B U S I N E S S

Fiscal deficit soars, FM says 5.3% target challenging but doable
New Delhi, October 31
Finance Minister P Chidambaram has sought the support of all political parties in strengthening the government’s efforts to contain both the fiscal deficit and current account deficit.

Banks’ advances and deposits slow as weak economy hits demand
Mumbai, October 31
Indian banks' advances and deposits grew at a slower pace so far this fiscal year that started in April, compared with the similar period last year, as a sluggish economy dampened demand for credit.

Airtel opens first-of-its-kind network experience centre
Manesar, Haryana, October 31
Communications & IT Minister Kapil Sibal has exhorted the corporate sector, espe IT and telecom majors, to focus their energies on manufacturing processes. Sibal, who inaugurated Bharti Airtel’s Network Experience Centre (NEC) here on Wednesday, said Indian IT and telecom firms had fared pretty well in the service sector, and it was high time that they laid emphasis on the manufacturing side as well.

Barclays hit by fresh US investigations
London, October 31
Barclays, already rocked by an interest rate rigging scandal, unveiled two new U.S. regulatory investigations into the bank's financial probity on Wednesday and said its profit was hit by charges for misselling insurance.

Cairn India maiden dividend
New Delhi, October 31
Cairn India, majority owned by billionaire Anil Agarwal's Vedanta Group, today declared its maiden dividend of Rs 5 per share. The interim cash dividend of Rs 5 on a face value of Rs 10 per share "is proposed to be paid on or before November 15, 2012, to shareholders on record as on November 6, 2012," the company said in a press statement here.

Hosiery exports to US hit by Hurricane Sandy
Ludhiana, October 31
Faced with a slump in trading volumes, local hosiery exporters are a worried lot as they brace for the impact of Hurricane Sandy that is wreaking havoc across the US East Coast.

CPI for industrial workers up 1 point at 9.14% in Sept
New Delhi, October 31
India's consumer price index (CPI) for industrial workers was at 9.14% in September, lower than an annual rise of 10.31% in August, government data showed on Wednesday. The index for industrial workers rose by 1 point from the previous month to 215 in September, data released by the labour ministry showed.

Fiscal deficit soars, FM says 5.3% target challenging but doable
Tribune News Service

New Delhi, October 31
Finance Minister P Chidambaram has sought the support of all political parties in strengthening the government’s efforts to contain both the fiscal deficit and current account deficit.

Addressing the consultative committee of the finance ministry, Chidambaram said the debt of a country must be sustainable and should be within the limits. "No country can live beyond its means", he said. Countries that have accumulated unsustainable levels of debt are facing economic and financial problems, he added.

He said the government was trying to maximize revenue collection and contain expenditure to restrict fiscal deficit to 5.3% of GDP in the current fiscal. He added best efforts would be made to contain fiscal deficit at 5.3%, even though the Kelkar committee had said that it could be 6.1% in line with current economic trends .

Chidambaram further said serious efforts would also be made to bridge the current account deficit estimated at US $70.3 billion by encouraging FDI and FII flows.

In this regard, he mentioned that capital inflows through FDI and FIIs are vital in meeting the current account deficit. He said FDI was not an option but an imperative, failing which the economy would have to rely on borrowings to meet the current account deficit.

The panel members, representing different political parties, gave various suggestions including fiscal consolidation, framing a debt and fiscal management policy and keeping the debt-GDP ratio at a low level.

FISCAL DEFICIT up 65.6% in April-SEPT

India's fiscal deficit during the April-September period rose to Rs 3.37 trillion (US $62.6 billion), or 65.6% of the full fiscal year 2012/13 target, government data showed on Wednesday. During the same period in the previous fiscal year, the deficit was 68% of the budget target. The net tax receipts during the April-September period stood at Rs 2.94 trillion and the total expenditure was about Rs 6.94 trillion. — Reuters

Banks’ advances and deposits slow as weak economy hits demand

Mumbai, October 31
Indian banks' advances and deposits grew at a slower pace so far this fiscal year that started in April, compared with the similar period last year, as a sluggish economy dampened demand for credit.

As of October 19, credit grew 2.6% to Rs 48,159.38 billion since the start of April, compared with a growth of 4.9% in the year-ago period, data from the Reserve Bank of India showed on Wednesday.

Banks' deposit growth was 4.8% at Rs 63,886.09 billion, lower than 5.5% in the last fiscal year. On Tuesday, the central bank cut its nonfood credit and deposit growth projection for 2012-13 by 1 percentage point each to 16% and 15%, respectively. It also cut banks' cash reserve ratio, or the share of deposits they have to maintain with the central bank in cash, by 25 basis points to 4.25%, to enhance liquidity in the banking sector.

Meanwhile, Reserve Bank governor D.Subbarao said Wednesday the cash reserve ratio cannot be presumed to be the preferred tool to address liquidity tightness in December. He was speaking to analysts a day after cutting the CRR. — Reuters

held-to-maturity limit may be cut

The Reserve Bank of India is considering cutting the held-to-maturity (HTM) ceiling, deputy governor Anand Sinha said Wednesday, referring to a category of debt that banks must hold until redemption but which can be reshuffled once a year. The limit is currently set at 25%, but traditionally has been aligned with the banks' statutory liquidity ratio — or the minimum investments in government bond and other approved securities - which was cut by 1% point to 23% in July and implemented in August.

Airtel opens first-of-its-kind network experience centre
Tribune News Service

Manesar, Haryana, October 31
Communications & IT Minister Kapil Sibal has exhorted the corporate sector, espe IT and telecom majors, to focus their energies on manufacturing processes. Sibal, who inaugarated Bharti Airtel’s Network Experience Centre (NEC) here on Wednesday, said Indian IT and telecom firms had fared pretty well in the service sector, and it was high time that they laid emphasis on the manufacturing side as well.

The NEC, the first-of-its-kind facility in the country, will monitor Airtel’s network performance across mobile, fixed-line, DSL broadband, DTH, M-Commerce, enterprise services, international cable systems and internet peering points from a single location.

The NEC houses one of the biggest video walls in the world with 3600 square-feet of solid state LED screen to monitor the company’s telecom network. Designed specifically to be used as a command centre in case of national emergencies and natural catastrophe, the earthquake proof facility also provides for a single control of command, and a fully redundant technology layout.

Terror attacks, floods damage 85 AIRTEL Nigeria cell sites

Terror attacks and floods in several parts of Nigeria have damaged 85 installation sites of Airtel Nigeria, part of India's telecom leader Bharti Airtel. The damage has affected operations of 234 sites across the regions where the terror attacks and flooding occurred, Airtel Nigeria's director of regulatory affairs & special projects Osondu Nwokoro said in Lagos on Tuesday. He said 32 sites were damaged by floods, affecting operations of 41 sites across the region, and 53 installation sites were impacted by terror attacks, hitting operations in 193 sites across northern Nigeria. He added the incidents have led to further loss of sites and fiber capacities. — PTI, Abuja

Barclays hit by fresh US investigations

London, October 31
Barclays, already rocked by an interest rate rigging scandal, unveiled two new U.S. regulatory investigations into the bank's financial probity on Wednesday and said its profit was hit by charges for misselling insurance.

Following investigations in the UK over its dealings with Qatari investors, Barclays said the Department of Justice and Securities and Exchange Commission were investigating whether its relationships with third parties who help it win or retain business are compliant with the US Foreign Corrupt Practices Act.

The bank is currently under investigation by Britain's financial regulator and fraud prosecutor into payments to Qatari investors after it raised billions of pounds from the Gulf state five years ago to save it from taking a taxpayer bailout.

The Financial Services Authority (FSA) is investigating the bank and four current and senior employees, including finance director Chris Lucas, to determine whether it made adequate disclosure of the fees it paid in a 2008 capital raising.

Barclays disclosed the FSA investigation when it released half-year results in July. The FSA probe relates to fees paid to the Qatar Investment Authority on deals in June and November 2008, when Barclays raised £11.5 billion.

Barclays declined to comment on whether the US probe was linked to the same transactions. It also said Wednesday that the US Federal Energy Regulatory Commission was investigating whether it manipulated power prices in the western United States from late 2006 until 2008. FERC could notify the bank of proposed penalties as early as Wednesday, it said. Barclays said it would "vigorously" defend this matter. — Reuters

Cairn India maiden dividend

New Delhi, October 31
Cairn India, majority owned by billionaire Anil Agarwal's Vedanta Group, today declared its maiden dividend of Rs 5 per share. The interim cash dividend of Rs 5 on a face value of Rs 10 per share "is proposed to be paid on or before November 15, 2012, to shareholders on record as on November 6, 2012," the company said in a press statement here.

For Cairn India, which had a net cash of Rs 12,442.7 crore as on September 30, this maiden dividend will entail a payout Rs 1,109 crore including the dividend distribution tax of Rs 155 crore.

The Vedanta Group, which holds 58.82% stake in Cairn India, will get Rs 561.35 crore from the dividend.

Cairn said it was now well positioned to grow by building a balanced portfolio of assets and resources.

"While deciding the quantum of payout, the twin objective of stable dividend payout and investment for growth has been kept in view by the board," the company’s statement said. — PTI

Hosiery exports to US hit by Hurricane Sandy
Manav Mander/TNS

Ludhiana, October 31
Faced with a slump in trading volumes, local hosiery exporters are a worried lot as they brace for the impact of Hurricane Sandy that is wreaking havoc across the US East Coast.

"The hurricane has become a cause of concern for us. My consignment is on its way and if it fails to reach its destination I’ll have to bear huge losses. I pray the hurricane subsides soon," said Balwinder Kumar, a hosiery exporter.

"Hurricane Sandy is threatening to hit the entire US East Coast and business activity there has virtually come to a halt. There will be downward pressure on the Indian markets as liquidity will remain low," added Badish Jindal, president of the Federation of Punjab Small Industries Association.

A senior treasury official said the rupee could depreciate further on account of the shutdown in the US.

"There’s also the possibility of some mismatches since balances in nostro bank accounts in the United States will be unknown for some time," added another exporter Subhash Jain. A nostro account is a bank account held in a foreign country by a domestic bank, to facilitate settlement of of forex and trade transactions.

CPI for industrial workers up 1 point at 9.14% in Sept

New Delhi, October 31
India's consumer price index (CPI) for industrial workers was at 9.14% in September, lower than an annual rise of 10.31% in August, government data showed on Wednesday. The index for industrial workers rose by 1 point from the previous month to 215 in September, data released by the labour ministry showed.

The government uses CPI for industrial workers to fix wages for its employees.

The statistics ministry separately releases annual inflation data based on the consumer price index every month. The annual consumer price inflation was 9.73% in September. — Reuters