The Tribune, Chandigarh, India

	Rangarajan pegs growth at 6-6.5% Tribune News Service Hyderabad, September 17 The Indian economy would see “definite signs” of recovery in the second half of the current fiscal and the growth rate would be in the range of 6 to 6.5 per cent, the chairman of the Prime Minister’s Economic Advisory Council, Dr C Rangarajan, said today. The global meltdown had an “indirect impact” on the country’s economy, particularly during the current financial year, he said. Rangarajan was delivering a keynote address here on “International financial crisis and its impact on India” at a conference on “Global economic meltdown: Challenges and prospects.” The noted economist predicted that the fiscal 2010-11 would see a distinct improvement in growth, touching 7 to 8 per cent. “However, to go back to 9 per cent growth, we have to wait for the world economy to improve and world trade to pick up,” he said. India, he said, could escape the impact of the global recession in the first half of 2008-09 but was feeling the heat in the current year. “We were not directly impacted by the global meltdown as Indian financial system is not directly exposed to the toxic or distressed assets of the developed world. This is not surprising since Indian banks have very few branches abroad. However, the indirect impact of the global recession is very much there,” Rangarajan said. India’s growth rate in 2008-09 was 6.7 per cent as compared to 9 per cent in the previous year. Though India’s import bill had reduced sharply as a result of the fall in international commodity prices, particularly crude oil, the recession abroad had adverse impact on exports of goods and services, he said. The capital flows were also hit. “In contrast to the strong inflow of over $108 billion in 2007-08, 2008-09 saw a net increase of only $9.1 billion in capital flows,” he said. Rangarajan said a cut in excise duty and enlarging government expenditure were among the fiscal measures aimed at stimulating the economy. Later, talking to reporters, he said the interests rates might increase marginally towards the end of current fiscal. The credit off-take, he said, had also shown some signs of recovery. “As the economy picks up there will be greater demand. I am sure the banking system has enough liquidity with it to lend more,” Rangarajan said. The former RBI Governor does not foresee RBI immediately withdrawing accommodative policy. “We need to have definite signs of recovery. Only after the economy recovers we can think in terms of withdrawing. It should not be premature. As the signs of recovery become very definite, then they can think of it,” he said. Arguing that there was no need for another stimulus package, he said, “The package already given is very good. The fiscal measures of increased expenditure will go on till March next year. We will have to review situation after that.”
	Inflation in positive territory New Delhi, September 17 Inflation edged back into positive territory after 13 weeks at 0.12 per cent, driven by higher prices of essential food items and may rise further on the back of poor farm production. The wholesale prices-based inflation rose 0.24 percentage points for the week ended September five against (-) 0.12 per cent a week before, despite a high base of 12.42 per cent a year ago. Cost of essential items like fruits rose by an exorbitant 17.8 per cent on a weekly basis. Also, prices of poultry chicken rose by 16 per cent, spices by three per cent and some pulses by one to two per cent. Inflation had been in negative territory for 13 straight weeks due to base effect. Prices of food items, which rose continuously during the period, may rise further on the back of poor rainfall and resultant reduction in farm output. Terming the transition of inflation into positive territory as slightly faster than expected, Crisil principal economist DK Joshi said the major driver are the prices of items found in raw form (primary articles). — PTI
	UNCTAD favours FDI in farm sector Bhagyashree Pande Tribune News Service New Delhi, September 17 Whether to allow foreign investments in agriculture sector and formulate better policies to facilitate the same has been a political hot potato in India. The reasons for the debate against modernising agriculture or opening doors for foreign investments range from vote bank politics to hunger, malnutrition and sustenance of farmers. Opening doors for investment amid sharpening financial and economic crisis could be an edgy issue for the UPA government. However, the World Investment Report 2009 by the United Nations Conference on Trade and Development (UNCTAD), which, for the first time deals with investment flows in agriculture, stresses that foreign participation in farms can play a significant role in enhancing agricultural production and providing economic development in developing countries. The report, necessitated by the global food crisis took agriculture investment as a subject of study, and released by UNCTAD suggests that foreign investment would not only provide food security and enhanced food safety, but will also result in transfer of technology in farms as well as better access to credit and markets. FDI flows in agriculture tripled to $3 billion annually between 1990 and 2007, driven by the food import needs of populous emerging markets, growing demand for biofuel production and land and water shortages in developing countries. The report suggests that government should formulate policies and regulatory framework for foreign investors entering agricultural production. This should include vital policy areas such as infrastructure development, competition, trade and trade facilitation and research and development. Governments, the report argues, should also promote contract farming between foreign companies and local farmers to enhance farmers income and protect the interests of the farmers. In order to address the concern about “land grab”, the international community should devise a set of core principles that deal with the need for transparency in large scale land acquisitions, protection of indigenous peoples and respect for existing land rights. Global FDI flows have been severely affected worldwide by the economic and financial crisis. Inflows are expected to fall from $1.7 trillion to below $ 1.2 trillion in 2009, with a slow recovery in 2010 and gaining momentum in 2011.
	Sensex extends gains for third day Mumbai, September 17 The benchmark Sensex today closed with modest gains of 34 points after surrendering most of its early lead due to a fall in index heavyweight Reliance Industries. The BSE barometer closed at 16,711.11 points, a rise of 34.07 points or 0.20 per cent over its previous closing. It had rose by 143 points to a high of 16.820.02 in early trade. The broad-based Nifty of the National Stock Exchange crossed 5,000-mark to touch a high of 5,003.05, the level not since May 23, 2008. The Nifty closed at 4,965.55 points, a net gain of 7.15 points or 0.14 per cent. Brokers attributed an initial rise in share values to strong Asian cues on the back of firm Wall Street advices after US economic data raised hopes that the global economic recovery is strengthening. Besides Straits Times which ended barely flat, other Asian indices ended in the green with a gain between 0.5 to 2.0 per cent. European markets also were trading higher in their afternoon trade. However, fall in the top heavyweight, RIL, mainly weighed on the bourses as the share was down by Rs 97.15 or 4.45 per cent and was the top loser from the Sensex pack. RIL informed BSE that Petroleum Trust sold over one crore equity shares of the company today. IT and auto counters attracted good buying while refinery and realty stocks were at the receiving end. — PTI
	WB offers 45 acres to Infosys, Wipro Kolkata, September 17 Ten days after scrapping the ambitious IT township project at Rajarhat following a land scam, the West Bengal government, in a bid to keep Wipro and Infosys in the state, today offered 45 acre each to the two IT giants for setting up their units. "We are ready to give 45 acre each to Wipro and Infosys. They can construct new units at Rajarhat which has all the infrastructure," Chief Minister Buddhadeb Bhattacharjee told a press conference at the CPI(M) headquarters here. "The IT firms will be contacted by tomorrow," he said. Both Wipro and Infosys were to set up their units at the Rajarhat IT township project which was scrapped on September7. The decision had come as a setback to the Left front government which had suffered a major embarrassment following Tatas pulling out their Nano project from Singur after violent protests over land acquisition. Bhattacharjee said the two IT majors could take possession of the land at Rajarhat which was with the Housing Infrastructure Development Co (HIDCO). The land price, he said, would be determined after discussion with the IT firms. The two IT majors had earlier rejected the proposal mooted by state Housing Minister Gautam Deb of providing alternative 10 acre each to set up their shop at Rajarhat. — PTI
	India Inc mops up Rs 40k cr in Q1 New Delhi, September 17 India Inc's fund raising through private placement of debt surged 42 per cent to Rs 40,300 crore in the first quarter of the current fiscal, with over half of the fund being mobilised by financial institutions. The April-June quarter of the current fiscal witnessed a mobilisation through debt (bonds) on private placement basis of Rs 40,300 crore, up 42 per cent from Rs 28,385 crore raised in the first quarter of last financial year, market research firm Prime Database said. With over 67 institutions and corporate houses raising the total amount during the June quarter of the current fiscal, the biggest mobilisation through the route came in from financial institutions, including banks. A debt private placement refers to issue of securities, usually bonds, sold without a initial public offering, usually to a small number of chosen private investors. In the June quarter, fund raising of financial institutions through debt private placement increased 35 per cent to Rs 21,002 crore. On sector-wise basis, private sector surpassed public sector in terms of fund raising. "The sector, which witnessed the most significant growth was the private sector whose mobilisation went up by 50 per cent from Rs 11,184 crore to Rs 16,753 crore," Prime Database CMD Prithvi Haldea said. — PTI
	Wireless broadband service in Punjab by April next Ruchika M. Khanna Tribune News Service Chandigarh, September 17 The much-awaited wireless broadband service using WiMax technology will be launched in the Punjab circle of BSNL in April 2010. Officials in BSNL informed TNS that the contract to set up the WiMax-enabled common service centres in urban areas has been given to Chinese telecom gear manufacturer, Huawei. For the rural areas, the contract has been given to HCL Technologies. The two companies will install equipment at 350 places in urban areas and 46 rural areas of Punjab telecom circle. “The equipment installation at the rural areas has already started and the installation at the urban sites will begin soon,” said PK Paliwal, CGM, Punjab telecom circle. It is learnt that the pilot projects for launching WiMax technology have already been conducted. While the spectrum is yet to be allocated for other telecom players, BSNL will be the first one to roll out this service, thus enabling users high-speed Internet access on laptops and mobiles. Paliwal said: “The broadband services in the Punjab circle have been successful and we hope to replicate this success for WiMax as well. We already have 1.70 lakh broadband customers in this telecom circle. We also have 1.85 lakh dial-up connections.
	IATA forecasts more losses for airlines Dubai, September 17 Airlines this year would lose $11 billion due to rising fuel prices and exceptionally weak yields, the International Air Transport Association has said. This is $2 billion worse than the previously projected $9 billion. According to IATA's revised global financial forecast on airline losses, industry revenues for the year are expected to fall by $80 billion (15 per cent) to $455 billion compared with 2008 levels. “This is not a short-term shock. $80 billion will disappear from the industry’s top line. That 15 per cent of lost revenue will take years to recover," said Giovanni Bisignani, IATA’s Director General and CEO. Bisignani said “the bottom line of this crisis - with combined 2008-9 losses at $27.8 billion - is larger than the impact of 9/11.” Stressing that conserving cash, careful capacity management and cutting costs are the keys to survival, Bisignani said the global economic storm may be abating, but "airlines have not yet found safe harbor. The crisis continues”. IATA also revised its loss estimates for 2008 from a loss of $10.4 billion to a loss of $16.8 billion, an IATA statement said. This revision reflects restatements and clarification of the accounting treatment of very large revaluations to goodwill and fuel hedges. IATA said passenger traffic is expected to decline by 4 per cent and cargo by 14 per cent for 2009, compared to declines of 8 and 17 per cent respectively in the June forecast. By July, cargo demand was -11.3 per cent and passenger demand -2.9 per cent. While both are improvements over the lows of -23.2 per cent for cargo (January) and -11.1 per cent for passenger (March), both markets remain weak. — PTI
	Re breaches 48-mark Mumbai, September 17 The Indian rupee today breached the 48-level to touch a one-month intra trade high before closing higher by 8 paise at 48.15/16 against dollar on heavy capital inflows amid sustained weakness in the US currency overseas. In active trade at the interbank foreign exchange (Forex) market, the domestic unit breached 48 level to touch 47.94 a dollar, more than one-month intra-trade high, in sync with the stock markets. — PTI