New Delhi, August 1
The Prime Minister's Economic Advisory Council (PMEAC) today lowered the economic growth projection for the current fiscal to 8.2 per cent from 9 per cent earlier, citing the uncertain global outlook, high domestic inflation and subdued industrial performance.

The PMEAC, in its Economic Outlook for 2011-12, also said inflation will remain around 9 per cent till October and thereafter, it would ease to 6.5 per cent by the end of March, 2012, indicating that the RBI may continue with its tight monetary policy for some more months to come.

"The projected growth rate of 8.2 per cent, though lower than the previous year, must be treated as high and respectable, given the current world situation," PMEAC Chairman C Rangarajan told reporters here.

Rangarajan, who had earlier presented the report to Prime Minister Manmohan Singh, said India's agriculture output is projected to grow at 3 per cent in 2011-12, with a favourable monsoon on the cards, as against 6.6 per cent witnessed in the previous fiscal.

Underlining the weak performance by industry, he said the sector is likely to grow by 7.1 per cent in 2011-12, as against 7.9 per cent in 2010-11, due to a slowdown in investment and the weak business sentiment.

The services sector, which accounts for over 50 per cent of the GDP, has, however, been projected to grow at 10 per cent this fiscal, compared to 9.4 per cent in the previous fiscal.

The Centre has projected fiscal deficit to fall to 4.6 per cent in 2011-12, down from 4.7 per cent in 2010-11. The PMEAC report also said capital flows this fiscal were likely to rise to $72 billion from $61.9 billion in 2010-11. — PTI

New Delhi, August 1
The National Mining Regulatory Authority will review sectoral issues and advise the government on policy and strategy, including royalty rates, and would have the power to investigate and launch prosecution against cases of large-scale illegal mining.

The mining sector will have a comprehensive legislation as the Group of Ministers (GoM) headed by Pranab Mukherjee cleared the draft of Mines and Minerals (Development and Regulation Bill) MMDR Bill.

The draft bill has been modified to address the recommendations of the Ashok Chawla committee.

On concerns of the state government of Chhatisgarh and Orissa, the GoM agreed to the introduction of suitable provisions on allowing the state governments to call for competitive bids in the areas where direct prospecting licences are filed to get better value for the deposit.

They have also been allowed to set a minimum floor for competitive bidding and to call for better financial bids in case of transfer of mining lease, where it is felt that the consideration of transfer is unique.

They can also increase the time limit for disposal of applications for prospecting licences.

In order to incentivise state-of-the-art technology and high investments, the new concession instrument of high technology reconnaissance licence would be encouraged for non-bulk minerals.

On the issue of sharing of mining benefits with the local population, the GoM decided that since royalty-based systems are simple, transparent and easy to administer, in respect of non-coal minerals, an amount equal to royalty may be paid by lessees into the District Mineral Foundation instead of the earlier proposed 26 per cent of profit after tax.

For coal minerals, keeping in view the administered price system and complex royalty formula, the proposed formulation of 26 per cent profit after tax of draft MMDR Bill will be retained.

In case of minor minerals, the basis for payment by lessee will be determined by the state governments with the concurrence of the national regulator.

New Delhi, August 1
The comprehensive free trade pact between India and Japan has come into force from today, a move which will boost bilateral trade between the countries to $25 billion by 2014.

The Comprehensive Economic Partnership Agreement (CEPA) will bring immediate gains to exporters of textiles, seafood and spices to Japan, as duties on these products would be eliminated.

It would ultimately result in the removal of duties on almost 90 per cent of the products traded between the countries. Under the CEPA, duties will be brought to zero in 10 years on 66.32 per cent of the products traded between the nations. — PTI

New Delhi, August 1
India's exports went up by 46.45 per cent to $29.21 billion in June, 2011, but the impressive growth rate may not be sustained into the second half of the fiscal in view of uncertainty in the US and Europe.

Merchandise exports aggregated to $19.94 billion in June, 2010. Helped by an impressive rise in June, exports grew by a hefty 45.7 per cent to $79 billion in the first quarter of the current fiscal, according to Commerce Ministry data released today.

Though most of the sectors posted robust expansion - be it petroleum products, readymade garments, engineering or pharmaceuticals - Commerce Secretary Rahul Khullar has cautioned that news from the largest two markets - the US and Europe - "is far from cheerful... Summer is not over. It is still not going to be easy".

The US and Europe together account for about 35 per cent of the country's exports.

"Export growth is going to continue for another three months but will not be as good in the third and fourth quarters" Federation of Indian Export Organisations (FIEO) President Ramu Deora said. — PTI

New Delhi, August 1
Automobile sector continues to see a slowdown with all big market shareholders seeing a major drop in sales in July in comparison to the smaller players, some of whom saw a major spurt in their sales. The market continues to be sluggish due to the repeated hike in interest rates and fuel prices.

The worst performance came from country’s largest car-maker Maruti Suzuki India Ltd whose sales in July plummeted by 25.34 per cent in comparison to its sales in the same period last year. The picture was not rosy for Hyundai Motors and Tata Motors.

However, Toyota Kirloskar Motors and General Motors registered higher sales as a result of their particular models selling well.

MSIL reported a 25.34 per cent fall in total sales for July to 75,300 units from 1,00,857 units sold in the same period last year.

Hyundai reported a 1.48 per cent decline in total sales to 49,667 units in July, 2011. The company sold 50,411 units in the corresponding year-ago period.

Tata Motors reported a 5.96 per cent decline in total sales during July 2011 to 63,761 units from 67,800 units in the same month of 2010.

On the other hand, Toyota registered a sales of 13,592 units in July 2011 as compared to 6,834 units in July 2011. The company sales grew by 99 per cent as compared to corresponding period last year. This has mainly been due to the response company has received for its two new models Etios and Etios Liva.

General Motors India also reported a 33.46 per cent jump in its sales in July 2011 at 9,508 as compared to the same month last year. The growth was primarily driven by the overwhelming response to the newly launched Chevrolet Beat Diesel.

New Delhi, August 1
In a major setback to its ambitious turnaround plans, cash-strapped national carrier Air India’s entrance into the prestigious Star Alliance has been “suspended” for not complying with minimum joining conditions that were contractually agreed in December 2007.

The decision to suspend Air India's integration with the alliance was jointly taken by 27-member airlines as the national carrier had not met the minimum joining conditions which were contractually agreed in December 2007.

Star Alliance CEO Jaan Albrecht has been quoted as saying that “the decision to suspend has received subsequent confirmation by the Star Alliance Chief Executive Board”.

“With the collective decision to put the integration efforts on hold today, we aim to contribute to AI's flexibility to concentrate on its ongoing strategic reorientation.

“In this process our member carriers will continue to provide assistance to Air India wherever required,” he adds.

Terming the move as “unexpected and disappointing,” an Air India official said the Civil Aviation Ministry would write to Star Alliance to reconsider their decision. He claimed that just last week a Star Alliance Project Manager gave in writing that all the 87 criteria had been met by the airline.

He also insisted that the airline’s request to join the global Star Alliance network had only been put on a hold for some more days.

Air India had been given a deadline of July 31 to meet the list of requirements to join the group that has 27 members carrying more than 600 million passengers a year.

Joining the alliance would have enabled the ailing carrier to add depth to its route network in the international sector by providing passengers last mile connectivity in foreign countries, thereby making considerable savings.

Air India estimated that joining the Alliance could add $335,000 to $450,000 in revenue per day.