The Tribune, Chandigarh, India

Asia faces tough year, global events may
shape outlook: IMF
Policy stances of China, India to play role

Washington, DC, January 6
Events unfolding far from Asia's shores could shape the region's economic outlook for 2012, but Asian policymakers still have the room to respond aggressively to a deteriorating global economic scenario, economists with the International Monetary Fund (IMF) have said.

"Despite the prevailing global uncertainty, Asia has until now, proven to be very resilient. It has boasted strong domestic demand, low unemployment, and factories working at near-full capacity. While credit growth has slowed from the torrid pace of early 2011, it remains robust in most economies," Xinhua quoted an article on the IMF blog as saying.

However, Asia's heavy reliance on trade was likely to make 2012 a difficult year.

Asia is one of the world's most trade-dependent regions, exporting everything from commodities like metals and rice to sophisticated electronic products and cars.

Regional growth has already started to slow due to weaker demand, although domestic factors such as tighter macroeconomic policy stances have also played a role, especially in India and China.

Recent stresses in several regional financial markets suggest that financial channels of contagion also pose a risk for Asia, according to the article on the IMF blog.

"Further financial turmoil in the euro zone would likely have a substantial impact on Asia by reducing access to credit. Eurozone banks are an important source of funding for many Asian banking systems, and play a crucial role in providing trade credit," the article said.

But there was still sufficient policy space in the region, though less than at the start of the global financial crisis in some countries.

Some economies have already started monetary easing. Fiscal policy consolidation could be appropriately delayed if external demand were to collapse, especially where low levels of public debt afford space for measures, it said.

Asia is home to some of the world's most dynamic economies, but several reforms were needed to sustain the region's excellent historical performance and reduce vulnerabilities to external shocks in the medium term. — IANS

Automakers see sluggish 3-4 months;
hopeful of better H2

New Delhi, January 6
Despite a slew of launches and unveilings and keen interest from visitors at the 11th Auto Expo, carmakers do not expect the market to revive in the next three four months, though they are hopeful of a better 2012 in the second half.

According to most industry players, factors like high interest rates, rising fuel prices and input cost pressures that resulted in higher prices of vehicles have resulted in low demand and the situation requires government intervention.

"It’s a tough quarter. We expect the market conditions will improve in the second half of this year. Government intervention is needed to create a positive vibe... Besides, softening of the interest rates could help the segment," Hyundai Motor India director (sales & marketing) Arvind Saxena said.

Echoing this view, General Motors India vice-president - corporate affairs) P Balendran said: "The market continues to be sluggish because of factors like high inflation and rising interest rates. We do expect the situation to improve, but not before the next 3-4 months."

He said General Motors, however, expects to grow in double digits this year.

Even Hero MotoCorp, which makes two-wheelers, expects similar growth.

"2012 may not be as good as 2011, but we will still see a double-digit growth," Hero MotoCorp Managing Director and Chief Executive Officer Pawan Munjal said.

Growth of the industry was hit in 2011 due to continuous hikes in interest rates. The rates were raised seven times by the Reserve Bank during 2011, adding to the woes of the industry.

Taking an optimistic view, Mahindra & Mahindra President (automotive & farm equipment sector) Pawan Goenka said: "For the second half of 2012, many of us are optimistic that the interest rates will come down with the Reserve Bank of India indicating softening of monetary stance”.

“Hopefully, the forex situation will also improve and commodity prices will come down. So we expect about 10 pc growth in the second half of this year”, he added

In 2011, car sales growth fell to a single digit and even went into negative territory for a couple of months as demand took a hit. The trend was in sharp contrast to the near 30 per cent growth witnessed in 2010-11. — PTI

M&M displays electric cars amid green glitz

Music blared and white smoke swirled in the cavernous Tata Motors hall at the India Auto Expo as an excited crowd milled near a stage displaying the company's new hybrid car. Most, though, were craning their necks to catch a glimpse of the carmaker's new gas-guzzling Safari offroader being launched on the other side of the hall. Few seemed to notice the sparkling green tech vehicle behind them. Billed as an event to showcase new environmentally friendly vehicles entering India's auto market, about a dozen new hybrid, electric or alternative-fuel vehicles from global and domestic carmakers will debut at the biannual expo. But for all the green glitz, most of these cars, trucks and buses are decades away from gracing India's roads, executives say. Blame a cost-sensitive market, a lack of on-the-ground support infrastructure, and little or no government support. — Reuters

Iran sanctions pose problem for India’s oil payments

New Delhi, January 6
India may face problems in making payments for crude oil it buys from Iran because of recent moves by the US to curb Tehran's nuclear programme, a top government official said on Friday.

India currently pays Iran about US $1 billion every month through Turkey for the 370,000 barrels per day of crude oil it buys from the world's fourth-largest oil producer. "There are chances that Turkey may come under pressure after a fresh round of US sanctions imposed on Iran," the official, who wished not to be named, said.

Routing payments through Russia was discussed during the visit of Prime Minister Manmohan Singh to Moscow last month. But Russia is not keen due to "complexities" involved.

US President Barack Obama signed a Bill into law late last month empowering US authorities to impose penalties on foreign banks dealing with the Central Bank of Iran to settle oil import payments.

On Thursday National Security Advisor Shivshankar Menon chaired a meeting of officials from the finance, petroleum and external affairs ministries and the Reserve Bank of India after indications from Turkey's state-run Halkbank that it would have to stop settling payments on behalf of Indian companies.

The official said a multi-disciplinary team would visit Tehran later this month to discuss the issue of uninterrupted supply. New Delhi, however, sees no supply disruptions unless the Strait of Hormuz is closed.

Iran has threatened to block oil deliveries through the Strait of Hormuz if sanctions are imposed on the country's oil industry over its nuclear activities. The US Energy Information Administration estimates that the strait carries about 20 per cent of all oil traded worldwide.

India gets about three-quarters of its crude needs through imports and Iran is its second-largest supplier after Saudi Arabia. — PTI

Oil climbs above $113 a barrel

London, January 6
Oil climbed above $113 a barrel on Friday as concern over any possible supply disruption due to mounting tensions between Iran and the West countered worries about Europe's economy and rising US stockpiles.

Crude was set to rise more than 5 per cent in the first week of 2012 after Iran threatened to shut the Strait of Hormuz, the world's most important oil route, in retaliation against tighter sanctions from the United States and a possible ban on its crude exports to Europe.

Brent crude rose 58 cents to $113.32 a barrel by 0943 GMT, after declining by 96 cents on Thursday. US crude was up 43 cents to $102.24. — Reuters

Keep subscribers in the loop on charges
for services: TRAI

New Delhi, January 6
In a move to bring in more transparency and end consumer woes, the Telecom Regulatory Authority of India on Friday asked operators to ensure that subscribers are informed every time an amount is deducted from their account for different services.

The operators have been given a deadline of 45 days.

"Notwithstanding the several steps taken in the past by TRAI with a view to enhance transparency in tariff offers, the authority continues to receive complaints and representations from consumers," TRAI said while announcing the Telecom Consumers Protection Regulations, 2012.

"With a view to protecting the interest of telecom consumers and particularly the prepaid consumers, TRAI has today issued the Telecom Consumers Protection Regulations, 2012," it added.

The operators will have to send messages to subscribers to inform them about the deduction from their account after every call made or after every data usage session.

"This information will include the duration of the call or usage, the charges deducted, balance available, quantum of data usage. The consumer can also get details of his tariff plan, available balance in his account and details of any value added service activated on his telephone."

To ensure that a prepaid consumers get an itemized usage of their accounts, the service providers have been mandated to provide this within 30 days of a request being made and at a cost not exceeding Rs.50.

Customers will be provided a startup kit at the time of enrollment which will contain a SIM card, a mobile number and an abridged version of the Citizen's Charter on the rights of a consumer. The prepaid vouchers offered have also been standardized into three categories — plan voucher, top-up voucher and special tariff voucher.

On Thursday, TRAI had announced the Telecom Consumers Complaint Redressal Regulations, asking the operators to set up complaint centres and a web-based complaint monitoring system within 45 days to help consumers check the status of complaints filed.

The new system will do away with the current three-tier complaint redressal mechanism and will not have a nodal officer but just the call center and appellate authority. — IANS

BIS to strive for more gold hallmarking centres in North
Ruchika M. Khanna/TNS

Chandigarh, January 6
Even as on last Wednesday the cabinet approved the amendments to the Bureau of Indian Standards Bill, 2011, which makes hallmarking of gold jewellery mandatory in stages, the country’s north is gearing up to come up with more hallmarking centres.

The region, which has thousands of jewellers, mainly in Jammu, Chandigarh, Ludhiana, Jalandhar, Amritsar, Ambala and Panipat, has just 10 hallmarking centres as of date. With the way paved for making hallmarking of gold jewellery mandatory, the BIS regional office in Chandigarh will now be stepping up efforts to add more hallmarking centres in the North, besides registering more jewellers in the region for getting their jewellery hallmarked.

According to information available with The Tribune, the maximum number of jewellers who have registered with BIS are in Punjab (191), followed by Uttar Pradesh (180), Haryana (141) and Chandigarh (85). As many as 59 jewellers in Himachal Pradesh and 21 in Jammu & Kashmir, too, have gotten themselves registered with BIS for getting their jewellery hallmarked. Officials in BIS here, however, say that as more and more jewelers in the region get themselves registered, they will face a shortage of hallmarking centres.

“As of now, we have these centres at Jalandhar, Amritsar, Panipat, Ambala, Jammu, Chandigarh and two each at Ludhiana and Kanpur. In order to incentivize those who are setting up hallmarking centres, the government has raised the subsidy on the cost of hallmarking machinery from 15% to 30% in urban areas and up to 50%in rural areas. This will help us in getting more hallmarking centres. As and when the amendments to the bill are approved by Parliament, and hallmarking becomes mandatory, we propose to have all basic infrastructure ready in the region,” said a BIS official.

There are an estimated 300,000 jewellers in the country, but the number of hallmarking centres is only 165.

The BIS official also said mandatory hallmarking would not lead to an increase in cost of jewellery. “We’re charging a hallmarking fee of Rs 25,000 for three years from each jeweller. Besides this, the jeweller has to pay a nominal fee of Rs 18 per article that he gets hallmarked,” he added.

Weak rupee draws NRIs to realty in India

Bangalore, January 6
Nonresident Indians (NRIs) have started taking keen interest in the real estate sector back home following significant appreciation of the dollar vis-a-vis the rupee, a top official of housing finance company said Friday.

"NRIs have started taking keen interest due to the appreciation of the dollar. They have started converting the dollar into rupee", LIC Housing Finance director & CEO Vijay Kumar Sharma told reporters.

NRI interest is "perceptible and visible", he said, adding the company’s Dubai and Kuwait offices (catering to NRIs investing back home) have "lot of enquires and log-in" and "compared to last year, the growth (there) is 50-60%". He added the Bangalore metro rail project would transform the real estate sector in the city. — Agencies

Fiscal deficit may be more than projected: FM

Chennai, January 6
Finance Minister Pranab Mukherjee said Friday the fiscal deficit for 2011-12 could be more than the projected figure. Observing that India's fiscal deficit rose to 6.5% in 2008-09 due to the global financial crisis, he said in 2009-10 it was brought down to 4.5%.

"But unfortunately, the fiscal deficit may be more in 2011-12 than projected," he said while delivering his address at a three-day international conference organized by the Institute of Chartered Accountants of India here.

In the budget, the fiscal deficit is projected at 4.6% of gross domestic product (GDP). Fiscal deficit is the difference between the total expenditure and total revenue.

The eurozone crisis and slow progress in other parts of the world has also affected India, he added. — PTI