The Tribune, Chandigarh, India

Economic woes continue, IIP contracts; exports dip
Sanjeev Sharma
Tribune News Service

New Delhi, January 10
Industrial production contracted for the second straight month by 2.1% in November with a sharp decline in consumer goods, the most since 2009.

The contraction in industrial production by 2.1% in November was the lowest in the past six months and clearly signals that the economy continues to reel under pressure. Industrial growth had been negative in October also.

"Sequential negative growth in IIP in October and November 2013 is disturbing", said Sidharth Birla, president, Ficci. Consumer goods de-growth of 8.7% in November 2013 is the sharpest since March 2009 with steep decline in consumer durables demand, where consumer interest rates could also be a key factor, Ficci said.

Industry also pointed out that investments are still not happening. Chandrajit Banerjee, Director-General, CII, said the November IIP which continues to be in the negative territory for the second month in a row, is extremely worrisome. “What is also causing concern is the performance of the manufacturing sector, indicating that new investments are still not happening”, he added.

The lack of industrial activity could also hit employment as companies cut jobs. “Our worry is that if the situation is not immediately arrested and reversed, there could be a severe impact on employment. A sharp reduction in demand would force companies to prune headcount to remain afloat”, said Rana Kapoor, president, Assocham.

On the trade front, the numbers were not so bad with trade deficit widened slightly in December 2013 to $10.1 billion from $9.2 billion in November.

Imports continued to contract sharply in December as weak domestic demand and restrictions on gold imports lowered non-oil imports by nearly 23% year- on-year. Export growth slowed for the second consecutive month in December to 3.5% from 5.9% in the previous month.

Exporters pointed out that with the government delaying their dues, their margins were getting affected.

Rafeeque Ahmed, FIEO president said the liquidity problem is affecting exports. “Exporters are borrowing at a high cost for a longer duration due to financial crises across the globe.

India Inc uninspired

Though exports rose 3.49%, they seem to have lost momentum as they had been growing at a double-digit rate until October

— Sanjay Budhia, chairman, CII export committee

Export growth of 3.5%, although lower month-on-month, reflects a turnaround in external sector. However, it would not suffice. We have to keep a check on trade deficit, which is more a function of import compression than a robust export expansion

— Anupam Shah, chairman, eepc india

While reduction in trade deficit provides some solace, we are not happy with a modest growth of 3.49% in exports. All out efforts are required to keep export growth in the double-digit

— M Rafeeque Ahmed, president, fieo

If sustained, the drop in trade deficit can ease pressure on current account deficit, make the rupee less volatile and enable the country to more effectively manage risks in our external sector

— Sidharth Birla, president, ficci

We must not forget that trade deficit has narrowed significantly mainly because of import compression which is also a sign of significant slowdown in consumption-led growth and investment-led economic expansion

— Rana Kapoor, president, assocham

Gold, silver imports decline 69% in Dec

New Delhi, January 10
Gold and silver imports declined 68.8% to $1.77 billion in December after the government imposed restrictions on inbound shipments of the yellow metal aimed at narrowing the current account deficit.

Imports of gold and silver in December 2012 stood at $5.6 billion. However, the level in December was higher than $1.05 billion in November.

Gold and silver imports during April-December declined 30.3% to $27.3 billion from $39.2 billion a year earlier. Lower gold and silver imports helped to narrow the trade deficit to $10.1 billion in December from $17.5 billion. "There has been a substantial decline in trade deficit. It is down by about 42%," Commerce Secretary SR Rao said. — PTI

Infosys has deep leadership pool, says Narayana Murthy
Tribune News Service

Bangalore, January 10
Untroubled by the recent exodus of top executives, Infosys co-founder and executive chairman NR Narayana Murthy today said he wished luck to those who quit the firm and said the company was having a strong leadership pool to fall back upon to replace an existing leader.

“These people have shouldered heavy responsibilities in the company for several years. Some of them have taken new work, bigger responsibilities. So therefore, I would say that we wish all the people that have left us the best,” Murthy said at Infosys’s Mysore campus where the company’s quarterly results were announced today.

In the past few months, Infosys has witnessed a steady exit of top-level executives with Board member and BPO business head V Balakrishnan being the latest to put in his papers.

Another board member and Head of Americas business Ashok Vemuri, who was considered to be a top contender for the CEO's position after the incumbent CEO S D Shibulal’s retirement, quit the firm to join iGate as CEO.

Other exits included vice-president and financial services head (Americas) Sudhir Chaturvedi, sales head Basab Pradhan and senior vice-president and head of financial services (Americas) Shaji Farooq.

Last week, the company announced restructuring of its business under two divisions to be headed by BG Srinivas and UB Pravin Rao.

These two are now being seen as possible contenders for the CEO’s post after Shibulal retires.

Infosys has also dissolved its top decision-making body, the executive council, with effect from April 1, 2014.

Murthy, who returned to Infosys last year to give it a fresh boost, said he had full confidence in the “strong cadre of leaders” that the company was having.

Q3 profit rises 21%

Mysore, January 10
Infosys today posted a 21.4% rise in net profit and raised its revenue growth outlook for this financial year as improving US and European economies revive demand for outsourcing services.

The company's net profit stood at Rs 2,875 crore in the third quarter ended December 31 as against Rs 2,369 crore a year earlier. Revenue rose 25% to Rs 13,026 crore from Rs 10,424 crore, Infosys said.

"Our Q3 was a decent quarter. We grew by 1.7% in Q3. Our revenue was $2.1 billion. The volumes went up by 0.7%. The onsite came down by 3.4% and the offshore went up by 2.6%, very much in line with some of the initiatives which we have undertaken over the last two quarters," Infosys CEO and MD SD Shibulal said.

He added the quarter saw good client additions with 54 new customers, including a new $50 million client.

Infosys raised its revenue growth forecast to 24.4-24.9% for the financial year ending March 31, from 21-22% estimated earlier.

Shares of the company rose 2.73% to Rs 3545.35 on the BSE, while the benchmark Sensex climbed 0.76 per cent. — PTI

Govt to consider raising LPG cylinder quota, says Moily
Tribune News Service

New Delhi, January 10
Petroleum Minister Veerappa Moily today said the government will "seriously consider" raising the limit of LPG cylinders to 12 per household. Moily, who last week said there was no proposal to increase the quota, today said he will consult Finance Minister P Chidambaram and move the Cabinet Committee on Political Affairs (CCPA) on the issue.

The comments came after Congress MPs Sanjay Nirupam, PC Chacko and Mahabal Mishra met Moily with a petition requesting an increase in the quota of subsidised LPG cylinders to 12 per household in a year from the current limit of nine. Chidambaram had last week stated that there were demands from "several Chief Ministers" to raise the quota and that the government "will look into" them. With a view to cutting its subsidy bill, the government had initially capped the supply of subsidised domestic LPG cylinders to six per household in a year in September 2012. The annual quota was raised to nine in January 2013. The government today notified a new natural gas pricing formula that will be almost double the rate of all domestically produced fuel to $8.2-8.4 a unit starting April 1.

The Ministry of Petroleum and Natural Gas notified the domestic natural gas pricing guidelines that will apply to all natural gas produced domestically, irrespective of the source, whether conventional, shale or coal-bed methane (CBM) from April 1.

It said gas from April will be priced at an average price of liquid gas (liquefied natural gas or LNG) imports into India and benchmark global gas rates. This formula will be applicable for five years.

Rahul takes up issue with Manmohan

Rahul Gandhi on Friday made a strong pitch for raising the quota of subsidised LPG cylinders for households during a meeting with Prime Minister Manmohan Singh
n Soon after Rahul met the PM, some party MPs met Oil Minister Veerappa Moily and demanded a raise in the quota of subsidised LPG cylinders

Posco’s Rs 52,000-cr project gets environmental nod

New Delhi, January 10
South Korean steel maker Posco has received environment clearance for its Rs 52,000 crore steel plant in Odisha, ending an eight-year wait for the project to get off the ground.

"Yeah, I have cleared it," new Environment Minister M Veerappa Moily said. The approval comes a week ahead of South Korean President Park Geun Hye's visit to India.

The clearance will pave the way for Posco to build the steel plant with an annual production capacity of 12 million tonnes.

The project, the largest FDI in India, has languished since 2005 due to problems related to environmental clearance and land procurement.

Officials in the ministry said Posco's project comprised two aspects — a steel plant and a port project. Moily delinked the two and granted approval for the steel plant.

Posco had received initial clearance from the Environment Ministry in 2007 and final approval in 2011. In 2012, the approval was suspended by a quasi-judicial body, citing environmental concerns. — PTI

Coal Ministry de- allocates more mines
Girja Shankar Kaura
Tribune News Service

New Delhi, January 10
The Coal Ministry has decided to de-allocate some more mines while deducting the bank guarantee in another case.

The ministry has also shot off notices to some other firms, including PSUs and state-owned power companies, seeking explanation from them regarding the delay in developing the mines.

Continuing with the action based on the recommendations of the Inter Ministerial Group (IMG), the Coal Ministry has sent notices to Sunflag Iron & Steel Ltd, Dalmia Cement (Bharat) Ltd, Maharashtra State Mining Corporation Ltd, Birla Corporation Ltd and Gondwana Ispat Ltd for deallocating the coal blocks, given to them earlier.

The coal blocks in question are the Khappa and Extn Coal block, Warora coal block, Bikram coal block and Majra coal block. The coal ministry has also decided to deduct 50% of bank guarantee given by Birla Corporation Ltd.

The ministry has also sent notices for delay in developing the coal blocks to NTPC, Madhya Pradesh State Mining Corporation Ltd, Damodar Valley Corporation and show-cause notices for why the coal blocks should not be deallocated to Bhushan Steel, Jai Balaji Industries and Rashmi Cement.