Washington, October 29
The world's largest economy US climbed out of recession as it grew by 3.5 per cent in the third quarter ending September 30, the first quarterly expansion in a year, thanks to higher consumer and government spending among others.

The economy, which was battered by the worst financial turmoil since the 1930s Great Depression, expanded last in the second quarter of 2008, when GDP rose 1.5 per cent.

The advanced estimates from the US Bureau of Economic Analysis (BEA) released today showed that American GDP expanded 3.5 per cent in the third quarter.

Consumer spending, which accounts for two-thirds of the GDP, grew 3.4 per cent in the quarter under review compared to 0.9 per cent fall in the previous quarter.

America is the latest advanced economy to shrug off recession and joins the likes of Germany, France, Japan and Singapore.

However, the country would be officially out of recession only after the National Bureau of Economic Research (NBER) declares so. A country is said to be in recession if its economy contracts for two straight quarters.

The third quarter growth was primarily due to rising personal consumption expenditures (PCE), higher federal government spending and exports, BEA said in a statement.

The economy shrank 0.7 per cent in the second quarter after contracting at a staggering pace of 6.4 per cent in the first three months of 2009.

"The upturn in real GDP in the third quarter primarily reflected upturns in PCE, in private inventory investment, in exports, and in residential fixed investment and a smaller decrease in non-residential fixed investment...," BEA said.

One of the main factors for the upturn in economic activities in the third quarter is the government's 'Cash for Clunkers' programme for the auto industry, which resulted in increased car sales. The initiative which ended in August had offered rebate of about $4,500 for consumers to purchase new cars and sell their old models.

As per NBER, the American economy officially slipped into recession in December 2007.

However, the situation turned for the worse after the fall of then Wall Street major Lehman Brothers in September 2008. Since then, the Federal government has come up with unprecedented measures, including massive stimulus packages, to boost the nation's sagging economy.

US stock markets opened higher on better-than-expected growth figures as also on government data that showed fall in jobless claims.

Elsewhere, the European Union also announced that business and consumer confidence in the 16 nations that use the euro rose to the highest level since Lehman Brothers collapsed.

Japan also announced growth in industrial production for the seventh month in a row. — PTI 

New Delhi, October 29
In the midst of tensions between them over contentious political issues, India and China are close to concluding negotiations over a free trade agreement (FTA).

Senior Indian officials confirmed that the two sides have completed a feasibility study on their proposed FTA which now awaits approval from the political leaderships of the two countries.

An FTA between the two countries is expected to lead to the establishment of the biggest free trade region in the world.

The officials said the government was well aware of the concerns expressed by the Indian industry over concluding an FTA with China. “We will not do anything under the proposed FTA that will hurt the domestic industry. In fact, every effort would be made to ensure that the domestic industry does not face any disadvantageous situation under such an arrangement,” they added.

It was during the then Prime Minister Atal Behari Vajpayee’ visit to Beijing in June 2003 that India and China had decided to put the border and other contentious issues on the backburner and concentrate on cooperation in the economic area. Trade between the two countries has grown up manifold since then.

However, recent developments, especially China’s strident stand on Arunachal Pradesh and repeated incursions by Chinese troops into the Indian territory, had triggered fears that political issues could again cast a shadow on economic ties between the two nations.

But Prime Minister Manmohan Singh, a votary of close Sino-Indian ties, is learnt to be keen about India entering into such a pact with China as he believes it would help the two Asian giants exploit the true potential of their cooperation in the economic field.

However, the Indian industry is strongly opposed to any FTA-like arrangement with China, given the huge trade imbalance in favour of China. Against exports of $9.26 billion, imports from China into India totalled $31.33 billion in 2008-2009.

New Delhi, October 29
India’s exports dropped by 13.8 per cent in September, but the decline was the lowest this fiscal, giving hope of a rebound of a year-old negative trend from the third-fourth quarter of the current fiscal.

The exports for September the current fiscal stood at $13.6 billion. But the contraction in decline can be seen well when the figures are compared with last year when the exports in the same month stood at $15.8 billion.

During the first half of the current fiscal, overseas shipments contracted by 28.5 per cent to $77.9 billion as against $108.9 billion in the same period last year, Commerce Secretary Rahul Khullar said.

The pace of decline of the country’s exports have, however, slowed since May when it tanked 39.2 per cent, and in the subsequent month it contracted by 31.9 per cent.

In July, the overseas shipment fell by 28.4 per cent and in August it dipped by 19.5 per cent.

Sakhtivel, president of Federation of Indian Exports Organisation (FIEO), said if the dollar maintained a level above Rs 45 it would be beneficial for the exporters. This will also help Indian exports regain the targets as estimated from January onwards.

The FIEO chief said the RBI’s ‘wait and watch policy’, despite the selling off of domestic currencies by Asian nations on concerns that export recoveries would slow down further, till January when the next review is to take place was a prudent decision.

As far as the MSMEs’ export sector is concerned, the transmission mechanism for the credit sector needs to be improved, he observed.

Ludhiana, October 29
The recent orders of the Excise and Taxation Department to hold all claims of VAT refund has sent a negative signal among the industrialists of the state.

The submission of Forms C and H has been made mandatory while claiming the VAT refund. But the shortage of Form C has perturbed the industry.

“It is a fact that throughout the country, a number of assessment cases were pending due to non-availability of these forms. If the practice of submission of one form a year creates such a crisis, then how could it be available on quarterly basis, as it will increase the requirement by four times,” DS Chawla, president of United Cycles and Parts Manufacturers’ Association, said. He said that while issuing the new orders, the officers had overlooked the rules, which allowed the dealer to deposit Form C and H on yearly basis since both forms were to be issued by different state governments all over the country.

PD Sharma, president of Apex Chamber of Commerce and Industry, said Form C had to be obtained from buyers located in some other state. Similarly, procurement of Form H too was not solely in the hands of the seller.

He added that due to the recent orders, tax refund would take several months and the working of industrial units will come to a halt. 

Pokhra (Nepal), October 29
American mobile chipmaker Qualcomm Inc has said it hopes to launch a low-cost computing device ‘Kayak’, which could also be used as a phone, in India in the second half of next year.

The device, to be priced at or under Rs 10,000, will be a ‘personal computer alternative’ and will undergo trials early next year and is basically targeted at users in rural areas where digital divide is huge, Qualcomm Inc senior VP Kanwalinder Singh told reporters here.

It can offer Internet access and the user would also be able to make phone calls. The San Diego-based wireless technology provider is in talks with major Indian telecom service providers like Bharti Airtel and Reliance Communications for the launch. — PTI 

BRIEFLY

Inflation rises to 1.51 pc
New Delhi: Inflation grew by 1.51 per cent as of October 17 on the back of higher food prices, vindicating Reserve Bank's hawkish stance of slowly withdrawing its easy money policy. The wholesale prices-based inflation stood at 1.21 per cent in the previous week. During the week, tea, mutton and arhar and manufactured food items turned expensive. — PTI

Shell to shed 5,000 jobs
London: Royal Dutch Shell will see 5,000 job losses in the coming months, as part of the restructuring programme initiated at the oil major earlier this year. "The Transition 2009 programme, which I announced earlier this year, is progressing well, and will be completed by the end of 2009. Some 5,000 employees are leaving Shell as a result of these changes," Shell CEO Peter Voser said. — PTI

ONGC net up 6 pc
New Delhi: State-run ONGC on Thursday reported a near six per cent rise in its net profit in second quarter ended September 30, the first gain in five quarters due to lower fuel subsidy bills and better realisation on crude sales. Net profit in July-September quarter at Rs 5,089.64 crore was 5.9 per cent higher than Rs 4,808 crore in the same period a year ago, ONGC chief RS Sharma said. — PTI

Max New York Life plan
Chandigarh: Max New York Life has introduced a universal life product called Max New York Life Secure Dreams. The product offers the best of traditional as well as unit-linked life insurance products. Sanjay Bakshi, zonal vice president, said it has been designed as a hallmark of guarantee and safety to address the consumers’ need of capital preservation and growth. — TNS

Ping Mobile offer
Chandigarh: Ping Mobile has launched a special tariff voucher with ‘Pay per Use’ plan for its subscribers. With this offer, the pre-paid subscribers can now enjoy local and STD calls at just one paisa per second, irrespective of the service providers. The cost of the special tariff voucher is Rs 52 and it will have one-year validity. 
— TNS