New Delhi, May 18
Global ratings agency Standard & Poor's move to revise India's sovereign credit rating outlook to negative from stable may have some impact on the perception of investors but the government has taken note of the concerns and is taking a series of steps to strengthen and sustain robust economic growth, Finance Minister Pranab Mukherjee said on Friday.

Replying to a question in Parliament, he said S&P's assessment should be viewed in the context of the current economic difficulties that nations around the globe were facing.

"In its India report, Standard & Poor's raised concerns about issues such as the level of fiscal deficit and debt burden, increase in the current account deficit and the slowdown in the economic growth. However, a revision in the outlook may have some perceptional impact. The government has taken note of these concerns," Mukherjee said in a written reply in the Lok Sabha.

He said S&P had not downgraded India's credit rating although it has revised the outlook on the long-term ratings of India from stable (BBB+) to (BBB-) negative.

"S&P's assessment should, however, be viewed in the context of the current economic difficulties that nations around the globe are facing and India's comparative performance which has been reflected in the recent rating that it has received," Mukherjee said.

The minister added since April several sovereigns had been downgraded but India's sovereign ratings had either been affirmed or upgraded in segments.

Mukherjee said the government was taking a number of steps to strengthen the economic health of the country. "These include measures contained in the fiscal 2013 budget that are aimed towards fiscal consolidation, improvement in investment environment, development of the infrastructure and industrial sectors, and further development of the human resources," he said.

Mukherjee claimed the government was also making sustained efforts to restrict expenditure on central subsidies to under 2 per cent of gross domestic product in fiscal 2012-13 and to further bring it down to 1.75% of GDP in the next three years. 

Chandigarh, May 18
The sliding rupee may be bringing short term cheer for exporters, who are getting more rupees for the dollars earned in exports. But with the loans taken by exporters through external commercial borrowings (ECBs) and foreign currency convertible bonds (FCCBs) due for repayment from next month, the exporters will be forced to shell out more rupees to repay the loan taken by them in dollars.

The worst affected will be the small and medium exporters, who generally take the ECB and FCCB routes to raise funds. But with the rupee in a freefall (with expectations of a further slide), these exporters will now be forced to pay more rupees for the dollars raised through ECBs and FCCBs.

The rupee ended at 54.48/54.49 to the US dollar, and analysts expect in the next two months the Indian currency will continue to remain at 55.50-56 a dollar. The rupee has depreciated by 23% since July 2011.

“Almost 30% of exporters, mainly in the small and medium segment, borrow money from external commercial sources. With repayments due now, these people are in for major trouble. Most small exporters won’t be able to bear the impact of paying much more in rupees for the dollars borrowed, and will have no option but to shut down operations. What’s making matters worse is the fact that competition between small exporters is now leading to most foreign buyers renegotiating deals with exporters here and forcing them to offer discounts up to 10% or face rejection of goods, citing poor quality. Exporters have no option but to agree,” said A.K. Kohli, senior vice president of the Punjab Chamber of Small Exporters. He added the leather goods, engineering, textile and sports goods industries in the region were already adversely affected.

Abhishek Goenka, CEO of India Forex Advisors, said from companies’ perspective the expiry of ECBs and FCCBs was likely to lead to a flow of defaults, which in turn would hit tax revenues. “This will create a downgrade for the companies. This will lead to a vicious cycle and higher cost of funds and ultimately affect growth,” he said.

N.R. Bhanumurthy, economist at the National Institute of Public Finance & Policy, a New Delhi based think tank, echoed a similar view: “Since India is a net importing country, the depreciating rupee will lead to a higher import bill. On the companies’ side, those that are due to repay their loans raised through ECBs are now trading more in the future currency markets so as to mitigate the losses incurred in repaying their overseas debts”.

New York City, May 18
Investors are bracing for Facebook's Wall Street debut on Friday after the pioneering online social network raised about $16 billion in one of the biggest initial public offerings in US history.

A monitor shows a welcoming message for Facebook's listing on the Nasdaq market site prior to the opening bell in New York City on Friday. Facebook Inc began trading on the Nasdaq with it's initial public offering at $38 per share, valuing the world's largest and most popular social networking website at more than US $100 billion. — Reuters

To rapturous applause from employees, Facebook chief executive Mark Zuckerberg rang the bell to kick off trading on the Nasdaq market at the company's Silicon Valley headquarters at 6:30 a.m. Pacific time. Zuckerberg rang the bell, with chief operating officer Sheryl Sandberg and Nasdaq CEO Robert Greifeld on either side. The 28-year-old founder hugged and high-fived Sandberg and other employees in celebration after he pressed the remote button.

The area outside the office was packed with throngs of photographers, more than 12 television trucks and a TV news helicopter hovering overhead as the excitement reached fever pitch.

With a value of $104 billion, Facebook is larger than Starbucks Corp and Hewlett-Packard combined.

"A 15 to 20 per cent pop is in the realm of possibility," said Tim Loughran, a finance professor at the University of Notre Dame. "Given they already moved their IPO range up and increased the size, that's bullish to begin with."

Facebook priced its offering at $38 a share on Thursday, but the price could be higher when shares begin trading under the FB symbol on the Nasdaq at 11 a.m. Eastern time (1500 GMT).

Throngs of cameramen gathered around the Nasdaq building in New York's Time Square early on Friday morning as press throngs joined tourists and workers in the area. One of the billboards in the area prominently carried the Facebook logo.

On Twitter and in office elevators the morning talk was betting how much Facebook's initial price would rise by the end of trading.

Some expect shares could rise 30 percent or more on Friday, despite ongoing concerns about Facebook's long-term money-making potential. An average of Morningstar analyst estimates put the closing price for Facebook shares on Friday at $50.

The IPO, expected to mint more than a thousand paper millionaires at the company, has received wall-to-wall media coverage and sparked hopes of a boom in sales of everything from San Francisco Bay area real estate to automobiles.

Facebook employees marked the event with an all-night "hackathon" at the company's Menlo Park, Calif., headquarters starting on Thursday evening, a tradition in which programmers work on side projects that sometimes turn into mainstream offerings. — Reuters

New Delhi, May 18
Industry Minister Anand Sharma has opposed the exclusion of industry, manufacturing and public-private partnerships (PPP) from the “public purpose” definition as defined in the Land Acquisition Bill. “I’ve taken on board fully the concerns of industry. We’ll be placing this very firmly before the cabinet. This part of the report, as has been submitted, is unacceptable — not only to industry but to my ministry also", he said on Friday.

The parliamentary standing committee on the Land Acquisition Bill has said that “public purpose” for the government to acquire land can only be for infrastructure and social purposes, leaving out manufacturing and PPP, which has been strongly opposed by industry.

Sharma said no step that “deindustrializes” the country or brings down industrial growth and investment should be taken. He added the issue has to be finally cleared by the cabinet where the industry ministry will take up the matter. “I’m very clear about my ministry’s view — we’re opposed to the exclusion of manufacturing and industrial activities and PPP project from the ‘public purpose’ as defined”.

Sharma said the national manufacturing policy (NMP) has been adopted to create NMIZs and the target is to raise their share from 16% to 25% in a decade and create 100 million jobs.

Emphasizing the role of states, he said they had an important role in PPP projects when it came to infrastructure expansion. “Now that is a public purpose that cannot be taken out of public purpose for land. And you can’t take a view that is regressive and prevents the growth of manufacturing or that would virtually dampen investor sentiment. We’ve to encourage investments in our economy, particularly in the manufacturing sectors. The jobs will only be created there”, he added.

Sharma said a facilitating environment had to be created for industry where it would feel confident to engage with the government. “We’ll definitely be in favour of a legislation that promotes growth and keeps principle of equity in mind when it comes to adequate compensation. But that shouldn’t be taken to an extreme where growth and industrialization is brought to a halt or sharply slowed down”, he said.

Leaders of apex industry chamber FICCI met Sharma on Friday to discuss the issues on land acquisition. CII president Adi Godrej said the recommendations made by the standing committee would adversely affect industry, specially the manufacturing sector. He said the bill had rightly included industry in the definition of “public purpose” as industry equally contributes in creating wealth and employment for the country.

Pankaj Bajaj, president (NCR) of CREDAI, a real estate body, said all significant projects in the country were stuck due to land acquisition issues. “Whether it’s China or any other competing economy, the government goes out of the way to facilitate industry”, he said.

New Delhi, May 18
Gold prices regained the crucial level of Rs 29,000 per 10 gram, shooting up by Rs 700 — its biggest single day gain this year — in the bullion market here on Friday on strong cues from overseas markets.

Gold gained Rs 700 to Rs 29,320 per 10 grams, a level last seen on May 8. Silver prices too spurted by Rs 1,400 to Rs 54,000 per kg on increased offtake by industrial units and coin makers.

Traders said sentiment turned bullish after gold rose 0.9% to $1,587.85 in London as concerns over deepening eurozone debt crisis spurred the demand for the metal as a protection of wealth.The trend abroad normally sets a price in the domestic market, they added.

Back home, gold of 99.9 and 99.5 per cent purity gained Rs 700 each at Rs 29,320 and Rs 29,180 per 10 grams, respectively. Sovereign followed suit and rose by Rs 100 to Rs 23,750 per piece of eight grams. Silver ready gained Rs 1,400 to Rs 54,000 per kg. — PTI