The Tribune, Chandigarh, India

	Car sales slump in H1, growth forecast slashed Girja Shankar Kaura/TNS New Delhi, October 10 Reeling under high interest rates and rising fuel costs, sales of passenger cars in the domestic market fell by over one per cent in the first six months of fiscal 2011-12 as an industry body lowered growth forecast for the financial year. Figures released by the Society of Indian Automobile Manufacturers (SIAM) said in the period between April to September 2011 sales of passenger cars in the domestic market declined by 1.36 per cent to 909,283 units from 921,812 units in the year-ago period. "There is a general negative sentiment prevailing in the market due to various reasons. Interest rates and fuel prices are going up. Besides, developments in Europe are also not encouraging," SIAM president S Sandilya told reporters here while releasing the first six months report on the automobile sector. SIAM significantly lowered the passenger car sales growth forecast for the financial year to just about 2 to 4 per cent due to various issues including lower output at Maruti Suzuki because of labour issues, and higher lending rates. This is the second time that SIAM has revised the growth figures for the industry for fiscal 2011-12. It had earlier revised the sales forecast for FY 2012 downwards for the passenger cars to 10-12 per cent in July against 16-18 per cent announced at the beginning of the fiscal. The labour unrest that is severely impacting production at Maruti Suzuki India's Manesar plant has also affected car sales growth, Sandilya said, while adding Maruti produces and sells 50 per cent of the domestic market's passenger cars. "So, any negative incidents happening at Maruti Suzuki will obviously impact the industry," Sandilya said. The total passenger vehicles segment is now estimated to grow by 4-6 per cent in this fiscal compared to 10-12 per cent projected in July. Utility vehicle sales is likely to rise by 9-11 per cent now compared to 10-12 per cent announced earlier. However, SIAM revised its total sales projections marginally upward to 11-14 per cent for FY12 from 11-13 per cent announced in July. Sandilya, however, said India became the second fastest growing passenger vehicles market in the world with 9.90 per cent jump in sales during January-August period. Germany topped the list with 11.20 per cent growth. The cumulative production data for April-September 2011 shows production growth of 16.62 per cent over same period last year. The overall commercial vehicles segment registered a growth of 17.85 per cent during April-September 2011 as compared to the same period last year. While medium and heavy commercial vehicles registered growth of 6.05 per cent, light commercial vehicles grew at 28.72 per cent.
	Crisil cuts GDP growth outlook Mumbai, October 10 Leading ratings agency Crisil on Monday joined its rivals in revising the country's growth forecast for this fiscal downward to 7.5 per cent, citing a lack of reforms and repeated rate hikes on the domestic front, besides weak global economic fundamentals. The agency had in May projected that India would register an economic growth rate between 7.7 per cent and 8 per cent this fiscal and today's revision comes within a week of Fitch Ratings and Citigroup revising their own forecasts downward to 7.5 per cent from 7.7 per cent earlier. "The growth forecast has been scaled down in view of the deteriorating global economic scenario and the grim investment climate in the country on account of the policy environment," Crisil said in a statement here. The domestic economy clocked 8.5 per cent growth last fiscal, on the back of which the government had projected a growth rate of over 9 per cent in the budget. However, it recently revised the estimate downward to 8.2 per cent due to the worsening euro zone sovereign debt crisis and fears of a double-dip recession in the United States. The agency said the slowdown in advanced countries has been "sharper than expected", but maintained that its new estimates are based on the assumption there will be a sharp slowdown in such economies, but not a recession. On the domestic front, the report blamed the lack of domestic policy reforms, coupled with the repeated rate hikes by the Reserve Bank of India as factors hurting growth prospects. — PTI
	OECD paints dark picture of global economy Paris, October 10 The outlook for the world's major economies is continuing to darken according to the latest data from OECD published on Monday, which showed sharp falls in leading indicators for all countries except Japan. The Paris-based Organization for Economic Cooperation and Development said its composite leading indicator (CLI) for its 33 member countries dropped for a fifth straight month in August, hitting 100.8 after 101.4 in July and signalling a slowdown in economic activity. Individual country readings fell across the board, including for non-OECD member countries, with most seeing their CLIs drop below their long-term average of 100. Only Germany, Russia and the United States kept readings above 100. Japan, meanwhile, stood out as the only country not yet headed for a clear slowdown, registering a modest 1-point decline in its CLI to 102.5 from 102.6. "For all other major economies, except Japan, the CLIs are now pointing strongly to a slowdown in economic activity below long-term trend," OECD said. The OECD CLIs are designed to anticipate turning points in economic activity relative to trend - a turnaround in an indicator tends to precede turning points in economic activity by around six months. The consensus at the moment is that many major western economies are teetering on the brink of recession, as they struggle to repay inflated levels of debt. — Reuters
	Small savings collections fall sharply in North Ruchika M Khanna/TNN Chandigarh, October 10 Posing a serious threat to the economic condition of state governments, the small savings collections across north India have begun to decline sharply. With banks offering a much higher rate of interest than being offered by the National Savings Institute, a large number of depositors have started withdrawing their savings from various post office saving schemes, Kisan Vikas Patras and Public Provident Fund. With a difference of almost two per cent in the rate of interest offered under these schemes and bank deposits, small saving collections in most of the northern states have witnessed a drastic fall in collections for the past one year. This means most of the cash strapped states, including Punjab, will have smaller amount available for them to borrow as long term loans to meet its budgetary requirements, thus posing a threat to these states' fiscal health. These small savings collections are vital to the economy of states, as the state governments can borrow 80 per cent to 50 per cent of these saving collections as long term loans from the central finance ministry. These loans are granted as soft loans and account for the major source of revenue for the states. With the fall in collections, the state governments will be doubly hit. Not only will they have lesser amount in the small savings kitty to borrow from, but they will also have to shell out higher interest rates in case they borrow money from other financial institutions, as cost of borrowings too have gone up. Figures available from the National Savings Institute show the sharpest fall in small savings collections in north India has been witnessed in Chandigarh. With people being more aware of the various schemes offered by banks in fixed deposits, and a large concentration of banks, the gross collections have fallen by 29.82 per cent (from Rs 388.49 crore till August 2010 to Rs 299.23 crore till August 2011). This is followed by Punjab, where collections have dipped by 26.47 per cent (from Rs 4,606.63 crore in August 2010 to Rs 3,642.40 crore in August 2011). In Haryana gross collections have fallen by 24.90 per cent (from Rs 2,886.60 crore to Rs 2,311.07 crore). Though both Himachal Pradesh and Jammu and Kashmir, too, have witnessed a dip in small saving collections, it is not as high as the remaining states. "The collection in Himachal Pradesh has fallen by 16.56 per cent and in Jammu & Kashmir by 12.08 per cent. The reason why the fall is not as sharp as other states is that most areas in these states are still unbanked," said a senior National Savings Institute official. "The government is aware of the fall in collections and its repercussions on the states' economy, and thus proposes to increase the interest rates on these small saving schemes and PPF", the official added.
	Starbucks lobbies with US govt for India entry New Delhi, October 10 American coffee retail giant Starbucks is lobbying hard with lawmakers and government officials in the United States to facilitate its entry into the highly lucrative Indian market. Starbucks, which runs the world's largest coffee shop chain and enjoys cult status among coffee lovers, has been trying to enter India for many years, but has been unsuccessful in its efforts so far. The company has been very active in lobbying with US lawmakers on various issues since way back in 2004, but it began lobbying for its Indian market entry only this year, lobbying disclosure reports filed with the US Senate show. Lobbying is a legal activity in the US, but a disclosure report is required to be filed with the Senate every quarter regarding these activities. As per Starbucks' lobbying disclosure reports, its lobbyists "discussed market opening initiatives in India" with the US Senate, the US House of Representatives and the US Department of State during the first quarter of 2011. Before 2011, the entry into Indian market never figured in the lobbying disclosure reports filed by Starbucks, as per the disclosures made since 2004. The company is estimated to have spent nearly US $500,000 on various lobbying issues, including its Indian entry, so far in 2011. Starbucks has held discussions with Indian policymakers in the past regarding its entry here, but it has not been able to finalise an Indian partner so far. The rules allow it to hold up to a 51 per cent stake in an Indian venture, while the rest would have to be with an Indian partner. Currently, Starbucks is said to be exploring a strategic alliance with Tata Group firm Tata Coffee in areas like sourcing of coffee beans and coffee roasting facilities for its retail operations in India. There have also been reports that Starbucks might join hands with Tata Coffee and other Tata Group firms for opening retail outlets in India. Queries sent to Starbucks in this regard remained unanswered. On many occasions in the past, Starbucks has termed India as a high-growth market where it would like to establish a presence. — PTI
	Relief for BlackBerry as DoT against ban New Delhi, October 10 In some relief to BlackBerry , the telecom ministry is understood to have said that a complete ban on encrypted communications is not desirable as long as solutions exist to have the data intercepted in a readable format. "Banning of encrypted communication is not desirable as long as some solutions exist to get the (data) intercepted in readable format. Therefore, accent should be on regulation of these services in such a manner that security assistance needs and communication security needs are balanced," an expert committee set up by the department of telecommunications (DoT) said in its report. Recently, Canada-based Research In Motion (RIM) came up with a solution for realtime interception of its BlackBerry Enterprise Service (BES) after seeking several extensions of deadlines for nearly a year. The government had earlier set August 15 as the deadline for RIM, the maker of BlackBerry, to provide the country's security agencies with interception keys to enable real-time tracking of its popular messenger and corporate e-mail services in readable format. Besides Research In Motion, Nokia is another player that provides a push mail facility to its subscribers. The solution provided by Research In Motion is being tested by the department of telecommunications, which is expected to give its report by the monthend . Earlier, the Indian ministry of home affairs had also stated that if no solution is found for any encrypted service, those services should be banned or blocked. — PTI
	BHEL bags Rs 4k cr contract for thermal plant New Delhi, October 10 State-owned Bharat Heavy Electricals Ltd (BHEL) on Monday said it has bagged over Rs 4,000 crore contract for setting up a thermal power plant in Andhra Pradesh from Singareni Collieries Co. "BHEL bagged a contract valued at Rs 4,071 crore for setting up a 1,200 MW thermal power plant of Ltd (SCCL) in Andhra Pradesh," the company said in a statement. BHEL will set up 2x600 MW unit for Singareni Collieries' upcoming super thermal power project at Adilabad. The scope of work envisages design, engineering, manufacture, supply, erection, testing and commissioning of steam turbines, generators and boilers, along with controls and instrumentation and auxiliaries including associated civil work. — PTI
	Honda plans to export India-made cars Kochi, October 10 Honda Siel Cars India on Monday said its primary focus will be the domestic market, but it does plan to export cars to Nepal, Bangladesh, Bhutan and Sri Lanka, a top official said. The firm presently exports component and engine parts from its factory in Rajasthan and expects a turnover of Rs 112 crore this fiscal, Honda senior VP (marketing & sales) Jananeswar Sen told reporters here. Presently, the firm has 135 dealers in 83 cities and over 60 per cent are located in small cities. By this fiscal-end, the firm plans to have 143 dealers in 91 cities. Honda on Monday launched its new car, Brio, in the Kerala market. "There was a very good response to the new car in the cities where it has been launched and in the first 10 days, at least 2,000 enquiries were received", Sen said. — Agencies
	Reliance set to ink deal with Disney’s UTV Mumbai, October 10 Reliance Industries Ltd, India's largest listed firm, is set to sign a deal with the Indian unit of Walt Disney, to acquire content for its telecom operations, the Financial Times said. The deal by Reliance with UTV Software, in which Disney controls 50.44 percent, is expected to be completed in the coming weeks, the newspaper said late on Sunday, citing people close to the development. UTV Software said it had no immediately comment on the report, while Reliance could not be immediately reached. Reliance, which has diversified into telecom, retail, financial services and hospitality sectors in recent years from its core business of refining and oil and gas exploration, last year acquired Infotel. — Reuters