New Delhi, August 19
With the rupee sliding below the 63 mark against US dollar, World Bank Chief Economist Kaushik Basu today said the country should use forex reserves to curb volatility in the currency market and not to look to IMF for funds.

"To use certain amount of your forex to buy and sell dollar I think (is) a good idea...(It) gives out signal that reserve has a purpose. That is broadly the direction we should go and use reserves to curb turbulence", he said while delivering the 16th JRD Tata Memorial Lecture here.

Basu, who was Chief Economic Adviser in the Finance Ministry before taking over his assignment with the World Bank, said the government should not "overreact" to depreciation of rupee.

Continuing its free fall, the rupee today breached 63-mark a dollar to end at all time low of 63.13, recording the decade's worst single-day fall of 148 paise, heightening fears that more capital control steps could be in the offing.

"There was a sudden depreciation in exchange rate but we must not overreact to that. We do need steps to correct it. The certain amount of buying and selling of foreign exchange is the technique that is done in floating exchange rate market...that method could be strategic intervention," he said.

On the possibility of India approaching the International Monetary Fund (IMF) for money, Basu said: "I don't think we are in a situation where there is any need for that. India has enough foreign exchange reserve. So, the question of having to turn to IMF is not there." India has a foreign exchange reserve of about $280 billion.

Meanwhile, he said India's present economic woes are not comparable to the problems the country faced in 1991. "Are we back to 1991? That is completely a non-question because if you just look at a couple of numbers, then you say there is absolutely no comparison. Foreign exchange reserves in 1991 was down to $3 billion, India now sits on $280 billion foreign exchange reserves," he said.

"Last year, India's economic growth had slowed down to around 5 per cent, that's a very poor performance, however, in 1991, the growth was much lower than 5 per cent," he added. Recently, Prime Minister Manmohan Singh had also ruled out the possibility of India witnessing a repeat of the 1991 balance of payments crisis and reversing the path to globalisation of economy.

On measures taken by RBI to arrest the fall of rupee, he said: "Supporting the currency is a typical matter. Typically, what RBI has done is what central banks with floating exchange rates do." Last week, the RBI announced stern measures, including curbs on Indian firms investing abroad and a reduction of outward remittances, to restrict the outflow of foreign currency and stabilise rupee. Widening CAD, which touched to a record high of 4.8 per cent in 2012-13, is putting pressure on rupee. The government has been taking a series of measures to increase the inflow of foreign exchange as well as check its outflow. — PTI 

New Delhi, August 19
In its continuing bid to rein in CAD, the government today banned duty-free import of high-end flat screen plasma televisions, which will now attract a levy of 36.05 per cent.

Seeking to end more than a decade-old concession, the Revenue Department issued a notification that amended rules so as to "disallow import of flat panel (LCD/LED/Plasma) television as part of free baggage allowance" with effect from August 26. The notification was tabled in Parliament today.

This would mean travellers bringing in LCD/LED/Plasma TV as part of baggage from August 26 would have to pay customs duty at the rate of 35 per cent, plus an education cess of 3 per cent on it. The effective rate of import duty would be 36.05 per cent.

As the Current Account Deficit (CAD) continued to swell at high proportions in the first four months on the back of surging gold imports, the government last week raised duty on gold, platinum and silver to 10 per cent.

Finance Minister P Chidambaram had also said that steps would be taken to compress import of non-essential goods.

The value of rupee touched all-time low of 63.30 to a dollar in the afternoon trade today.

Import of gold went up by a huge 87 per cent from 205 tonnes in April-July 2012 to 383 tonnes during the corresponding period this year. In value terms, the increase was 68 per cent from Rs 56,488 crore to Rs 95,092 crore.

In the case of silver, import during April-July 2013 was valued at Rs 12,789 crore in comparison with Rs 4,281 crore during the corresponding period year ago, registering a 200 per cent increase. — PTI 

New Delhi, August 19
Private sector lender Axis Bank today increased benchmark lending rate by 0.25 per cent to 10.25 per cent making costlier the home, auto, corporate and other loans linked with base rate or the minimum lending rate.

The bank revised its base rate to 10.25 per cent effective from August 19, the bank said.

All categories of loans (other than exceptions permitted by RBI) will become costlier at least by 0.25 per cent.

Earlier this month, HDFC Bank had raised the base rate to 9.80 per cent from 9.60 per cent.

Meanwhile, some of the public sector banks like Andhra Bank have also raised base rate. — PTI

New Delhi, August 19
The government is mulling conducting audit of NSEL's physical stocks lying in warehouses by own agencies as it fears defaults in payment by buyers, a top Consumer Affairs Ministry official said today.

Consumer Affairs Secretary Pankaj Agarwal also asked the National Spot Exchange Limited (NSEL) to be a responsible guarantor to the Rs 5,600-crore dues of investors and meet its commitments.

Last week, the NSEL had announced its seven-month plan to settle the dues to investors. As per the plan, August 16 was the first 'pay-in' day and August 20 the first 'pay-out' day. There are 24 companies which have to pay around Rs 5,600 crore to the spot exchange for settling dues to investors.

New Delhi, August 19
The country's 10 leading business houses, including Reliance Group, Vedanta, Essar and Adani, have seen their total debt levels soar by 15 per cent to over Rs 6 lakh crore during the last fiscal while profitability continues to remain under pressure, a research report said today.

The cumulative debt of these groups, which also include Jaypee, GMR, GVK, JSW, Lanco and Videocon, is likely to further increase in the current fiscal because of rupee depreciation and delays in projects being undertaken by many of them, Credit Suisse said its annual House of Debt report for India.

As per the report, the collective debt of these 10 groups rose to Rs 6,31,025 crore at the end of last fiscal ended March 31, 2013, from Rs 5,47,361 crore a year ago.

"For most of them the debt increase has outpaced capex and asset sales are yet to take off. The rising stress is visible with some loans of Lanco, JPA, and (Anil Ambani-led) Reliance groups already being restructured," it said.

"The largest increases have been at groups such as GVK, Lanco and ADA where the gross debt levels are up 24 per cent year-over-year .... Asset sales - key for de-leveraging for most of these - have still not taken-off; only GMR and Videocon have had some success on that front," Credit Suisse said.

The report also warned of additional asset quality stress of banks because of growing debt levels of big business houses. While large corporate NPLs (non-performing loans) are still low, the over-leverage in the large corporate segment is high and is a potential source of additional asset quality stress for banks, it said, adding corporate asset quality issues are likely to persist for the banking sector. — PTI

Lucknow, August 19
There is good news on the job front for the Akhilesh Yadav government. Six major cities in the state have clocked an average growth of over 39 per cent in new job generation in the first quarter of the current financial year, claims industry body Assocham.

Assocham undertook a study in six cities of Uttar Pradesh, namely Agra, Allahabad, Aligarh, Lucknow, Kanpur and Meerut during Q1 of the financial year 2013-14 against the corresponding period last year. It has revealed that new jobs in these cities have primarily been generated in the education and services sectors.

As per the study, a total of about 5,230 new jobs were generated across these cities in the Q1 of current financial year as against 3,750 jobs created during the same period in the previous fiscal.

“This authenticates and substantiates the fact that companies today are moving to tier II and tier III cities to attract talent, cut operational expenses and remain competitive,” said Assocham’s secretary-general DS Rawat while releasing the study.

The Assocham team had tracked the data on a daily basis for vacancies posted by over 3,000 companies on various job portals, advertisements in job supplements of national and regional dailies and news journals for 56 cities and 32 sectors offering employment opportunities.

“With over 2,690 new jobs generated in Lucknow alone, the state capital has garnered the maximum share of over 51 per cent of the total number of new jobs followed by Meerut which accounts for about 16 per cent share with over 830 new jobs generated there,” Rawat said.

According to the study, the industrial town of Kanpur followed by Allahabad, Agra and Aligarh accounted for a share of about 13 per cent, 10, 7, and 3 per cent, respectively, in the new job generation across top cities of the state.

BRIEFLY

Rolls Royce unveils Wraith
New Delhi: Ultra luxury car maker Rolls Royce on Monday launched 'Wraith' with a price starting at Rs 4.6 crore in India. The company, which currently sells Phantom and Ghost models in the country, is also looking to expand its dealerships. Herfried Hasenoehrl, GM, Emerging Markets Asia, said the two new dealerships would come up at Chandigarh and Ahmedabad. — PTI

Gold declines
New Delhi: Gold prices slipped from eight-month high by losing Rs 165 to Rs 31,360 per 10 grams in the national capital on Monday on sluggish demand at prevailing higher levels amid a weak global trend. Silver also declined by Rs 75 to Rs 50,610 per kg on lack of buying support after steepest rise in last week. — PTI

IDBI launches tax saving scheme
Mumbai: IDBI Mutual Fund on Monday launched an open-ended equity-linked savings scheme (ELSS), 'IDBI tax saving fund', with an aim to provide capital appreciation to investors along with tax benefit. The new offering which will be open for subscription from Tuesday, will close on September 3 and the scheme will reopen for continuous sale from September 17. — PTI

AquaSure Xpert
Chandigarh: Eureka Forbes on Monday launched AquaSure Xpert, priced at Rs 20,999, to provide safe and pure drinking water. It is equipped with an advanced 6 Stage RO+UV+UF water purification technology with ‘taste guard’ that senses input levels of total dissolved solids and selects the optimum purification method. — TNS