Paris, September 13
The slowdown in leading emerging market economies China, India and Russia will persist over the coming quarters, while the outlook for the eurozone remains weak, the Organization for Economic Cooperation & Development said on Thursday.

The Paris-based economic think-tank said its composite leading indicator for China held steady in July from June at 99.1, a rate consistent with an economic slowdown and below the long-term average of 100.

The indicator for India also remained stable but at the even lower level of 98.1, while Russia's index dropped to 99.1, from 99.6 in June. The Chinese economy picked up but output in the eurozone, Japan and South Korea slowed sharply. Britain and Italy also showed shrinking output data. Some emerging economies showed relatively resilient growth, the data showed.

The easing for the G20 (Group of 20) area marks the third quarter running of slowing growth but "masks diverging patterns," with a moderate slowing in the United States and contraction in the eurozone, OECD said.

Growth in China picked up to 1.8% from 1.6% and in Brazil to 0.4% from 0.1%, in Indonesia to 1.6% from 1.4% and in South Africa to 0.8% from 0.7%. In Japan growth fell to 0.2% from 1.3% and in South Korea to 0.3% from 0.9% output. In Australia, output also slowed sharply to 0.6% from 1.4%.

The slowdown was less marked in the United States where activity growth eased to 0.4% from 0.5%, in Germany to 0.3% from 0.5% and in India 0.8% from 1.1%.

Developed countries will also continue to struggle in the coming quarters, said the OECD, which last week cut its growth forecasts for most countries in the Group of Seven developed economies, saying that the eurozone's debt crisis had spread to the region's core.

"Composite leading indicators, designed to anticipate turning points in economic activity relative to trend, show that the loss of momentum is likely to persist in the coming quarters in most major OECD and non-OECD economies," the OECD said a statement.

The indicator for the United States dipped to 100.8 from 100.9. — Reuters/AFP

New Delhi, September 13
India's annual exports fell 9.7 percent to $22.3 billion in August, while imports fell about 5.1 percent to $38 billion, leaving a trade deficit of $15.7 billion, a trade ministry official told reporters on Thursday, citing provisional trade data.

After strong growth for much of last year, India's overseas sales have slumped, with officials blaming weak demand in major export destinations like the US and Europe.

Paltry exports have added to India's economic gloom, with growth close to its weakest levels in three years.

Exports have fallen from year-ago levels in five of the last six months. Exports between April and August were $120 billion. — Reuters

New Delhi, September 13
Worried over the declining growth in manufacturing, the central government has urged state governments to create land banks for setting up manufacturing zones for boosting industrial production and creating employment.

At a meeting with state chief and principal industry secretaries on Thursday, Commerce & Industry Minister Anand Sharma said states would have to play a major role in acquiring land to set up industrial townships.

Sharma also emphasized the need for availability of land for industrial purpose and strongly advocated inclusion of NMIZs and DMIC and other industrial corridors such as the Bangalore-Chennai and Eastern Corridors in the definition of public purpose in the Land Bill. He said state governments were advised in advance to create land banks for the policy.

Referring to the social dimension of manufacturing policy, Sharma said neither agriculture nor services will be able to grow at such a rapid pace to create newer job opportunities for the youth.

The manufacturing sector alone holds this potential to create skilled jobs for the rural youth. The national manufacturing policy announced last October aims to raise the share of manufacturing to 25% in GDP and creating 100 million productive jobs in this sector within a decade.

Sharma emphasized without increasing the share of manufacturing sector in the economy it would be difficult to create jobs and attract investments in the country. He explained the incentives in the national manufacturing policy can be availed of by any industrial cluster which is based on a model of self-regulation through a special purpose vehicle. This should address the concerns of the states that are not in position to earmark the land for manufacturing & investment zones.

The government has already notified nine such townships along the Delhi-Mumbai Industrial Corridor with a minimum land area of 5,000 hectares after a strong demand from the state governments concerned.

Cabinet secretary Ajit Seth asked the officials to accelerate clearance for the industrial projects. 

New Delhi, September 13
The Cabinet Committee on Economic Affairs is likely to consider the proposal to divest stake in five public sector firms including Nalco, Hindustan Copper, MMTC, Oil India and Neyveli Lignite on Friday.

Shares in these companies gained as the markets welcomed the proposal. Nalco closed up 2.11% at Rs 53.30, MMTC was up 0.83% at Rs 779.20 and Hindustan Copper was up 1.44% at Rs 267.70. Oil India was down 0.69% and Neyveli Lignite up 1.65% at Rs 80.

The disinvestment move is to mop up revenues and bridge the fiscal deficit which has been running very high. The government has a target of Rs 30000 crore in proceeds to be mobilized through the route. However, market conditions will play an important role in determining whether there is appetite for PSU issues.

The government had cleared divestment in SAIL but the issue has not gone through owing to stock market conditions. With the threat of a ratings downgrade looming, the government is moving quickly to send some investor friendly signals. The last stake sale of ONGC through the auction route turned out to be a fiasco.

The department of disinvestment has proposed sale of 10-15% stake in these public sector units.

Dubai, September 13
Low-cost airline SpiceJet has held "preliminary discussions" with a Gulf airline for potential investment in the Indian budget carrier, a news report has said.

"There have been preliminary discussions to check in principle whether there is interest on both sides and the confirmation there would be 'yes there is'," SpiceJet CEO Neil Mills told Arabian Business.

Any such tie-up depends on a policy shift in India's aviation industry, which currently prohibits foreign direct investments in the sector.

The Indian cabinet will consider a proposal on Friday to allow foreign airlines to buy stakes in local carriers, moving forward with a much-delayed reform that could revitalize debt-ridden domestic carriers.

Under current rules, foreign airlines are barred from buying stakes in domestic carriers, although foreign investors are allowed to hold a cumulative 49%. If the proposal is approved, foreign airlines would be allowed to buy similar sized shareholdings.

Mills said as the framework for FDI in Indian aviation is not yet in place, overseas carriers were reluctant to enter more formal negotiations. "(Talks have) been on a preliminary basis, because they've quite rightly said what's the point in investing money in due diligence if the rule to enable (an investment) doesn't even exist," Mills was quoted as saying.

Mills, however, declined to reveal whether UAE-based Etihad Airways, which owns minority stakes in airberlin and Virgin Australia, and Qatar Airways were among the interested parties.

SpiceJet has a network of 41 destinations across South Asia and the Middle East.

Any future tie-up, Mills said, would provide reciprocal benefits. "We've got a good network and we're carrying 36,000 people a day (and) about one million people a month now, so we've got good feed and good catchment," he said.

A partnership with an international carrier would give SpiceJet access to economies of scale on procurement contracts and long-haul options for its passengers, he added. — Reuters

Chandigarh, September 13
Small and medium enterprises need to be nurtured and supported with favourable policies by the government. For this, easy and cheap credit should be made available to the MSMEs.

This was stated by Raman Saluja, chairman, regional committee on MSMEs, while speaking at a seminar on 'Sustainable development of micro, small & medium enterprises’ organized by CII here. He said if the provision of "payment within 45 days of sale" under the MSMEs Act is implemented in toto, most problems that MSMEs face because of poor credit availability would be solved. ‘They could then use the money they get from sales within 45 days and recycle it to meet their requirements,” he said.

State Bank of Patiala MD A.K. Gupta said banks, financial institutions and NBFCs should come forward and take responsibility to help the MSMEs get easy and cheap credit, within strict timelines and enable schemes for the growth of the sector. “MSMEs contribute 45% of India’s total manufactured output, 40% of India’s exports, 9% to the GDP, besides providing large scale employment.,”he said.

Aman Chugh, advisor, capital markets group, ICAI, apprised the industry about the various ways in which they could get credit — seed capital, ECBs, etc.