New Delhi, August 31
Showing signs of recovery and despite poor monsoon, India’s economy grew by 6.1 per cent in the April-June quarter, the highest since the global financial meltdown hit the shores last September, according to figures released by the Central Statistical Organisation (CSO) today.

The rate makes India the second fastest-growing economy among major countries after China, which recorded 7.9 per cent growth in April-June quarter.

“The worst may be over,” said Montek Singh Ahluwalia, Deputy Chairman of the Planning Commission.

Finance Secretary Ashok Chawla had predicted growth of above 6.5 per cent in the fiscal year ending March 2010, as strength in manufacturing and services offsets weakness in agriculture.

However, stock markets discounted GDP numbers with the key equity index Sensex down 220 points.

Economists say that most of the growth is coming from stimulus measures announced last year which is spurring demand.

In actual terms, quarterly GDP for Q1 of 2009-10 is estimated at Rs 8,30,555 crore, as against Rs 7,82,619 crore in Q1 of 2008-09.

Manufacturing output expanded 3.4 per cent in the June quarter while farm output was up 2.4 per cent.

Agriculture continues to remain an area of concern. The production of rice, wheat, coarse cereals and pulses during the Rabi season of 2008-09, which ended in June 2009, recorded growth rates of 3.8 per cent, 2.6 per cent, 25.6 per cent, and 18.2 per cent, respectively over the production last year.

Among the commercial crops, the production of oilseeds increased by 13.6 per cent during the Rabi season of 2008-09. The cash crops, cotton and sugarcane, saw a decline in production of 10.5 per cent and 22.1 per cent, respectively, during the agriculture year 2008-09.

The Index of Industrial Production (IIP), mining, manufacturing and electricity, registered growth rate of 7.3 per cent, 3.2 per cent and 6.0 per cent, respectively, over last year.

Key indicators of construction sector, namely cement and finished steel registered growth of 12 per cent and 3.4 per cent, respectively, during Q1 of 2009-10.

The consumers share of spending in the Indian economy shrank to 55.6 per cent in April-June from 58 per cent a year earlier, while the government’s share rose to 9.9 per cent from 9.6 per cent on the back of stimulus spending.

The services sector, which accounts for more than 57 per cent of the economy’s output, grew at 7.8 per cent in the June quarter, compared with 10.2 per cent in the year-ago period.

However, last week the RBI warned that poor monsoon was more likely to drive inflation than to curb growth.

The index of food prices jumped 13.3 per cent in the year through August 15, even as the wholesale price index fell for the 11th week.

With the growth sinking from the estimated 7-9 per cent levels, the government is likely to review ways to increase investment in agriculture, infrastructure and public sector investment.

The meeting will be presided over by Prime Minister Manmohan Singh, Deputy Chairman Planning Commission Montek Singh Ahluwalia, Finance Minister Pranab Mukherjee, Home Minister P Chidambaram, Agriculture Minister Sharad pawar, and Chairman to Prime Minister’s Advisory Council C Rangarajan.

New Delhi, August 31
India Inc today saw signs of turnaround in the economy with the GDP showing a growth of 6.1 per cent in the first quarter of the fiscal 2009-10.

On the release of GDP data, leading business chambers said the worst was behind the global economy.

"With global recession bottoming out we expect sectors such as trade, hotels, transport, communication and manufacturing to accelerate the pace of growth in the coming months," Ficci said.

It said the growth on sequential basis from 5.8 per cent in the fourth quarter of 2008-09 to 6.1 per cent in first quarter of the current fiscal "is an indication of a turnaround in the economy".

It said the economy was showing improvement despite weak performance of the agriculture sector.

"The stimulus measures taken by the government are yielding results on the ground and there is clear case for continuing these for some more time," Ficci president Harsh Pati Singhania said. He expected the economy to grow by 6.5 per cent in the current financial year.

Assocham said it would not be correct to compare the performance of the economy this fiscal with last year, given the current economic scenario in which "demand creation is still a challenge".

Assocham said the economy would gradually bounce back as sectors like steel and real estate have started picking up.

CII said the timely intervention of the government through fiscal and monetary measures are helping the economy recover from the global crisis.

"The GDP numbers indicate that the economy has bottomed out," CII Director General Chandrajit Banerjee said. — PTI

Mumbai, August 31
For years, the diamond industry has been worried about China with its cheap labour edging Indians out of global markets. But, in a sudden turn of events, the neighbouring country has emerged as a major buyer of Indian diamonds.

"With the Western markets showing signs of decline, diamond exporters are looking at entering the Chinese markets," says Amit Jain, a small diamond exporter, who is setting up operations in Hong Kong.

According to him, Indian diamond exporters are looking at Chinese cities like Macau, Shanghai and other places to set up operations.

According to exporters, the Chinese markets are still bullish because of the massive fiscal stimulus undertaken by the government of that country. Flush with cash, Chinese customers are buying diamond jewellery aggressively.

Chinese buying habits, according to those in the trade, are similar to that of Western buyers. Small diamonds below one carat are said to be in demand.

That is good news for Indian diamond exporters who cut and polish the smaller stones, leaving the bigger and more expensive part of the business to European and Israeli players.

According to the trade buzz from Surat, India's main cutting and polishing hub, demand for diamond jewellery from China is expected to peak in the week beginning October 1 when the country celebrates National Day Golden Week.

Exporters from Surat are camping in Hong Kong to push diamond jewellery. Indians are aggressively slashing prices to beat competitors from Israel and Antwerp.

Indians have reportedly emerged as major players in Hong Kong, controlling nearly 60 per cent of the $ 5 billion diamond market in that city.

So far, Indian diamond exports have been badly hit by the global economic crisis. According to the Gem and Jewellery Export Promotion Council, total exports of cut and polished diamonds in July 2009 stood at $1,239 million as compared to $1,325 million last year, a decline of around 7 per cent.

Imports of rough diamonds also fell sharply from $1,138 (Rs 4,916 crore) in July 2008 to $848 million (Rs 4,152 crore) this year.

Mumbai, August 31
Market regulator SEBI is considering the issue of setting up an exchange for small and medium enterprises (SMEs), a top SEBI official said.

"The SME exchange is an issue we are looking at and as and when we feel that necessary conditions are in place, we will allow that," SEBI chairman CB Bhave said at a function to launch interest rate futures at the National Stock Exchange today.

On extension of trading hours at the NSE, Bhave said SEBI’s secondary market committee has discussed the issue.

"Our secondary market committee is looking at it and a committee with exchanges in it has been constituted to look at the practical aspects of this (extension of timing)," Bhave said.

"If we find it practical, we will take it back to the secondary market advisory committee," he said.

There has been a suggestion that trading timings should be extended beyond the present 1530 hours period.

To a query on introduction of more products, the SEBI chairman said, "we want to see how to introduce more products on the exchange traded platform and settle through a central clearing entity which gives settlement guarantee."

Bhave also said the time was not yet ripe for the introduction of interest rate futures in more currencies but SEBI was open to the idea. At present, it is allowed only between the rupee and the dollar. — PTI

Jalandhar, August 31
Rajasthan-based Rallison Electricals Private Limited today launched the country’s first Fire Survival Cable and targeted to achieve a turnover of Rs 500 crore turnover during the current fiscal year.

Managing director Lalit Babbar said his company virtually had its monopoly in the indigenous production of the cables, as so far these used to be imported only.

Noting that these fireproof cables are about 35 per cent more costly than others, he said these would prove useful at times of exigencies when other cables fail.

The company was maintaining its growth at a steady 70 per cent from the past four years and this year, too, the same growth rate was expected, he claimed.

The company’s turnover was Rs 325 crore last year that was expected to reach more than Rs 500 crore in the current fiscal, he added. The company’s direct export accounted 10 per cent of the total turnover last fiscal.

Babbar, recipient of Cable Man of the Year Award 2007, was conferred with the Best Entrepreneur of the Country Award on Friday by Prime Minister Manmohan Singh.

He announced that Rallison plans to pump in Rs 50 crore next year to start manufacture of High Tension Wire in its Chopanki plant, Rajasthan, and may launch its IPO in near future.

The company has three manufacturing units - Bhiwadi, Chopanki in Rajasthan and Baddi in Himachal Pradesh.

He added that Remson, a part of the group, has recently started manufacturing CFLs, apart from home appliances and attained a turnover of Rs 150 crore so far.

Chandigarh, August 31
The RBI has banned all chit fund companies from accepting deposits from the public with immediate effect. The apex regulatory bank, in a notification, has said other than their shareholders, these companies cannot accept deposits from the public.

Any deposit accepted and held by the miscellaneous non-banking companies (MNBCs) other than from its shareholders as on date shall be repaid on maturity and shall not be eligible for renewal.

These MNBCs include chit fund companies that collect money in installments or lumpsum by way of contribution from depositors and repay them in the form of prize money by auction.

“Since this activity has an element of lottery, RBI has asked them not to accept deposit from public,” said a senior official in RBI.

Officials in RBI said they were imposing a ban on collection of deposits by public by these chit fund companies in public interest and to regulate the credit system of the country to its advantage.

These chit fund companies are regulated by the Miscellaneous Non-Banking Companies (Reserve Bank) Directions, issued by the Central Bank in 1977.

Coming down heavily against those corporate houses who are floating non banking finance companies (NBFCs) to get tax benefits, the RBI has also warned them from accepting any kind of deposits from public.

A large number of top business houses in the region, especially from Ludhiana, have floated these NBFCs, transferred their shares to these companies and then taken finance from these companies.

Since the parent companies pay interest to these NBFCs, they get income tax
relief on them.

BRIEFLY

NSE launches interest rate futures
MUMBAI: The National Stock Exchange on Monday launched interest rate futures (IRF), a product that enables hedging against interest rate risks. Banks, primary dealers, MFs, insurance companies, corporate houses, financial institutions and member-brokers will be eligible to participate in IRF trading — available in futures contracts worth Rs 2 lakh each with a maximum maturity of 12 months. — PTI

Kingfisher Airlines to raise $100 m
MUMBAI: Vijay Mallya-led Kingfisher Airlines board on Monday approved an enabling resolution to raise $100 million (nearly Rs 487.8 crore) by various fund raising instruments, including Global Depository Receipts. The proposal is subject to shareholders’ approval. — PTI

Tata Motors Q1 net loss at Rs 328.78 cr
MUMBAI: Auto major Tata Motors on Monday reported Rs 328.78 crore consolidated net loss for the first quarter of this fiscal. The company had a net profit of Rs 719.69 crore in the same quarter last fiscal. Total income from operations stood at Rs 16,397 crore for the reported quarter against Rs 14,490.18 crore recorded in the same quarter the previous fiscal. — PTI

Tata Tax Saving Fund declares 30 pc dividend
MUMBAI: Tata Mutual Fund on Monday announced a 30 per cent dividend for one of its schemes - Tata Tax Saving Fund. Investors in the scheme would receive 30 per cent dividend, at the rate of Rs 3 per unit on the face value of Rs 10 each. — PTI

Amrapali plans Rs 3,000 cr IPO
NEW DELHI: Real estate player Amrapali Group on Monday said it would invest Rs 15,000 crore over the next five years to develop various projects across the country and is considering to raise up to Rs 3,000 crore via a public offer. The Noida-based company is likely to launch the IPO within this financial year. — PTI

Parsvnath township project in Rohtak
NEW DELHI: Realty firm Parsvnath Developers on Monday said it has received approval from the Haryana government for a township project in Sector 33 A, Rohtak, in which the company would invest about Rs 380 crore. The township project will have about 4 million sq ft of saleable area. — PTI

IL&FS to promote Maytas Infra
NEW DELHI: Infrastructure major IL&FS has replaced the B Ramalinga Raju family as promoters of crisis- hit Maytas Infra and will pump in Rs 55 crore to revive the company. IL&FS has also been permitted to appoint four directors, including the chairman. — PTI