New Delhi, November 6
The government is reviewing budgeted expenditure at each ministry and plans to defer some spending to the next financial year beginning in April to keep the fiscal deficit at 5.3 percent of GDP, a top finance ministry official told Reuters on Monday.

India's economic growth is expected to slow to about 5.5% this fiscal year, the slowest pace in a decade, while rating agencies S&P and Fitch say higher spending and rising subsidies could push the fiscal deficit to 6% of GDP.

"Those expenditure that can be moved to the next year would be moved, instead of being done this year," Arvind Mayaram, economic affairs secretary at the ministry of finance said in an interview.

He said the government was determined to keep the deficit to 5.3% of GDP this fiscal, and would take all necessary steps for this purpose. However, he ruled out drastic, across-the-board spending cuts.

Analysts have expressed doubt about whether the government would be able to keep the deficit even to that level.

"Prospects for a material improvement in the fiscal position in the near term are remote, leaving intact the risk of a sovereign downgrade," Anjalika Bardalai, an analyst with political risk consultants Eurasia Group, said in a recent research note.

In March, the government budgeted Rs 14.9 trillion spending in 2012/13 fiscal year. It estimated revenue of Rs 9.4 trillion and targeted a fiscal deficit of 5.1% of GDP.

But delays to planned economic policies and the global slowdown have impacted growth and tax collection, forcing the finance ministry to revise the deficit target upwards and look at ways to save money and increase revenues.

"We are reviewing expenditure at this point of time. By early December we will be able to get a picture of what type of savings we will get from that," Mayaram said.

He said finance ministry expected a moderation in the burden of oil subsidies because of a recent hike in diesel prices and the appreciation of the Indian currency.

"We believe the rupee might strengthen a little further and go down to 52, 52.5, in which case there would be a substantial shaving off of the subsidy bill on that account," Mayaram said. — Reuters

New Delhi, November 6
The world's largest producer of spirits, Britain's Diageo Plc, is set to pick up a 51 per cent stake in liquor baron Vijay Mallya's United Spirits this week in a transaction worth around US $2 billion, a media report said Tuesday.

The deal would involve the direct purchase of a portion of Mallya's holding, the issue of fresh shares and an open offer to buy stock from public shareholders, the report added.

United Spirits' share price has risen sharply this year on speculation about a stake sale.

The newspaper quoted two unidentified UB Group executives and two investment bankers who said the takeover was likely to be announced later this week.

United Spirits' parent United Breweries said it was not commenting while Diageo said it was not making any statement beyond one issued in September. In that statement, Diageo, makers of Johnnie Walker whisky, said it was in talks with United Spirits and parent United Breweries (Holdings) to potentially "acquire an interest in United Spirits".

But an executive familiar with the discussions, who spoke on condition of anonymity, told AFP that while a "deal makes sense, there is still no certainty". — AFP

New Delhi, November 6
A company promising hefty returns on investments made for rearing goats has come under the scanner of capital market regulators Securities & Exchange Board of India and action may be initiated against it as early as next week.

Claiming to have large goat rearing farms in northern parts of the country, Beetal Livestock & Farm (P) Ltd had solicited investments from the public with a promise of 2 per cent monthly returns, and doubling of money in three to four years.

Suspecting an unregistered collective investment scheme (CIS) being run to milk investors, SEBI served show-cause notices to the company and its four directors, but were returned undelivered.

Consequently, SEBI has now issued a public notice asking the company and its four directors to collect the “show cause” notices by November 10, failing which the regulator has warned to begin ex-parte proceedings against them.

SEBI regulates CIS, which involves pooling in of money from multiple investors for a specific objective.

The company, which was not registered as CIS entity with SEBI, had solicited investments in the goat-rearing business through newspaper advertisements a couple of years ago.

The business model involved paying a few thousands of rupees to become owner of a goat, to be reared by Beetal. Investors were told that as each goat gives birth to four kids a year, the new goats would be sold to other investors—giving up to four-fold appreciation in the first year itself. The investments could give manifold returns in subsequent years, said Beetal, with each of the four new goats giving birth to 3-4 kids the following years.

Suspecting a typical ponzi scheme in the name of goat farming, SEBI began an enquiry into the matter following several complaints received by it. — PTI

Bangalore, November 6
Chandigarh has been included by the National Association of Software & Services Companies among five tier II Indian cities that are emerging as hubs for IT product startups. The four other cities are Trivandrum and Cochin in Kerala, Coimbatore in Tamil Nadu and Ahmedabad in Gujarat.

A Nasscom booklet released on the eve the IT association’s two-day Product Conclave 2012, which starts here Wednesday, said 810 of the 3402 IT product companies are located in the region comprising of Chandigarh, Mohali, Gurgaon, Delhi and Noida. In terms of conglomeration of companies, this area is second only to Bangalore with 929 IT product startups.

Nasscom, the premier Indian IT & BPO industry lobby group, also noted digital domain has witnessed a rapid growth among the product companies. It noted the Chandigarh-Mohali and Gurgaon-Delhi-Noida (NCR) areas house 437 of the total 1,278 product companies in the digital domain. This is by far the largest comglomeration of product firms in the digital domain followed by 413 in Bangalore and 385 firms in the Mumbai-Pune region.

New Delhi, November 6
The latest quarterly survey by apex industry chamber FICCI, which drew responses from 364 manufacturing units and associations, a modest recovery in manufacturing in the third quarter of fiscal 2012-13 is expected as demand conditions reflected in order books show a marginal improvement.

According to the survey, around 45% respondents felt that they expect the production to be higher in Q-3 vis-à-vis last year as compared to 44% and 46% in previous two quarters of current fiscal.

The survey noted while the demand conditions remain subdued but a marginal improvement has been seen in Q3 for 2012-13 as compared to Q2 of 2012-13. In Q-3 of 2012-13, over 33% respondents reported higher order books for October-December 2012-13 as compared to 31% in Q-2 2012-13. The above outlook is also borne out by the fact that recently both the Index of Industrial Production and Index of eight infrastructure industries have shown some upturn in growth.

Manufacturing grew 2.9% in August 2012 after registering negative growth for two consecutive months of June and July 2012.

Similarly, the index of eight core industries witnessed a growth of 5.1% in September 2012 as compared to the growth of 2.5% in September 2011, showing some signs of turn around. In terms of capacity addition, around 33% respondents reported plans for capacity addition in next six months as compared to 28% in the previous survey.

However, except a few sectors like leather where majority of the firms plan to add new capacities, in other sectors only very few companies have any new capacity addition plans. This indicates that investment will not pick-up at least in next two to three months.

New Delhi, November 6
Canadian real estate billionaire Bob Dhillon, whose roots are in Barnala, Punjab, has called for foreign funds to be permitted in building townships. His take is: India will need to open up the realty sector for FDI if it intends to meet the requirement of 50-60 million new houses to be built every year.

Dhillon, president & CEO of realty firm Mainstreet Equity Corp, which is listed on the Toronto SE — is visiting India as part of a business delegation accompanying Canadian Prime Minister Stephen Harper.

Dhillon told The Tribune: “In Canada there’s an ageing population of first-generation Punjabi immigrants. They’re looking for second home in Punjab in warmer climes. The possible site of such townships can be anywhere in North India. I’m looking at planning for the next 50 years”.

“However, certain clarifications are needed on policy before we can invest”, he added, He listed them as “clarity of ownership of land, FDI in the realty sector up to 51%, changes in tenancy laws and repatriation of capital”.