New Delhi, February 4
Costlier potatoes and pulses pushed food inflation higher to 17.56 per for the week ended January 23 and economists expect prices to rise further in the next two to three weeks.

This is the second week in a row that food inflation has increased, after easing for three successive weeks. For the week ended January 16, it stood at 17.40 per cent.

Food inflation, which was easing after touching the decade's high of about 20 per cent in December, rose mainly because potatoes became dearer by 44.91 per cent and pulses by 44.43 per cent over the previous year.

According to economists, food inflation can rise in the next two to three weeks and thereafter it could moderate. "Due to poor monsoon, food inflation may rise in the next two to three weeks, though the increase would be marginal.

However, on expectations of good Rabi harvest, it could fall thereafter," Axis Bank economist Saugata Bhattacharya said.

He expects that overall wholesale inflation could rise to 8-9 per cent by March from 7.31 per cent in December.

"This 8-9 per cent range is without factoring in the hike in fuel prices. If fuel becomes dearer, overall inflation could touch 10 per cent by end of this fiscal," he added.

On the weekly basis, the index for food articles declined by 0.1 per cent, mainly due to lower prices of tea (5 per cent), arhar (3 per cent) and urad, fruits & vegetables, ragi and eggs (1 per cent each).

However, prices of coffee rose by 5 per cent, gram by 2 per cent, while wheat, moong, barley and jowar moved up by 1 per cent each over the previous week.

The index for non-food articles group declined by 0.5 per cent due to lower prices of groundnut seed and raw rubber.

HDFC Bank economist Jyotinder Kaur said, "On the weekly basis, food prices have moderated. However, food inflation is expected to be higher in the coming days." She further said the fuel price inflation is the main concern. It has increased by 0.2 per cent on weekly basis due to higher prices of light diesel oil and furnace oil. — PTI

New Delhi, February 4
The government today said it might decide before the beginning of the Budget session on the Parikh Panel recommendations of freeing the oil prices and increasing the rates of kerosene and cooking fuel.

"By next week, the ministry will be able to offer its comments on the recommendations and it will then go to the Cabinet," Oil Minister Murli Deora told reporters here.

Asked by when the Cabinet is expected to take a decision, he said it would be very soon, "may be before the Budget itself".

Earlier in the day, Deora's deputy Jitin Prasada hinted that the government might not accept the report in totality and would protect the common man's interest.

"The government will ensure that least burden is passed on to the poor and common man... while also ensuring that the financial health of PSU fuel retailers is protected," Minister of State for Petroleum and Natural Gas Jitin Prasada said here.

Indian Oil, Bharat Petroleum and Hindustan Petroleum currently lose Rs 180 crore per day on selling petrol, diesel, LPG and kerosene below the imported cost. In full-fiscal, they are estimated to lose Rs 46,030 crore. — PTI

Mumbai, February 4
The Bombay Stock Exchange and the National Stock Exchange will carry out a special 90-minute trading session on Saturday to help NSE test an upgrade its 
trading system.

The special live trading session on February 6, in cash and futures segments, will open at 11 am and close at 12:30 pm, the NSE and the BSE said in separate circulars.

"The NSE is upgrading the capacity of capital market trading system by implementation of horizontally scalable architecture. Towards this, the exchange is conducting a special live trading session on Saturday, February 6," the NSE stated.

In view of the NSE's special session, the BSE stated that it would also trade on Saturday this week.

"The facility to enter block deal orders on Saturday will be available from 11 am to 11.35 am," the BSE circular added.

The trades will be settled on February 9 as a separate settlement. — PTI

Mumbai, February 4
An expected surge in capital inflows might prompt the Reserve Bank to increase the amount banks must keep with it by another 0.75 per cent, besides tightening policy rates by 1 per cent in 2010, a top economist today said.

"The RBI has been proactive (in its policy actions).... They remain serious about the inflation and the impact of capital flows in the domestic market," Macquarie Securities Global Head of Economics Richard Gibbs told reporters here. There is a likelihood of the apex bank hiking the CRR by another 0.75 per cent and policy rates by 1 per cent in the current year, Gibbs said.

Exiting from its accommodative policy stance, the RBI last week hiked its cash reserve ratio by 0.75 per cent sucking out Rs 36,000 crore liquidity from the system.

The bank, which retained the other policy rates, also upped the GDP growth target to 7.5 per cent and inflation projection to 8.5 per cent for the current fiscal.

Reforms in agriculture sector and increased investments in the infrastructure segment would play key roles in the economy as it did strive to return to the earlier high growth trajectory, Gibbs said.

According to him, on the back of their strong economic fundamentals, India and China would lead the global economic recovery.

Macqaurie expects the global economic growth to be at least 3.7 per cent over 2010, with public spending and inventory rebuilding likely to be at the forefront of economic activity.

"The growth in the major developed economies is no longer expected to be consumer or services driven. Rather, industrial production, exports, infrastructure and hard assets are expected to dominate," Gibbs said. — PTI

New Delhi, February 4
The country's software and business process outsourcing exports are expected to rise 5.5 per cent to touch $ 50 billion in the current fiscal (2009-10), Nasscom said today.

The estimation is in line with an earlier forecast of 4-7 per cent given by Nasscom. The industry was optimistic to reach the $ 50 billion milestone export target in the current fiscal.

For 2010-11, it hopes that IT and BPO exports should grow at an annual 13-15 per cent to touch $ 56-57 billion as the slowdown peters out and the world economy recovers boosting demand for outsourcing. The sector's export growth had been slowing down from 32 per cent five years ago to single digits of late.

Releasing the Indian IT-BPO sector performance estimates for FY09-10, Nasscom said, "Export revenues for the Indian IT- BPO industry are expected to record a growth of 5.5 per cent, to reach $ 49.7 billion in FY 09-10." It said as the industry emerged stronger from the global economic meltdown to post encouraging results, domestic revenues may also grow by 15-17 per cent in the next fiscal to touch Rs 76,100-77,500 crore. For the current fiscal, the domestic market was expected to witness 12 per cent growth in FY09-10 to reach Rs 66,200 crore.

The industry will continue to be a net hirer with direct employment expected to grow by 4 per cent and cross 2.3 million with over 90,000 jobs added in FY09-10, Nasscom president Som Mittal said.

Pramod Bhasin, chairman, Nasscom and president and CEO, Genpact, said, "The performance of the industry this year is far stronger than what is reflected through the growth numbers." He further said the industry had reinvented itself by increasing its cost efficiencies, utilisation rates, diversification into new verticals and markets and new business and pricing models. — PTI

New Delhi, February 4
ICICI Bank CEO and MD Chanda Kochhar today said an upward pressure on interest rates was likely in the second quarter of the next fiscal.

"Clearly, we will see no immediate pressure on interest rates. But we will see upward pressure on interest rates--not from the beginning of the next fiscal, but I will say the second quarter of the next fiscal," she said on the sidelines of the Diamond Jubilee celebrations of PTI here.

She said interest rates were not driven so much by policy announcements of the RBI, but demand and supply of credit and level of liquidity. The RBI had recently asked banks to keep more cash with it to suck out Rs 36,000 crore from the system to combat inflationary expectations.

From the next financial year, there would be big demand for credit as many projects were seeing financial closure. She, however, said the rise in the interest rates would be gradual and not something that would hurt growth. "Lots of investment activities will start (next fiscal). Lots of projects have seen financial closure, they have started initial investment, demand for credit will pick up in a big way next fiscal, and that will lead to some amount of increase in interest rates," she said.

On the RBI's move to suck out Rs 36,000 crore of liquidity from the system to tame inflation, she said in the long run, inflation could only be cooled down if capacities were built. She said she hoped the Budget would be investment-driven budget. Some kind of stimulus, like implementation of the fourth Pay Commission's recommendations, were built into the system and would always remain there, she said.

On the concern expressed by the RBI over home loans given on teaser rates, where interest rates rise after initial years, Kochhar said the important issue was that there should be transparency while offering these loans and added that teaser home loans were very less in the total loan portfolio of ICICI Bank. — PTI

Chandigarh, February 4
Aksh Optifibre Limited (AOL) is all set to go global with the launch of its Internet Protocol Television (IPTV) in Sri Lanka and some African countries. The company is looking further for expanding its base in 20 cities in the next financial year.

Lt-Gen Virin Dhir (retd), president (Corporate Initiatives) said they were all set to launch their IPTV service in Sri Lanka. “We are already the largest IPTV player in South-East Asia. With the launch of IPTV service in Sri Lanka and by adding more customers in India, we will be able to reach our break-even point. Besides, we are also in advanced stages of talks with an African country to start the service,” he said.

Dhir said though the IPTV service was far more advanced than the Direct to Home (DTH) services, there were some glitches in the rolling out of the service. “We are now in collaboration with MTNL and BSNL across 22 cities. In order to achieve a target of 2.50 lakh customers by 2010-11, we have roped in channel partners, who will act as the first point of contact for customers,” he said.

He further said they were also creating awareness about the superior services being offered by the IPTV vis-à-vis DTH service. “Our USP is “chill and cool” service, which ensures that a customer can watch missed programmes as and when he wants for seven days, besides being able to pause, rewind or fast forward live channels. Also, IPTV is much cheaper than the DTH service,” he added.

He said they had earmarked Rs 150 crore for expanding their infrastructure and adding new content.

BRIEFLY

Highest rating for Reliance AMC
New Delhi: Crisil has assigned its top rating to Reliance Capital Asset Management, which reflects the company's high level of process quality and risk management capabilities. Crisil assigns the top rating of “Fund House Level-1” to AMC which are judged to possess the highest governance levels and process quality in fund management practices. The firm is the investment manager of Reliance MF which is the market leader with average assets under management of Rs 1,17,248.56 crore and investor base of over 70.97 lakh at the end of January. — PTI

Gold tumbles Rs 155
New Delhi: Snapping a three-day uptrend, gold prices plunged by Rs 155 to Rs 16,800 per 10 grams at the bullion market here today on selling driven by a weakening global trend. Standard gold and ornaments plunged by Rs 155 each to Rs 16,800 and Rs 16,650 per 10 grams, respectively, while the sovereign remained flat at Rs 14,000 per eight-gram piece. — PTI

DB Realty IPO at Rs 468
New Delhi: DB Realty has fixed the issue price of its IPO at Rs 468 per share, the lower end of its price band. Rs 1,500 crore IPO that closed on February 2, was subscribed nearly three times. The issue will constitute 13.18 per cent of the fully diluted post-issue capital of the company, DB Realty said today. — PTI