New Delhi, June 10
Industrial output growth plunged to 6.3 per cent in April due to a dismal show by manufacturing and mining sectors, which prompted the government to term the situation as disturbing.

“The IIP growth figures are disturbing. (We) need to wait for longer term IIP growth to see the trend,” Finance Minister Pranab Mukherjee said.

According to the government data with base year of 2004-05, the factory output in 2010-11, as measured by the Index of Industrial Production (IIP) is higher at 8.2 per cent.

Concerned over the impact of high interest rate on consumer demand, Chief Economic Advisor (CEA) Kaushik Basu today said Reserve Bank will need to have a re-look at the monetary tightening policy.

“RBI will have to balance its monetary policy tightening in view of growing concerns particularly in consumer goods front, where higher interest rates are impacting demand," Basu told reporters here.

The comments comes as the RBI is scheduled to hold a mid-quarter review of the monetary policy on Wednesday. The central bank, in its bid to tame high inflation, has raised its key policy rates nine times since March 2010 It is widely expected that the bank may again hike the rates on June 16.

As per the latest Index of Industrial Production (IIP) data, output in the consumer goods sector slowed to 2.9 per cent in April from 13.8 per cent in the year-ago period.

Meanwhile, the growth in factory output numbers for the fiscal 2010-11 has been revised upward to 8.2 per cent in the new series (with base as 2004-05) from 7.8 growth projected in the series with 1993-94 as base year.

Basu said there will be a marginal upward revision in 2010-11 GDP figures following change in IIP growth.

The new series showed the factory output growth in April was 6.3 per cent against 13.1 per cent in the corresponding period last year.— PTI

New Delhi, Jun 10
After nearly five years of its association, Bharti group today exited from its financial services joint ventures with French firm AXA and sold its entire 74 per cent stake in both general and life insurance businesses to Mukesh Ambani-led RIL for an undisclosed amount.

“The decision is in line with Bharti's strategy of focusing its energies and financial resources in businesses where it is making a deeper impact both in India and overseas. Currently, the financial services ventures do not fit into Bharti’s long-term growth plans," the company said in a statement.

The company had entered into these joint ventures with the AXA group in 2006 and held 74 per cent stake in both these ventures — Bharti AXA Life Insurance and Bharti AXA General Insurance.

“It (Bharti) intends to use the proceeds from selling its interests in these joint ventures towards other group businesses in India and abroad,” it said.

Bharti, a leading telecom player, has operations in 19 countries including 16 nations in Africa where it acquired Zain Telecom’s assets last year for over $10.7 billion. It has accumulated mobile subscriber base of over 190 million.

RIL said that the company has reached an understanding with Bharti on acquiring its entire stake in JV with AXA.

“This sale is subject to necessary approvals from IRDA (insurance regulator), Competition Commission of India ( anti-monopoly watchdog) and any other relevant/applicable authorities,” Bharti said.— PTI

New Delhi, June 10:
Nearly a year after scrapping the non-compete agreement between them, the Ambani brothers today came into direct competition with each other with the elder sibling Mukesh-led group’s entry into the insurance business.

Younger brother Anil-led group's Reliance Life Insurance and Reliance General Insurance are already among the leading private sector players in their respective businesses.

The Bharti group would exit from its joint ventures with AXA ventures sell its stakes to the RIL group. The two ventures would now be run in partnership between RIL and the French financial services major AXA group.— PTI

New Delhi, June 10
The country’s May trade deficit widened the most in nearly three years as the country's demand for oil, gold and industrial machinery soared, prompting concerns the gap for the fiscal year could expand despite a strong rebound in exports.

The trade deficit rose 67 per cent in May from a month ago to $15 billion, the highest since September 2008. The trade gap widened despite a 57 per cent year-on-year jump in exports, led by robust overseas sales of engineering goods, petroleum products and electronics.

"Exports are still growing," Trade Secretary Rahul Khullar told reporters on Friday. "The big change between the last couple of months and now is that imports have suddenly surged."

"I can only hope it's a one-off event," Khullar said, referring to May's trade deficit figure. "What I am saying is, if this repeats itself in the next couple of months, then we have something to be worried about."

Oil imports are expected to rise by 18 per cent in May, Khullar said.

Later, Commerce Minister Anand Sharma said the trade deficit was a "matter of concern". — Reuters

Tallinn, June 10
Nokia was expected to report a loss for this quarter and next as it cuts prices to try to prevent more customers defecting to rivals' smartphones, a Reuters poll found.

Analysts also forecast a meager profit in the normally buoyant fourth quarter, as the once-undisputed leader in mobile phones loses the initiative to smartphones like Apple's iPhone and devices based on Google's Android software.

At the low end of the phone market, Nokia has been losing share rapidly to cheaper Asian rivals, and it said last week it would miss sales and profit targets, blaming tough competition in China and Europe.

|Analysts now expect the company to report a second-quarter loss of 0.04 euro per share and a loss of 0.05 euro for the third. They have also lowered their core EPS outlook for 2012 and 2013.

"We believe the new guidance ... is a strong indication that our worst-case scenario for the company, of accelerating market share and gross margin decline, is crystallizing," Bernstein analyst Pierre Ferragu said in a research note.

"The announcement confirms our view that the Nokia brand is at risk of losing visibility and that the opportunity to create a third ecosystem based on Windows Phone is rapidly vanishing."—Reuters

Toronto, June 10
BlackBerry maker Research In Motion Ltd said on Friday it will begin to roll-out its BlackBerry PlayBook tablet device in 16 countries outside of North America over the next month.

The long-awaited competitor to Apple Inc's iPad device was launched to some troubling reviews in the United States and Canada in April.

Waterloo, Ontario-based RIM said it will now begin to sell the device in the United Kingdom, France, Germany, Australia, the United Arab Emirates and India, among other countries.

The Canadian company has been dogged by troubles in recent months, disappointing investors by slashing sales and earnings forecasts soon after revealing a weak earnings outlook.

It was also forced to recall about 1,000 PlayBooks last month due to an operating system flaw. RIM had hoped the launch of the PlayBook could revive its fortunes, but the product garnered poor reviews.— Reuters

New Delhi, June 10
Amid concerns over spiralling inflation, a research report has said that higher food prices actually help in increasing the national income of food exporting Asian nations like India, China and Thailand.

"Higher food prices do not harm everyone. Some gain. In Asia, Thailand, India and China are net exporters of food. National income goes up, not down, when food prices rise...," according to a recent report from Singapore's banking major DBS.

Going by the report, these three Asian countries -- having low per-capita income -- together exported USD 43 billion-worth more food last year than their food import during the same period.

India's food inflation shot up to a two-month high of 9.01 per cent for the week ended May 28, due to costlier fruits and onions.

Rising prices have become a major concern in emerging markets, sparking fears that it could slowdown economic growth in many countries including India.

The report said it is also possible that "overall Asia might benefit" since these nations are big. "Their size also suggests that, from an equality perspective, poor country incomes might be catching up with rich country incomes, at least in Asia.

"Both conclusions are the opposite of what so many seem to think occurs when food prices rise. Both conclusions depend on who imports, how much, and where they stand on the income ladder," the report noted.

Estimates show that India spends about 20 per cent of its income on food.

"High food prices hurt the richer, more urban economies such as Korea, Hong Kong and Singapore. They benefit the larger, poorer and more agricultural economies such as China, India and Thailand," the report said. — PTI

New Delhi, June 10
The much-awaited Real Estate Regulation Bill, 2011, which seeks to protect home-buyers from fly-by-night developers, is under process of consultation by various ministries.

"The draft Bill is almost being finalised. We have sent the Bill to Law Ministry for their approval and subsequently we will sending it to other ministries for approval," Ministry of Housing and Urban Poverty Alleviation Joint Secretary S K Singh said today on the sidelines of a RICS event here.

Singh said the government intends to bring a central legislation instead of earlier plan to enact a Model Real Estate (Regulation of Development) Act, which was not binding to the state governments as land being a State subject.

The objective of the new bill to protect the consumer and ensure that contractual obligations between developer and home buyer are adhered to, he added.

Minister of Housing and Urban Poverty Alleviation Kumari Selja had said in March this year that as per the advice of Law Ministry, the model Act is being redrafted as a bill that may be posed to the Parliament under the Concurrent List.

The Bill would go to the Cabinet for approval after all the ministries have vetted it, he said, but declined to give a timeline for placing it in Parliament.

"The Bill will not cover the pricing of property as the intention is not to strangulate the sector but to make real estate properties easily available," Singh said.— PTI