New Delhi, November 27
The Reserve Bank may announce cut in policy rates up to 50 basis points soon as inflation has been on way downward for the past three successive weeks, bankers said.

Given the softening of global commodity prices and crude oil, there is room for reduction in benchmark interest rates, Union Bank of India CMD M.V. Nair said.

Private sector lender HDFC Bank's treasury head Sudhir Joshi said RBI has scope to slash rates. The apex bank could cut short-term lending (repo) rate between 25-50 basis points.

What is fuelling anticipation of rate cut by the RBI is inflation declining for the third straight week. The rate of price rise is at six-month low of 8.84 per cent for the week ended November 15 against 8.9 per cent in the previous week.

RBI has already shifted its focus from price management to growth as commodity and fuel prices have come down substantially in the last one month.

The decline in inflation may prompt RBI to cut policy rates or reserve ratios as demanded by bankers to enable them to cut interest rates to give a fillip to growth rates.

Analysts feel that lowering of interest rates would also boost economic and business confidence.

Earlier, ICICI Bank CEO and MD K.V. Kamath had demanded that the RBI should ease money supply further to enable cut in interest rates by 200-300 basis points.

"The RBI now has enough room for a rate cut. Within this calendar year, I expect a 50 basis point cut in the repo rate and reverse repo rate. The slashing of the CRR will depend on how the liquidity situation emerges in the coming days," Crisil principal economist D.K. Joshi said.

The RBI had slashed repo rate by 50 basis points to 7.5 per cent in the beginning this month.

Besides, the apex bank had also injected an additional estimated Rs 85,000 crore into the system by one per cent cut the Cash Reserve Ratio and Statutory Liquidity Ratio.— PTI

New Delhi, November 27
Inflation continued its downward journey and slipped for the third week in a row to 8.84 per cent for the week ended November 15, raising the hopes for further cut in key policy rates by Reserve Bank.

Despite the winter season, food items remained expensive as prices of vegetables, rice and pulses remained high.

The inflation declined by 0.06 per cent from the previous week on account of decline in prices of metals, fruits and some manufactured items such as imported edible oil and rubber.

Measured by rise in wholesale prices, the inflation was 3.35 per cent during the corresponding period a year ago.

While the prices of fruits and sea fish declined during the week, the index of fuel, power, light and lubricants remained unchanged during the week.

The prices of items in the textile group and some chemicals items, too, became expensive.

The RBI has injected Rs 2,75,000 crore since October through various policy instruments such as cut in mandatory deposits that banks keep with the central bank and reduction of funds that banks park in government securities.

The decline in inflation may prompt RBI to cut policy rates or reserve ratios as demanded by bankers to enable them to cut interest rates to give a fillip to growth rates.

The data for economic growth during the second quarter of this fiscal is slated for tomorrow amid fears of slowdown.

New Delhi, November 27
India Inc stood by the people of Mumbai and condemned the terrorist attacks in the financial capital. The Oberoi Hotel said: “We all are deeply saddened by the tragic events in Mumbai. We are very concerned about the safety of our guests and staff at our hotels in Mumbai. The safety of our guests and staff remains our primary concern”.

“Despite all efforts we are unable to make contact with the persons inside the hotel. Therefore, at present, we do not have more information than what is being relayed by the media. We will update you as soon as we have confirmed information on further developments,” said the statement.

PHDCCI president Dr L.K. Malhotra said the Mumbai terrorist attacks would not have any direct impact on the economy and it would only register a small and extremely short-term blip on the economic radar of the country. He said, such terrorist attacks, though targeted at the commercial capital of the country with an objective of disrupting the economy, should not have any significant economic outcomes.

“These terrorist attacks will only affect adversely the capital market sentiment, tourist inflows, etc. in the short term and all these will bounce back within a few days,” he said.

CII has expressed deep shock and anguish on the Mumbai terror attacks, including those at leading hotels in Mumbai. “This is indeed unprecedented and we express full sympathy to the families of those who have lost their lives,” it said.

“The city of Mumbai is known for solidarity and resilience, we are sure that Mumbai would bounce back to normalcy soon,” said Chandrajit Banerjee, director-general, CII.

“There is also a need for an administrative and organised mechanism to deal with terror and have in place a coordinated response mechanism to counter such terror attacks so that they do not happen again,” CII observed.

Ficci president Rajeev Chandrasekhar said India’s business and its various stakeholders have, so far, been mute and detached from the debate on terrorism and tougher approach to terrorism and terrorists, including anti-terror laws. "It is time we all joined this debate on terrorism and demanded stronger and firmer leadership and approach to this threat of terrorism, including better laws," he said.

Chandigarh, November 27
Global agricultural machinery manufacturer, KUHN, is eyeing the Indian market in a big way. Having launched its operations in Punjab three months ago, the company is now looking at a pan- India presence.

This was stated by N.K. Gopinath, country representative, KUHN, while interacting with The Tribune here today. “Punjab is a very strategic market for introducing new agri machinery, because the agriculturists here are very receptive to technology. Keeping this in view, we have first launched our sales operations here, and have already sold 20 units of rotary drillers here,” he said.

The company has sold dairy equipment to Ludhiana-based Macro Dairy, and is in talks with Progressive Dairy Farmers Association of Punjab for supplying advanced dairy equipment. “We have brought down the price of our machinery in India, as this is a very price-sensitive market. We have also submitted our equipment to the Indian government to qualify for subsidy,” he said.

Having tasted success in Punjab, the company now proposes to launch its sales in the states of Maharashtra, Madhya Pradesh, Gujarat, western Uttar Pradesh and parts of Tamil Nadu. “We propose to sell at least 200 units of various agriculture and dairying machinery across India. Other than rotary drillers, we will be offering our state-of-the-art TMR (total mix rations) mixers, power tillers, silage cutters and feeders,” said Gopinath, adding that they proposed to import and sell 200 units during the financial year.

He said though initially the company would import machinery and then retail it through their dealers, they were now examining the sites for setting up warehouses in India. “We are also importing and selling our farm machinery in China. Though we have two manufacturing plants in France and one each in Brazil and USA, we are now considering setting up a green field project in either India or China,” he added.

London, November 27
Global stocks hit two-week highs on Thursday with European equities playing catch up to strong gains overseas, but more grim economic reports briefly sent government bond yields in Europe to a fresh three-year low.

Trading though is seen lacklustre with Wall Street staying shut for the Thanksgiving Day holiday.

Renewed expectations that Washington will bail out the US motor industry and China's aggressive interest rate cut on Wednesday had helped lift some of the gloom surrounding the global economy.

But there was no shortage of bleak news with two of Britain's high profile retailers DSG and Kingfisher posting downbeat results and weak outlooks, while a report showed euro zone economic sentiment plunged to a 15-year low this month.

A string of dismal US economic reports this week has also caught up with the dollar, pushing it lower against a basket of major currencies, while political risk emerged after attacks in India's financial capital.

The FTSEurofirst 300 index of top European shares rose 1.9 per cent, Britain's FTSE 100 index put on 1.4 per cent and Germany's DAX climbed 1.6 per cent. This followed gains of 2 per cent for Japan's Nikkei, 2.4 per cent for MSCI's measure of other Asian stock markets. On Wednesday, the US Dow Jones industrial average rallied 2.9 per cent.

MSCI world equity index climbed 0.9 per cent to 217.82, having earlier reached a peak of 218.46 — a level last seen on November 14.

Meanwhile, the dollar eased 0.2 per cent against a basket of major currencies.

US crude oil slid more than $1 towards $53 a barrel, reversing some of the 7 per cent gains a day earlier as investors fretted about falling demand.— Reuters

New Delhi, November 27
Consumer affairs minister Sharad Pawar yesterday said the government would soon take a decision on futures trading in four banned commodities — chana, potato, rubber and soyoil.

Speaking at the Economic Editors' Conference here, Pawar said there was a ban on four items up to November-end. “There is still a week to go...We will take a decision on revoking or continuing with the suspension (of the ban),” he added.

He specified that the government's effort was to allow futures trading to protect farmers' interests but not at the cost of consumers. Pawar also specified that there was little possibility of allowing futures trading in rice as prices of the commodity had been pushing northward. Due to the same reason, the government also does not plan to end the ban on the export of non-basmati rice.

The UPA government had suspended futures trading in potato, chana, rubber and soyoil in May under pressure from former Left allies, who blamed futures trading for the price rise. The ban was imposed for four months and later extended till November 30. The government had also banned futures trading in rice, wheat, tur and arahar last year.

Meanwhile, the food subsidy bill for the country for the financial year 2008-09 is all set to rise to Rs 50,000 crore from the budgeted Rs 34,500 crore. According to Pawar, the reason for this additional burden on the government's resources was the hike in paddy MSP and subsidised sale of edible oil and wheat. Experts say the additional burden will put government resources to further stress and add to the fiscal deficit.

New Delhi, November 27
Having lost £17 billion in the global financial meltdown, India-born billionaire Lakshmi Mittal has put on hold his investments in $10 billion refinery-cum-petrochemical project planned at Vizag.

Mittal is, however, going ahead with investing in Hindustan Petroleum Corp Ltd's Rs 18,919-crore, 9-million-tonne-a-year Bathinda refinery in Punjab.

"They (Mittals) have informed us that they would like to go slow or rather put a pause on their investment in the proposed project in Andhra Pradesh," Arun Balakrishnan, chairman of HPCL, one of the five promoter firms of the projects, said.

Mittal Investment Sarl, the holding company of Mittal family, has told HPCL and other promoters to go ahead with the project but "keep us in mind for a possible future re-entry." The five-way alliance of HPCL, Mittal, French energy giant Total, gas utility GAIL and Oil India Ltd was currently doing pre-feasibility study for the project and the partners are scheduled to take an investment decision in March 2009.

"Total is very keen on the project and we are going ahead with the project," he said.

Other than Mittal, the partners feel this was the right time to build the project, when globally steel and other input costs have come down and fabrication yards are looking at new orders to keep themselves afloat and orders from major economies were being cancelled on fears of a recession.

"We will take a re-look at the project in March, and in the meanwhile, we are going ahead with the technical studies," Balakrishnan said.

While the export-oriented refinery will be of the order of 14-15 million tonne a year, the petrochemical plant would be of at least one million tonne capacity. — PTI