady around its previous close of 49.67/69 a dollar in the initial stages.

The RBI fixed the reference rate for dollar at Rs 49.74 and for the single European currency at Rs 62.78.

The rupee premiums on forward dollar ended lower on fresh receiving by exporters.

The domestic currency fell further against the pound to end the day at Rs 75.24/26 per pound from last close of Rs 74.60/62 per pound and also dropped against the single European unit to Rs 63.14/16 per euro from overnight close of Rs 62.65/67 per euro.

It, however, inched up against the Japanese Yen to Rs 51.65/67 per 100 yen from previous close of Rs 51.67/69 per 100 Yen. — PTI 

New Delhi, November 19
Country’s largest car manufacturer Maruti Suzuki Indian Limited (MSIL) is looking at improving its standing in the export market through its new hatchback “A-Star” which was launched here today as part of Suzuki Motor Corporation’s (SMC) global plans.

The MSIL is looking at exporting as many as two lakh units by 2010-11, of which A-Star would form half the percentage. This would be a jump of almost 300 per cent over its present total exports of about 50,000 units.

Launching the “A-Star”, MSIL chairman R.C. Bhargava admitted that there was a global slowdown in the automobile sector but pointed out that it was indeed favourable for the small car sector. He added that in the worst case scenario the company’s export target would come down by 50,000 units by 2010-11.

He was confident that production and sales in the 2008/09 fiscal year would not fall below the previous year’s level.

The 'A-Star' will be available at an introductory price ranging from Rs 3.47 lakh to Rs 4.12 lakh, with the top-end model having dual airbags and ABS besides other safety features. A-Star is Maruti's fifth global model which would be manufactured only in India.

Meanwhile, the company would in next four years come out with its first indigenous car. "We have started the ground work to launch a car which is conceived, designed and developed fully in India," Maruti Suzuki India managing executive officer (engineering) I V Rao said.

A-Star, manufactured at its Manesar plant, will be powered by a 998cc K10B petrol engine and will be available in three variants in the domestic market. MSI claims that according to the Automotive Research Association of India (ARAI), the A-Star delivers a mileage of 19.59 km per litre.

For exports, the company would manufacture A-Star in over 200 variants and sell to around 150 countries across Europe, the Middle-East, Latin America, Asia, Australia and Africa.

Incidentally, the company expects to produce fewer cars than it had targeted as higher loan rates and a slowing economy are decreasing demand for automobiles.

Production will now be pegged at 4.5 per cent more than last year while the intial target was of a 10 per cent increase, said Mayank Pareek, the company's executive officer in charge of marketing. 

Chandigarh, November 19
The Punjab government will soon be implementing the Punjab Special Economic Zone (SEZ) Act, which will allow the state to promote mega and super mega projects, in consonance with the rules framed under the SEZ Act of Government of India.

Punjab Chief Minister Parkash Singh Badal today gave his in-principle approval for formulating a comprehensive SEZ policy. He directed the chief secretary to thoroughly look into the comments given by the Departments of Revenue and Rehabilitation, Local Government, Housing and Urban Development and Power besides the Punjab Pollution Control Board, before the Act is brought to the state Cabinet for final approval.

Badal said the setting up of SEZs in the state would give a further fillip to the industry besides generating tremendous employment opportunities for the youth.

The Government of India has so far given in-principle approval for setting up eight SEZs, and formal approvals to seven SEZs. Besides, two SEZs — Quarkcity India and Ranbaxy Laboratories at Mohali have already been developed over an area of 13.75 and 32 hectares, and have been notified by the Centre. The eight SEZs which had been given in-principle approval are DLF Universal Ltd. for establishing four multi-products SEZs at Amritsar (440 hectares), DLF Universal Ltd. multi-products at Ludhiana (1,011 hectares), Rockman projects textiles in Ludhiana (100 hectares), Malhotra Land Developers and Colonizers in engineering at Ludhiana (121.41 hectares) and Ishan Developers Pvt. Ltd in textile at Khasa in Amritsar district (100 hectares). Likewise, the SEZs which had accorded formal approvals by the GoI included Vividha Infrastructure Pvt. Ltd in engineering at Rajpura (100 hectares), Mridul Infrastructure in textiles in Rajpura (100 hectares), Sukhmani Towers Pvt. Ltd. in Derabassi (14 hectares), Lark Projects Pvt. Ltd. in IT sector at Landran in Mohali district, Sukhm Infrastructure Pvt. Ltd. in IT at Mohali (11.62 hectares), ATS Estate Pvt. Ltd. in IT in Derabassi (12 hectares), Shipra Estate Ltd. in IT in Derabassi (20.24 hectares). Another SEZ to be promoted by A-Tech IT City in IT sector at Mohali over an area of 57.89 hectares worth Rs 205 crore with an employment potential of 10,000 jobs is awaiting approval from the Centre.

The local government and industry minister Manoranjan Kalia said the state government should make concerted efforts to identify unproductive land in sub mountainous, kandi and bet regions to develop land bank so that this land could be viably utilised for mega industrial and housing projects.

New Delhi, November 19
After China, it is the turn of India to spend money and spur growth, which is likely to sag in the coming days. Planning Commission deputy chairman Montek Singh Ahluwalia today said the commission would firm up an action plan in the next 10 days, entailing additional infrastructure financing of up to $150 billion.

He said it was initially targeted that $500 billion would be spent for infrastructure development. However, financing arrangements had been worked out earlier for $350 billion.

In addition to this, the commission is identifying new projects and seeing how existing projects with absorptive capacity can be accelerated.

The report is to be submitted to the apex committee, headed by Prime Minister Manmohan Singh. The committee, formed to protect the Indian economy from the global meltdown, comprises of finance minister P Chidambaram, commerce minister Kamal Nath and RBI Governor D Subbarao, apart from Ahluwalia.

Ahluwalia said Prime Minister was of the view that infrastructure development needed to be speeded up to accelerate growth. This will provide the requisite fiscal stimulus.

He said the projects that have been identified would fall both in the domain of public sector initiatives and those under the public-private partnership (PPP) mode. It is a way of pump priming the economy, whose projected growth rate is now expected to be 7-7.5 in the current fiscal as compared to 9 per cent growth in the past four years.

He said if the funds for additional spending come by way of budgetary resources, then it would require another set of supplementary grants. However, the commission was weighing options on finding ways and means of financing additional expenditure.

Ahluwalia said the financing arrangements of Infrastructure Leasing and Financial Services Ltd (IL&FS) could be increased. Similarly, banks could also provide additional financing.

Asked about the apex committee’s programme relating to stepping up of exports, Ahluwalia said the commerce ministry was examining the issue. 

Bangalore, November 19
The Indian IT industry will retain employees but will go slow on hiring this fiscal (2008-09) following declining growth rate, the organisation representing the industry said here Wednesday.

"No job cuts. Hiring will be less in this fiscal compared to previous years as IT firms are cautious about their business prospects in the short and medium terms due to global recession and financial meltdown," National Association of Software and Service Companies (Nasscom) president Som Mittal told reporters.

Admitting that the downturn would impact the industry in terms of higher growth rate, aggressive hiring and investment-driven expansion, Mittal said Nasscom would come out with a mid-annual review of the industry outlook for this fiscal in the third week of December.

"We will re-visit the growth rate of 21-24 per cent projected in June for this fiscal, after studying the feedback from our 1,200 member companies, including 250 global firms. After three-four years of about 30 per cent annual growth rate, the industry is facing slower growth rate on a wider base," Mittal said.

With attrition rates dipping and utilisation rates improving, companies are on a consolidation mode to make best of the difficult times.

Though the top 10 global Indian firms such as TCS, Infosys, Wipro, Satyam and HCL are likely to maintain their projected hiring this fiscal, a few companies operating in niche areas or catering to verticals impacted by the meltdown could retrench staff and freeze fresh recruitment.

"Because of value proposition, high talent pool and cost arbitrage, the Indian IT industry will continue to be in demand for outsourcing, back-office operations and value- added services. In our estimate, the industry will return to high growth rate in the next 12-18 months," Mittal said.

Nasscom has advised members to explore emerging and new markets to sustain the growth momentum and acquire domain expertise in new verticals.

"This is the time to invest in domain expertise to broaden the service offerings and move up the value chain with innovation. Though the US and Europe account for about 90 per cent of the IT export services, it is high time we look at other markets such as Latin America, Eastern Europe, the Middle East, North Africa and the Asia-Pacific region to ensure we remain risk-free during global meltdown in future," Mittal said. — IANS

A Planning Commission panel of economists has unveiled a proposed macro-economic stabilisation plan for 2008-10, seeking to slash country's expenditure by Rs 115 billion, including cut in defence spending and subsidies by Rs 30 billion.

Prime Minister Yousuf Raza Gilani was briefed on the interim report at a meeting attended by finance adviser Shaukat Tareen, the planning and development minister, the Planning Commission deputy chairman and the state minister for finance. The panel report is believed to be in line with the conditionality imposd by the IMF as pre-requisite to its bailout package expected to be worth $7.6 billion.

The proposed plan will reduce debt servicing by Rs 25 billion and other expenditures by Rs 40 billion. The panel said that several proposed steps to mobilise revenue would have their full impact in the medium term, but their implementation would nonetheless secure revenue.

The panel recommended revenue mobilisation of Rs 75 billion through additional taxation proposals, including imposition of a broad-based regulatory duty on non-essential imports (excluding wheat, edible oil, pulses, pharmaceuticals, fertilisers and petroleum products) that do not already carry a duty, at a rate of 4 per cent on machinery and 8 per cent on other items.

In a bid to broaden the base of the tax system, the panel recommended levying a services tax similar to the type in India by January 1, 2009, on 12 selected services initially, an excise duty on non-essential consumer goods and durables, a capital gains tax on the transfer of properties by provincial governments, and an agricultural income tax by provinces.

The economists also proposed the withdrawal of some income tax exemptions. They have called for bringing the highest slab of income tax at the same level, or close to the corporate tax rate, reducing the revenue threshold of companies for the purpose of corporate taxation; and a reduction in sales tax thresholds.

The panel also proposed increased reliance on non-bank borrowing to finance up to Rs 250 billion of the budget deficit, and said a reduction in borrowing from the central bank would necessitate an increase in the average return on national saving schemes. 

New Delhi, November 19
Global investor confidence witnessed a drop of 1.4 points in November mainly driven by a fall in sentiments of Asian and European investors, while in America they remained almost flat, a latest report says.

According to the US-based investment research and trading firm State Street Global Markets, the Global Investor Confidence index declined by 1.4 points to 57 points in November from a revised October level of 58.4.

"The drivers of the decline in overall sentiment were European investors, whose confidence fell from 79.5 to 73.6, and Asian investors, where sentiment slipped from 87.8 to 82.3 in November," the report said.

Meanwhile, confidence of American investors failed to change this month and remained essentially flat declining 0.1 points to 49.9 from October's revised level of 50.

"Last month's decline in North American investor confidence foreshadowed the decline in US consumer confidence to a record low in October and the declines in European and Asian investor confidence that took place this month.

"Nevertheless, the fact that North American institutional investors did not accelerate further the pace of their deleveraging this month could be seen in a positive," Harvard University professor involved in developing the investor confidence index Ken Froot said.

The State Street Investor Confidence Index measures investor confidence on a quantitative basis by analysing the actual buying and selling patterns of institutional investors.

Further, Froot said that this month's reading are a measure of relief after last month's dramatic decline.

In October, the investor confidence index had witnessed a sharp drop of 17.5 points to 58.2 from 75.7 level in September primarily due to a plunge in the confidence of American investors.

The index is based on financial theory that assigns precise meaning to changes in investor risk appetite, or the willingness of investors to allocate their portfolios to equities.

The more portfolio institutional investors devote to equities, the greater their risk appetite or confidence.

"While market prices saw further write-downs on the realisation that fundamentals have deteriorated substantially in the face of a looming recession, institutional investors did not react as strongly as last month to these changing circumstances," Froot added. — PTI

BRIEFLY

Topsgroup acquisition
Mumbai: After acquiring a majority stake in the UK-based security service firm, the security solutions major Topsgroup is all set to acquire another majority stake of 51 per cent in one of the leading US security firms for a record $250 million. With this acquisition, aided by organic and inorganic growth in the domestic market, the Rs 1,200- crore Topsgrup will rank as the 14th largest security firm globally by end-March 2010.— UNI

Import of sensitive items up
New Delhi: India's import of items which may affect the interest of small-scale industries and agriculture grew at a lesser pace by 26.8 per cent than overall imports at 44.9 per cent in the first half of this fiscal. Imports of sensitive items stood at Rs 20,560 crore in the first half of this fiscal against Rs 16,216 crore in the same period a year ago, an official statement said today.— PTI

Tea e-trading platform
Kolkata: The commerce ministry is contemplating to set up a single, web-based electronic trading platform for tea from September 2009, minister of state for commerce Jairam Ramesh said on Wednesday. Launching an electronic auction here, Ramesh said the Tea Board was moving towards a system for setting up a single electronic trading platform in the country.— PTI

Air India plan
Mumbai: National air carrier, Air India, plans to launch its domestic cargo operations from Nagpur next month, a senior National Aviation Company of India Ltd official said. "We plan to launch our domestic cargo operations from Nagpur next month with four dedicated freighters," the official said on condition of anonymity.— PTI

Moen plans unit at Baddi
Kumarhatti: Moen Inc., a global leader in kitchen & sanitary ware, has announced its foray into the Indian market and is planning to set up an assembling unit at Baddi. According to information, Moen India Pvt. Ltd will make Baddi unit functional by the end of 1st quarter next year. — OC

Vodafone voice SMS
Chandigarh: Vodafone Essar on Wednesday launched voice SMS service in 16 circles across India. With the launch of this service, a Vodafone customer can send a voice SMS to a mobile subscriber, anywhere in India, for a fixed price of 75 paise per minute. The service is available to both pre-paid and post-paid subscribers. — TNS

Axis Bank’s remittance service
Mumbai: Axis Bank has tied up with TimesofMoney to launch AxisRemit, the bank's own branded online remittance service. "With AxisRemit, the bank will provide high-speed online money transfer services for NRIs belonging to major geographies such as the USA, the UK, Eurozone, Canada, Australia, Singapore, Hong Kong and the UAE, using TimesofMoney's remittance platform and know-how," a press release issued here said.— PTI