New Delhi, August 18
As the country readies to fight drought through a series of fiscal measures, Finance Minister Pranab Mukherjee today said the government will not need to borrow more. “We will get more by way of taxes and, if needed, we will try to adjust from existing budgetary provisions,” Mukherjee said. The government has projected to borrow Rs 4.5 lakh crore for spending in the current year.

The Finance Minister was taking stock of the rural banks’ performance and credit flow to the farm sector and said capital infusion would help Regional Rural Banks achieve their agriculture targets in 2009-10.

“The government will infuse fresh capital into the regional rural banking system to increase credit flow to the farm sector. This would be done through a committee that would be formed to assess capital requirements of the RRBs,” he said.

Some RRBs, he added, would need capital infusion to achieve the capital adequacy requirement of 7 per cent.

“The non-performing assets (NPA) levels of the regional rural banks (RRBs) are within acceptable limits. We intend to make rural banks profitable by 2010,” Mukherjee said. He added that the government would set up a committee to look into the demands of the rural banks, including fresh capital infusion.

The government says that it is in no mood to write off farm loans for the current fiscal, even as the country faces severe drought. Saying that there is no such proposal in front of the government, the FM clarified the UPA government’s position in the matter.

Despite the fact that the assessment of the drought has not been made fully yet, the FM said that the country would be able to achieve six per cent growth.

However, economists are skeptical about the claim made by the minister and say that the domestic rural demand is what drove the country at a time when the economic crisis hit the world. But now with the drought hitting most of the country, the growth engine is likely to be stuttering and achieving six per cent growth seems difficult.

Poor monsoon, besides eroding farm output, could also have a telling effect on consumer spending in rural areas.

The UPA government had last year announced a nearly Rs 71,000-crore farm loan waiver scheme to offer relief to farmers, especially the small and medium ones who were unable to access fresh loans due to non-payment of dues.

However, the Finance Minister does not see interest rates rising in the foreseeable future.

New Delhi, August 18
Haryana Chief Minister Bhupinder Singh Hooda is all set to give Rohtak, his son’s Parliamentary constituency, a big employment generation gift ahead of state Assembly elections.

Come Friday, the Haryana Chief Minister will be allotting as much as 700 acres of land to country's largest car manufacturer, Maruti Suzuki India Limited (MSIL) for the construction of country’s largest automobile research and development (R&D) centre at Rohtak.

Incidentally, Rohtak has always aspired to be the capital city of Haryana and remains one of the most developed cities of the state.

MSIL is to sign an agreement with the Haryana Government on Friday for the allocation of over 700 acres of land at Rohtak where it would come up with its new R&D centre. The site will also have a facility for the supplier’s park spread over 100 acres besides the R&D facility.

The R&D facility, which would be largest which even Suzuki Motor Corp (SMC), MSIL's parent company would have anywhere in the world, is also expected to generate major employment in the region. It also reflects SMC’s resolve to establish India, which has been providing it with highest revenue, as its main R&D centre outside of Japan.

Meanwhile, MSIL is all set to roll out its small car Zen Estilo equipped with the latest KB-series engines. It will be rolling out the new Estilo here on August 25.

The small car with the new engine would be produced from the company's Gurgaon plant along with other two small cars — A-Star and Ritz — which also have the KB-series engine.

Riding on the success of the new fuel-efficient technology, MSI plans to bring the KB-series engines in other existing as well as new models.

While some weeks ago, MSIL launched its latest Ritz model with the KB-series engine, it has set a target to gradually introduce this next generation light-weight fuel-efficient engine series on other models also over a period of next 3-5 years.

The company currently produces Bharat Stage-III, Bharat Stage-IV and Euro-V emission norms compliant KB-series engines. It produces two different petrol engines-1 litre (A-Star) and 1.2 litre (Ritz).

Incidentally, last month MSIL had rolled out over one lakh units of A-Star and Ritz. This happened within 10 months of the start of production of the KB-series engines.

Washington, August 18
The global economic recovery has begun but sustaining it will require refocusing the United States toward exports and Asia toward imports, the International Monetary Fund's chief economist said. In an article released by the IMF on Tuesday, Olivier Blanchard also said potential economic output may be lower than it was before the financial crisis struck.

"The turnaround will not be simple," Blanchard said. "The crisis has left deep scars, which will affect both supply and demand for many years to come." He said US consumption, which accounts for about 70 per cent of the US economy and a large chunk of global demand, would not quickly return to pre-crisis strength as households cope with trillions of dollars in losses from the falling housing and stock markets.

He said the financial crisis had made Americans more conscious of "tail risks" — events that are unlikely to occur, but when they do have devastating consequences. That means US consumers are unlikely to return to their free-spending ways, and both the United States and its trading partners will have to adjust. Emerging Asian countries, especially China, must play a big role.

"From the point of view of the United States, a decrease in China's current account surplus would help increase demand and sustain the US recovery," he said.

"That would result in more US imports which would help sustain world recovery." But in order for China to boost domestic demand, it will need to provide a stronger social safety net and increase household access to credit, which will encourage its consumers to save less and spend more. "Both higher Chinese import demand and a higher (yuan) will increase US net exports," he said. — Reuters

New Delhi, August 18
Engineers at state-run telecom company BSNL went on an indefinite strike from today demanding absorption of deputed officers from the telecom department, and transparent human resource policy.

The strike, called by the All India Graduate Telecom Officers Association (AIGETOA), is expected have an impact on the operations of the telecom company as most of the engineers on strike, numbering nearly 10,000, are heads of its zonal branches.

To ensure that the strike does not disrupt the operations, BSNL has set up a control room.

Deputed officers in the telecom company were not happy with the Department of Public Enterprises (DPE) rules that states the deputation of government servants to any public sector undertaking should be not allowed for more than three years, a representative from the association said.

Meanwhile, around 1,50,000 workers of the company will go on a two-day strike from tomorrow demanding a higher wage revision.

According to BSNL union general-secretary VAN Namboodri, the company management had offered 30 per cent wage revision to workers, while higher officials received 60-70 per cent hike. “We want a better salary hike and periodicity (of wage revision) to be reduced to five years,” Namboodri said.

The union has also demanded an increase in fitment which was fixed at 78.2 per cent by the government. This would augur a hike in the basic salary and perks.

New Delhi, August 18
Financial major Citigroup today slashed its outlook for India’s gross domestic product (GDP) to 5.8 per cent from its earlier projection of 6.8 per cent on anxiety about the drought situation in the country.

“Factoring in negative agri growth, but leaving industry and services unchanged, we cut our FY10 GDP estimates to 5.8 per cent from 6.8 per cent,” Citi India economist Rohini Malkani said in a note titled ‘Estimates Cropped…As Drought Fears Turn Real’.

Further, the financial services firm said the relief measures could widen the projected fiscal deficit of 6.8 per cent for the current fiscal to 7 per cent.

Citi also raised its forecast for the year-end inflation to 6 per cent from 4 per cent earlier on higher food prices.

“The worst fears have come true. The rains have played truant resulting in 209 out of 593 districts already being declared drought affected,” Citi said, adding it now expects tightening of policy rates by 125 basis points instead of 75 points seen earlier in the fiscal.

However, the bank said the economic impact of the drought would be muted due to various factors, including ongoing measures (NREGA, farm waiver, pay commission), stock of food grains and buoyant forex reserves if the need for import arises.

Besides, Citi kept its outlook for exchange rates unchanged at Rs 46 and Rs 44.5 for the financial years 2009-10 and 2010-11, respectively. — PTI 

Ludhiana, August 18
The exporters in the region are worried over the call of an indefinite strike given by the entire dyeing industry in the city. They said it was unfortunate that when the industry, after a long spell of recession, had started showing signs of improvement, the impasse between dyeing units and Punjab Pollution Control Board (PPCB) will cause a great loss to the textile exporting units all over the state.

Ajit Lakra, general secretary of Knitwear and Apparel Exporters' Organisation told The Tribune that industry was alreday facing loss of production and escalation of cost due to severe shortage of power and labour.

The strike by the dyeing units will further paralyse the total garment industry. He said exports, being time-bound, will be hit due to strike. "We will not be able to get the dyed yarn or cloth in time and due to this, the export deliveries will be delayed", said Lakra.

He further added that they will have to bear huge losses in case shipment was delayed and was not sent through sea. The price of air-shipment was much higher than sea-shipment and it was not viable to send huge shipments by air.

"Moreover there will be loss of trust by the foreign buyers on Ludhiana Textile Exporters, which can be very harmful. The whole export business is run on commitment and if exporters fail to fulfil their commitment, the buyers will be forced to look for other options in South. There will be setback to the economy of the state as well", said SC Ralhan, chairman, Northern Region, Export Engineering Promotion Council.

Lakra said the deadlock had to be resolved at the earliest for the betterment of the textile industry. He said officials of the PPCB, representatives from industry and leaders should sit together and find ways and means to remove pollution from the city and not the industry, which was putting maximum share to state's economy.

He said industry was in deplorable condition and the PPCB officials had no concern for the industry. "The image of exporters was being spoiled in the eyes of foreign customers", he said.

It may be mentioned here that the entire dyeing industrial units (about 300) were on indefinite strike against PPCB’s move to cut power connections of about 13 units for causing pollution.

CNI Research in pact with Dow Jones
Mumbai: Capital market research firm CNI Research on Tuesday said it has entered into an agreement with Dow Jones' content distribution arm, Dow Jones Factiva, to provide content on the Indian small and mid cap segment. In addition, research and sectoral reports on Indian corporates, economy and stock markets would also be provided by the company for the global client base of Dow Jones Factiva, CNI Research said. — PTI

Allahabad Bank campaign
Chandigarh: Allahabad Bank has launched a campaign for mobilisation of savings bank deposits. Customers having savings bank account will enjoy free personal accident cover of Rs 1 lakh, life insurance of Rs 1 lakh at a very low premium, free international ATM cum debit card, instant credit of outstation cheques up to Rs 15,000, besides other facilities. — TNS