New Delhi, August 17
The Prime Minister's Economic Advisory Panel on Friday pegged GDP growth for the current financial year at 6.7 per cent, much higher than what had been projected by several brokerages and rating agencies.

Reacting to the PMEAC estimate, industry body, FICCI said growth target of 6.7% is on the higher side. “GDP growth may actually be lower at 6%, said chamber president R.V. Kanoria.

The apex industry body pointed out in fiscal 2012 the PMEAC’s projection was significantly higher at 7.1% as compared to the actual number of 6.5%. Several brokerages have put the GDP target at between 5.3-5.5% for the year.

Releasing the economic outlook for 2012-13, PMEAC chairman C. Rangarajan added inflation would remain high during the fiscal at 6.5 to 7 per cent, mainly due to poor monsoon which will pull down the agriculture growth rate to 0.5% from 2.8% last year.

The containment of the government’s fiscal imbalance rests on our management of the subsidy bill, especially that on refined petroleum products and by raising the tax-GDP ratio, it said.

Recommending reforms for the economy, the PMEAC called for suitable increase in the price of diesel in one or more steps, and a cap on the level of consumption of subsidized domestic LPG close to what is currently being consumed by poorer households at four cylinders.

Rangarajan asked the government to open up multibrand retail ad and civil aviation to foreign investment. He also recommended curbs on gold imports and improvement in regulatory regime to encourage investment in mutual funds and insurance.

The PMEAC also said for projects costing in excess of a minimum threshold, say Rs 5,000 crore, a cabinet committee comprising ministers in charge of the departments concerned should take an integrated view. It added there was need to specifically focus and address the apprehensions that have been occasioned by perceptions of arbitrary actions on tax and other fronts.

On reforms in agriculture sector, it emphasized the need for focused attention on liberalizing tenancy arrangements, reforming domestic markets for agricultural produce and, reducing input subsidies.

Reuters adds: Advisers to the prime minister issued a stern warning to the government on the need to rein in the country's fiscal and current account deficits to avoid the risk of a credit ratings downgrade to junk status.However, economists doubted the ideas would be turned to action anytime soon.

Global agencies Fitch Ratings and Standard & Poor's Ratings Services this year warned that India may become the first of the BRICS group of large emerging markets to lose its investment grade rating if it did not control the fiscal and current account deficits.

New Delhi, August 17
Finance Minister P. Chidambaram said the government would shortly take a decision on including mutual fund equity schemes under the purview of the newly announced scheme with tax breaks for first time investors, Rajiv Gandhi Equity Savings Scheme.

In a statement issued Friday, Chidambaram asked the Securities & Exchange Board of India to convene a board meeting early next month to announce more measures to boost savings in financial instruments.

Expressing satisfaction over wide-ranging reforms for mutual funds and other segments announced Thursday by the market regulator, he said he had requested SEBI chairman U.K. Sinha to look into a number of other suggestions for the benefit of investors.

"The examination by the government and SEBI is likely to be completed in the next two weeks. I’ve requested Sinha to schedule another meeting of the (SEBI) board in early September when some more decisions can be taken on the suggestions that are under examination," he said.

Chidambaram said the SEBI measures "will stimulate financial savings among households as well as give a fillip to the mutual fund industry. More and more households should be encouraged to save in financial instruments rather than in gold".

The minister added he expected the government to take a decision shortly on SEBI's recommendation for providing tax benefits to equity mutual fund investors under the proposed Rajiv Gandhi Equity Savings Scheme. “I’ve asked the department of economic affairs’ capital markets division to examine SEBI’s recommendations and I expect it’d be possible to take a decision shortly”, he added.

SEBI yesterday announced steps for expanding the reach of IPOs and MFs across the country through measures like electronic public offers.

Chandigarh, August 17
Industry body Confederation of Indian Industry has predicted power shortages are likely to continue, even as most north Indian states look to become base load power surplus in another four years.

Releasing a report on the power scenario in the northern region, CII said only Delhi and Rajasthan are expected to meet the power demand in 2016. The report highlights a significant gap between demand and supply in almost all north Indian states, noting Uttar Pradesh has the highest quantum of deficit while Haryana and Jammu & Kashmir have witnessed a rise in energy deficit.

The report attempts to capture the impact of the reforms process on the power sector’s performance in the northern region. It brought out some contradictions in the system that needed attention.

Surprisingly, the outlook for the region appears positive in base load energy availability, with six of the states expected to become energy surplus in another four years. However, Uttar Pradesh, Jammu & Kashmir and Uttarakhand will continue to remain power deficit even in 2016-17. But there is a caveat for the power surplus scenario — if all plants under execution are commissioned by the end of the 12th Plan.

A mix of thermal and large hydro sources continued to dominate the installed capacity trends across states. However, the role of nuclear energy in the region is growing, with Rajasthan receiving the highest share of capacity addition (6.7%) as a percentage of the total capacity in 2010-11.

The CII report suggests a need to adopt a judicious mix of base load coal plants and nuclear plants with pumped storage hydro and decentralized quick start stop flexible gas-based peaking plants, along with accelerated exploitation of renewable energy such as solar and wind.

Chandigarh, August 17
The dollar’s rise against the rupee might have played spoilsport for the consumer electronics industry, with manufacturers being forced to jack up prices by almost 10% last year.

After facing flat growth the industry is now counting on the festive season to boost sales. Companies are now coming up with innovative offers to lure customers and make up for lost ground. From offering easy finance options and freebies to new product models, they are going the extra mile to woo buyers.

Industry sources said firms are facing flat growth, mainly because of price escalation in white goods. Unable to absorb the higher input costs manufacturers passed on the hike to consumers. In the past three months alone, prices of almost all consumer electronic goods have risen by 2-3%.

Samsung India VP (home appliances) Mahesh Krishnan said the firm had set a 25% growth target for this year. “Almost 40% of sales are in the festive season. We’re coming up with many innovative finance schemes”, he added.

LG Electronics too has come up with attractive finance schemes. Company branch manager Surinder Sachdeva said LG has also come up with various new product models.