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Gujarat most sought-after state by investors, Punjab remains laggard 
New Delhi, February 13
Five out of 20 industrial states led by Gujarat, Maharashtra, Andhra Pradesh, Orissa and Karnataka have clearly emerged as preferred investment destinations by attracting 53.56 per cent of total live investments worth Rs 120.34 lakh crore, according to a recent study undertaken by the Associated Chambers of Commerce and Industry of India (Assocham).

Greece still to convince Europe after €130 bn EU rescue deal
Athens, February 13
The Greek government came under pressure on Monday to convince sceptical European capitals that it would stick to the terms of a multibillion euro rescue package endorsed by lawmakers during violent protests on the streets of Athens.

A petrol bomb explodes near riot police during a huge anti-austerity demonstration in Syntagma (Constitution) Square in downtown Athens on Sunday. Greek lawmakers looked set to endorse a new and deeply unpopular austerity deal to secure a multibillion euro bailout package and avert what Prime Minister Lucas Papademos warned would be “economic chaos”.
A petrol bomb explodes near riot police during a huge anti-austerity demonstration in Syntagma (Constitution) Square in downtown Athens on Sunday. Greek lawmakers looked set to endorse a new and deeply unpopular austerity deal to secure a multibillion euro bailout package and avert what Prime Minister Lucas Papademos warned would be “economic chaos”. — Reuters



EARLIER STORIES


India’s economy improving: OECD
Paris, February 13
The international economic outlook is showing tentative signs of improvement, with the momentum shift spreading from the United States and Japan to other developed countries, OECD's December survey of growth prospects showed on Monday.

2012 may see 2nd slowest year of global growth in a decade
Beijing, February 13
If the World Bank is correct, 2012 will see the second slowest year of global economic growth in a decade, at a level consistent with a world recession that, like the 2008/2009 financial crisis, would not spare Asia.

ICAI bars tainted Satyam ex-CFO, PwC auditor from practice for life
New Delhi, February 13
Accounting regulator ICAI on Monday barred the ex-CFO of the erstwhile Satyam Computer Services, Srinivas Talluri, and former PricewaterhouseCoopers auditor Vadlamani Srinivas from practice for life, while slapping a Rs 5 lakh penalty on them over the Rs 14,000 crore fraud at the IT firm.

Gold prices extend losses on sluggish demand
New Delhi, February 13
Gold prices extended losses for the second day today losing another Rs 70 to trade at Rs 28,330 per ten grams in the bullion market here owing to sluggish demand at prevailing high levels. — PTI

Exuberant stock, forex markets gloss over grim economic reality
New Delhi, February 13
Surging capital inflows, booming stock markets and a fast-appreciating currency suggest the India story is again shining after a dismal 2011.

Branded soap makers in Punjab moving out due to heavy tax burden
Ludhiana, February 13
Punjab’s branded soap industry, whose turnover pegged at over Rs 1,000 crore, is shifting to neighbouring states due to the high tax structure in the state. Nearly 80% of the manufacturers have either shut down operations or moved out. The manufacturers are paying 10% central sales tax and 10.3% VAT. Unbranded soap makers pay only 5.5% VAT while no CST is applicable on them.

Is RBI’s feat in reversing rupee slide temporary?
Mumbai, February 13
The Reserve Bank of India's victory in reversing a sharp decline in the rupee may be short-lived and the currency will remain vulnerable unless the problems of a hefty fiscal and current account deficit are addressed. The rupee plunged to a record low of 54.30 to the dollar in mid-December, prompting the RBI to unleash an uncharacteristically aggressive slew of measures to support it.

 





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Gujarat most sought-after state by investors, Punjab remains laggard 
Tribune News Service

New Delhi, February 13
Five out of 20 industrial states led by Gujarat, Maharashtra, Andhra Pradesh, Orissa and Karnataka have clearly emerged as preferred investment destinations by attracting 53.56 per cent of total live investments worth Rs 120.34 lakh crore, according to a recent study undertaken by the Associated Chambers of Commerce and Industry of India (Assocham). Punjab is among the states lagging behind in attracting investments.

While Gujarat attracted investment proposals of Rs 16.28 lakh crore, Maharashtra Rs 14.14 lakh crore, Andhra Pradesh Rs 12.09 lakh crore, Orissa Rs 12.09 lakh crore, Karnataka Rs 9.85 lakh crore till 2011-end, the remaining 15 states received Rs 55.89 lakh crore worth of proposals.

Tamil Nadu was at sixth position by attracting investment proposals worth Rs 9.13 lakh crore and Jharkhand was at seventh position with Rs 7.16 lakh crore investment proposals, Assocham said.

The remaining 13 states were West Bengal (Rs 6.23 lakh crore), Madhya Pradesh (Rs 5.65 lakh crore), Uttar Pradesh (Rs 5.38 lakh crore), Haryana (Rs 4.98 lakh crore), Chhattisgarh (Rs 4.56 lakh crore), Rajasthan (Rs 2.54 lakh crore), Bihar (Rs 2.38 lakh crore), Punjab (Rs 2.16 lakh crore), Kerala (Rs 2.12 lakh crore), Jammu and Kashmir (Rs 1.11 lakh crore), Uttarakhand (Rs 1.07 lakh crore), Himachal Pradesh (Rs 84,062 crore) and Assam (Rs 58,179 crore).

The highest amount of investment has gone into electricity (35.9%), manufacturing (25.3%), services (21.8%), real estate (11.8% ), irrigation (3.1%) and mining (2.1%).

Mining has got the highest share in live investments in the states of Orissa, Andhra Pradesh, Jharkhand, Chhattisgarh and Madhya Pradesh. As opposed to this trend, mining sector got the least share in total investments in Uttarakhand, Punjab, Haryana, Bihar and Jammu and Kashmir.

Manufacturing is expected to achieve higher growth relative to other sectors in the states of Orissa, Jharkhand, Gujarat, Karnataka, and West Bengal. Conversely, manufacturing got lower shares in Jammu & Kashmir, Uttarakhand, Himachal, Punjab and Assam.

As regards the share of electricity, the sector has got the highest share of investments in the states of Gujarat, Orissa, Maharashtra, Andhra Pradesh and Tamil Nadu. The bottom five states to focus on electricity are Assam, Kerala, Jammu and Kashmir, Himachal Pradesh and Haryana.

For the real estate sector, Haryana was a major destination as it attracted 49.7% of the total investment proposals.

For the electricity sector, Uttarakhand received 75.1% of the total investment of Rs 1.07 lakh crore, followed by Chhattisgarh, 66% of Rs 4.56 lakh crore, Bihar 65.2 per cent of Rs 2.38 lakh crore), Himachal Pradesh 63.2% of Rs 84,062 crore and Madhya Pradesh 59.4% of Rs 5.65 lakh crore.

Orissa emerged second to Jharkhand as far as manufacturing was concerned. While manufacturing has got a 63.1% share in total live investments in Jharkhand, the sector has got prominence in Orissa (44.2% share), West Bengal (43.1%) followed by Karnataka (38.9%) and Assam (31.9%).

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Greece still to convince Europe after €130 bn EU rescue deal

Athens, February 13
The Greek government came under pressure on Monday to convince sceptical European capitals that it would stick to the terms of a multibillion euro rescue package endorsed by lawmakers during violent protests on the streets of Athens.

Parliament backed drastic cuts in wages, pensions and jobs on Sunday as the price of a 130-billion euro bailout by the European Union and International Monetary Fund, as running battles between police and rioters outside parliament drove home a sense of deepening crisis.

The EU welcomed the vote, but told Greece it had more to do to secure the funds and avoid a disorderly default next month that would have "devastating consequences".

Euro zone finance ministers meet on Wednesday, and the fragile ruling coalition of Prime Minister Lucas Papademos has until then to say how 325 million euros of the 3.3 billion euros in budget savings will be achieved.

A government spokesman said political leaders also had until Wednesday to give a written commitment that they will implement the terms of the deal, reflecting fatigue in Brussels over what EU leaders say have been a string of broken promises.

The spokesman said an election would be held in April, when deep public anger over the second round of austerity since 2010 could drive voters to the left and right and test Greece's commitment to the cuts.

First reaction from euro zone paymaster Germany was cautious. "Now we need to wait and see what comes after the legislation," Economy Minister and deputy Prime Minister Philipp Roesler said on German television. "We’ve taken one step in the right direction but we’re still far from the goal," he said.

Austrian reaction, too, was muted. "Adopting the austerity package is one thing, implementing it’s another, and this is something in which we’ve to place great store," said Austrian Vice Chancellor and Foreign Minister Michael Spindelegger.

Greece needs the international funds before March 20 to meet debt repayments of 14.5 billion euros, or suffer a chaotic default that would send shockwaves through the eurozone.

WORST VIOLENCE IN YEARS: EU Economic & Monetary Affairs Commissioner Olli Rehn said a disorderly default would have devastating consequences for Greek society. "I’m quite confident the other conditions, including the identification of concrete measures of 325 million euros, will be completed by the next meeting of the Eurogroup, which would then decide on the adoption of the programme," he said.

Papademos had warned of a "social explosion" if lawmakers rejected the deal and Greece defaulted. But the unrest outside, and a rebellion by 43 parliamentarians of the ruling coalition, suggested Athens might already be on the brink.

"The people yesterday sent a message: Enough is enough! They can't take it anymore," said Ilias Iliopoulos, general secretary of public sector union ADEDY.

Firefighters on Monday doused the smouldering remains of cinemas, shops and banks set ablaze in the capital during the worst violence in years.

The riots spread to Greece's second city of Thessaloniki, towns across the country and the islands of Crete and Corfu. — Reuters

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India’s economy improving: OECD

Paris, February 13
The international economic outlook is showing tentative signs of improvement, with the momentum shift spreading from the United States and Japan to other developed countries, OECD's December survey of growth prospects showed on Monday.

The survey picture was mixed in the eurozone, where seven countries were now "pointing towards a positive change in momentum" while the region's overall reading dipped marginally.

OECD said its leading indicator pointed to a "positive change ... for the OECD area as a whole, driven primarily by the United States and Japan, but similar signs are beginning to emerge in a number of other developed economies."

The reading, which seeks to flag turning points, improved for the OECD group of industrialised economies as a whole, rising 0.2 points in December to 100.4, versus its long-term average of 100.

India and Russia showed evidence of improvement while encouraging signs that appeared a month or two previously in Japan and the United States were confirmed, the Organization for Economic Cooperation and Development said.

The US reading rose for a third month running, this time by 0.7 points to 102.0, while the Japan reading, which stopped dropping three months earlier, rose 0.2 points to 101.9 in December.

India's reading rose 0.6 points even if, at 95.6 in December, it was still well below its long-term average. Russia's reading rose 0.2 to 102.4.

The readings for China, Brazil and the euro area continued to drop, however, with China down 0.5 points at 99.3, Brazil down 0.1 at 93.7 and the euro zone down 0.1 as well at 98.3. — Reuters

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2012 may see 2nd slowest year of global growth in a decade

Beijing, February 13
If the World Bank is correct, 2012 will see the second slowest year of global economic growth in a decade, at a level consistent with a world recession that, like the 2008/2009 financial crisis, would not spare Asia.

Its sister organization, the International Monetary Fund, warns that economic expansion in China could be slashed in half this year if Europe's debt debacle worsens, grim news given that China adds more to global growth than any other economy.

And around 600 of the world's best private sector economists polled by Reuters say global growth momentum is disappearing, along with their more robust estimates for Asian expansion. "In summary, much of Asia is in a sweet spot right now," Robert Prior-Wandesforde, director of non-Japan Asia economics at Credit Suisse. — Reuters

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ICAI bars tainted Satyam ex-CFO, PwC auditor from practice for life

New Delhi, February 13
Accounting regulator ICAI on Monday barred the ex-CFO of the erstwhile Satyam Computer Services, Srinivas Talluri, and former PricewaterhouseCoopers auditor Vadlamani Srinivas from practice for life, while slapping a Rs 5 lakh penalty on them over the Rs 14,000 crore fraud at the IT firm.

The disciplinary committee of the Institute of Chartered Accountants of India has found the two auditors guilty of professional misconduct, said Jaydeep Shah, the newly elected president of the institute. "The committee has ordered that the names Vadlamani Srinivas and Srinivas Talluri be removed from the registers of members permanently. Also, a fine of Rs 5 lakh each has been imposed on both of them (the maximum amount)," he said.

Shah added the verdict on ex-PwC partner S. Gopalakrishnan and V. Prabhakar Gupta, former internal auditor, would be finalized in a month.

Earlier, ICAI had barred from practice two Lovelocke & Lewes auditors for "serious gross negligence on the part of these two chartered accountants in the discharge of their duties as audit team members which carried out the statutory audit of Satyam Computer Services". — PTI

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Gold prices extend losses on sluggish demand

New Delhi, February 13
Gold prices extended losses for the second day today losing another Rs 70 to trade at Rs 28,330 per ten grams in the bullion market here owing to sluggish demand at prevailing high levels. — PTI

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Exuberant stock, forex markets gloss over grim economic reality

New Delhi, February 13
Surging capital inflows, booming stock markets and a fast-appreciating currency suggest the India story is again shining after a dismal 2011.

Dig a little deeper, and problems afflicting Asia's third-largest economy remain largely unabated and unaddressed. Inflationary risks remain and a political logjam continues to hem in reforms, clouding the economic outlook.

"Nothing has happened on the policy front to justify this mood," said Andrew Kenningham, an economist at Capital Economics, London. "Growth prospects are not looking good by historical standards."

The government on Tuesday cut the growth estimate for the current fiscal that ends in March to 6.9% from a revised forecast of around 7.5% issued in December, sharply below the 8.4% growth of the last fiscal year. Still, the BSE Sensex is up nearly 15% this year while the rupee has risen about 8% from its 2011 close, with both clocking the sharpest gains in more than a decade.

An improved global funding environment, relatively attractive valuations of Indian equities and hopes for rate cuts by the central bank have lured foreign institutions. They are net buyers of $3.2 billion Indian equities this year after having sold $357 million last year.

"The rally at this stage may be more a reflection of foreign portfolio flows and an appreciation of the rupee," said Sanjay Sinha, a veteran fund manager who founded Citrus Advisors, an investment advisory firm.

"This in itself may be in an anticipation that the twin factors of a rate cut from April and bold economic policies may actually herald the resurgence of the economy. Therefore, data may follow but the markets may have rallied ahead of them."

The RBI has signalled it is finished raising interest rates after 13 increases between March 2010 and October 2011, to the relief of companies and banks. A rate cut is widely expected by the end of June, if not sooner. The rupee's recovery has been fuelled in part by measures the central bank took to stabilize the exchange rate.

"It’s a feel-good rally," said Jagannadham Thunuguntla, head of research at SMC Investments & Advisors Ltd.

Macroeconomic indicators are recently looking better.

Industrial output has recovered from a record slump and the manufacturing and services sectors continue to pick up pace. Inflation slipped below 8% for the first time in two years in December and is on track to fall to the central bank's 7% target by the end of the fiscal.

PREMATURE: Many India-watchers warn the euphoria is premature. Inflation is indeed down smartly, falling to a two-year low of 7.47%,, but that is due almost entirely to a drop in food inflation that is widely seen as unsustainable. Nonfood manufactured inflation eased by just 0.2 percentage points from 7.9% in November to 7.7% in December.

All of this means that the RBI may not be in a hurry to slash interest rates. — Reuters

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Branded soap makers in Punjab moving out due to heavy tax burden
Manav Mander/TNS

Ludhiana, February 13
Punjab’s branded soap industry, whose turnover pegged at over Rs 1,000 crore, is shifting to neighbouring states due to the high tax structure in the state. Nearly 80% of the manufacturers have either shut down operations or moved out. The manufacturers are paying 10% central sales tax and 10.3% VAT. Unbranded soap makers pay only 5.5% VAT while no CST is applicable on them.

"The pressure of steep taxation on branded soap manufacturers is high. In addition to this we also have to maintain our quality due to brand value and are also spending money on advertising," said Surinder Arora, president of the All Punjab Soap Manufacturers Association. 

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Is RBI’s feat in reversing rupee slide temporary?

Mumbai, February 13
The Reserve Bank of India's victory in reversing a sharp decline in the rupee may be short-lived and the currency will remain vulnerable unless the problems of a hefty fiscal and current account deficit are addressed. The rupee plunged to a record low of 54.30 to the dollar in mid-December, prompting the RBI to unleash an uncharacteristically aggressive slew of measures to support it.

Those efforts, including heavy dollar selling as well as administrative measures, restored confidence and reversed the decline, with the rupee strengthening past 50 in January and the central bank indulging in a round of crowing over its success.

However, these measures are quick-fixes and rupee is still susceptible, meaning the tide of funds that has flooded into India this year could just as quickly reverse.

"The fundamental problem remains the structural BoP (balance of payments) deficit and weak fiscal position," said Andy Ji, Asian currency strategist for Commonwealth Bank of Australia in Singapore. "Both require substantial and sustained funding sources. Until then, the INR will remain the laggard in Asia, fluctuating to the volatile risk sentiment”.

A worsening of Europe's prolonged sovereign debt crisis could trigger a reversal of funds from emerging markets, and India with its economic reforms logjam, high inflation and twin deficits could be among the worst hit.

"Since the rupee's turnaround has been helped by the opening up of the capital account, the authorities would do well to worry that what comes in can go out readily," Deutsche Bank economist Taimur Baig said last week. — Reuters

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CORPORATE BRIEFS

SBI Q3 net profit up 15%
State Bank of India, the country's biggest lender, beat market expectations with a 15% rise in third-quarter net profit as interest income rose.Net profit was Rs 3,260 crore for the quarter to Dec 31, up from Rs 2,830 crore a year earlier.

Ind-Swift Labs Q3 PAT rises
Pharma major Ind-Swift Laboratories Ltd posted a profit after tax of Rs 28.44-crore in Q3 ended Dec 31, a 15.5% jump from Rs 24.62-crore in the year-ago period. Total revenues rose 15.7% to Rs 358.80 crore (Rs 310.11 crore).

Indian Oil Q3 net spurts
State-run Indian Oil Corp Ltd rposted a 52% jump in net profit at Rs 2,488 crore for the quarter ended Dec 2011 from Rs 1,635 crore in theyear-ago period. Net sales in Q3 rose 29.4% to Rs 98,272 crore (Rs 75,891 crore).

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