New Delhi, September 13
The Prime Minister’s Economic Advisory Council (PMEAC) headed by C Rangarajan has lowered the GDP forecast for the current fiscal year to 5.3 per cent from 6.4 per cent projected earlier.

Rangarajan cited strong growth in agriculture and a modest recovery in manufacturing as the reasons for better performance in the second half of the year to peg the GDP estimate at 5.3 per cent.

The PMEAC estimate is more optimistic than other analysts who are pegging the growth at between 4.5 and 5 per cent while some have even lowered to a sub 4 per cent level.

The PMEAC had in April projected 6.4 per cent growth for Indian economy for current financial year. The GDP grew by 5 per cent in 2012-13. RBI too had earlier lowered its growth projection for this fiscal to 5.5 per cent from 5.7 per cent. Rangarajan has advocated further liberalisation of FDI norms to boost growth. Among the other measures include resolve tax concerns of the industry, fast track public sector investment and initiate measures to contain fiscal deficit.

Sounding caution on the fiscal deficit, Rangarajan said containing fiscal deficit within the budgeted estimate could be a challenge.

He said the fiscal deficit during the first four months of the current financial year has already reached 62.8 per cent, and expenditure on major subsidies 51.3 per cent, of the budgetary provision for the full financial year.

Discretionary expenditure budgeted may need to be compressed, and subsidies restructured, in the remaining months of the financial year in a growth friendly manner to limit fiscal slippages.

Industry body Ficci said the downward revision in growth projection for the year 2013-14 was anticipated. Even earlier several independent estimates as well as those by RBI had indicated that growth this year will be in the range of 5 to 5.5 per cent. Given the present state of the economy, it is imperative that all steps are taken to bring growth back to the higher trajectory.

Referring to the external sector, Rangarajan expressed hope that the current account deficit (CAD) in 2013-14 will come down to $ 70 billion from $ 88.2 billion a year ago.

As regards rupee, he hoped “at the current level (it) is well corrected. Stability is returning to the foreign exchange market. As capital flows return and as CAD begins to fall, this tendency will strengthen”.

New Delhi, September 13
In the biggest vehicle recall in the country, Ford India today said it is recalling 1,66,021 units of best selling compact cars Figo and Classic sedan to rectify problems related to steering and rear suspension.

The recall will impact different batches of Figo and Classic models manufactured between January 2010 and June 2012.

"Ford India is extending its existing voluntary Field Service Action (FSA) and will recall the remaining batches of Figo and Classic models to inspect them for potential issues related to the Rear Twist Beam (RTB) and the Power Assisted Steering (PAS) Hose," Ford India said.

With respect to the RTB, 1,09,469 units of Figo and 22,453 Ford Classic produced and sold from January 2011 till June 2012 will need to be inspected but will not necessarily need part replacements, it said.

In the case of the Power Steering Hose, 30,681 units of Figo and 3,418 units of Classic produced and sold in India from January 2010-August 2010 and March 2011-November 2011 will be inspected and then replaced, the 
company said.

"This is to ensure the safety and satisfaction of our customers by inspecting and replacing any potentially affected parts as required... Ford India will continue to drive this service initiative through its authorised dealers," the company said.

No injuries or accidents related to the RTB or PAS issues have been reported, it added. — PTI

Kolkata, September 13
India Infoline Ltd (IIL) is in the process of demerging its broking business to meet banking regulations and has already received the SEBI nod.

"In order to meet the banking regulation, India Infoline is demerging the broking business and it would be transfered to its subsidiary India Infoline Distribution Co Ltd," India Infoline Finance Ltd (IIFL) executive director Mukesh Singh said today.

"We have already got SEBI approval and are now moving ahead with further compliance to complete the demerger process," he said on the sidelines of announcement on a forthcoming Rs 1,050 crore secured redeemable NCD issue. India Infoline Distribution is an existing non-listed subsidiary carrying out financial products distribution activity. — PTI

New Delhi, September 13
In a decision that would boost the country’s defence, strategic and economic aspirations, the Union Cabinet last night gave its approval for the setting up of two semiconductor manufacturing facilities in the country.

The two “semiconductor wafer fabrication manufacturing facilities” would be set up by two consortiums at Greater Noida and Prantij, near Gandhinagar in Gujarat, at an estimated cost of over Rs 51,500 crore.

The setting up of the two facilities would put India in a select band of countries like Germany, China, the US, Korea and Taiwan, which manufacture chips for the production of electronic goods.

Briefing newsmen here on the Cabinet decision, Telecom and IT Minister Kapil Sibal said the decision would not only bring in high investment but would also create 28 million jobs by 2020.

The two facilities would be put up by M/s Jaiprakash Associates along with IBM and M/s Tower Jazz (Israel) at Greater Noida at an investment of Rs 26,300 crore where 40,000 chips would be manufactured in the first phase, which is likely to be in place over the next two years and by M/s Hindustan Semiconductor Manufacturing Corporation (HSMC) along with ST Microelectronics (France/Italy) and Silterra (Malaysia) at a cost of Rs 25,250 crore in Gujarat for the manufacture of 40,000 chips in the first phase.

As part of the incentives to be given to the two consortiums, besides incentives already available under the Modified Special Incentive Package Scheme (M-SIPS) and deduction available for expenditure on R&D under the Income Tax Act, these facilities will also be eligible for investment-linked deduction under Section 35AD of the Income Tax Act. The government will provide Viability Gap Funding (VGF) in the form of an interest-free loan for a period of 10 years.

The units, when set up, will stimulate the flow of capital and technology, create employment, help higher value addition in the electronic products manufactured in the country, reduce dependence on imports and lead to innovation.

Hyderabad, September 13
Ogilvy & Mather, a global advertising, marketing and public relations agency, has agreed to acquire a majority stake in PennyWise Solutions, a city-based digital technology and production company. However, financial details were not disclosed by both the companies.

The Hyderabad-based company was established by current CEO Anand Morzaria in 2003, and has grown from a six-member start-up to become India's market leader in digital delivery, employing more than 140 people, PennyWise said today.

"PennyWise are, quite simply, the best digital technology and production professionals in the business. This is a strategic investment," Piyush Pandey, executive chairman and creative director, Ogilvy South Asia said in a statement.

"It will combine the digital skills and services of both companies to deliver solutions for our clients across India and APAC," he said.

PennyWise will serve as the digital technology and production centre of excellence for Ogilvy & Mather in India, the statement said.

The current client portfolio of PennyWise includes Vodafone India, Johnson & Johnson and WPP Agencies, including Ogilvy & Mather, Soho Square and a host of others. — PTI

New Delhi, September 13
Country's two leading stocks exchanges NSE and BSE have applied for registration with European Securities Market Authority (ESMA), capital market regulator for the EU region.

ESMA, an independent EU authority, contributes towards safeguarding the stability of the European Union's financial system by ensuring the integrity, transparency, efficiency and orderly functioning of securities markets, as well as enhancing investor protection.

Both NSE and BSE have sought ESMA registration, sources said without specifying further details.

Indian market watchdog SEBI recently finalised information sharing and regulatory cooperation MoUs with 31 EU regulators at the initiative of the ESMA, as part of the European Union's Alternative Investment Fund Managers Directive (AIFMD).

ESMA fosters supervisory convergence both among securities regulators and across financial sectors.

The 31 regulators with whom SEBI has signed MoUs include those from the nations like Germany, France, Spain, Italy, Luxembourg, Denmark, Cyprus, Greece, Hungary, Norway, the UK, Liechtenstein, Belgium, the Netherlands, Portugal and Finland. — PTI