The Tribune, Chandigarh, India

	S&P lowers India's growth forecast to 5.5% for 2012 Tribune News Service New Delhi, September 24 Global rating agency Standard and Poor's (S&P) has lowered the India’s growth forecast to 5.5 per cent for this fiscal from 6.5 per cent due to the global slowdown, weak monsoon and infrastructure problems. According to the S&P report, the Asia-Pacific region is feeling the pressure of ongoing global economic uncertainty and it has lowered India’s growth forecast by one percentage point to 5.5 per cent for this fiscal. Lack of monsoon rains has affected India, "for which agriculture still forms a substantial part of the economy", the report said. Moreover, "The global investors have become more critical of India's policy and infrastructure shortcomings which were recently highlighted by the power outage in early August that affected 20 of India's 28 states," the report added. S&P said Asia Pacific economies are witnessing cautious growth conditions and any worsening of the economic conditions in the Eurozone will increase contagion risk for the region as these economies are "sensitive" to capital flows and trade. "A trifecta featuring a slowdown in China, ongoing troubles in the Eurozone, and a weaker recovery in the US leads us to forecast slower economic growth rates for Asia Pacific," S&P said. According to S&P credit analyst Andrew Palmer, "Any worsening of the economic conditions in the Eurozone will increase contagion risk for Asia Pacific, given the region's--particularly the open economies'--sensitivity to capital flows and trade." S&P has cut economic growth rates for Asia Pacific including China, Japan, South Korea, Singapore and Taiwan. "We have lowered our base case forecasts of 2012 real GDP growth by about half a percentage point for China to 7.5%; Japan to 2%; Korea to 2.5 %; Singapore to 2.1% and Taiwan to 1.9%," said the report. Rangarajan dimisses forecast, sticks to 6.7% growth The country's growth rate is expected to pick up in the second half of this fiscal and reach 6.7 per cent for entire 2012-13, Prime Minister's Economic Advisory Council chairman C Rangarajan said today. Stating that there were indications to this effect, he said the monsoon had turned out to be better than predictions made a few months ago. "Our own forecast is that the growth rate of economy in the current (financial) year will be 6.7 per cent, which is a better shape than last year. I think, the growth will pick up in the second half of this year. Enough indications are there," Rangarajan said. — PTI
	Gold demand improves as strong rupee knocks prices Mumbai, September 24 Gold demand in India, the world's top consumer, rose on Monday after prices fell to their lowest level in more than two weeks following a drop in the world market and on a strong rupee, luring jewellers replenishing inventory for festivals. The most-traded gold contract for October delivery was down 0.58 per cent at Rs 31,324 per 10 grams, after falling to Rs 31,272 earlier in the day. It had hit a record high of Rs 32,421 earlier this month. "The sharp rise in the rupee in a week is supporting demand. Jewellers and investors are back in the market," said a Mumbai-based dealer with a private bank. "Demand will rise further, if prices fall below Rs 31,000." Spot gold prices in the world market pulled back from a near seven-month high on Monday, but a recent spate of stimulus measures from central banks that has buoyed bullion is expected to continue supporting prices. The rupee, which determines the landed cost of the dollar-quoted yellow metal, rose to a four-month high on Monday. Gold demand traditionally rises in the last quarter of the year in India and China, the world's top two gold consumers, as consumers buy gold for festival celebrations and weddings that typically take place during this season. "The buying interest is much higher than last week, mostly because the rupee has appreciated substantially," said a dealer at a private-sector bank in Mumbai, adding that physical demand might be sustained if prices held below Rs 32,000. India will celebrate Dussehra in October and Diwali in November, when buying gold is considered auspicious.Gold demand traditionally rises in the last quarter of the year in India and China, the world's top two gold consumers, as consumers buy gold for festival celebrations and weddings that typically take place during this season. — Reuters
	Rupee still up 20 paise against dollar Mumbai, September 24 The rupee erased some early gains today, but was still up 20 paise at 53.25 a dollar on persistent selling of the American currency by banks and exporters amid sustained foreign capital inflows. Weakness of dollar in the overseas market also boosted the rupee value, a forex dealer said. In New York market, the dollar had slipped against the euro on Friday. Back home, the rupee resumed at at 53.44 a dollar as against the last weekend's level of 53.45. It firmed further to 53.05 before quoting at 53.25, at 1100 hrs. The domestic currency has moved between 53.05 and 53.52 per dollar during the morning deals. Meanwhile, the BSE 30-stock index, Sensex, was up 23.68 points or 0.13 per cent at 18,776.51 at 1100 hrs. — PTI
	Govt looking at relaxing Navratna norms for PSUs New Delhi, September 24 The government is working on a proposal to relax guidelines for granting the coveted Navratna status to public sector undertakings (PSUs). This is aimed at enhancing the valuation of such companies and help the government obtain better price at the time of any stake sale. "The department of public enterprises has formed a panel to relook into the current parameters which a PSU needs to fulfill to be considered for grant of the Navratna status," an official said. The committee has already met several times and is soon likely to finalise the guidelines, he said, adding, relaxation of norms is desirable to enable more PSUs to obtain the tag. "The department of disinvestment (DoD) has made a case that one of the parameters to qualify for Navratna status is earning per share (EPS) and this needs to be modified as it is a disincentive for PSUs," the official said. The department is also of the same view as the DoD on EPS. "To avoid any conflict, we are planning to bring in a substitute for EPS," the official said. To qualify for the Navratna status, a CPSE having a Miniratna Category-1 status should have a composite score of 60 or above out of 100 marks based on its performance during the last three years on the six identified parameters. These parameters include net profit to net worth (25 marks), earnings per share (10 marks), manpower cost to cost of production or services (15 marks) and gross profit out of turnover (15 marks). On getting the Navratna status, the concerned CPSE board would not be required to take the government's permission for investments up to Rs 1,000 crore in a joint venture project or wholly-owned subsidiary. Further, the official said, the move would also help the government to get a better price at the time of its stake sale in any CPSE. Last month, Finance Minister P Chidambaram had asked officials to expedite the process of disinvestment to enable state-owned companies hit stock markets in time and help government achieve the target of Rs 30,000 crore in 2012-13. On September 14, the Cabinet Committee on Economic Affairs (CCEA) approved the minority stake sale in four PSUs -- NALCO, MMTC, Hindustan Copper, NMDC -- which is likely to fetch around Rs 15,000 crore to the exchequer. — PTI
	Haven’t heard from Kingfisher after FDI liberalisation, says SBI Mumbai, September 24 Kingfisher lenders today said the debt-ridden carrier has not informed them of anything concrete after 49% FDI was allowed in airlines on September 14. However, an SBI official said lenders are likely to meet the Kingfisher management soon. This will be the first meeting after the government allowed 49% FDI in the domestic airlines. "We have heard nothing concrete from them after the policy relaxation on FDI. Newspaper reports say they are in talks (with foreign airlines to divest stake). I am sure Mallya will come to us when he has something tangible," SBI chairman Pratip Chaudhuri told reporters here. Earlier, the 17-member bankers consortium had met here and had asked airline promoter Vijay Mallya to personally make a presentation on a turnaround plan. SBI has the largest exposure of Rs 1,500 crore to the airline which has not been serviced since this January. Chaudhuri further said he expects the next meeting in the first half of October. "The brand Kingfisher is very important for Mallya and the talk of selling non-core assets like Mangalore Refineries is welcome," Chaudhuri said, adding "Mallya is keen to keep control of Kingfisher...So the sense we have from him is that he is willing to do everything possible, including big sacrifices." However, an SBI official said the meeting could be early as in the next couple of days. The airline, which has not reported a single quarter of profit since its launch in May 2005, is sitting on a debt pile of around 15,000 crore and accumulated losses and is operating a skeletal fleet of under 10 aircraft. — PTI
	SBI hints at more lending rate cuts Mumbai, September 24 State Bank of India today said though there is little room for further reduction in the base rate, it could cut lending rates in select categories, as it recently did for the SMEs, home and auto loans. Given that the bank has already reduced the base rate, another round of rate cut may be difficult but the bank may go for reducing rates and thereby cutting spreads in select loan categories, SBI chairman Pratip Chaudhuri told reporters here. The bank had slashed its base rate by 0.25% to 9.75% last Tuesday in a bid to transmit the benefit of the 0.25% reduction in the cash reserve ratio by the Reserve Bank of India (RBI). Chaudhuri said with the reduction in base rate, the bank was leading the path of interest rate reduction in the system, in sync with the wishes of the central bank. — PTI
	‘India to get $2 billion per year inflows on cuts in tax on foreign borrowings’ New Delhi, September 24 India is likely to attract additional inflow of $2 billion a year in the medium term, after the government has cut the withholding tax on overseas borrowings to 5% from 20%, says a report. According to Barclays Capital, the government's decision to lower the withholding tax on foreign borrowings could produce an additional $2 billion per year inflow in the medium term - a material sum against annual balance of payments forecasts (around $15 billion deficit). However, the bigger and immediate impact of such kind of initiative would be the revival of the investor sentiment towards India, as the move will be seen as an indication of the government's resolve to continue to take positive steps to revive investor sentiment, Barclays Capital said in a note. Continuing with the slew of reforms initiated by the UPA government, finance minister P Chidambaram last week cut the withholding tax on overseas borrowings to 5% from 20% and approved the Rajiv Gandhi Equity Scheme to attract more investment and supress demand for gold. "While the political stalemate continues, the recent developments indicate that the government is unlikely to face near term threats, given the support of the Samajwadi Party," Barclays Capital said. The report further noted that the government is "unlikely" to completely rollback its recent measures. While announcing the reduction of withholding tax on overseas borrowings, Chidambaram had said that appropriate amendments would be made in the Income Tax Act, 1961, under which the interest income of a non-resident investor will be taxed at reduced rate of 5% instead of 20%. The reduced tax will apply to funds borrowed between July 1, 2012 and June 30, 2015, Chidambaram had said, adding this would enable domestic companies to access cheaper funds from abroad as the tax on overseas borrowings has been lowered. "It is to encourage overseas borrowings. Interest rates are low abroad and these low cost funds can come to India," Chidambaram had said. According to Barclays Capital, the cut in withholding tax could reduce the cost of external borrowing by 75-100 basis points for companies, assuming current borrowing costs at Libor + 500 basis points). — PTI
	iPhone 5 sales up 5 million in first weekend New York, September 24 Apple said Monday sales of its new iPhone 5 topped five million in the launch weekend and that demand has "exceeded the initial supply," forcing some customers to wait. "Demand for iPhone 5 has been incredible and we are working hard to get an iPhone 5 into the hands of every customer who wants one as quickly as possible," said Tim Cook, Apple's chief executive. Apple opened sales Friday of the latest version of the iconic smartphone, leading to long queues in the nine launch countries. The phone will be available in 22 more countries by the end of the week and 100 countries by the year-end. Cook said "while we have sold out of our initial supply, stores continue to receive iPhone 5 shipments regularly and customers can continue to order online and receive an estimated delivery date. "We appreciate everyone's patience and are working hard to build enough iPhone 5s for everyone," he said in a statement. Apple said that the new mobile operating system iOS 6, had been downloaded for "more than 100 million iOS devices" since it was launched last week. Analysts expect record-breaking sales of the iPhone 5, which is lighter, slimmer and more powerful than its predecessors, even though the phone has drawn only lukewarm reviews and has drawn complaints for its glitch-prone maps programme. — AFP Apple supplier Foxconn’s plant shut down Taiwan's Foxconn Technology Group, which assembles Apple's iPhones and makes components for top global electronics companies, closed a plant in northern China on Monday after about 2,000 workers staged a riot at a company dormitory. It was not immediately clear how long the shutdown would last at the plant, which employs about 79,000 people in the Shanxi provincial capital, while police and company officials investigate the cause of the disturbance. "The plant is closed today for investigation," Foxconn spokesman Louis Woo told Reuters, but a company employee contacted by phone said the closure could last two or three days. — Taipei, Reuters
	FDI in July up 60 pc to $1.76 billion New Delhi, September 24 After declining for three consecutive months, foreign direct investment (FDI) in India increased by about 60 per cent to $1.76 billion in July. In July 2011, the country had received foreign investment worth $1.10 billion. However, according to latest data of the Reserve Bank of India (RBI), during April-July 2012 the FDI inflows dipped to $6.18 billion from $14.6 billion in the same period last year. When asked about the reason for increase in FDI in July, an official in the Commerce and Industry Ministry said these numbers are fluctuating in nature. "But the recent decisions like allowing foreign direct investment in multi-brand retail and civil aviation would help in boosting investments in the country," the official added. The Centre has also allowed foreign airlines to buy 49 per cent stake in the domestic carriers, besides permitting 49 per cent FDI in power exchanges. It has also increased foreign equity cap to 74 per cent in services like teleports, DTH, Multi System Operators (MSOs) operating at national, state or district level which were involved in digitisation and mobile TV and mobile TV. Foreign inflows in April, May and June dipped to $1.85 billion, $1.32 billion and $1.24 billion compared to $3.12 billion, $4.66 billion and $$5.65 billion respectively, in the a year-ago period. India received maximum FDI from Mauritius, the Netherlands, the UK, Singapore and Cyprus. — PTI
	Cairn Energy selling 8% stake in Cairn India New Delhi, September 24 Cairn Energy is selling an 8 per cent stake in Cairn India for up to $940 million, a source with direct knowledge of the matter said, in a second such deal in three months to pare holding in its former Indian unit. Cairn Energy last year sold a controlling stake in Cairn India to London-listed miner Vedanta Resources in an $8.7 billion deal. The British oil firm owned nearly 22% of the Indian company as of March 31. In June, Cairn Energy sold 3.5% of Cairn India to raise about $360 million. Cairn Energy held 18.3% of Cairn India as of end-June, stock exchange data showed. After its latest share offering, its stake will fall to about 10 per cent. Cairn Energy on Monday launched an offering of nearly 153 million shares of Cairn India for between Rs 317.90 and Rs 328.30 per share, said the source, who asked not to be identified as he was not authorised to speak to the media. The range represents a discount of 5-8.7% discount from Cairn India's closing price of 345.55 rupees. Citigroup is the sole bookrunner for the transaction, the source said. — Reuters
	Honda to raise prices of Brio, Jazz, City cars Mumbai, September 24 Honda Motor Co will raise the price of its three most popular cars in India by as much as 2.6 per cent from October 1 due to rising input costs, high inflation and the impact of a recent hike in diesel prices, the Japanese carmaker's Indian unit said. The prices of Honda's Brio, Jazz and City cars will be increased by 0.2 to 2.6 per cent, the company said in a statement on Monday, without providing further details. India's monthly car sales fell in August for the first time in ten months, as a gloomy economic outlook and high interest rates dampened demand. — Reuters