New Delhi, December 1
India's exports fell for the first time in seven years by 12 per cent in October on sagging demand from the world's two biggest consumer markets — the US and Europe — widening the trade deficit further.

Exports in October 2008-09 declined 12.1 per cent to $12.8 billion from $ 14.58 billion a year ago, causing job losses in the sector, while merchandise imports grew by 10.6 per cent to $23.36 billion from $21.12 billion in the year-ago period.

As a result, trade deficit ballooned by over 61 per cent to $10.53 billion.
Imports in September were up by a huge 43.3 per cent on account of government easing restrictions and the impact of the crude oil prices, which have since dropped sharply.

The negative trend in October took its toll on the April-October 2008-09 export performance, which showed an improvement of 23.7 per cent at $ 107.79 billion. The growth remained above 30 per cent in first half of the year.

Exporters doubt the possibility of achieving the target of $200 billion in the current fiscal given the slowdown in the US and Europe.

The target would not be achieved. The grim situation would continue, especially in the traditional sectors like handicraft, textile, carpets, marine products, leather and agro and agro products, director general of Federation of Indian Export Organisations Ajay Sahai said.

Industry officials have estimated that five lakh handicrafts workers would lose their jobs, while commerce secretary G.K. Pillai had on November 21 said textile ministry estimates suggests a loss of another five lakh jobs in the sector in the next five months.

Mumbai, December 1
The Bombay Stock Exchange benchmark Sensex opened the week today on a positive note — with a high of 235 points — but on a weak trend in Europe and concerns over the rising recession, the 30-share index tumbled to close with a loss of over 250 points.

Initial gains were washed off and the Sensex closed at 8,839.87 with a loss of 252.85 points, as automaker Maruti Suzuki's stocks recorded heavy losses. The key-index touched the day's high of 8,326.68 and a low of 8,803.34 points.

The wide-based National Stock Exchange index Nifty dropped by 72.20 points at 2,682.90. During the day, it surged to 2,832.85 points and dipped to a low of 2,669.50 points.

Selling pressure gathered momentum following reports of a weakening trend in the opening session of European stock markets, rising concerns over recession, which might pull down sales of luxury items such as car.

Marketmen said global recession, a fall in India's gross domestic product (GDP) and terrorist attack on the financial hub in Mumbai remained major issues to dampen the trading sentiment.

They said the Market Eurozone Purchasing Managers Index for the manufacturing sector slumped to 35.6 in November, a low level never seen in the past 11 years.

The Eurozone was officially declared in recession this month following a second quarterly contraction in economic output.

As selling pressure picked up, almost all sectoral indices led by auto, realty, capital goods and banking segments remained in the negative zone. — PTI 

New Delhi, December 1
Addressing mediapersons, outgoing finance minister P. Chidambaram today said the economy would be able to clock 7 to 8 per cent GDP growth this fiscal. The new home minister, though admitted that he was reluctant to take over his new assignment, but added that a final call in this regard was taken by Prime Minister Manmohan Singh and Congress president Sonia Gandhi.

Before assuming charge as home minister, Chidambaram exuded confidence that inflation will further moderate and growth will be satisfactory despite a slowdown even as there is unfinished work in the economic sphere.

He said Prime Minister Manmohan Singh can guide the economy far better than anyone else, given his exceptional background, and the economy will clock a growth rate of 7-8 per cent this fiscal, despite the global financial crisis.

“There is unfinished work in the finance ministry. The whole country is extremely reassured, speaking personally I am more than reassured with the fact that the Prime Minister has decided to keep the portfolio with himself. At least for the time being I am told,” he told reporters at his last press conference as finance minister.

He said in this difficult year, the country needs close coordination between the finance ministry, planning commission and RBI, and Manmohan Singh had experience in handling all three.

“We have in Dr Manmohan Singh a former RBI governor, a former planning commission deputy chairman and a former finance minister. I have no doubt in my mind that with this exceptional background, Dr Singh will be the guide to the economy far better than anyone,” he said.

Chidambaram said while the Indian economy is affected by the global meltdown, it will only amount to a slowdown and not a recession. He also said inflation will moderate.

The Indian economy recorded a growth rate of 7.8 per cent in the first half of the current fiscal, much in line with the government projection of 7-8 per cent and the RBI's estimates of 7.5-8 per cent. Declining for three consecutive weeks, inflation eased to 8.84 per cent.

To a query, Chidambaram said there always will be an unfinished agenda. “How can there be no unfinished agenda,” he asked.

Though he did not elaborate, the finance ministry is yet to carry out reforms in the pension and banking regulations and bring out a direct tax code.

The other pending work of hiking FDI in private insurance to 49 per cent from 26 per cent has been approved by the cabinet and the Bill is expected to be introduced in this session of the Lok Sabha.

New Delhi, December 1
The effect of the global meltdown has also been felt in the domestic automobile sector with most of the major automobile manufacturers reporting a huge decline in sales during the month of November.

Lack of liquidity and high rates of interest have led to the country’s largest car manufacturer Maruti Suzuki India Limited (MSIL) reporting a 27.4 per cent dip in car sales during last month. TVS Motor Company also reported a 12.7 per cent decline in the sale of two wheelers.

While MSIL had sold 64,885 units in the corresponding month last year, it sold 47,103 units during November, 2008.

Total vehicle sales during the month were also down by 24.4 per cent at 52,711 units compared to 69,699 units in the corresponding month last year.

The major fall was in the sale of compact cars, comprising Alto, Zen Estilo, Wagon R. Besides there was also a decline in the sales of Swift and A-Star.

The company witnessed a 26.6 per cent decline in this segment. While the company sold 34,976 units in the reporting month, it had sold 47,641 units in November last year.

The sedans — SX4 and Dzire, however, bucked the trend as the sales in this segment grew by 40.3 per cent at 5,975 units compared to 4,260 units last year. Similarly, the exports for the company grew by 11.7 per cent at 5,007 units from 4,483 units last year.

Domestic sales were down by 26.9 per cent. Domestic sales for November, 2008, stood at 47,704 units compared to 65,216 units in the corresponding month last year.

Similarly, TVS Motor Company sold 98,402 units in November compared with 1,12,766 units in the corresponding period last year.

Motorcycle sales of the company stood at 45,276 units for the month of November this year compared with 57,113 units in the same month last year.

However, in terms of exports, the company has registered a growth of 100 per cent as it has exported 20,911 units in November, 2008, compared with 10,408 units in the same month of the previous year.

Meanwhile, another auto major Mahindra and Mahindra (M&M) said it would reconsider its plans for overseas acquisitions in the face of an economic downturn as the company's overall sales figures plummeted 69 per cent in November over the same period last year. Mahindra's exports also went down by over 40 per cent during the period.

"We are always looking for acquisitions, which will suit our portfolio, but the market situation is changing every day and we have to assess how to finance our mergers and acquisitions in times like these," Pawan Goenka, president of Mahindra's automotive division, said.

The company was recently in news as one of the prospective buyers of Chrysler's iconic Jeep and Dodge brand of vehicles. 

Kolkata, December 1
The labour unrest over the Dunlop crisis turned violent today when a large number of Dunlop workers and their supporters attacked the management, forcing the officials to leave the factory premises. The police had to resort to mild lathicharge for dispersing the angry mob.

The irate employees organised blockades on the railway tracks at Bandel station and the adjoining B.T.Road, leading to the disruption of train services and the vehicular movement.

Yesterday, the Dunlop management had issued order of temporary closure at the Sahaganj factory which enraged the workers.

Earlier, the work suspension order was carried out and the workers were told to collect an ad hoc amount of Rs 2,000 every month till the company’s present financial crisis was over and the normal work at the factory began. But, the workers refused to accept that and instead they approached the state government to intervene.

Accordingly, the state labour minister Mrinal Banerjee met the management and the unions separately more than once but there was no solution. The management suddenly declared temporary closure, making the 3,000 odd employees jobless.

Chandigarh, December 1
Once the state’s premier mobile service provider, Spice, is now losing its base in the state.

According to the latest figures released by the Cellular Operators Association of India (COAI), the company’s market share has dropped from over 2.2 per cent at the beginning of this year to 1.5 per cent by end October 2008.

More interesting is the dwindling monthly growth rate recorded by the company this year. Starting with a steady 3.6 per cent in April this year, the growth rate declined in May to 3.08 per cent. In June it hit 1.12 per cent and then came the big shock. In July and August this year, the company lost subscribers by the thousands and registered a negative growth rate of over 17 per cent! In August alone, the company lost almost 3.1 lakh connections. In July, it had lost 2.8 lakh customers.

The major gainers in Punjab during this period were Airtel and Vodafone, who obviously ate into the Spice’s market share. During November, Airtel added almost 60,000 customers to its list and Vodafone added almost 39,000 subscribers. BSNL lapped up over 26,000 customers in the month.

Other than the dismal statistics, Spice subscribers are now also complaining of the poor services being provided by the company.

“There is virtually no after-sales service. My Spice phone was on roaming recently to Rajasthan and all outgoing landline calls were blocked for no reason. When the customer care was contacted, I was told that the problem would take two days to sort out. However, all six days that I was there the spice network did not connect me to any landline in Punjab or anywhere else in India,” said a subscriber.

According to sources, the company is also shrinking its office set- up in the region. A large number of employees of the company at the senior level have left the organisation in search of better options.

The company started operations in Punjab in 1997 and was bought out by Idea some time ago. However, Idea continues to provide its services as Spice in Punjab and Karnataka. Spice was at one time number one in the state, based on its subscriber base, but the position was now wrested by Airtel. Up to June this year, Spice had a subscriber base of 2.75 million.

Spice officials could not be contacted despite repeated attempts.

New Delhi, December 1
State-owned Air India slashed fares across the board on Monday by reducing its fuel surcharge by Rs 400 for all routes.

An airline official said the cut would come into effect from midnight today. This would amount to a reduction of 14.5 per cent on the total fare.

AI's move follows civil aviation minister Praful Patel's comments that India's airlines should cut fares now that jet fuel prices had eased. He had appealed to airlines to cut fares and reciprocate measures taken by the government to help the ailing industry.

Domestic carriers presently charge fuel surcharge of Rs 2,350 per passenger flying up to 750 km and Rs 3,100 for those flying beyond 750 km in India. The airline had in June increased the surcharge by Rs 300 for sectors less than 750 km and Rs 550 for longer flights.

The reduction in the fuel surcharge comes after a recent decline in jet fuel prices. State-run oil companies cut jet fuel prices November 15 by over 12 per cent.

Private air operators have said they would continue to watch the situation before slashing passenger fares. Aviation experts, however, say that private operators would be forced to do so now that Air India has cut fuel surcharge.

The government has also abolished five per cent customs duty on jet fuel. It is now also planning to amend the Central Sales Tax Act in the coming session of Parliament to include ATF in the list of declared goods so that a flat four per cent tax is imposed on it across the country. 

Chandigarh, December 1
The high minimum support price (MSP) of cotton, coupled with high market fees in Punjab has forced the private players out of the cotton mandis. As a result, almost 70 per cent of the cotton ginning mills in the state have now shut shop. 

It is learnt that of the 295 odd cotton ginning units in the state, over 160 have closed shop. With the procurement price of cotton having being increased by almost 45 per cent over last year, inspite of a fall in prices in the international market, these units are finding it difficult to operate. As a result, almost 80 per cent of the cotton procurement in the state is being done by Cotton Corporation of India. Almost seven lakh bales of cotton has arrived in the mandis of Punjab so far.

Talking to TNS here today, Harjit Singh Makkar, general secretary of Punjab Cotton Factories and Ginners Association, said as against the cotton price of 46.98 cents per ounce in the USA, the price in Punjab was 63 cents per ounce. "There is a difference of Rs 300 per quintal in the MSP at which we are forced to buy from farmers, and the international price. This high price will make the cotton exports from India unviable. As the global slowdown has hit our textile exports, and the rise in input costs, thanks to the high MSP, will prove to be the death knell for this sector," he said. 

The high market fees in Punjab has also added on to the woes of the ginners in the state. The market fee in Punjab is four per cent, as compared to 0.8 per cent in Rajasthan, one per cent in Andhra Pradesh and 0.5 per cent in Maharashtra. While other states do not levy any infrastructure cess, in Punjab a three per cent cess is also levied, thus leading to a further increase in prices. 

This will also lead to the inability of textile industry in the region to meet the export targets this year. Last year, textile mills exported textile products worth $3 billion. With USA, the main market for Indian textile exports going through a severe recession, exports are likely to decline substantially this year. 

Makkar, along with other ginners, recently met the union secretary, agriculture, T. Nanda Kumar, and apprised him of their situation. Though the latter said that the MSP could not be rolled back, he said a bailout package for the cotton textile sector would be announced soon. 

Chandigarh, December 1 
Tata Chemicals is now going to come up with customised fertilisers, based on the soil health and cropping pattern of the area. The plant is going to come up in Badayun district in Uttar Pradesh.

This was stated by Kapil Kumar Mehan, director of the company, while talking to mediapersons on the sidelines of a seminar organised by CII on the concluding day of Agro Tech here today.“This plant, being set up with an investment of Rs 50 crore, will manufacture fertilisers based on the soil requirement of this area. This is a pilot project, and we hope to set up similar plants in different parts of the country,” he said. 

Explaining the concept, he said the nutrient requirement of each crop, be it wheat, paddy, sugarcane, maize or potato, are different. Even the nutrient requirement of soil in different areas is different. “In order to study these requirements, we had first come up with a Crop Nutrition Centre at Aligarh. Once the plant at Badayun becomes successful, we propose to set up such plants,” he said.

Mehan also said the company, which operates a farmers’ mart chain, Tata Kisan Ghar, will double these stores from the present 600, in the next five years.

Amritsar, December 1 
Khanna Paper Mills (KPM) would commission its 300- tonne per day newsprint production unit here. 

B.M. Khanna, chairman and managing director of the company, said the unit with a total capital outlay of Rs 250 crore would go on stream from tomorrow with its inauguration by SAD chief Sukhbir Singh Badal. He said the company was expecting to reach a turnover of Rs 1,000 crore with the commissioning of this unit from last year’s Rs 600 crore. He said with this unit, the company would become the largest paper plant in the country using recycled paper.

He said the company was also planning to launch Rs 100-crore inland container depot along with warehouse and logistics park near Amritsar and was awaiting approvals for the same. He said the company would acquire 100 acres of land for this project.

New Delhi, December 1 
Expressing confidence in India despite the Mumbai terror attacks, global private equity investor Actis today said it will invest $1 billion (over Rs 5,000 crore) in the country in the next 3-4 years.

The firm, which has raised $2.9 billion for investing across emerging markets, said it was still positive on the Indian growth story.

"We remain positive on the Indian growth story and will continue to build value for our partners and investors," Actis Partner and Head for South Asia J M Trivedi said in a statement. — PTI

BRIEFLY

Mumbai
SBI adjudged best bank: State Bank of India has been adjudged the Best Bank of the Year 2008 by London-based 'The Banker' magazine of the Financial Times group, the bank said. State Bank chairman O.P. Bhatt received the award from Stephen Timewell, the editor-in-chief of the magazine, a press release on Monday said.— PTI

Nagarjuna Const bags 6 orders: Nagarjuna Constructions on Monday said it has got six orders aggregating Rs 484 crore for infrastructure related works. The company has secured a Rs 121 crore order for constructing a hotel in Hyderabad, it said in a filing to the Bombay Stock Exchange.— PTI

India Infoline okays buyback: Brokerage firm India Infoline on Monday said the directors has approved the Rs 98.91 crore share buyback at a maximum price of Rs 43.20 per piece. The company's board of directors at its meeting on November 29, has approved the proposal of buyback of equity shares, India Infoline said in a filing to the Bombay Stock Exchange.— PTI

New Delhi
NATRiP plan: National Automotive Testing and R&D Infrastructure Project (NATRiP) on Monday said it would invest Rs 1,718 crore for setting up auto testing facilities at seven locations across the country by 2011. NATRiP, a joint venture between the central government, a number of state governments and the country's auto industry to create a state-of-the-art testing, validation and R&D infrastructure, would set up its centres at Manesar, Chennai, Indore, Silchar, Rae Bareilly, Pune and Ahmednagar.— PTI

Onion export price up: Cooperative major Nafed has raised the minimum export price of onion by $25 a tonne to an average of $305-310 for December, a move aimed at containing the domestic prices and increasing the availability of the commodity. Nafed had earlier raised the MEP by $50 a tonne in mid-November to contain price rise.— PTI

AAI chief: V.P. Agarwal, a senior board member of the Airports Authority of India (AAI), will take over as its chief from January 1. The appointment of Agarwal, who would replace Dr K Ramalingam, has been approved by the Appointments Committee of the Union Cabinet, official sources said.— PTI

Hyderabad
AEGON Religare Life: AEGON Religare Life Insurance on Monday launched the AEGON Religare Guaranteed Return Plan, a tax-free single premium policy. "The scheme is an attractive long-term investment product, that provides the benefit of life cover five times of the single premium paid," AEGON Religare CEO Rajiv Jamkhedkar told reporters here.— PTI