New Delhi, February 15
India's current account deficit for fiscal 2012-13 is likely to rise to US $87.9 billion or 4.7 per cent of GDP as against $76 billion or 4 per cent of the gross domestic product estimated earlier, Citigroup said in a research note.

Citigroup revised CAD estimates for the 2013 financial year to 4.7 per cent from 4 per cent of GDP after incorporating the latest trade and GDP data, and said CAD is likely to stay elevated in financial year 2014 as well.

The trade deficit in January widened to $20 billion in January, the second highest rise ever in a month. The biggest trade gap of $21 billion was recorded in October, 2012.

"Going forward for FY14, we expect the CAD to remain elevated at 4.3% of GDP as exports are more sensitive to global demand rather than the rupee, while oil and gold are likely to keep imports high," Citigroup said.

The current account deficit, which occurs when a country's total imports of goods, services and transfers is greater than the country's total export of goods, services and transfers, had touched a record high of 5.4% of GDP in the July-Sept quarter. "Given India's rising external financing requirements, we expect capital raising to be a key priority in 2013," the report said.

The Reserve Bank of India has also expressed concerns over high CAD and said that a high CAD will threaten macroeconomic stability and impact growth. "Large fiscal deficits will accentuate the CAD risk, further crowd out private investment and stunt growth impulses," the central bank had said in its third quarter monetary policy review.

Over the last few months, the government has taken several steps to boost dollar inflows like deregulating NRI deposit rates, relaxing external commercial borrowings norms, increasing FII debt limits, liberalization of FDI and postponement of GAAR (General Anti-Avoidance Rule) and higher duties on gold.

Meanwhile, high gold imports are adding to the current account deficit despite efforts by the government to check imports. — PTI

Mumbai, February 15
Capital markets regulator Securities & Exchange Board of India has decided to extend the pre-open call auction facility to all scrips, which would be available in all stock exchanges.

Generally, in a call auction the buyers set a maximum price at which the shares can be bought while the sellers keep a minimum price for selling the scrips. Generally, this facility, conducted before start of trading session helps in reducing price volatility.

SEBI has also introduced periodic call auction sessions for illiquid shares in the equity market. The call auction facility for all scrips, including illiquid ones, would be effective from April 1 this year, SEBI said in a circular on Thursday.

Currently, the pre-open call auction sessions are in place on pilot basis for shares on benchmark Sensex and Nifty indices. The 30-share Sensex is part of the BSE while the 50-share Nifty is the key index of National Stock Exchange. Besides, it is also available for Initial Public Offering (IPO) as well as relisted shares.

According to the circular, SEBI has decided to "extend the pre-open session to all other scrips in the equity market" as well as "introduce trading through periodic call auction for illiquid scrips in equity market".

The decision has been taken following deliberations by Secondary Market Advisory Committee (SMAC).

The pre-open call auction session would be open to scrips in all exchanges.

"...The pre-open call auction session shall be applicable to all exchanges with active trading and for all scrips that are not classified as illiquid," SEBIsaid.

The price bands for such sessions would be applicable in the normal market, the guidelines said. "All orders shall be checked for margin sufficiency at order level for inclusion in pre-open session," it added.

As per the norms for periodic call auctions for illiquid scrips, a scrip would be illiquid if its average daily trading volume in a quarter is less than 10,000, the average daily number of trades is less than 50 in a quarter and if it is classified as illiquid at all exchanges where it is traded.

The illiquid scrips are required to be identified by the stock exchanges at the beginning of every quarter.

These shares can exit from the call auction mechanism to the normal trading session provided they have remained in session for at least two quarters and are not illiquid. — PTI

New Delhi, February 15
The government on Friday slashed the import tariff value of gold to US $535 per 10 grams and reduced the rate for silver marginally to $1,003 per kilogram due to weakening global prices of precious metals.

The tariff value is the base price on which the customs duty is determined to prevent under-invoicing.

In the last fortnight, the tariff value of gold was $545 per 10 gram, while silver was $1,018 per kg.

The Central Board of Excise & Customs issued a notification in this regard.

However, the government has increased the import tariff value of RBD palmolein to $912 from $870 per tonne in the last fortnight, while the tariff value of brass scrap was lowered to $4,074 from $4,077 per tonne.

The government decided to reduce the import tariff value of precious metals following sluggish price trend in the international market.

In Singapore, gold fell 0.3 per cent to $1,630.60 an ounce today. Due to weakening global trend, domestic gold prices also fell by Rs 100 to Rs 30,625 per 10 grams in the national capital.

Traditionally, India has been the world's largest consumer and importer of gold. Recently, the government raised import duty on gold to six per cent from four per cent to curb demand and limit the growing current account deficit.

Gold imports in the April-December period stood at $38 billion. In 2011-12 fiscal it was $56.5 billion.

Gold accounts for second largest import in value terms after oil. — PTI

New Delhi, February 15
Having set up a wholly-owned subsidiary, Coal India Africana Limitada (CIAL), in Mozambique to pursue coal mining opportunities in the coal-rich country, India’s largest coal producer, Coal India Ltd, has now begun the process to assess reserves of its mines there.

Coal India has invited bids from companies for taking up drilling at the blocks. The contract would be outsourced and comes within days of the coal ministry having come out with a notice seeking EoIs from foreign consultancy firms and organizations to prepare a roadmap for modernizing the state-owned coal company, which incidentally is also the single largest coal producer in the world.

Coal India is facing problems in enhancing coal production and the country is facing shortage of the fossil fuel.

CIAL had won a five-year licence for exploration and development of mines in Mozambique in August, 2009. Two coal blocks — A1 and A2 — at Motaize, in Tete Province of Mozambique, are spread over 200 square kilometres and their exploration may take over two years, according to Coal India.

Chandigarh, February 15
India is all set to overtake Thailand as the world’s largest exporter of rice this year, and is expected to export over nine million tonnes of this staple foodgrain during this crop year (July 2012-June 2013).

Till end-January, India’s total rice exports stood at 8.3 million tonnes, according to data available with the All India Rice Exporters Association. Of the total exports, 2.9 million tonnes of basmati rice and 5.4 mt of various non-basmati varieties have been exported. Against this, last year India’s outbound shipments of rice stood at 7.7 mt.

However, this year, while the basmati exports have been low, the export of non basmati varieties has increased by leaps and bounds. Last year, the total sale of basmati rice was 3.3 million tonnes (as compared to 2.9 mt till now). But in case of non basmati rice varieties, the outbound shipments have already crossed 5.4 mt, as compared to 4.5 million tonnes exported last year.

Almost 70 per cent of the basmati exports from India are of PUSA 1121 variety. However, with efforts being made to revive the traditional basmati and thus capture the niche European market with the launch of Punjab Basmati 3, exports of basmati varieties are likely to increase substantially in the coming year. The release of the PUSA Basmati 1509 variety, too, will contribute to increase in basmati exports.

Sources close to the trade said after several years of Thailand’s hegemony as the world’s largest supplier of rice, India is all set to be the world’s largest exporter of rice.

“In the coming year, too, we expect the rice exports to do well. Though rice growers did not fetch good prices in the last year, this year, high quantum of exports has meant that farmers get much higher prices for their produce. The basmati rice varieties were exported at US $900 to $1,600 per ton, which ensured that farmers got Rs 24 to Rs 34 per kg of rice, as compared to just Rs 18 to Rs 20 per kg. last year,” said Vijay Setia, a leading rice exporter.