The Tribune, Chandigarh, India

Despite positive indicators, growth for current fiscal lower at 5.9%
Tribune News Service

New Delhi, December 17
Raising hopes of an economic revival, the government today said the economy is heading towards a gradual recovery with several indicators, including moderating inflation pointing towards that and growth in the second half will be much higher at 6% as compare to 5.4% in the first half of the year.

In the Mid Year Economic Review tabled in Parliament today, the Finance Ministry has guided for a full year growth estimate for 2012-13 of 5.7% to 5.9%. This is lower than the 7.6% projected in the Economic Survey in the beginning of the year and 6.5% projected by the Prime Minister's Economic Advisory Council (PMEAC) headed by C Rangarajan. Analysts have been saying the economy will grow by 5.5% or lower. The review said the economy has grown much slower than the average growth rate of around 8 per cent achieved in the last decade.

The review pointed out several indicators that have turned positive recently which suggest that the economic growth is stabilised and even picking up. These include moderating inflation, upturn in the Business Expectations Index for the October-December quarter, the PMI index has moved up in November, buoyancy in the capital markets, improved internal accruals in the corporate sector and some pick up in manufacturing.

On inflation, it said, further moderation in price rise is likely to commence from the fourth quarter of the fiscal. Inflation at the end of March 2013 is expected to moderate to 6.8-7% level. Agriculture is expected to improve because of better prospects with rabi crops benefiting from greater moisture content in the soil and dominance of irrigated wheat and rice crops.

Addressing a press conference, Chief Economic Advisor Raghuram Rajan today said several steps need to be taken, including a confidence inducing Budget to push growth in the economy.

Rajan said while India's growth in the current year will be one of the highest in the world but it is not satisfactory. Among the steps he mentioned for a revival include a good confidence inducing budget, speeding up clearance for projects and further liberalisation of capital markets. The Cabinet Committee on Investments (CCI) has been set up to fast track projects.

On the fiscal deficit, he said that while achieving 5.3 per cent was tough, the government was showing full ambition in going after it.

Rajan expressed confidence that growth will be higher in the second half as business confidence picks up and investments start to flow in. The current account deficit, he added was a cause for worry but the global situation had impacted exports which have been declining. On gold imports, he said there is a need to create alternative investment avenues for people to invest.

Re at 3-week low, all eyes on RBI policy

Mumbai, December 17
The rupee today nosedived to a three- week low of 54.85 by losing 37 paise against the dollar due to persistent demand for the US currency, amid the government lowering economic growth forecast for the current fiscal.

Continuing its downward march for the fourth straight session, the rupee closed down by 0.68% from its previous close at 54.85, after moving in a range of 54.40- 54.89 against the dollar during the day.

The rupee weakened ahead of the RBI's mid-quarterly monetary policy on Tuesday, which could impact the local currency, forex dealers said.— PTI

No fresh funds now, lenders tell KFA
Mallya ready to infuse Rs 425 crore: SBI

New Delhi, December 17
In yet another blow to Kingfisher Airlines, lenders on Monday refused to give more funds to Kingfisher and demanded partial repayment of dues. Despite expressing confidence that the debt-strapped airline will be able to restart operations before the DGCA deadline, Kingfisher failed to give a timeline for the same. At a lenders' meet the airline officials said they were sure that KFA's licence will not be cancelled.

Kingfisher promoter Vijay Mallya is ready to infuse Rs 425 crore into the airline and restart its limited operations as soon as DGCA gives a go-ahead, the lead lender to the grounded carrier, State Bank of India (SBI) said.

SBI deputy managing director for mid-corporates Shyamal Acharya said Mallya, however, did not give any timeline for fund infusion or restart of the operations.

SBI on Sunday said there is no need for lenders to panic as the cash- strapped Kingfisher Airlines is looking for a solution to come out of the crisis.

“Kingfisher has been a good airline at some point of time. They are going through their set of problems. And there is no reason for bankers to panic as long as they say that they are looking for a solution.”

SBI is the lead banker in the 17-lender consortium that extended Rs 7,000 crore loans to the now grounded Kingfisher Airlines. It has an exposure of Rs 1,500 crore to the carrier, which has not been serviced since January, 2012.

Kingfisher has been attempting to raise the much-needed capital. — Agencies

Etihad in final talks with Jet, KFA

Abu Dhabi's Etihad Airways is in final stages of talks with Indian carriers Jet Airways and Kingfisher Airlines to buy a stake in either of them and a deal could come by next week, a top government official said on Monday. "Etihad has not yet decided. They are talking to both," said the official who asked not to be named. — Reuters

Tata Steel makes new kind of anti-ballistic steel

London, December 17
Tata Steel's Port Talbot plant in the UK has developed a new kind of anti-ballistic steel which could transform safety of soldiers and security forces fighting terrorists and extremists.

Super Bainite, the lightweight, super-strength anti-ballistic steel with a lattice form, could be used to armour-plate troop carriers and tanks.

Prince Charles, the heir to the British throne, visited the plant and unveiled a plaque to mark a multi-million pounds project to rebuild a furnace where the new kind of steel is being produced by the Ministry of Defence and the Tatas.

"It will give our troops a level of protection they have not had before and which nobody in the world offers. It is unique to the UK," a Tata spokesman said.

Tata Steel announced last month that it planned to restart the furnace in the first quarter of 2013. According to Tata, the operation has been the largest industrial construction project of 2012 in the UK.

The furnace will be restarted over the Christmas period, before running up to full operation in early 2013. At full capacity it will provide an extra half-million tonnes of liquid iron at the site.

"I know just what an extraordinary effort was required to put this project together. I understand that it will become one of the most sophisticated blast furnaces in Europe".the prince said. — PTI

No discrimination against private power producers: Govt
Tribune news service

New Delhi, Deccember 17
The government has said there is no discrimination against the private power producers in the initiatives being taken by the public sector undertaking Coal India Ltd (CIL).

The response from the government came in a written reply to a question raised in Parliament where Minister of State for Coal Pratik Prakashbapu Patil said CIL was taking steps to address some of the issues raised by the private power producers by taking the same to the forthcoming board meeting of their company.

He was asked whether the government had received any representations from private power producers alleging that CIL is excessively favouring PSUs against them.

Last month, the private power producers had said the discriminatory treatment by CIL to the private power producers was giving undue benefits to state-owned companies. “CIL's draft Fuel Supply Agreements (FSA) is one-sided and is not in accordance with the presidential directive," Association of Power Producers director general Ashok Khurana had said in a statement.

The minister said the Association of Power Producers has raised the matter that certain provisions of the model Fuel Supply Agreements (FSAs) are discriminatory.

"However, there is no discrimination in the clauses concerning the key parameters of FSAs," the minister stated.

The association said the draft document still retains many of the provisions which the industry had opposed. CIL does not have the right to terminate FSAs in case of differences with power producers, the statement said.

"Considering the fact that majority stakes in both CIL and PSU power stations are being controlled by the government, some provisions to reduce the operational issues in the clauses relating to dispute resolution, requirement of security deposit etc, have been made for the PSU/government power stations," the Coal Ministry has said.

Infosys may trim forecast again as US clients cut back

Bangalore, Deccember 17
Infosys, India’s No. 2 software services provider, may cut its revenue forecast next month as US business clients defer spending and balk at signing big deals.

The outsourcing icon, which has missed its own revenue guidance in three of the past four quarters, has struggled as its big customers cut costs, and analysts have criticised management for sticking with a rigid pricing policy when competitors have offered more flexible plans.

Infosys executives have sounded downbeat in recent interviews and in meetings with analysts, citing client troubles ranging from Hurricane Sandy-related shutdowns to worries about the US ‘fiscal cliff’ of tax hikes and spending cuts. "From what they've been saying in various conversations, it's not unlikely that they will cut guidance," said Ambit Capital analyst Ankur Rudra, who has maintained a "sell" rating on Infosys shares since January 2011. An Infosys spokeswoman declined to comment, noting that the company is in a mandatory quiet period ahead of its earnings results due in January.

With about 60% of its business in the United States, Infosys is particularly vulnerable to swings in US corporate sentiment and has been hit hard by spending deferrals.

Diviya Nagarajan, an analyst at UBS, wrote in a December 6 note to clients that the company's growth forecast for the fiscal year ending in March could be under threat because of cutbacks on large projects and delays in closing deals.

Longer-than-expected client shutdowns due to Sandy were also hurting Infosys, wrote Nagarajan in her report.—Reuters

Global semiconductor revenue to rise: Gartner
Tribune News Service

New Delhi, Deccember 17
Worldwide semiconductor revenue is projected to total $311 billion in 2013, a 4.5 % increase from 2012 revenue, according to Gartner Inc. Due to economic headwinds and an inventory correction, the fourth quarter projections have been revised down from the previous quarter's forecast of $330 billion.

"The looming fiscal cliff, ongoing European debt crisis, slower emerging market growth and regional tensions have all played a part in reduced growth projections for semiconductor revenue in both 2012 and 2013," said Peter Middleton, principal analyst at Gartner. "Inventory levels were already high at the start of the second half of 2012, and as PC demand rolled off, supply simply overshot demand."

Reports said the semiconductor market was further depressed when DRAM prices failed to rebound in 2012. The DRAM market will not recover until the second half of 2013, when lower supply growth is expected to pull the market into a period of undersupply.

This should prove a turning point for the semiconductor industry with total semiconductor revenue is projected to reach $342 billion in 2014.

JSW Steel, JFE Steel Corp ink pact
Tribune News Service

Bangalore, December 17
Steel maker JSW Steel Ltd and Japan's JFE Steel Corporation have signed an agreement for production of non-oriented electrical steel sheets (CRNGO) at JSW's Vijayanagar plant in Karnataka. The Japanese company will provide the technology for this purpose.

A JSW spokesman said by leveraging JFE Steel's manufacturing technology, the plant shall produce CRNGO grade electrical steel and supply to its customers consisting of local companies as well as Japanese, European and US-affiliated companies doing business in India.