New Delhi, November 4
The National Council of Applied Economic Research (NCAER) has lowered India's GDP growth forecast to 5% in the current financial year on weak economical fundamentals and uncertainties in growth prospects.

The economic think-tank in its earlier projection had suggested that the economy was likely to grow at 5.7% in 2014-15.

"The NCAER is predicting a slower growth for the economy unlike other forecasts. The fundamentals of the economy remain weak with uncertainties prevail. The only redeeming feature is the weakening of inflation and FDI inflows. Whether that will help us revive our growth prospects will depend on a number of factors, including revival of the external economy and the extent of damage on agriculture due to deficit rainfall," it said in a release today.

The NCAER said the overall economy is looking weak with uncertain growth prospects.

"The economy is giving mixed signals. On one hand, we had Sensex reaching record levels partly driven by record foreign institutional investment (FII) and FDI. However, the business confidence index is showing a rise in sentiments on the back of a stable political regime with the new government," it said.

The weakening of prices due to cheaper food and fuel inflation is also positive, but agricultural growth is predicted to be lower than last year as there was deficit rainfall with uneven spatial and temporal patterns.

"The pace of growth shows signs of slowing down in the services sector. Not surprisingly, bank credit to the commercial sector has not picked pace and continues to languish. Further, the slowdown in the external economy, except the United States, shows little growth prospects for the external sector even though exports grew in the first quarter," it said.

Therefore, while inflation has weakened significantly and sentiments have improved, the fundamentals of the economy continue to be weak, said the NCAER. — PTI

New Delhi, November 4
The country's gold imports could come down by 250 tonnes a year if the government re-launches a gold deposit scheme and mobilises at least 1% of estimated 25,000 tonnes of idle gold stock lying with Indians, according to the gold and silver refiner MMTC Pamp.

The current gold deposit scheme, launched in 1999, is beyond the reach of most households as it mandates a minimum deposit of 500 gram. Only temples and trusts are taking advantage of this scheme and not the general householders.

"There is a need to re-launch a gold deposit scheme with a minimum 40 gram of gold deposits. Even if we mobilise 1% of the estimated 25,000 tonnes of idle gold stock, we will be able reduce imports by 250 tonnes a year," MMTC Pamp MD Rajesh Khosla said.

The company has proposed a minimum gold deposit of 40 grams after carrying out a survey of 5,000 households across the country. "The Reserve Bank has said the proposal looks alright and we are now waiting for a notification," he said.

Stating that India's gold demand is unlikely to come down even if the government further tightens import norms, Khosla said. "The only way is to get the idle gold in circulation through a gold deposit scheme tailored especially for general households and not for banks and large gold holders."

The proposed scheme will help in balancing the huge gap between demand and supply and bring down the current account deficit (CAD), he said.

If the proposed scheme takes off, Khosla said the company would act as an enabler in the gold deposit scheme since it was the only refinery to be accredited with the London Bullion Markets Association.

MMTC Pamp, a joint venture between state-run MMTC and Switzerland's PAMP, said under the proposed scheme it would collect, assay, transport, refine and re-transport gold as instructed by banks.

India imports 800-900 tonnes of the yellow metal every year. The country is estimated to have imported 410 tonnes in the first half of this fiscal. — PTI

Chandigarh, November 4
Maruti Suzuki India, India's largest car maker, is beating the downturn in the auto industry by launching models and making aggressive marketing strategies for both old and new cars.

While all other car manufacturers (taken together) have shown a negative growth of 4.6%, Maruti has shown a growth of 12.4% between April and October this year. Maruti officials claim that the auto industry registered a growth of 2.3% due to high sales growth of Maruti.

Talking to The Tribune, on the sidelines of the launch of Alto K10, here, Tarun Garg, national sales head, Maruti Suzuki India, said the launch of Alto K10 would further propel the company's growth trajectory. "We already have 44.5% of the market share in the country and with the new launches, especially K10 which is one of the growth drivers for the company, we will be able to increase our sales," he said.

"Across India, K10 continues to be our best selling model. Now, we plan to explore new markets in West Asia, Latin America and Africa for exporting the car," he said, adding that so far they have exported 7,200 units of K10 and the new model will help it zoom the export sales.

Garg said Punjab and Haryana were the biggest markets for K10 and contribute 22% of the total K10 sales, with 2,200 units of the model being sold in the two states monthly. Today, as many as 21 customers were handed over the new generation K10after the launch.

In the past one year, the company has managed to increase its market share in Punjab by 9% (its total market share in the state is 54%) and the increase in market share is 4% in Haryana (with the total share of 48%), he said.

Garg said the company would also be commissioning its new manufacturing facility in Gujarat by 2017. "The R & D facility and test track being set up in Rohtak will be commissioned by 2016," he said.

New Delhi, November 4
Indian banking and financial securities companies will spend Rs 469 billion on IT products and services in 2014, an increase of more than 10% over 2013 revenue of Rs 427 billion, research firm Gartner said.

The forecast includes spending by financial institutions on internal IT (largely personnel), hardware, software, external IT services and telecommunications.

IT services is the largest overall spending category at Rs 155 billion in 2014 (33% of the entire enterprise IT market), which confirms the interest of the banking industry for IT services.

However, software is forecast to achieve the highest growth rate among the top level IT spending categories — at about 16.7% in 2014 — which will slow down in the following years compared to the IT services market.

"New bank licenses will be soon granted by the RBI. This will trigger a new wave of IT spending across the country as the RBI's goal is to reach a higher local penetration for banking services and this means more branches," said Vittorio D'Orazio, research director, Gartner.

"Front-office technologies, such as branch-related hardware and software, will be the sweet spot as well as new channels such as mobile and ATMs/kiosks," he said.

New Delhi, November 4
Emerging as one of the most-liked stocks for foreign funds, mortgage giant HDFC has seen overseas investors raising their stake in the company to a record-high of nearly 78% during the quarter ended September 2014.

The mortgage financier has also become the first-listed Indian company among 30 Sensex firms to have over 75% shareholding by foreign institutional investors (FIIs).

The cumulative FII holdings in the company rose to 77.85% in the July-September quarter this year from 73.09% in three months ended September last year, according to data from stock exchanges.

In the April-June quarter of 2014, FIIs' holding in HDFC stood at 77.36%.

Moreover, the shareholding of overseas players or FIIs in HDFC has been steadily rising since September last year. — PTI

Mumbai, November 4
An entity registered only as a stock broker cannot undertake the role of a merchant banker in the capital markets, the Securities and Exchange Board of India (SEBI) has said.

SEBI has stated this position in reply to an "interpretive letter" sought by Almondz Global Securities Limited (AGSL), which had asked whether it, as a stock broker, can handle any issue of debt securities offered on a private placement basis.

In case of AGSL, SEBI further said although it was registered as a merchant banker too, it was barred by the market regulator in March 2014 from taking up fresh assignments as a merchant banker for five years.

In March this year, SEBI had prohibited AGSL from taking up new assignments or involvement in any new issue such as an IPO, follow on issue etc from the securities market for five years in the matter of PG Electroplast Limited.

Later in April this year, SEBI also suspended AGSL (as a merchant banker) for six months in the matter of Bhartiya Global Infomedia Limited.

SEBI said, in the present case, the activities specified by AGSL were in the nature of activities carried out by a merchant banker, therefore AGSL (stock broker) cannot perform such activities. — PTI

New Delhi, November 4
The Food Ministry has decided to disband the 56-year-old Development Council for Sugar Industry (DCSI) saying the statutory body is no longer relevant after decontrol and de-licencing of the sugar sector.

The DCSI was set up in 1954 under the Industries (Development and Regulation) Act. The council looked into issuance of licences for setting up of sugar mills and other issues related to the sector. It has normally been reconstituted after the expiry of a two-year tenure.

"The DCSI has no relevance today especially after the sugar industry has been de-licenced and decontrolled. There is little rationale to continue the council and we have decided not to reconstitute the DCSI," a senior Food Ministry official said. The 25-member council will be disbanded and a notification in this regard will be issued soon, the official said.

The Food Ministry has also decided to do away with a sub-committee on sugar standards functioning under the DCSI.

The official said, "Since the Bureau of Indian Standards (BIS) and the Food Safety and Standards Authority of India are looking into the sugar standards issue, there is no point continuing with the Standing Advisory Committee on Sugar Standards under the DCSI."

The ministry will shift the DCSI's another sub- committee — Standing Research Advisory Committee (SRAC) — under the existing Sugar Development Fund Standing Committee. The sub-committee will be renamed as "Grant-in-aid for research projects". "This has been done to streamline the committees to avoid confusion," the official said.

The sugar industry was de-licenced in 1998 and the requirement of licence for setting up sugar mills was dispensed with. In May 2013, the government removed some more key controls in the sugar sector. — PTI

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