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Slowdown in foreign trade compounds economic woes
Weak growth rate sparks slew of downgrades; RBI rate cut expected
Air India-IA merger: Govt to begin implementing Dharmadhikari report in 45 days
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Car sales hit bump in May; Maruti, GM, Ford slow down
Can only take calibrated steps to defend Re: RBI
CBI arrests senior SEBI official on bribery charges
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Slowdown in foreign trade compounds economic woes
Mumbai, June 1 The export figures compounded an already gloomy economic picture — GDP data on Thursday showed the economy grew at its slowest pace in nine years in the first three months of 2012. The rupee has also tumbled to record lows this week. Faced with a barrage of dismal economic data in the past few months, the government's chief strategy has been to blame the downturn on high global oil prices and the eurozone debt crisis, while insisting that this is a temporary blip and growth prospects are still good. This has infuriated investors who say a string of policy u-turns by the government and its failure to take aggressive action to narrow its rising trade and budget deficits and encourage more foreign investment are also to blame. — Reuters |
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Weak growth rate sparks slew of downgrades; RBI rate cut expected
Mumbai, June 1 Some analysts also say they now expect a rate cut as early as on June 18, the next RBI meeting. It will still be a close call though, given the central bank has expressed concerns about continued inflationary pressures and has previously shown reluctance to ease until later in the year. Standard Chartered Bank cut its fiscal 2013 GDP forecast to 6.2% from 7.1%, adding a 25 basis point rate cut in June was "now more likely than before. — Reuters |
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Air India-IA merger: Govt to begin implementing Dharmadhikari report in 45 days
New Delhi, June 1 The Indian Pilots Guild, which is spearheading the 26-day-old pilots' strike, rejected the report, saying it was biased in favour of the erstwhile IA employees. Unveiling the roadmap for implementation of the justice D.M. Dharmadhikari committee recommendations on human resources integration of employees of the erstwhile IA and AI, Civil Aviation Minister Ajit Singh promised parity in payscales and working hours in the merged Air India. April 1, 2007 has been set as cutoff date for new pay scales. A four-member panel, called the the implementation-cum-anomaly committee, has been set up to seek views of all sections of employees. “We will be patient and persuasive in talking to the employees. They will realize their future depends on the future of Air India,” Singh said. Now whether the exercise will help resolve the 26-day management-AI pilots’ impasse that has crippled the national carrier is yet to be seen. The is fear of some more trouble brewing fact and its genesis is the fact that there will be uniform pay scale for all employees, including pilots, engineers and senior managerial staff. Parity in payscales and uniform working conditions also means that pilots, whether those flying narrow-bodied or wide-bodied aircraft, will be treated equally. Significantly, according to Singh, the report recommended abolishment of production-linked-incentive (PLI) for employees and this essentially means that pilots, engineers and senior staff would get allowances as per industry standards. “Payscales and allowance structure would be determined on the basis of industry norms. Since these issues are not dealt with by DPE guidelines, the cabinet’s approval is required,” he said. In other words this means that the niche group, constituting 20 per cent of AI staff, will be take home a pay packet far lesser that what they are getting now. PLIs constitute a major chunk of not just the salaries of pilots, cabin crew and engineers but also that of senior managerial staff. The decision has evoked mixed reactions. Aviation expert Jitendra Bhargava said, “The report is good in parts but it needs through examination and careful implementation”. As expected, reactions from the side of pilots and senior managerial staff were not favourable. They say if these recommendations were implemented, the management may end up with more HR problems. “The rivalry between pilots of the erstwhile IPG (Air India) and ICPA (Indian Airlines) is well known. Issues should be thrashed out to ensure there is no resentment in the cockpit,” they said. However, welcoming the move, Air Corporation Employees Union president Arun Kumar Malhotra said out of the Rs 3,000 crore AI wage bill, a whopping Rs 1,800 crore goes toward disbursement of PLIs for 20% of the employees. The cutting down of PLIs is expected to save the cash-strapped of Rs 250 crore every year. PILOTS’ STRIKE STILL ON: Close to a month after Air India pilots decided to strike work, IPG president Jitendra Awhad on Friday offered to quit provided all the 100-plus suspended pilots were reinstated. However, Ajit Singh again reiterated that demands of the striking pilots would only be examined after they unilaterally call off the “illegal strike” and resume work. |
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Car sales hit bump in May;
Maruti, GM, Ford slow down
New Delhi, June 1 Carmakers are struggling to hit a sales target set by the local industry body as India's economy grows at the slowest pace in nine years, hurting an industry that has been one of the country's best performers over the past decade. "Things are not looking good," said Sugato Sen, senior director of the Society of Indian Automobile Manufacturers (SIAM), which has forecast 10% to 12% sales growth in the fiscal to March 2013. "We didn’t expect that sales would be so low. The economic sentiment is not positive." Maruti Suzuki, the biggest carmaker with a 45% market share, said passenger car sales fell 5.9% from a year earlier. Tata Motors, the country's no. 3, posted a 6% increase. Ford, which manufactures cars in India, said its sales in the country fell 14%. General Motors reported a 27% slide in sales. TVS Motor, the country's third-largest two-wheeler manufacturer, said its sales declined 4.8%. The government raised petrol prices by around 11% last month, hurting car makers already reeling from an excise hike announced in the federal budget in March and a weakening of the rupee that is jacking up import costs. India's economy grew 5.3% in the first three months of 2012, compared with 9.2% a year earlier, with the manufacturing sector contracting 0.3%. Car sales in the country rose 30% in 2010-11, attracting billions of dollars in investment from automakers such as Ford, Nissan and Renault. But a slowing economy dragged sales growth down to 2.2% in the last fiscal year. Mahindra's car sales rose 27% in May, mainly thanks to its all-diesel range. Demand for diesel cars has doubled over the past year to around 40% of sales due to government subsidies on diesel. Honda Siel Cars India posted a 343% jump in sales in May, while Nissan Motor India reported a 98% year-on-year rise in sales. |
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Can only take calibrated steps to defend Re: RBI
Mumbai, June 1 "Unless we work hard (to take some corrective measures), the GDP rate will fall further," RBI deputy governor K.C. Chakraborty told reporters Friday. He made it clear the central bank was running out of ammunition to shore up the rupee. "If the rupee's fall is because of fundamental weakness or (due to) the global situation ..., we cannot arrest it," K.C. Chakrabarty told reporters on the sidelines of a banking event here. He added the RBI was monitoring the rupee's falls and would take measures as needed, though he added: "We need to do it in a calibrated manner." India's trade deficit stood at $13.5 billion in April, while economic growth in the January-March quarter slumped to its weakest in nine years. New Delhi's inability to push reforms or take hard decisions to cut subsidies have added to the gloom. Doubts about India's ability to fix its finances have also weighed heavily on the rupee, as investors worry the government will overshoot its deficit target of 5.1% of GDP for the fiscal ending next March. The rupee fell to a lifetime low of 56.52 to the dollar on Thursday, down 13.3 percent from its 2012 high in early February, making it the worst performing currency in Asia so far this year.
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CBI arrests senior SEBI official on bribery charges
New Delhi, June 1 In a statement issued by the CBI it was alleged SEBI had barred an Ahmedabad-based stock trader from trading in September 2011 for alleged market manipulation using global depository receipts GDR issues and initiated an enquiry against the firm. A CBI official said thereafter investigation was initiated by the market regulator against the firm. The SEBI deputy general manager who was conducting an investigation had issued a show cause notice to the complainant’s firm. |
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Indian exports inched up 3.23 percent to $24.5 billion in April from a year earlier after falling in March, a far cry from the more than 20 percent growth recorded in recent years. India has been hit by falling demand from its traditional export markets in the United States and Europe.
There was fresh evidence of a slowdown in the manufacturing sector, which accounts for nearly 15 percent of the economy, on Friday as India's top automaker Maruti Suzuki said its c ar sales in May fell 5.9 percent, dragged down by high fuel costs and an excise tax hike.