New Delhi, August 6
Finance Minister P. Chidambaram on Monday unveiled a road map to revive the economy with a dose of restoring investor confidence, fiscal consolidation, review of retrospective tax measures and steps to moderate inflation.

Chidambaram made his first statement to the media after taking over as finance minister last week and presented a detailed gameplan of the challenges facing the Indian economy and steps required to overcome these problems. The intent in the plan and the short timelines to address issues are likely to provide confidence to the markets and the economy.

Chidambaram said the top priority is to regain the confidence of all stakeholders. He added policies would have have to be modified or finetuned to meet the expectations of different stakeholders.

On fiscal consolidation, he said a plan, “in which the poor must be protected and others must bear their fair share of the burden”, would shortly be announced. This would include adjustments to be made both on the revenue side and on the expenditure side. A new panel of experts comprising Vijay Kelkar, Indira Rajaraman and Sanjiv Misra will assist the government in formulating the fiscal consolidation plan in a few weeks.

On the soaring food inflation, Chidambaram said the government would take steps to remove the constraints on the supply side and also use foodgrain stocks to moderate prices. “Where necessary, we’ll enhance the import of items in short supply”, he said. “The government will work with the Reserve Bank of India to ensure that inflation is moderated in the medium term”, he added.

Underlying the importance of attracting more investments, both domestic and foreign, Chidambaram said it was important to remove any apprehension or distrust in the minds of investors. “We’ll improve communication of our policies to potential investors. The aim will be to remove perceived difficulties in doing business in India, including fears about undue regulatory burden or regulatory over-reach”, he said. Indian firms, especially PSUs that have large cash balances, will be encouraged to restart investment. Proposals pending with the FIPB will be processed.

Seeking to assure investors who have been shying away from India, the minister conveyed a message, “Clarity in tax laws, a stable tax regime, a nonadversarial tax administration, a fair mechanism for dispute resolution, and an independent judiciary will provide great assurance to investors. We’ll take corrective measures wherever necessary”, he said.

On the prickly issue of retrospective taxation, Chidambaram announced a review of tax provisions that have a retrospective effect in order to find fair and reasonable solutions to pending as well as likely disputes between the tax departments and the assessees concerned.

The government is also working on reviving financial instruments and reducing the lure of gold. Since, mutual funds and the insurance sector have turned sluggish a number of decisions will be announced in the next few weeks,.

The government will announce steps to boost growth in manufacturing and exports, which have shown negative trend in recent months. There will be also a big push to speed up implementation of projects that are under construction.

Chidambaram also announced sectors under stress like petroleum, electricity and textiles would be taken up to find practical solutions to the problems that are impeding higher production.

Chandigarh, August 6
Punjab will soon get a software technology centre at Ropar and an incubation centre at Amritsar. The state government will be giving land free of cost for these projects.

Announcing the setting up of the two projects in Punjab, Communications & IT and HRD Minister Kapil Sibal, said he software technology centre will be set up on 12.5 acres of land in association with National Institute of Electronics and Information Technology (NIELIT). The department of electronics has approved the Rs 55 crore investment for the centre.

Sibal has also conceded to the demand of the state government for setting up a second incubation centre for the IT industry at Amritsar.

The minister was in town to lay the foundation centre of an incubation centre being set up by Software Technology Park of India in Mohali. This centre will have a built up area of 1.40 lakh square feet and will be set up at accost of Rs 55 crore. He said the government was in the process of setting up the national optic fibre network that would enable it to connect over 250,000 gram panchayats and provide them all citizens services online.

“Most are on board for this project and have given the right of way to the central government. Punjab, too, has promised to give us the right of way for laying the network,” he said.

Rejecting the charge of “policy paralysis”, Sibal said the UPA government had taken “very big decisions” and brought “path breaking reforms” but lamented that information regarding these decisions and reforms do not reach people.

“The way this government took decisions in the field of education, IT or telecom sector, has not happened in the last 60 years. The problem is that information regarding these decisions does not reach people,” Sibal said. He also rejected the charge of non-Congress party states that the central government was giving “stepmotherly” treatment to them.

Speaking on the occasion, Punjab Chief Minister, Parkash Singh Badal said the incubation centre at Mohali would make a comprehensive cluster impact on the state governments efforts towards making Punjab the next IT hub of the country

“This would eventually facilitate software solutions expansion by providing a large number of small units with space at affordable rates and other benefits of infrastructure facilities such as lease line connections, computers, software, manpower and guidance,” he said.

Badal spelt out the strides made by Punjab in expansion of the IT industry in the state. He said exports from the region had seen a meteoric rise with those of information technology/IT enabled services rising from just Rs 8 crore in 1998 to over Rs 1,000 crore now.

“Software Technology Park of India has so far registered about 170 units in the region as software exporters. The STPI in Mohali has also created new job opportunities for nearly 5,000 software professionals”, he added.

Software exports from the Software Technology Park of India at Mohali have shown a phenomenal increase — from Rs 1,565 crore in fiscal 2010-11 to Rs 1,900 crore in FY2011-12. 

Bangalore, August 6
Cognizant Technology Solutions Corp reported a better-than-expected quarterly profit on increased demand for its outsourcing services, and the information technology services provider raised its full-year adjusted profit forecast.

Revenue for the current quarter rose to $1.795 billion, up 4.9% sequentially and 20.9% from a year-ago quarter.

The information technology services provider's net income rose to $251.9 million, or 82 cents per share, for the second quarter from $208 million, or 67 cents per share, a year earlier.

The company now expects full-year adjusted earnings of at least $3.64 per share, up from its previous forecast of $3.62 per share. It reaffirmed its revenue forecast of at least $7.34 billion. The company's net headcount addition for the quarter was approximately 4,700.

The outlook for IT services companies has been mixed at best. Indian outsourcing heavyweights Infosys Ltd and Wipro Ltd had forecast weak sales, citing slowing global outsourcing spend, while others like Capgemini raised growth targets.

Excluding items, the firm, which also competes with Accenture Plc and Computer Sciences Corp, earned 88 cents per share. Commenting on the results, CEO Francisco D'Souza said: "Clients continue to turn to Cognizant to help reinvent their business models in the face of secular industry changes, evolving demographics, and a new stack of social, mobile, analytics”. — Agencies

New Delhi, August 6
Steel Authority of India Ltd (SAIL), the country's largest domestic steel producer, reported on Monday an unexpected 18 percent drop in quarterly profit, weighed down by high input costs, large foreign exchange losses and sluggish sales.

India’s steel consumption has waned in recent quarters after growing in double-digits over the past few years as Asia's third-largest economy slows. The strong growth previously has pushed local firms to boost capacity and drawn global steelmakers to set up base in the country.

State-owned SAIL said its net profit in April-June, its fiscal first quarter, fell to Rs 6.96 billion from Rs 8.48 billion a year earlier. A Reuters poll of brokerages had estimated on average net profit of Rs 9.83 billion for the quarter. Net sales slipped to Rs 106.4 billion from Rs 108.3 billion a year earlier.

SAIL shares lost ground after the news, giving up most of the gains earlier in the day. The stock closed at Rs 85.40, up 0.9% but had risen to as much as Rs 87.35 early in trade on Monday.

Steel prices are expected to remain stable for the next quarter, although input costs are still at an unsustainable level, SAIL said.

"Especially with the sluggish market conditions globally, this level of coal prices, input prices cannot be sustained by the steel industry," SAIL chairman C.S. Verma told reporters after announcing the results.

WEAKER RUPEE HITS: SAIL said it incurred a foreign exchange loss of Rs 2.57 billion in Q1, mainly on account of the sharply weaker rupee. The currency had slipped 8.5% against the dollar, during the quarter. "These are really sluggish market conditions (globally)...we can’t remain insulated from the happenings of the European and the US markets," Verma said. — Reuters

Mumbai, August 6
Traders are placing fewer orders as prices of gold breached the Rs 30,000 per ten grams mark yet again on Monday. The trade is expecting a slowing economy and poor monsoon to dampen demand for the yellow metal during the current festive season.

"We don’t expect business to be great this year even during the festive season when demand is at its peak," says Abhishek Jain, a jeweller at Mumbai's Zaveri Bazaar.

Gold prices which had fallen last month again breached the Rs 30,000 mark following strong global demand. Gold for October delivery on the MCX hit a high of Rs 30,004 before falling to Rs 29,982 per 10 grams later in the day.

Information available from the All India Gem and Jewellers Federation indicates traders expect a sharp fall in gold buying this year due to weak monsoon rainfall.