Mumbai, August 26
The rupee today tumbled 110 paise to once again close below the 64 mark against the US dollar, giving up a major part of Friday's gains amid heavy month-end dollar demand from importers and capital outflows.

A strengthening dollar overseas and late weakness in local stocks also put pressure on the rupee, a forex dealer said. Global ratings agency Fitch today said India's fiscal numbers ‘look weak’ and warned of a downgrade if the country is unable to meet the fiscal deficit target.

At the interbank foreign exchange market, the rupee opened lower at 63.65 a dollar from the previous close of 63.20 and dipped further to the day's low of 64.75.

The local currency recovered some ground after the RBI was said to have stepped in through state-run banks, helping the rupee to end at 64.30, a fall of 110 paise or 1.74 per cent.

"The RBI, which was there in the market on Friday, was not seen today, at least till 4.30 pm today. After that, there was some hint of intervention by the RBI. Month-end dollar demand from oil importers kept rupee under pressure," said Navin Raghuvanshi, VP for treasury at Development Credit Bank.

The benchmark S&P Sensex erased early gains and closed up 39 points, a gain of 0.21 per cent. Foreign institutional investors withdrew a net Rs 148.57 crore of stocks on Friday, as per provisional data with the stock exchanges.

In the wake of the rupee's depreciation and doubts over revenue increase targets, the government has repeatedly asserted it will meet the fiscal deficit target of 4.8 per cent. Fitch said the space to contain expenditure is very limited in the second half of the fiscal.

"A slowdown in fiscal expenditure in the second half of the year remains quite challenging," Fitch lead analyst Art Woo said on a conference call today.

The dollar index was up by 0.08 per cent against a basket of six major global currencies after US Federal Reserve officials wrapped up a yearly gathering appearing ready to start slowing the monetary stimulus next month.

"India urgently needs to attract capital as foreign institutional investors have sold about $4.2 billion in bonds this year and $750 million in equities over the previous six sessions," said Pramit Brahmbhatt, CEO at Alpari Financial Services (India). — PTI

Bangalore, August 26
Incoming RBI Governor Raghuram Rajan will prioritise currency stability over inflation and growth, according to a Reuters poll which also showed the worst is not over for the rupee.

The rupee has lost around 15 per cent to the dollar, hitting record lows almost daily, since the US Federal Reserve hinted in May that it would soon begin paring back its massive economic stimulus programme, sparking an investor exodus from emerging markets seen as the most exposed to foreign funding.

Rajan, a widely acclaimed economist, takes over as governor of the RBI from incumbent Duvvuri Subbarao on September 5, at a time when the Indian economy is facing its worst crisis since 1990-1991.

Eleven of 17 economists polled by Reuters said the currency will be the top priority for Rajan but the consensus showed it will likely weaken to 69 per dollar before rising, implying a further 7 per cent fall from Monday's spot rate of 64.10. Most expected it to bottom out in September.

The Indian economy is caught in a quagmire of slow growth, high inflation, rickety government finances and a tumbling currency that is the among the worst performing in emerging markets.

"Rajan could streamline the RBI's focus to stabilising the currency and inflation while being supportive of growth," said Nizam Idris, head of FX strategy at Macquarie Bank in Singapore. — Reuters

New Delhi, August 26
India may be able to contain its current account deficit (CAD) to $70 billion, about 3.7 per cent of GDP, in the current fiscal because of various steps taken by the government, Prime Minister's Economic Advisory Council chairman C Rangarajan said today.

He also said the country's economic growth will be around 5.5 per cent in the 2013-14 fiscal.

"Reducing CAD from $88 billion (2012-13 fiscal) to 70 billion is possible because of various actions taken by the government... Gold imports falling by $10-12 billion itself will be a great relief," Rangarajan said at an event here.

India's CAD — the gap between inflow and outgo of foreign exchange — widened to a record high of $88 billion or 4.8 per cent of the GDP for the fiscal ended March 31, from $78.2 billion in 2011-2012, about 4.2 per cent of the Gross Domestic Product.

Finance Minister P Chidambaram had said recently that the government will make all efforts to contain fiscal deficit at 4.8 per cent, and CAD at 3.7 per cent of GDP, about $70 billion in the 2013-14 financial year.

The government has increased duty on import of gold and silver to 10 per cent in a bid to contain the forex outflow, and also announced a slew of measures including easier overseas borrowing norms to fetch an additional $11 billion this fiscal to check the burgeoning CAD.

As for the steps to increase capital inflows, financial bodies — IRFC, PFC and IIFCL — will be permitted to raise $4 billion collectively through quasi-sovereign bonds for the infrastructure sector.

Chidambaram had also said PSU oil companies would be permitted to raise additional External Commercial Borrowings (ECBs) to the tune of $4 billion.

He had further said the liberalisation of the ECB norms and non-resident deposit schemes (NRE/FCNR) would fetch $2 billion and $1 billion, respectively. — PTI

Reducing current account deficit (CAD) from $88 billion (2012-13 fiscal) to $70 billion is possible because of various actions taken by the government... Gold imports falling by $10-12 billion itself will be a great relief
— C. Rangarajan, Chairman, PMEAC

New Delhi, August 26
In a move that makes ISD even cheaper than local calls, Videocon today said it has lowered its ISD call rates to US and Canada by a staggering 98 per cent to 10.5 paise per minute for existing customers and 13.5 paise per minute for new customers under a special plan.

"With this pack, we are offering unmatched and most economical International Long Distance (ILD) calling to our subscribers at tariffs which will be cheaper than even local calling," Videocon Telecommunications' CEO Arvind Bali said.

Videocon will offer 1,000 minutes of ISD calling to US and Canada under the scheme for which its existing customers will have to pay Rs 105 and new customers will be charged Rs 135.

"This voucher offers free ILD calls to US and Canada at an effective price of less than 10 paise per minute, which is a discount of 98 per cent on the rack rate of Rs 6.40 per minute," the statement said.

Bali said such offerings will help the company in spreading network presence across the telecom circles where it is operational and extending its market share.

"This is a never before and never after proposition and yet another first one from Videocon Mobile Services," he said. — PTI

New Delhi, August 26
Shankarlal Guru, the non-executive chairman of the National Spot Exchange Limited (NSEL), has resigned saying some "bad people" have entered the crisis-ridden exchange and were responsible for its woes.

Guru's resignation comes on the heels of at least two directors on the five-member board of NSEL quitting as the exchange struggled to clear Rs 5,600 crore payment dues.

Ramanathan Devarajan and BD Pawar, non-executive directors have quit, leaving just Jignesh Shah, who owns FTIL, the single largest promoter of NSEL, and Joseph Massey on the Board.

"I resigned from Board of Directors of NSEL on August 7 as I and (NSEL director) BD Pawar felt that our mission of promoting agriculture marketing is not being followed and there has been such a big scam in the exchange, which is not the right thing. I have nothing to do with this issue," Guru said.

The non-executive chairman is not responsible for day to day functioning or running of the exchange.

NSEL should be brought out of this crisis and the few "bad people" who have entered the exchange should be punished, Guru, who has been a former Member of Legislative Assembly from Unjha (Gujarat) added.

"The government has the machinery and it should take the money and return the hard earned money of the investors. There are some bad people in the exchange who should be punished," he said.

He, however, refused to name the persons or elaborate on "bad people" entering NSEL. — PTI 

New Delhi, August 26
Wooing the industry to invest in Haryana, state Chief Minister Bhupinder Singh Hooda today said Haryana had emerged a leader in all four key parameters on which any state’s progress is judged that being per capita income, per capita investments, per capita plan budget expenditure and resource mobilisation.

Addressing the 2nd Invest North Conclave organised by CII here, he said, “With industry’s support and investments, we can create many more cities like Gurgaon across the state.”

While pledging his support to the industry, he said the KMP Expressway would facilitate seamless connectivity and a global corridor was also planned en route the 135-km expressway. To establish Haryana as a manufacturing hub, the state government is focusing on cluster-based manufacturing.

“A number of theme hubs, including food parks, foot wear parks, metro projects etc are also being planned. We are also coming up with industrial model townships and industrial estates to strengthen industrial infrastructure in the state. Also, 2/3rd of the state falls within the DMIC.

“All this is bound to open immense avenues of investments for the industry, which it should capitalise on”, he said.

Talking on the policy initiatives, he said Haryana was the first state to launch a structured State Labour Policy in 2006 to maintain industrial peace and harmony. The pioneering Land Acquisition and the Rehabilitation & Resettlement Policy in the country and had emerged as a role model for other states.

Hooda said from being primarily an agrarian state, Haryana has today emerged as one of the leading states of the country with a strong industrial base. Haryana today is a leader in manufacturing of a number of items and has become an ideal destination for industrialists and investors alike, he added.