SPECIAL COVERAGE
CHANDIGARH

LUDHIANA

DELHI



THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

Economy slows further, GDP growth hits 9-yr low of 5.3%
New Delhi, May 31
India’s economic growth has slumped to a 9-year low with the March quarter GDP coming in at 5.3 per cent and dragging the full-year figure for FY2011-12 to 6.5 per cent, leading to industry warning of a 1991 type economic crisis.

India a gasping elephant: HSBC
Mumbai, May 31
Global banking giant HSBC today termed India as a "gasping elephant" as the slowdown in economic growth is "deepening" and the downside risks to the outlook have increased.

Kingfisher Q4 loss trebles; vows to bounce back
New Delhi, May 31
Beleaguered private carrier Kingfisher Airlines, which is currently operating on a “holding plan” with a limited fleet, hopes to be back to full-scale operations in a year’s time.
Kingfisher Airlines aircraft parked on the tarmac at the New Delhi international airport Kingfisher Airlines aircraft parked on the tarmac at the New Delhi international airport. The cash-strapped carrier said Thursday its net losses more than tripled in the fourth quarter from a year earlier, hit by high fuel prices and curtailed operations.
— AFP


EARLIER STORIES



Bollywood actress Nargis Fakhri at the much-awaited India launch of Samsung’s Galaxy S3 smartphone in New Delhi on Thursday
Bollywood actress Nargis Fakhri at the much-awaited India launch of Samsung’s Galaxy S3 smartphone in New Delhi on Thursday. The device, which has voice recognition and is powered by Android OS 4.0, is touted as a strong competitor to the yet-to-be launched iPhone 5. Unveiled initially in London, the phone is priced at Rs 43,180. — Tribune photo by Mukesh Aggarwal

Gold losing safe haven appeal? Set for worst May performance in 30 yrs
London, May 31
Gold rose back above $1,570 an ounce on Thursday as expectations of an Irish vote in favour of Europe's fiscal pact lifted the euro, but this month's sharp drop in the single currency kept the metal on track for its worst May performance in 30 years.

Telenor in talks for new India partner
New Delhi, May 31
Having made huge investments in its India business venture, Norwegian telecom major Telenor, which is facing cancellation of its licences following the Supreme Court’s order, said Thursday it was in discussions with some companies to rope in a new partner in India before the government auctions 2G spectrum.

CPI for industrial workers in April up 10.22% y/y
New Delhi, May 31
India's consumer price index (CPI) for industrial workers rose 10.22 per cent in April from a year earlier, faster than the annual rise of 8.65 per cent in March, government data showed today.

Centre moots Rs 170/qtl hike in MSP of paddy
New Delhi, May 31
In view of rising farm input costs, the Agriculture Ministry has proposed a Rs 170 per quintal increase in the minimum support price (MSP) of paddy at Rs 1,250 per quintal for the 2012-13 crop year (July-June).





Top








 

Economy slows further, GDP growth hits 9-yr low of 5.3%
Sanjeev Sharma/TNS

New Delhi, May 31
India’s economic growth has slumped to a 9-year low with the March quarter GDP coming in at 5.3 per cent and dragging the full-year figure for FY2011-12 to 6.5 per cent, leading to industry warning of a 1991 type economic crisis.

Manufacturing has been the worst hit sector while mining, construction and agriculture have been weaker than expected and only the services sector has shown robust growth. This is the lowest growth since 2002-03 when the economy grew by 4%. The dismal numbers have now led to the GDP target for the current year being scaled down by several analysts.

This is significantly lower than the advance estimates of 6.9 per cent released earlier and is also lower than the 6.7 per cent GDP growth witnessed in 2009 after the global financial crisis.

While the economic crisis in Europe and its cascading risk aversion effect is hurting India, domestic issues caused by the uncertainty in the environment are leading to low investments and weak economic activity.



The rupee hit a record low on Thursday, clocking its worst month in half a year, settling at 56.08/09 per dollar
The rupee hit a record low on Thursday, clocking its worst month in half a year, settling at 56.08/09 per dollar. — Reuters

Even as a government which is in firefighting mode struggles to bring in new reforms hemmed in by ally pressure and political opposition, day to day decision making in government has suffered as collateral damage from a spate of controversies coming in one after the other. The break out of such controversies where prior decisions are coming under the lens or are being overturned and new ones not coming through has damaged business sentiment both for Indian business houses as well as foreign investors.

Finance Minister Pranab Mukherjee said among the factors that have contributed to the slowdown are the tight monetary policy that led to a significant rise in the interest costs and the weak global sentiments that affected growth in domestic private investment. The domestic investment sentiments may have been also affected by the environmental policy bottlenecks in the mining sector.

“Most of these factors have bottomed out and should help in the recovery of growth momentum”, he said.

The government has also launched an austerity drive to cut down on expenditure with steps like banning creation of new posts and holding their meetings in five-star hotels besides imposing curbs on foreign travel.

The finance ministry has also asked all ministries and departments to reduce non-plan expenditure by 10%in the current financial year.

FICCI secretary general Rajiv Kumar said the figures show there is a grave crisis of investors confidence. “We may be in the danger of slipping into a 1991 like crisis. Therefore urgent and bold steps are immediately needed to prevent the economy from descending in to a full blown crisis. This must be averted at all costs”, he said.

Crisil Research said industry continues to be the most stressed sector as it grew at a mere 3.4% in FY12, mainly due to the degrowth in mining and tepid growth in manufacturing sector. Though the services sector grew at a robust 8.9% in FY12, its growth has fallen below the 9% mark for the first time since 2004-05.

Fiscal deficit widens to 5.76% of GDP

India's fiscal deficit during the 2011-12 fiscal year that ended in March was Rs 5.097 trillion, or equivalent to 5.76% of GDP, government data showed on Thursday. The deficit is marginally lower than the upwardly revised estimate of 5.9% provided by the government in its March budget. Net tax receipts were Rs 6.32 trillion and total expenditure was Rs 12.98 trillion during the fiscal. — PTI

Top

 

India a gasping elephant: HSBC

Mumbai, May 31
Global banking giant HSBC today termed India as a "gasping elephant" as the slowdown in economic growth is "deepening" and the downside risks to the outlook have increased.

In a research note, HSBC said the slowdown in growth has proven deeper than expected and blamed administrative obstacles and policy paralysis for the same.

"Administrative obstacles have held back key investment projects and the much talked about policy paralysis has significantly hurt investor sentiments and added to the negative external spill overs trough the finance channel," it said. — Reuters

Top

 

Kingfisher Q4 loss trebles; vows to bounce back
Vibha Sharma/Tribune News Service

New Delhi, May 31
Beleaguered private carrier Kingfisher Airlines, which is currently operating on a “holding plan” with a limited fleet, hopes to be back to full-scale operations in a year’s time. According to the airline, the company is simultaneously progressing on its aircraft reconfiguration plan to contain losses amid a very tough operating environment for the Indian aviation industry.

“The company has a focused fleet re-induction plan and hopes to be back to full-scale operations in the next 12 months backed by a recapitalization plan that the company is actively pursuing and confident of achieving,” it added.

The cash-strapped airline’s fight for survival by cutting flights, therefore costs, has severely dented its market position, slipping from being India’s largest domestic carrier to its smallest carrier.

However, according to Kingfisher, the entire industry is operating in an unprecedented tough operating environment, intensified by consistently high fuel prices and the depreciating Indian rupee.

“Fuel prices have increased by over 40% over last year compounded by the weakened rupee. The industry’s demand growth in the domestic market at 13% in FY12 over last year has been overshadowed by a 17% growth in industry capacity leading to a pressure on the yields and the load factor for the industry,” it said.

Experts say that faced with such tough conditions, Kingfisher appears to holding on in anticipation of 49% FDI

Surviving on bare minimum infusions by its promoter Vijay Mallya, so far there are no signs of any serious interest in the airline that might turn its fortunes around. CAPA estimates that Kingfisher has a funding requirement of close to $ 1 billion of which US $500 to $600 million is needed immediately and additional $300 to $400 million in the next fiscal year. Therefore what the cash-strapped carrier really needs is a strategic foreign airline investor.

However, airlines across the world are struggling to beat the stressed-out economic scenario. According to IATA’s financial monitor for first quarter for 55 airlines released on Thursday, global airline share prices fell but outperformed the market as fuel prices eased further, though in Europe airline shares were sharply hit by concerns over the eurozone.

Top

 

Gold losing safe haven appeal? Set for worst May performance in 30 yrs

London, May 31
Gold rose back above $1,570 an ounce on Thursday as expectations of an Irish vote in favour of Europe's fiscal pact lifted the euro, but this month's sharp drop in the single currency kept the metal on track for its worst May performance in 30 years.

Concerns over Spain's banking system, a surge in Italian borrowing costs and Greek elections that may determine whether it stays in the euro zone have sent investors fleeing to the safety of the dollar this month.

As well as being caught in the broader market selloff, gold is particularly sensitive to gains in the dollar, which can dent gold's appeal as an alternative asset.

Spot gold was up 0.5% at $1,570.20 an ounce at 0945 GMT, while US gold futures for August delivery were up $5.60 an ounce at $1,571.30.

The precious metal is down more than 6 per cent so far this month, its biggest May loss since a near 10 per cent fall in 1982. The metal is also set to post a fourth consecutive monthly loss for the first time since January 2000.

While the possibility of a fresh round of monetary easing in the United States and demand for alternatives to the beleaguered euro could lift gold, confidence in the metal remains weak.

"If we had momentum upwards, there are still plenty of people who are bullish and who would buy into that, but at the moment, you have pressure from a strong dollar, or perhaps more accurately a weak euro, and people are just a little bit wary," Mitsui Precious Metals analyst David Jollie said.

"If you are looking to make a profit, and you think it will be $20 lower tomorrow, there's just no reason to buy it today."

"That doesn't alter the fact that there are plenty of bulls out there. They are waiting for a trigger to send the price higher, and the question is, what's that trigger?" he added. "It could be quantitative easing; it could be a short period of euro stability; it could be the Greek elections."

Expectations Ireland would vote to support Europe's fiscal pact helped lift the euro from a near two-year low against the dollar on Thursday, taking some downward pressure off gold. The single currency remains vulnerable, however, and is set for its biggest monthly fall in at least eight months, with some analysts expecting it to drop towards $1.20 in coming weeks. — Reuters

Top

 

Telenor in talks for new India partner
TNS & Agencies

New Delhi, May 31
Having made huge investments in its India business venture, Norwegian telecom major Telenor, which is facing cancellation of its licences following the Supreme Court’s order, said Thursday it was in discussions with some companies to rope in a new partner in India before the government auctions 2G spectrum.

The company's Indian unit Uninor suffered a major setback after 22 of its licences were cancelled by the Supreme Court in February in the 2G spectrum allocation case. While cancelling 122 licences in all of various telecom operators, the court ordered the government to conduct a fresh spectrum auction, where Telenor intends to participate with a new partner.

"We’re in active discussions for partners with handful of people," Telenor executive vice president & head of Asia region Sigve Brekke told reporters here.

Telenor operates a telecom services joint venture, Uninor, in India with real estate major Unitech. It holds over 67% stake in Uninor, while the rest is with the Indian partner.

Following the cancellation of Uninor's licences, Telenor had said it planned to set up a new company. It had also sought damages from Unitech accusing it of "fraud and misrepresentation" of facts based on which it had invested over Rs 6,000 crore in the joint venture.

Brekke added the new partner may have 26 per cent share in the new entity, as Indian rules allow foreign companies to own a maximum of 74 per cent stake in a telecom venture.

Top

 

CPI for industrial workers in April up 10.22% y/y

New Delhi, May 31
India's consumer price index (CPI) for industrial workers rose 10.22 per cent in April from a year earlier, faster than the annual rise of 8.65 per cent in March, government data showed today.

The consumer price index for industrial workers rose 4 points from the previous month to 205 in April, data released by the labour ministry showed.

The government uses the consumer price index for industrial workers to fix wages for its employees.

India's statistics ministry has also started releasing annual inflation data based on the CPI every month from February.

Indian consumer price inflation accelerated in April to 10.36 per cent, from 9.47 per cent in March. — Reuters

Top

 

Centre moots Rs 170/qtl hike in MSP of paddy

New Delhi, May 31
In view of rising farm input costs, the Agriculture Ministry has proposed a Rs 170 per quintal increase in the minimum support price (MSP) of paddy at Rs 1,250 per quintal for the 2012-13 crop year (July-June).

According to sources, the ministry has circulated a Cabinet note among various ministries recommending MSP of Rs 1,250 per quintal for common variety paddy and Rs 1,280 per quintal for 'A' grade variety of paddy for 2012-13 crop year.

For the 2011-12 crop year, paddy MSP of common and 'A' grade varieties were fixed at Rs 1080 per quintal and Rs 1,110 per quintal, respectively.

Paddy is grown in both kharif and rabi season. The kharif sowing begins with the start of the south west monsoon in June and harvest starts from October.

Sources said the agriculture ministry's proposal on support price of kharif crops for 2012-13 crop year are in line with recommendations made by the Commission for Agriculture Costs and Prices (CACP).

Besides paddy, the ministry has recommended Rs 800-1,000 per quintal increase in support price of pulses for 2012-13. It has suggested Rs 4,500 per quintal for moong, Rs 4,300 per quintal for urad and Rs 4,000 a quintal for tur this year. Last year, support price of moong, urad and tur stood at Rs 3,500 a quintal, Rs 3,300 a quintal and Rs 3,200 a quintal, respectively.

"Pulses require special attention as they are in short supply. The substantial increase in MSP has been suggested to raise domestic production and reduce imports," the sources said.

To boost oilseeds production, the ministry has proposed up to 37 per cent hike in MSP. It has suggested support price of Rs 3,700 per quintal each for groundnut and sunflower seed and Rs 2,200 per quintal for soyabean for 2012-13.

In 2011-12, MSP of groundnut and sunflower seed was fixed at Rs 2,700-2,800 per quintal. Whereas soyabean MSP was Rs 1,650 per quintal. With regard to cotton, the ministry has recommended Rs 3,600-3,900 per quintal for 2012-13, as against Rs 2,800-3,300 per quintal last year. — PTI

Top

 





HOME PAGE | Punjab | Haryana | Jammu & Kashmir | Himachal Pradesh | Regional Briefs | Nation | Opinions |
| Business | Sports | World | Letters | Chandigarh | Ludhiana | Delhi |
| Calendar | Weather | Archive | Subscribe | E-mail |