New Delhi, August 12
Industrial production revived moderately in June registering a growth of 8.8 per cent even as experts said the trend may not last long due to sustained inflationary pressure and likelihood of more rate hikes by the Reserve Bank.

However, the better-than-expected industrial production prompted Finance Minister Pranab Mukherjee to term the June numbers as "encouraging" that will boost economic growth if the trend is sustained.

The recovery in factory output, as measured by the Index of Industrial Production (IIP), from 7.4 per cent in June 2010 was led by good performance of the manufacturing sector and better output of capital goods.

During the first quarter (April-June) this fiscal, IIP growth stood at 6.8 per cent, as against 9.6 per cent in the corresponding three-month period last year.

"It is too early to say whether this shows an overall cyclical turnaround... Such numbers may also prompt the RBI to go ahead with further rate tightening in case inflation is seen to persist at over 9 per cent," Deloitte Haskins & Sells director Anis Chakravarty said.

Output of the manufacturing sector, which constitutes over 75 per cent of the index, grew by 10 per cent in June, 2011, compared to 7.9 per cent in the same month last year.

Off take of capital goods jumped by 37.7 per cent in June, 2011, as against a moderate increase of 3.7 per cent during the corresponding month last fiscal.

While economists remained cautious, Finance Minister Pranab Mukherjee termed the June numbers as "encouraging".

"It is encouraging. If this trend continues, it will give a boost to growth," Mukherjee told reporters here.

Mukherjee further said: "If these growth rates are maintained for manufacturing and electricity, then that will be substantial contribution to the positive growth. I do hope it would be possible for the industry to pick up the same growth rate sooner than later".

During the month under review, electricity production also improved, witnessing a growth of 7.9 per cent, as compared to a growth of 3.5 per cent in June, 2010.

"This uptick (in IIP growth) may not be sustained given that growth in June has benefited disproportionately from a sharp 37.7 per cent expansion in capital goods output, which has displayed substantial volatility over the past 15 months," ICRA economist Aditi Nayar said.

She said domestic inflationary concerns would remain the key focus of the RBI's monetary policy. However, RBI deputy governor Subir Gokarn said the June IIP numbers indicate that moderation in economic growth in not broad-based. — PTI

Chandigarh, August 12
Revolutionising the printing of out-of-print books, Xerox India will be launching a machine that will help publishers, libraries and book sellers to reprint these books on demand, at the click of a button. This machine, called the Espresso Book Machine, will be launched in India by the end of this year.

This machine will be a fully integrated solution that will print, bind and trim books with full colour covers, on demand in retail locations and libraries. This machine will produce a 300-page book in less than four minutes, and will have the capacity to print more than 40,000 paperback books per year.

Talking to The Tribune here today, Pankaj Kalra, head, graphic communications business, Xerox India, said the launch of this machine was a part of the company’s strategy to not just expand its footprint in the digital printing space, but also to increase the share of digital printing in the conventional printing industry.

“Presently, the digital printing segment is just over six per cent of the printing sector, which is dominated by conventional printing. We have over 65 per cent of market share in the digital printing sector. By bringing in new and cost-effective technology, we hope to gain a sizeable part of the digital printing market, which is expected to grow rapidly in the next two years,” he said.

The size of the digital printing market is estimated at $1.5 billion now and is expected to grow to $2.5 billion by 2012-13.With an aim to target small and medium businesses, Xerox has also started a “Certified Economic Value (CEV)” programme, which allows printers to explore profitable business opportunities in the growing digital print space and grow their business in any given economic scenario. 

New Delhi, August 12
Leading stock exchange NSE today said it has decided to levy charges for currency derivatives trading - a move that follows a Competition Commission order holding it guilty of abusing its dominant position with this "predatory" pricing.

The charge would be levied by the exchange with effect from August 22. However, the exchange would still challenge the order of Competition Commission of India, which on June 23, 2010 imposed a Rs 55.5 crore fine on the country's largest bourse for abusing its dominant market position and asked it to stop the "predatory" pricing practices.

In its order passed pursuant to an inquiry after a complaint filed by rival exchange MCX-SX, CCI said NSE's move towards subsidising its services was at the cost of rivals.

NSE said it had earlier waived the charges for the benefit of the market and the consumers, and all market players - including exchanges, members and consumers have benefited from the move. While NSE would be challenging the CCI order, it decided to levy the charge out of respect for the Commission. The CCI had felt that NSE should levy a charge and we are abiding by that suggestion, an NSE official said, but asserted that the exchange would still challenge the CCI order.

The National Stock Exchange (NSE) commenced trading in currency derivatives on August 29, 2009, becoming the first Indian bourse to offer this product for investors. However, it has not been levying any charge for this product till now.

Trading in currency futures segment has seen a rapid growth ever since its launch and the daily average trading volume has crossed Rs 18,000 crore. — PTI

New Delhi, August 12
Dani Rodrik, Rafiq Hariri Professor of International Political Economy at the John F. Kennedy School of Government, Harvard University, today said growth that relies on capital inflows or commodity booms tends to be short-lived and stressed that sustained growth requires devising incentives to encourage private-sector investment in new industries.

Speaking at a session on “Industrial Policies and Economic Development” organised by the CII, here today, Rodrik said that, “low post-crisis growth in the advanced countries need not impede developing countries’ economic performance.”

Rodrik also said igniting and sustaining rapid growth would require policies that stimulate ongoing structural change and foster employment in new economic activities that entail higher productivity. In other words, the challenge is one of structural change: moving labour from the traditional to the modern parts of the economy. Those countries that achieve this faster and on an ongoing basis are the ones that grow.

On designing industrial policies, Rodrik said strategic collaboration and coordination between the private sector and the government with the aim of uncovering where the most significant bottlenecks are, should be considered. According to him, Industrial Policy is a process of discovery rather than a list of policy instruments. Industrial policy should encourage investments in non-traditional areas and weed out projects/investments that have failed.

Subir Gokarn, Deputy Governor, RBI, commented on the much talked about inflation-growth trade-off. He said, there is high correlation between periods of low growth and high inflation though this may not imply causality. In the long term, sustaining high growth requires control on inflation. He further highlighted that structural barriers or supply side bottlenecks prevent the economy from growing rapidly and creates inflationary pressure.

Mumbai, August 12
Tata Steel today reported a nearly three-fold jump in its consolidated net profit at Rs 5,346.55 crore for the quarter ended June 30, on one-time gains in selling stakes in Riversdale and Tata Refractories and a settlement of claims at Teesside Cast Products unit in the UK.

The company had reported a net profit of Rs 1,825.26 crore during the corresponding quarter of last fiscal.

Net sales of the company also rose by 21.58 per cent to Rs 32,839.90 crore during the quarter under review, compared to Rs 27,010.06 crore, the company said in a filing to the BSE.

The filing added that in the April-June quarter, the company realised Rs 4,942.07 crore by selling its entire 26.27 per cent stake in the Australian mining firm Riversdale to Rio Tinto.

Mumbai, August 12
GMR Infrastructure today said one of its units, GMR Energy, will acquire a 30 per cent stake in Indonesian firm PT Golden Energy Mines Tbk for as much as $550 million in cash, a move that will enhance its coal asset portfolio.

GMR Energy has entered into a definitive agreement to acquire a 30 per cent stake in the Indonesian firm and will be paying a cash consideration of $450-550 million for the transaction, which will be funded through a combination of debt and internal accruals, GMR Infrastructure said in a regulatory filing. — PTI