Paisawaisa - Press Release and News Highlights

Banerjee announced Rail Budget 2009-10

Fri, 03 Jul 2009 06:54:14 UTC

With the great expectations of the improvements in Railway amenities, the newly appointed Railway Minister, Mamta Banerjee presented the 15th Railway budget in the Parliament. She announced that there will be no hike in the passengers fares and freight tariffs. By presenting a promised 'pro-people' budget, the railway minister showed a clear approach to provide better facilities and comforts to the passengers with their securities at the priority level. While presenting her political career's third Rail budget and the first under United Progressive Alliance (UPA) government, told that the development should not be limited to only a few people. People expects better facilities and better connectivity between the various stations in the country. The better passengers amenities, safety, security and availability of good quality food and drinking water in trains and on various stations is her key priorities. An expert committee will be set up to advice the railway minister for the accurate implementation and to fulfill the socially desired project.

Under the Railway budget 2009-10, 12 non-stop inter-city air-conditioned trains will be introduced and there is a proposal for the introduction of 57 new trains on various routes. There is a plan for the up-gradation of nearly 300 stations up to global standards and to provide computerized ticketing services from the 5,000 post offices across the country. Approximately 200 stations would be provided with the automatic vending machine in up coming months.

While keeping in mind the problems being faced by working women in traveling, Ms. Banerjee introduced EMU train services 'only for ladies' in Delhi, Chennai and Kolkata. To dedicate for the next generation, She introduced low cost, air conditioned 'Yuva trains' which will be only having sitting accommodation and the rules for the student concession will be relaxed. The media persons can avail 50 percent concession over the basic traveling fare. Earlier, it was 30 percent concession. Banerjee also launched a new beneficial scheme for the lower section of the society, named 'Izzat' providing Rs.25 pass up to 100 km of journey. She also told that the multi-purpose complexes would be built in 50 station premises with world class facilities in cities like Mumbai, Kolkata, Bangalore, Varanasi, Guwahati, Chennai, Mangalore, Porbundar and Kochi, among others. The panel of doctors would be available on long distance trains to provide the medical assistance during traveling.

The major highlighted portion of the Railway budget 2009-10:-

1 Media Concession:- a flat 60 % discount over the basic fare if the media person is traveling with spouse and increased 30 % to 50% discount for press correspondents.

2 Automatic Vending machine- the new 200 automatic vending machine will be installed at the major railway stations for selling the tickets.

3 Passengers can get computerized railway ticket from 5,000 post offices across the country.

4 SMS updates will be provided for the wait listed tickets.

5 Totally air-conditioned double decker trains for the inter-city travel at major cities.

6 For long distance journey, the Rajdhani Express would be equipped with infotainment facilities.

7 50 world class stations to be developed under the public-private partnership model.

8 Around 200 small and mid sized stations will be equipped with ATM facility .

9 Kolkata metro to be extended.

10 At least one Doctor would be posted for long distance journey.

11 Shipment Cargo has been increased up to 5 % during 2008-09.

12 For 2009-10, the target for cargo will be 882 million tonnes.

13 There is an increase of Rs.50 billion in budgetary support in 2009-10.

14 The amount of Rs.1102 crore has been allocated for the improvement in passengers amenities.

15 No increment in passengers fares and freight charges.

16 A monthly pass of Rs.25 will be issued to the unorganized sector with an income below Rs.1500 per month for travel up to 100 km.

17 The new fully air conditioned ' Yuva train' is introduced for youth with only seating accommodation and low fares.

18 In kolkata metro, Students will get 60% concession.

19 A separate EMU trains 'only for ladies' is introduced for the safety of daily commuting women passengers.

20 The fares of Rs.299 will be charged up to a distance of 1,500 km and Rs.399 up to 2,500 kms
in Yuva trains.

21 The introduction of 12 non-stop trains between major cities.

22 50 mobile rail ticket vans to be launched.

23 High-end securities will be provided on 140 endangered stations.

24 A 1,000 MW plant will be installed.

25 New factory will be established in West Bengal for the manufacturing of the coaches.

26 Private operation of cargo terminals will be encouraged.

27 A committee will be formed under Sam Pitroda to commercialize railways' optic fibre network.

28 A better food facility under the name 'Janta Khana' will be provided at various stations.

29 Seven nursing colleges is going to offer jobs to railway spouses.

30 Plans for the establishment of medical colleges through public-private partnership model.

31 The 50 stations of tourist places will have integrated facility.

32 Special recruitment will be done for the physically challenged.

33 New train information system will be started in Kolkata, Chennai & Delhi.

Maharashtra Government relaxed interest amount on floriculture

Fri, 03 Jul 2009 06:51:19 UTC

On the onset for the state election to be held four months from now the government has relaxed the interest amount of about Rs.25 crore of the high-tech floriculture farmers. At present Maharashtra is an important state for floriculture having 275 hectare of land used for green house floriculture. Among this 75% is in the hands of the small farmers and the rest belongs the corporate growers.

State cabinet, which last week conducted a meeting in Sindhudurg in Ratnagiri district, had announced for a interest relaxation for the 1372 identified small florist farmers in the state and as well as in the bank. The condition for availing the loan waiver is that the farmer have to pay their first installment of the re-analyzed loan to the bank and then only the state government will pay the entire amount of interest to the bank in respect of the loan on behalf of the farmers. Currently floriculture is mainly done in Pune, Satara, Sangli, Nashik and Kolhapur district of Maharashtra. According to Megha Borse, President of Maharashtra Flower Growers Association commented that the prices of water soluble fertilizers increase by more than 100% and the cost of transportation is also increased. The final influx came during the recession time when the cost of flowers increase during the marriage time. However the floriculturist have a very short range of season for cultivation. In this season the export of rose fall down by 25% .

Mahindra Satyam to conduct meeting on July 10

Fri, 03 Jul 2009 06:41:54 UTC

The Chairman of Mahindra Satyam, Kiran Karnik has decided to conduct a meeting on July 10 in order to take a decision over the matter of second round of the allotment of the preferential shares, to raise about 42.7 per cent stake of Tech – Mahindra in the firm or to stick over the 31 per cent.

In the month of April, Tech Mahindra acquired 31% stake in Satyam for the cost of Rs.1,756 crore.

Mr. Karnik said that the reason behind the lack of response of the shareholders to the open offer was company's strengthening position, with the rise in share price from Rs. 40-45 to Rs. 73. Tech Mahindra's open offer price was set as Rs. 58 which is lower in comparison to the current price. Thus to cover up the fallible reaction to the open offer the request has been filed to the Mahindra Satyam board for the allotment of the preferential shares, which could raise the stake of the Hyderabad-based company Tech-Mahindra to 42.7 per cent in Satyam.

Mr. Karnik declared, with the completion of the first offer the company is looking forward to go ahead with the second issue in the term of 15 days along with the approval of SEBI and the Company Law Board.

The company is expected to spend Rs. 1,155 crore for purchasing more preferential shares. If the open offer would have been successful, then Tech-Mahindra would take the stake of 51 per cent in Satyam. Now the company will have to spend more to gain the major holding, because the preferential share helps in the expansion of the share capital.

JSW Steel reports rise in production

Fri, 03 Jul 2009 05:51:41 UTC

India's largest steel producer by capacity, JSW Steel has reported a 45 per cent rise in the steel production to 14 lakh tonnes in the first three months of this fiscal as compared to 9.71 lakh tonnes in the same quarter a year ago. The main factors which led to a sharp rise in the steel production is the increasing demand from the consuming sectors such as automobile, white goods and construction among others. In addition to the strong demand from various sectors, additional steel production from its 2.8 million tonnes per annum blast furnace at Vijaynagar was another factor of an increase in the steel production.
During the quarter under review, flat-rolled products, mainly consumed by consumer durable and auto industry, witnessed a 47 per cent rise in the production which stood at 8.70 lakh tonnes as compared to the year ago period. Despite the temporary shutdown of of hot strip mill at Vijaynagar, there has been a growth in the production of flat products.
The company witnessed a rise of 103 per cent in the production of long-rolled steel products, mainly consumed by the construction sector, which stood at 1.86 lakh tonnes in the quarter as compared to the corresponding period a year ago. It is to be noted that the capacity of its Vijaynagar plant in Karnataka had been increased to 6.8 million tonnes and the steel maker has plans to further increase it to about 10 million tonnes by the end of 2010. With the strong signs of recovery in the major consuming sectors, JSW Steel is expecting a 70-72 per cent rise in production in the current fiscal.

Railway Ministry comes up with low cost 'Yuva Trains'

Fri, 03 Jul 2009 05:12:06 UTC

Railway Minister of India, Mamta Banerjee has come up with the new low cost 'Yuva Trains' today for some major cities. The trains are air-conditioned and introduced with the motive of providing travel facilities to the youth of the country.

The trains are also brought in with the target of providing service to the low cost income groups.

While presenting the Railway Budget, Banerjee said that the train would soon come with a weekly service programme as the pilot project in the term of 3 months in the routes of Delhi-Kolkata and Delhi-Mumbai. She also said that the programme would get extended if it gets success.

She added that the trains would be introduced on the routes between some major cities so that the youth and the lower income group takes benefit from this service.

The trains will travel in the area of 1,000 Km to 2,500 Km and will cover point to point distance. The fair for the train would be Rs.229 for the distance of 1,500 Km and Rs.399 for the distance of 2,500 Km.

Roshni Nadar appointed as chief executive of HCL Corporation

Fri, 03 Jul 2009 04:21:39 UTC

The only daughter of the billionaire and Padma Bhushan winner Shiv Nadar's, Roshni Nadar has been appointed as the chief executive and executive director of HCL Corporation. This is not a leadership change as the Vasant Valley School 1999 batch member Roshni Nadar will initially head the activities of Shiv Nadar Foundation Nadar's SSN Trust wheras her father would still be responsible for the strategic and management decisions of the company. It is to be noted that Roshni Nadar is a Vasant Valley School 1999 batch member and has done her MBA in Social enterprise management from the Kellogg school, USA

Markets ends on the positive note on the last trading day of the week

Fri, 03 Jul 2009 04:16:33 UTC

Indian indices ended the day on the profitable note despite some roughness in the market which occurred because of the new railway budget. The Sensex and the Nifty went northwards in the last hour of the trading session and ended the day, standing on the positive side.

The Sensex ended the day at the mark of 14,915 with the total gain of 257 points, Nifty stood tall at 4,422 on the closure, with the rise of 73 points. At the end of the day, the CNX Midcap went up by 0.7% and the BSE Smallcap recorded the gain of 0.6%.

It was a mixed affair for the Asian market as the Hang Seng rose by 0.14%, however, the Nikkei posted a decline of 0.61% and the Straits Times fell down by 0.91%.

Talking of the US indices, both the Dow Jones as well as the Nasdaq were trading flat.

Cash starved Maytas Infra gets lifeline

Fri, 03 Jul 2009 04:01:41 UTC

Maytas Infra Limited which had been suffering from a serious lack of cash has finally got a way out. A group of 18 banks has approved the corporate debt restructuring (CDR) package for the company and has agreed for a loan of Rs.100 crore for working capital purposes and additional time to repay previous loans worth Rs.1600 crore.

The company had earlier requested for Rs.200 crore fund based and Rs.400 crore non-fund based finance and out of this half of each had been asked at the earliest for fulfillment of immediate needs and the rest of the amount in the next three months based on the performance of the company which has been accepted by the lenders. It is to be noted that Maytas Infra is again in the race for the Hyderabad Metro Rail project. It had failed to achieve financial closure for the project earlier. The Andhra Pradesh government had even made plans for executing the project on its own

Virgin Mobile announces foray into data segment

Fri, 03 Jul 2009 03:08:40 UTC

Virgin Mobile India has marked its foray into the data segment with the roll out of its USB modem 'vLink' in the market. Its a CDMA based USB modem which comes with a capacity of one GB data storage. The company stated its price at Rs.2,100 and is coming with a starter kit which offers free unlimited promo data usage time up to 30 days. According to the Virgin Mobile India Chief Officer, Deval Parikh, the two tariff plans have been launched in the market. First plan offers unlimited data usage for a month with the monthly rental of Rs.801 while in the second tariff plan, the users will enjoy the service of balance add on over to the next month. Its monthly rental will be Rs.349. The second plan has a usage rate of 25 paise per minute from 8 am to 10 pm but at night these rates will dip to 13 paise per minute between10 pm-8 am.

As per the statement made by the Chief Executive Officer,Virgin Mobile India, MA Madhusudan, vLink will offer great connectivity and as it is a portable device, will surely attract the style-conscious youths, professionals and students to access Internet from anywhere. It has a storage capacity of 1GB which will allows users to save music, videos and photos. It is to be noted that the country has a total Internet user base of 49.4 million where nearly 52 percent share comes by the people of below 25 years of age.

LGB to take over MM Gears

Fri, 03 Jul 2009 02:56:52 UTC

LG Balakrishnan, the Coimbatore based Roller chain manufacturing company is going to take over MM Gears, the company involved in the business of manufacturing local gear and gear boxes.

On Thursday, an agreement is signed by LBG with the promoters of MM Gears to take over the 100% stake in the company. MM Gears was started in the year 1995 and has recorded the annual turnover of Rs.10 crore.

A senior official from LGB said in a statement that the company is going to acquire MM Gears as it is having the goal of entering in the business of gear and gear parts manufacturing. He added that the company will benefit from this acquisition as MM Gears is having already established manufacturing facility.

LGB is involved in the manufacturing of sprockets, automotive chains, belts and tensioners.

The promoters of MM Gears P Mohanraj and R Mylsamy said that they took the decision of selling their stake in the company as the need for more capex was estimated for the further expansion of business. Mr Mylsamy also said that he would continue to hold the position of chief of operations in the company.

The official from LGB said that the gear and gear parts industry is recording the good growth and is expected to avail orders from foreign countries also which would be needing the additional investment of Rs.10 to 20 crores. Promoters of MM Gears sold their stake in the company as they found it tough to arrange for the additional funds.

LBG posted the net profit of Rs.39.14 crore along with the net sales of Rs.507.6 crore in the fiscal 2008-09.

After starting the day on the steady note, market is giving out positive results, trading on relatively higher note after the railway budget is announced. Buying is seen in the stocks of power, financ

Fri, 03 Jul 2009 02:19:16 UTC

After starting the day on the steady note, market is giving out positive results, trading on relatively higher note after the railway budget is announced. Buying is seen in the stocks of power, financial, capital goods and pharma.

In the afternoon session, the Sensex is trading at 14,749 with the rise of total 91 points, the Nifty is trading at 4,366 with the gain of 17 points. However, a decline is seen in small indices as the CNX Midcap is down by 0.02% and the BSE Smallcap has recorded a loss of 0.1%.

Century Plyboards posts lower profit

Fri, 03 Jul 2009 01:44:40 UTC

Plywood and veneer producing firm Century Plyboards (I) has posted a lower net profit
for the year ended March 31, 2009 which stood at Rs.11.11 crore from Rs.44.62 crore last year. The company witnessed a drop in profit despite a 16.53 per cent rise its sales revenue which stood at Rs. 738.21 crore as compared to Rs.633.48 crore. Its net sales during the period also went up to Rs.647.69 crore as compared to Rs.541.43 crore in the previous fiscal. However, other operating income of the company fell to Rs.45.62 lakh as compared to Rs.59.53 lakh in the previous year. The board has also announced a dividend of Re.0.25 per equity share of Re.1 for the shareholders..

As per a statement made by the managing director Sajjan Bhajanka, the firm has performed well and has registered an increase in turnover despite the on-going economic turmoil which has led to a steep fall in the demand for the products and services. However, it witnessed a sharp fall in its export earnings due to the current slowdown in the international market and forex rates.

Interest and finance charges increased to Rs.17.55 crore during the year under review as compared to Rs.12.26 crore in the previous year, while depreciation cost stood at Rs.16.91 crore as against Rs. 13.92 crore in the previous year. Its profit before interest and exceptional items was Rs.58.35 crore from Rs.74.22 crore in the previous financial year. In addition to this, the group, with interests in ferrous alloys and cement, is planning for expansion in the near future at an estimated investment of Rs.2,050 crore in the next two years.

Land sale gives Rs.1,000 cr funds to DLF

Fri, 03 Jul 2009 12:17:43 UTC

DLF, the real estate major of India has raised the funds of Rs.1,000 crore in last 4-5 weeks, through the sale of lands in 4 major cities and is looking forward to make more such deals in order to raise additional Rs.500 crore funds in the coming weeks. Company officials confirmed the news in a statement.

The company is taking initiatives for raising the funds as it earlier chalked out the plan of raising about Rs.5,500 crore by the means of selling its assets, in order to reduce the burden of Rs.14,000 crore debt by the end of the current fiscal.

In the recent weeks, DLF has sold the land parcels in the cities like Baroda, Mumbai, Gangtok and NCR along with some hotel projects in Delhi and Gangtok.

DLF has sold 66% of its Mumbai based Prabhadevi plot to the Chennai based investor C Sivasankaran for the cost of Rs.310 crores, while its hotel project in Delhi is bought by a high net worth individual.

Many major real estate developers took the initiative of selling their personal assets after the Indian real estate market suffered the huge decline in the sales of properties like lands, homes, shops and offices between the term of September to March. These companies are finding it difficult to repay the loans after witnessing the slump.

Recently Unitech also took the same route of selling its personal assets as it sold some of its hotel properties and an office space in Saket.

NTPC looking for Japanese funds of $500 mn

Fri, 03 Jul 2009 11:37:42 UTC

NTPC, the state run power corporation is looking forward to avail the funds from Japanese funding agency Japan Bank for International Co-operation for its supercritical and ultra-supercritical power projects which runs through the consumption of fossil fuels.

The sources said that the company is willing to get the loan of $500 million from the Japanese finance agency.

The funds of $5 billion has been allocated by JBIC in order to provide semi commercial loans, under the Leading Investment to Future Environment Programme, to the companies which are involved with the energy efficient and cleaner power generation projects.

NTPC stands as the largest power utility of India, which approached the JBIL last month for the funds and in return some officials from the Japanese agency also visited India to interact with NTPC officials. NTPC is looking forward to build high end energy efficient solar and wind power projects in the current financial year.

The chairman of NTPC, RS Sharma said that the company has already submitted its project report to JBIC which is expected to satisfy the finance agency. If the project gets approved then both the companies would be signing an agreement. However he declined to open further details of the development.

Earlier in the year 2007 also, NTPC had availed the loan of $380 million in order to fund its Barh Super Thermal Power Project in Bihar with the capacity of 1,980 mw.

Sensex, Nifty takes off slowly but consciously

Fri, 03 Jul 2009 11:17:08 UTC

It turned out to be a rather a slow start-up affair for the Indian benchmark indices which though began the day slowly but managed to put up a confident start. The Sensex is trading at 14684 up by 26 points. The Nifty was up by 12, trading at 4361. In the second-rung stock segment, both the CNX Midcap and the BSE Smallcap were up by 0.2 percent, each.

In the Asian markets, the Hang Seng was down by 0.3-0.6 percent while the Nikkei was down by 1.40 percent. The Straits Times also had dropped down by 1 percent when the reports last came.

Magma Fincorp posts low profit

Fri, 03 Jul 2009 11:13:22 UTC

A retail asset financing company, Magma Fincorp has reported its net profit for the fourth quarter ended March 31, 2009 which stood at Rs.6.80 crore as against Rs.25.02 crore in the same quarter a year ago. During the period under review, the firm witnessed a marginal 6.24 per cent rise in income from operations at Rs.163.40 crore as compared to Rs.153.79 crore in the year ago period.

For the financial year ended March 31, 2009, its net profit also fell to Rs.39.04 crore as compared to Rs.50.53 crore in the previous year. However, income from operations stood at Rs.569.27 crore as compared to Rs.437.11 crore in the previous year, marking a growth rate of 30.23 per cent. The board has also recommended a dividend of Re.1 per piece of Rs.10 each for the shareholders.

As per a statement made by Magma Fincorp's vice chairman & managing director Sanjay Chamria, the firm has performed well in the present economic scenario and is expecting a recovery in the coming months from the on-going economic slowdown which has severely hit the automobile and financing industry which in turn hit its profit.

During the year, the company witnessed a marginal 5 per cent rise in disbursals which stood at Rs.3,673 crore as compared to the previous year despite the current slowdown. Its assets under management went up by 17.3 per cent and stood at Rs.8,694 crore. Besides its strong focus on the financing of passenger cars and utility vehicles, commercial vehicles as well as on construction equipments, the company is also working towards SME financing

Jet-Kingfisher finally in alliance

Fri, 03 Jul 2009 10:39:12 UTC

Jet Airways, the largest private carrier of India and Kingfisher Airlines, the five star airlines of the country have finally established the tie-up with each other on July 1. On the initial phase of the alliance, both the airlines are sharing the infrastructure at the domestic airports.

Both the companies are also looking forward to carry out the code sharing activity in the current month. A senior official from Kingfisher Airlines said that the operational cost of the company would come down by 20-30 percent because of the infrastructure and code sharing initiatives.

An official from Jet Airways also came up with the statement that the code sharing process would soon be started by both the companies, besides the steps taken for network rationalisation and joint fuel management.

An agreement was signed between the Chairmen of both the companies, Vijay Mallya and Naresh Goyal, in last October in order to reduce the costs and rationalise capacity, when the jet fuel prices were on the peak.

An analyst said that both the companies are looking forward to cut the costs as the landing and parking charges in the country are already high and jet fuel prices have also rose in the last 2 weeks.

Currently both the companies are carrying a large burden of debt on their heads. Jet recorded the net loss of Rs.402 crore and the debt of $3.1 billion for FY'09, while Kingfisher posted the loss of Rs.626 crore in the same fiscal.

The head of transport advisory services, KPMG, Raajeev Batra said that India airlines industry is facing the loss because of the high charges which are paid out for operations.

Simplex Infrastructures reports rise in profit

Fri, 03 Jul 2009 10:30:46 UTC

Simplex Infrastructures has reported a 36.66 per cent rise in its net profit for the year ended March 31, 2009, which stood at Rs.123 crore as against Rs.90 crore last year. Its year-on-year turnover rose 67.84 per cent to Rs.4,713 crore during the year under review as compared to Rs.2,808 crore in the previous year.

Its profit before depreciation and tax rose by 59.68 per cent to Rs.305 crore in the year from Rs.191 crore, profit before tax increased by 36.22 per cent to Rs.173 crore as compared to Rs.127 crore. The board of directors has also recommended a dividend of Rs.2 per piece on equity shares of Rs.2 each for the shareholders.

HUL workers to go on a protest rally

Fri, 03 Jul 2009 10:02:26 UTC

The workers of Hindustan Unilever Limited, are going to open a protest against the management of the company regarding the issue of closure of a factory unit and for not settling the major issues with the employees.

The Hindustan Lever Employees' Union said in a statement that in the year 2005 the 'Bombay Factory' of the company which employed about 800 workers was transferred to a subsidiary and following that the factory was closed by the company in the term of next 5 months.

The union was against the decision of the company and challenged it in the court where the case is still pending.

According to the union press note, the court has given 75 dates since the case is filed by the union, due to which the employees are not having there wages in hands since then.

The union also said that the company's decision of closing the facility was also supported by the Maharashtra government, which angered the union even more.

It also said that in November 2007, the negotiations were restarted by the company but it didn't came up with any result.

Market fails to cash upon the positive outcome of Economic survey

Fri, 03 Jul 2009 09:30:21 UTC

It proved to be a disappointing day for the Indian benchmark indices on Thursday as the market recorded a flat ending to the day. Even the encouraging figures furnished by the economic survey failed to move the market in a positive direction. With Railway budget slated to be presented on Friday by Mamta Banerjee, it would be again interesting to witness the effect of it on stock market.

Talking of Friday as a trading day, chances of a good start and a good finish to the day are very minimal on account of Railway budget presentation and also because of a weak ending of the American benchmark indices.

Speaking of the American indices, the Dow Jones ended the day at 8281, down by 223 points while on the other hand the Nasdaq too plunged by 27 points to finish the day at 896.

Top Gainers of the day

Sturdy Industries (20.0%)

Bhagyashree Leas (20.0%)

Cressanda Solutions (20.0%)

Intergrated Digital (20.0%)

Westlife Development (20.0%)

Top Losers of the day

Transcorp Inter (31.8%)

Trans Asia Corporati (20.0%)

Royal Cushion Vi (20.0%)

Bombay Talkies Ltd. (19.9%)

RobinsonWorldwideT (19.9%)

Inflation slips to -1.30 per cent

Thu, 02 Jul 2009 06:46:36 UTC

India's inflation rate slipped to -1.30 per cent for the week ended June 20 as compared to -1.14 per cent for the week before. The inflation has remained negative for three weeks in a row now. The decline of inflation can be attributed to the high base effect and high rate of rise in price which stood at 11.91 per cent in the same week in the previous year.
The prices of fruits and vegetables have also risen considerably this week as compared to the same week last year. The rise was by 11.19 per cent as compared to the previous year. Prices of cereals have also increased by 12.39 per cent, pulses became dearer by 16.52 per cent and condiments and spices went up by 7.49 per cent as well.
Inflation is expected to rise in the coming weeks due to the recent raise in prices of petrol and diesels. However, tea and fish marine showed no signs of movements. The inflation rate is expected to remain in the negative zone till September this year.

Apavou Hotel-Resorts & Spa appoints Connexons Tourism Services as their Representative Office in India

Thu, 02 Jul 2009 06:27:00 UTC

New Delhi, July 01, 2009: Mr Jean Luc Helary, CEO Apavou Hotels-Resorts & Spa Mauritius, today announced the appointment of Connexons Tourism Services, led by Mr. Sunil Puri, as their Sales Representatives in India. Connexons Tourism Services has its head office in New Delhi and branch offices in Mumbai & Chennai.

Apavou Hotels-Resorts & Spa operates a portfolio of eight hotels in Mauritius and Reunion namely, in Mauritius, Indian Resort & Spa, 4* luxe with 265 rooms; La Plantation Resort & Spa, 4* luxe with 271 room; Ambre Resort & Spa, 4* sup with 298 rooms; Mornea, 4* with 144 rooms; Bougainville, 3* with 50 rooms; Les Cocotiers, 2* with 48 rooms; in Reunion, Hotel le St Denis, 3* with 124 rooms; and Le Royal Cap Resort & Spa, 5* opening in 2010.

Reinforcing the sales force on the Indian market will assist in increasing awareness and business opportunities for Apavou Hotels-Resorts & Spa. Connexons has tight connections with the Indian travel trade, and will work on educating the Indian customers on the unique value proposition and special features offered by the Apavou Hotels.

According to Mr. Jean Luc Helary, India is an exciting and dynamic market and a key business priority for Apavou Hotels. Connexons will assist in re-establishing the hotels in India and target both FIT and MICE travel. For Sunil Puri, the representation will widen Connexons’ reach in this rapidly growing outbound market. Three sales managers will be appointed in the coming weeks, based in Delhi, Mumbai and Chennai.

Apavou Hotels-Resorts & Spa is a leading hotel group in the Indian Ocean with 1076 rooms in Mauritius and 124 rooms in Reunion Island. The hotels are strategically located on the islands and offer a range of activities and facilities for honeymooners, families on holidays, business purposes, corporate groups and MICE.

Hike in Petrol and Diesel prices

Thu, 02 Jul 2009 06:22:15 UTC

Oil Minister Murli Deora made an announcement in the press conference held yesterday that the government is going to rise the price of Petrol by Rs.4 and Diesel by Rs.2.The prices of Cooking Gas and Kerosene were left unchanged as they may badly effect the poorer strata of the society The government has taken this move in order to prevent the losses of the State owned retailers that sell petrol and diesel below the cost price. In the previous time the fuel prises were increased on 4th June '08 which simultaneously resulted in two quick rounds of price cuts in December'08 and in January'09. This was made just before the General Election as the global prices of crude oil had dropped down drastically.

The crude oil prices have doubled from $33.98 a barrel on 12th February but the oil prices is still unchanged. This was the lowest oil closing price which made the top key government -owned fuel retailers like BPCL, IOC, HPCL. The increase of the oil prices created a interested change in the political weather in the country. By increasing the oil price the Government get the advantage of taking two moves before the budget. Firstly, it includes in the lowering of the oil prices to a some extent to gain the favour of the countrymen and secondly to keep down the fiscal deficit by reducing the amount of subsidy on fuel. The government is now in the move to reduce the amount of losses faced by the oil sector industries. The fuel prices were increased after the meeting between UPA chairperson Sonia Gandhi and Prime Minister Manmohan Singh. Petroleum Secretary Mr. Pandey suggested that the government is not trying to recover all the losses of the fuel retailers, which are currently loosing Rs.3.60 on a litre of diesel and Rs. 6 on per litre Petrol. He also said that the fuel retailers can make up their losses by selling fuel at the government determined rates.
He also has given the statistics that the Indian base market crude oil prices are $70.29 a barrel and the fuel retailers losses this current fiscal year(2009-10) is Rs.30000 crore. The companies are still having a loss of Rs. 15.20 a litre on kerosene and Rs.96.8 on per cylinder on cooking gas..He again commented that the losses of the retailers will be neutralized through upstream discount. The contribution made by the upstream companies like Gail India,Oil India,ONGC will not be same as they have provided earlier.

Kavveri Telecom acquires Canadian firm

Thu, 02 Jul 2009 05:59:50 UTC

The Kavveri Telecom announced that it has acquired Trackcom Systems International (TSI) which is a Canada based company. In a filling to the Bombay Stock Exchange, Kavveri Telecom mentioned that its subsidiary Kavveri Technologies Int has acquired Trackcom Systems International. As per the statement made by the Products Managing Director, Kavveri Telecom, Shivakumar Reddy, these acquisition will help the company to access additional high technology products and will strengthen the its position in Defence and Telecom markets. The acquisition would allow them to access high technology products and antennas useful for different applications in defense, space and telecom markets.

Disappointing end to the Thursday's trading

Thu, 02 Jul 2009 05:27:19 UTC

Indian benchmark indices had a discouraging outing on the recently finished Thursday's trading day. The flat ending was credited to Economic Survey that hit the shores of Indian market today, and not to forget the Railway Budget that is slated to be presented on Friday. The Sensex ended the day at 14658, up by 13 points. On the other hand, the Nifty too finished the day in positive by 8 points, at 4349. In the second-rung stock segment, both the CNX Midcap and the BSE Smallcap left the day with a smile, up by 0.40 percent and 0.32 percent, respectively.

The Asian indices too ended on a mixed note. The Straits Times dropped down by 1.40 percent while the Hang Seng came down by 1.1 percent before finishing the day. The Nikkei too went down by 0.60 percent.

Government plans selling stake in SCI

Thu, 02 Jul 2009 03:55:19 UTC

The government is considering the option to divest its 5 per cent stake in the state-run Shipping Corporation of India (SCI) which will be used for expansion and growth operations. Further, the Cochin Shipyard Company will also raise Rs.1,000 crore for construction of offshore projects making it the first state owned ship builder to be listed. This will also provide funds for the construction of a small ship building division at an estimated investment of Rs.98 crore

Ex-Maruti CEO launches Carnation Auto

Thu, 02 Jul 2009 03:12:14 UTC

Jagdish Khattar, the EX-CEO of Maruti Suzuki, has announced the launch of his multi-brand car servicing business which would operate under the name of Carnation Auto. Initially, he has set up nine centres across the country. The company is planning to open its 100 car service outlets all over the country at an estimated investment of Rs.300 crore by 2011. Mr. Khattar had earlier arranged Rs.108 crore from PremjiInvest and IFCI venture for his new business.

The nine existing service outlets are spread all across the country and includes cities such as Amritsar, Chennai, Noida, Mumbai, Hyderabad and Kochi. For the first year, Carnation Auto is targeting to open 30 outlets and earn revenues of Rs.75 crore. The firm is also considering the option to enter the used car business, however car servicing business is on the priority list. As per the statement made by the company Chief Managing Director, Mr. Khattar, the pilot project is a part of the many businesses that Carnation is planning to introduce but initially the firm is targeting car servicing business only. Its service centres would provide for all the car related needs.

Indian benchmark indices run out of steam on Thursday's afternoon

Thu, 02 Jul 2009 02:28:05 UTC

Indian benchmark indices has gone completely off the track in the afternoon trading session as both the Sensex as well as the Nifty has slipped into the red zone. The Sensex is trading at 14570, down by 75 points. The Nifty too was down by 25 points, trading at 4316. In the second-rung stock segment, both the CNX Midcap and the BSE Smallcap was down by 0.30 percent and 0.33 percent, respectively.

SpiceJet appoints new CFO

Thu, 02 Jul 2009 12:55:44 UTC

SpiceJet has appointed Seema Chandra, ex-CFO of Mascon Global, as the new chief Financial Officer who would hold the office from Wednesday. With a 25 years rich experience with Ranbaxy, Nestle India and HT Media and strong business focused skills, the airline is expecting a turn-around from her amid the on-going economic slowdown which has led the airline firms to post negative results and lay-off thousands of employees to remain in the market.

Gemini Communication reports drop in profit

Thu, 02 Jul 2009 12:40:01 UTC

Networking firm Gemini Communication has posted a 63.45 per cent drop in its consolidated net profit for the year ended March 31, 2009 which stood at Rs.10.04 crore as compared to a net profit of Rs. 27.47 crore in the previous year. Its total income during the year under review increased to Rs.289.41 crore as compared to Rs.245.24 crore in the previous year.

Inflation slips to -1.30 per cent

Thu, 02 Jul 2009 12:15:17 UTC

India's inflation rate slipped to -1.30 per cent for the week ended June 20 as compared to -1.14 per cent for the week before.

Diageo to lay-off 900 employees

Thu, 02 Jul 2009 11:59:30 UTC

Diageo PLC, the world’s biggest spirits maker, is planning to lay-off around 900 jobs as it plans to close a distillery and packaging plant under its cost-cutting restructuring operations in Scotland. Under the restructuring plans, the spirits maker will close one of the company’s oldest distilleries and its related cooperage, will result in the reduction in the costs by nearly $66 million by the year 2012.

The planned lay-offs would be made over the next two years, however the firm will partly offset the cuts by the creation of nearly 400 new jobs with the proposed expansion of another Scottish packing plant and a new cooperage. As per a statement made by Diageo Scotland managing director Bryan Donaghey, the planned cuts are necessary for the firm to survive and stay in the competitive global market.

Savitabhabhi.com banned !

Thu, 02 Jul 2009 10:47:34 UTC

India's first cartoon porn comic website which depicts the sexual adventures of an Indian housewife has been banned by the Department of Telecommunication. Pornography is illegal in India and thus, the move was made. The website had 60 million visitors every month, 70% of the traffic being from India only. The website was blocked with official instruction to the Internet Service Providers (ISP's). The website was not informed of the news before-hand. The administrator of the site with the username Deshmukh has started a “Save Savita” campaign on Twitter stream as well as facebook.

Savita Bhabhi website banned

Thu, 02 Jul 2009 10:46:29 UTC

Graphite India reports rise in profit

Thu, 02 Jul 2009 10:33:51 UTC

Graphite India has reported a 44.83 per cent rise in its net profit which stood at Rs.193.57 crore for the year ended March 31, 2009 as against Rs.133.65 crore in the previous year. Its profitability follows a 2.32 per cent increase in Graphite India’s April-March gross sales revenue which stood at Rs.1182.73 crore as compared to the previous year. The board of directors has also recommended a dividend of Rs.3 per piece of Rs.2 for the shareholders.

As per a statement issued by the firm, the performance of the its electrode division was subdued on account of the on-going economic slowdown which severely hit the steel industry. It is to be noted that the graphite electrodes are used in the EAF route of steel production and with a steep decline in the steel production, demand for graphite electrodes has also been impacted. However, the firm sees positive signals for the future with governments announcing help packages for the worst hit sectors in a bid to revive the economies.

Profit before tax and interest from its graphite and carbon division went up to Rs.237.25 crore, however power division reported a fall in profit which stood at Rs.17.09 crore as compared to Rs.28.01 crore. Net sales for the year increased to Rs.1125.88 crore from Rs.1099.05 crore, marking a growth rate of 2.44 per cent, while interest outgo fell to Rs.25.94 crore as against Rs 35.70 crore. Depreciation costs was at Rs.34.35 crore from Rs 33.50 crore in the previous year.

Graphite India manufactures nearly 60,000 tonnes of graphite electrodes in the country and around 18,000 tonnes in Germany. It exports around 60 per cent of its graphite electrode production in the overseas markets.

Market gets stable on Wednesday after a windfall on Tuesday

Thu, 02 Jul 2009 09:01:52 UTC

Global positive cues along with positive domestic trading sentiments played a major role in reviving the Indian stock market on Wednesday which on Tuesday looked completely out of sorts. Asian markets along with European markets too ended positive.

Speaking of the Thursday's trading day, an apparent drop in the trade enthusiasm is possible, thanks to the fuel hike that has been made effective from midnight by the government on Petrol and Diesel by Rs. 4 and Rs. 2, respectively. This has certainly shocked people and one can definitely see its effect as the day begins on Thursday. Moreover, with Annual budget nearing, it would be interesting to see how market turns up.

Top Gainers of the day

M M Forgings Ltd. (20.8%)

Force Motors (20.0%)

Kiri Dyes And Chemic (19.9%)

Jetking Infotrain Lt (17.8%)

NIIT Ltd. (14.7%)

Top Losers of the day

Maha. Polybutene (11.6%)

Pentamedia Graph (10.2%)

Fairfield Atlas (9.4%)

Satra Properties ( I (9.2%)

Millennium Beer Indu (9.1%)

India budget: A ‘game-changer’ or not?

Wed, 01 Jul 2009 07:09:31 UTC

DBS Group Research 30 June 2009

Summary

The new government’s much-anticipated budget exercise is scheduled for July 6. Apart from the usual interest over size and allocation of government spending in the budget, this budget is also keenly watched for the tone it sets in terms of the reform agenda of the new government. We expect the government to target a deficit of 6.5% of GDP for FY09 (ends Mar10), 1%-pt wider than the 5.5% target set in the interim budget in February, and retain forecasts of 7% and 11% growth in real and nominal GDP in FY09. We expect the budget to be populist and inclusive, but also set a credible if slightly ambitious roadmap to trim the deficit over the next five years. In terms of the sectoral emphasis, we expect infrastructure sector to receive the greatest attention, followed by agriculture and education. Since the election outcome a month ago, there are many signs that the government is serious about liberalizing policies and delivering inclusive development, and importantly, that it understands the limitations of any new policies if it doesn’t pay attention to the constraints on delivery and governance. We are optimistic that the budget and the months ahead would see constructive plans, policies and initiatives from the government. However, we believe that many of the policy changes may yield benefits (in terms of higher growth) only in the longer run. At the same time, we are cognizant of the risks that remain on the policy implementation front, and also the more immediate risks to stability from the fiscal position. For example, we are yet to feel confident about the speed with which or the degree to which the government would liberalize oil prices. Indeed, we think it is likely the government exceeds its deficit target given its overly optimistic growth and revenue assumptions. As such, the fiscal position makes the economy vulnerable in the face of external shocks. The possible loss of investor confidence in the market should not be underestimated if risk scenarios such as poor monsoon and elevated crude oil prices actually play out. On the whole, despite brightening longer-run prospects, short-term stability risks remain.
Optimistic in the long-run: necessary ingredients for reforms in place
We may not be able to predict the twists and turns ahead in policy direction and implementation, but, knowing that the right combination of developments and motivations prevail greatly enhances the chances of actual implementation of further reforms. Indeed, the most important reason we expect the government to present a reformist budget and signal a reformist agenda is that many necessary ingredients for reforms, in the present Indian context, appear to be in place: these are political will & opportunity (pull factor), the mere need for reforms to sustain growth (push factor) and cracking the ‘re-election code’ (the means).

We expand on these aspects below.

Optimistic in the long-run: Necessary ingredients for reforms in place

We may not be able to predict the twists and turns ahead in policy direction and implementation, but, knowing that the right combination of developments and motivations prevail greatly enhances the chances of actual implementation of
further reforms. Indeed, the most important reason we expect the government to present a reformist budget and signal a reformist agenda is that many necessary ingredients for reforms, in the present Indian context, appear to be in place: these are political will & opportunity (pull factor), the mere need for reforms to sustain growth (push factor) and cracking the ‘re-election code’ (the means).

We expand on these aspects below.
(1) ‘Pull’ factor - Political will & opportunity: After two decades of witnessing its decline and the rise of regional parties, the Congress party has come back with a stronger mandate in the latest general elections (see chart, previous page). It has tasted ‘partial’ success and is now hungry for ‘complete’ success - i.e.: regaining its historic position and coming back to power as a single party government. This is something it cannot do if the status quo continues. We believe this points to a strengthened political will to overcome hurdles to reform.

(2) ‘Push’ factor - the economy ‘needs’ reforms at this juncture to return to and sustain 8-9% growth rates. The lack of fiscal room means that the government cannot boost growth or deliver inclusive development simply by accelerating spending. The country’s infrastructure is creaking and a binding constraint on growth. Education has to be revamped and delivered well if the so-called demographic dividends (i.e.: higher growth from rising working age population) have to be enjoyed. Agriculture has to be reformed to ensure both food security as well as national security (Maoist insurgencies grow where the state has failed). Many of the above changes cannot be delivered if governance is poor and the administrative machinery is weak and riddled with corruption and inefficiencies. Ironically, this dire straits is the best ‘push’ factor for reforms, including the usually politically difficult governance reform. The Congress party also appears to understand that it cannot come back to power with a stronger majority just by just doing more of the same (after all, the electorate is still not happy, the party fell well short of an outright majority).

(3) ‘The means’ - cracking the re-election code: To begin, the stronger mandate gives the party the space to pursue its agenda, something it did not have sufficient room for in the past five years. At the same time, it has the ‘means’ now. Having broken the anti-incumbency factor prevalent in the last two decades, the Congress party thinks it has cracked the ‘code’ to winning re-election by delivering inclusive development. The key to winning elections is not as obvious as it seems, as many parties win votes on issues other than development (such as caste, religion e.t.c.). Indeed, good economics has not meant good politics for nearly two decades. In 1996 and in 2004, the Congress party and the right wing Bhartiya Janata party lost elections despite pursuing wide-ranging economic reforms and overseeing periods of high growth. In other words, the party now has hit upon a combination of ‘smaller’ government and ‘better’ government that it believes will deliver inclusive development and hence win votes.

...yet, better to be realistic in the short-run, even cautious
A game changer, can only change the game so fast in India. The change would unlikely be dramatic - the political and administrative structure do not allow for dramatic change. It is often said that the Indian political system has the wheels of an ox-cart and the brakes of a Rolls Royce. This is why we do not see an easy return to 8-9% growth (unless global growth is extremely strong). Infrastructure, education, governance cannot be reformed in an instant or even in the space of a year. The first generation of reforms that began in late 80’s /early 90’s involved largely ‘letting go’ or de-regulation and liberalization. Hard as letting go is, the actual administration of such reforms can be fast. While there is still plenty of ‘letting go’ for the government to do, the most urgent reform agenda ahead - not only for distribution of the pie but for growing the pie - involves improvement in government administration and governance.

However, such reforms are often the hardest to implement. To be sure, the government’s initiative to set up a national citizen database would go a long way to improve governance and trim leakages and corruption. Assigning Nandan Nilekani, co-founder of software firm Infosys and its former CEO to head the Unique Identity Authority of India has strengthened hopes for successful implementation.

Even so, a project of this nature may take years to implement, and may well be incomplete in the current government’s term. These implementation risks aside, widening twin deficits make us wary of stability risks in the short-run (more on this later).

Specific budget expectations :

(1) Deficit target to be raised, major tax rates to be left unchanged
We think the mind-set of the current government is to push as much expenditure to kick-start inclusive development as it can. It would probably see a deficit of 6.5% of GDP as a ‘ceiling’ of sorts, at least for the budget target (sticking to the target is another issue). This is 1%-pt wider than the interim budget target of 5.5% of GDP. Additional excise duty cuts introduced after the interim budget and lower revenue collection due to weaker growth should widen the deficit by almost 1%-pt of GDP while additional one-off revenues from divestment of stakes in government enterprises and 3G license sales may contribute 0.5%-pt of GDP worth funds to the budget. Therefore, working backwards, this should leave the government room for additional expenditure of at most 0.5%-pt of GDP (+1%-1%+0.5%). Assuming, the government to retain forecasts of 7% and 11% growth in real and nominal GDP in FY09, our calculations points to room for about 8% rise in plan expenditure from levels penciled in February (see table). As a result, budgeted borrowing should rise to INR 3.8trn from INR 3.1 trn estimated in the interim budget.

To the extent that the election verdict is interpreted as a vote for inclusive development, the government would aim to allocate greater funds for flagship schemes that deliver the same. As the President’s inaugural address to the parliament already mentioned a new Food Security Act, and implementing the same would be very expensive, the government might attempt to partly deliver this through expansion of ‘food for work’ programmes. The government may attempt to expand the scope of the National Rural Employment Guarantee Scheme (NREGS) so that the aim of overall rural development is met, and at the same time, job security for the rural poor is improved. The education sector is also likely to receive a significant portion of the rise in plan expenditure given the necessity to improve skill levels to reap the demographic dividends. We do not expect the government to introduce any significant changes to tax rates aside from micro-level tinkering around and further incentives to boost export sectors hit by the downturn. Indeed, the government may indicate its intention to raise excise duty and reduce stimulus once the economy recovers. Nonetheless, given our expectations for real GDP growth to disappoint the government’s target of 7%, we see the revenue targets as ambitious and expect the fiscal deficit to hit 7% of GDP eventually. This should lead to budgeted borrowing rising past the new INR 3.8trn target (see table).

(2) Roadmap to rein in the deficit & implement tax & expenditure reforms
We also expect the budget to lay out a roadmap to rein in the deficit in the medium-term. The government would likely target narrowing the deficit to 3% of GDP by FY2013 and may introduce methodology to measure the same on a cyclically adjusted basis (in the past five years, the rapid reduction in the deficit was partly due to temporary improvement in tax revenue collections due to strong growth, leading to overconfidence on the fiscal front). Achieving the target entails reducing the deficit by 0.7%-pt of GDP each year – ambitious without material tax and expenditure reforms. There may even be plans to subsume subsidy related payments to oil companies in the budget. Even if it is too late to move towards a nation-wide goods and services tax (GST) by April 2010, the government can come up with a workable strategy to effect the transition by 2011. It would be important for the government to signal its intention in sticking to any new deadlines, both for the GST roadmap as well as the roadmap to return to fiscal sustainability. The government would also likely assert that the move to national biometric identity cards is a major expenditure reform, as it would greatly reduce leakages and help target subsidies better. This major reform gains credibility merely on the appointment of a capable head, but the task remains Himalayan.

(3) Reforms - focus on infrastructure, education and agriculture.

We expect to see the government impress upon investors and the nation its intent on reforms, improved policy implementation and improved service delivery. Although the budget is meant to be an accounting exercise and not necessarily a policy setting exercise, we do expect the government to outline its strategy for the next five years. This will also help the government ‘sell its case’ and attract investments necessary to meet its budget targets, besides helping it to avert any ratings downgrade (though we think it may not be successful on the latter).

Apart from tax and expenditure reforms outlined earlier, we think the emphasis would foremost be on the infrastructure sector. Education sector, land reforms, and governance reforms would also be emphasized. We expect measures to accelerate infrastructure spending, improve access to long-term financing and improve institutional and individual capacity of the public sector in handing public-private-partnership projects. Specifically, these may include regulatory measures to make it more attractive for banks to buy longer term bonds, measures to increase depth of corporate debt market, measures to raise equity financing, possibly roping retail investor funds directly, and ideas or proposals to rope in academic institutions to strengthen managerial, technical and administrative capabilities of relevant public sector employees. The government might also indicate intention to provide clarity on land acquisition policies at the earliest. These have been the biggest hurdle for both infrastructure development and special economic zones expansion. The government may reveal any intent or plans to incorporate technology such as GIS mapping to better monitor infrastructure projects and identify points of delay. It may also try to impress its seriousness in implementing at least some of the reforms suggested by the administrative reforms commission and other expert committees to improve governance. For example, steps to effectively implement decentralisation to urban local bodies and rural local bodies may be outlined, possibly including improving capacity of staff through training, and usage of technology to improve supervision and accountability. To improve food security and better target subsidies, pilot projects may be expanded to implement a Reforms to focus on infrastructure, especially addressing financing and administrative constraints system of food stamps or direct cash transfer to replace the wasteful and inefficient public distribution system (smart biometric cards are still many years away).
In terms of de-regulation, we may not get as much as we like from the budget, though we should further into the year. Divestment of stakes in public sector companies though is all but certain (at most 0.5% of GDP) since this is needed to bridge the deficit. It would be very encouraging if FDI limits are raised in insurance, education, aviation if only up to 49%, but this may not necessarily happen on the budget day itself. Even more positive would be plans to liberalize oil pricing, if only partially. But, we are not confident that the government would speedily liberalize prices, though it likely eventually will.
Policies to improve governance and equity should not be viewed as less promarket or pro-growth than de-regulation and liberalization. Indeed, pursuit of market reforms alone has hardly produced stable governments at the centre in the past two decades. On the other hand, pursuit of inclusive development along with liberalization should strengthen the government’s political capital, and ability to initiate tough reforms. The only difference is the impact is likely to be in the longer-run rather than immediate. Infrastructure policy reforms and tax reforms may be the only areas where impact on the economy is visible this year or next itself. Improvements in governance would likely take longer to make a difference.

Risks to the fiscal position and the economic outlook
Implementation risks and fiscal risks are the two main risks to the outlook
ahead.

(1) Implementation risks:
Much of the positives in the budget for the economy are likely to be related to the statement of intent and initiation of various steps to address some of the regulatory, administrative and governance issues plaguing sectors such as infrastructure, education, agriculture, food distribution e.t.c. Therefore, implementation risks are inherent as the budget would be an enunciation of ‘promises’.

(2) Fiscal risks :
Apart from slow implementation, the outlook also remains fraught with other risks. The main reason is the unfavourable, even precarious starting point. For one, the government ran a national deficit (including off-budget) of over 11% of GDP in FY08. While remittances over 4% of GDP helped limit the current account deficit to under 3% of GDP in FY08, the merchandise trade balance also recorded double digit deficit as a share of GDP. This makes the economy vulnerable to external shocks, especially oil price shocks. This especially as the ability (or the willingness) to pass on higher global prices to retail consumers remains limited (given poor governance and still widespread discontent). As such, expenditure remains highly inflexible on the downside, particularly in the short-run.

Perhaps, one can say the worst combination of events played out in FY08 from a fiscal and balance of payments perspective. This has hopefully jolted the administration out of any complacency on the prospects for Indian economy and the headroom to run deficits and imbalances. However, given the wider deficit targeted in the budget, it may be difficult to avoid an eventual downgrade in debt ratings. Should oil prices continue to rise, or should the monsoon fail to pick up, ratings agencies would have no choice but to downgrade ratings.

Indeed, our view of Indian economy would also materially worsen if the government fails to at least initiate partial de-regulation in oil prices (such as free market prices up to a cap) in the face of rising global prices. While there is talk of deregulating retail oil prices, it is not clear if it will come fast enough to avert further damage to the fiscal position.

TVS Motor reports growth in two wheeler sales

Wed, 01 Jul 2009 06:51:51 UTC

Defying the economic slowdown, TVS Motor Company has posted a rise of six per cent in two wheeler sales for the month of June 2009 which stood at 115,488 units as compared to 109,082 units in the year ago period. Its domestic saw growth rate of 12 per cent to 1,05,361 units during the period under review as compared to 94,072 in the year ago period.
Scooters sales rose by 21 per cent to 25,945 units as against 21,466 units in the same month a year ago. Total motorcycle sales during the period stood at 46,048 units from 51,409 units recorded in June 2008. Exports fell 32 per cent to 10,087 units as compared to 15,010 units in the corresponding period of the previous year.
Recently, the two wheeler rolled out Apache RTR 180 in the premium segment and TVS Flame, under the brand name TVS Flame SR 125 in the executive segment to expand its market share.

Indian indices records positive ending to the day

Wed, 01 Jul 2009 05:39:11 UTC

The Wednesday trading session came out in the form of all over positive session. Indian benchmark indices were suffering under the load of minor selling in the morning session but at the end of the day it marked on the higher point on the back of the good buying in oil marketing companies, sugar, brokerage and education.

The Sensex ended the day on 14,645 positing a surge of 151 points while the Nifty stood at 4,340 with the gain of 49 points. The CNX Midcap closed the session with the rise of 0.87% and the BSE Smallcap ended the day but not before surging up by 0.30%.

Asian markets also ended the day on the positive note as the Straits Times closed the session with the gain of 0.79% while the Nikkei ended trading at 9,939.

Speaking of US market, the Dow Jones is trading 0.97% lower, while the NASDAQ is down by 0.49%.

England's Michael Vaughan retires

Wed, 01 Jul 2009 05:05:32 UTC

Greater Manchestor born Michael Paul Vaughan announced his retirement on Tuesday from international cricket. He declared his retirement after being not selected for the Ashes series held in July against Australia. The ex-captian of the England cricket team mentioned that after a great deal of consideration, he decided to retire from cricket as it seems to be the perfect time. In the words of the player, playing for England has e in been an enormous privilege for him and taking the decision to go was one of the hardest decisions he made in his life.

Mahindra Satyam inducts new COO and CEO

Wed, 01 Jul 2009 04:02:02 UTC

Mahindra Satyam has appointed Rakesh Soni as its Chief Operating Officer (COO) who comes from Tech Mahindra and AS Murthy as the Chief Technology Officer (CTO). The decision of the change in the designation was made in the second round of the top level appointments. CP Gurnani has been given the charge of the CEO whereas S Durgashanker has been appointed as the CFO.

In the new role of CTO, AS Murthy will work towards controlling the Technological Competence and Innovation. He will also be responsible for the creation of technology assets and the IP of the company. He will also look over the consulting, IMS and engineering. The chief Operating officer Rakesh Soni will look over the BFSI, delivery for manufacturing, Strategic accounts and emerging verticals. It is to be noted that Satyam has recently been renamed as Mahindra Satyam by its owner Tech Mahindra.

Jet fuel prices hiked by 6%

Wed, 01 Jul 2009 03:33:10 UTC

The state run oil companies like Indian Oil, Hindustan Petroleum and Bharat Petroleum have again increased the jet fuel prices by 6% as the crude oil prices are going high. The ATF prices in Delhi are increased by Rs.2,306 to Rs.38,558 per kilolitre.

The aviation turbine fuel will carry the cost of Rs.39,789 per kilolitre from now, which earlier stood as Rs.37,367 per kilolitre. The ATF prices adds 40% to the total operating cost of the airline. This will again trouble the domestic carriers which are already going through the phase of cash crunch.

The international crude oil prices reached the value of $72 per barrel as the rise in the demand is expected further on the global platform.

The ATF price in Kolkata is raised to Rs.44,289 per kl, while in Chennai it has reached the value of Rs.42,524 per kl. No airline was available to comment on the matter of increased ATF prices.

In the month of August last year, the ATF prices in Delhi stood as Rs.71,028.26 per kilolitre as the international crude prices at that time was was on the peak at $147 per barrel.

Indices moves on the recovery path in afternoon

Wed, 01 Jul 2009 02:26:09 UTC

The benchmark indices are trading on the higher note in the afternoon session as the market is recovering from the red side. The buying interest is seen in the stocks like capital goods, IT, FMCG, realty, banks, auto, power and oil & gas. Stocks of companies like Infosys, Reliance, ICICI Bank and L&T are pulling the market towards north.

In the afternoon session the Sensex is trading at 14,681 with the gain of 187 points. The Nifty is trading at 4,320 with the rise of 48 points. Talking of second rung stocks the CNX Midcap has recorded a rise of 0.73%, while the BSE Smallcap is up by 0.03%.

Unitech ready to raise funds of Rs.2,789 crore

Wed, 01 Jul 2009 02:24:22 UTC

Unitech, India's second largest real estate firm is looking forward to raise the funds of Rs.2,789 crore by the means of private placement of shares to the institutional investors at the rate of Rs.81 per piece.

In a filing to Bombay Stock Exchange, Unitech said that it has already received the approval for issuing more than 344 million shares to qualified institutional buyers for the price of Rs.81 per piece.

The company has already raised the funds of Rs.1,621 crores in the month of April by issuing the shares to qualified institutional buyers at the rate of Rs.38.50 per share.

The promoter's stake in the company has come down to the value of 51% from earlier 64% after the first round of QIP in the month of April.

Unitech is continuously taking steps in the direction to raise funds in order to reduce the burden of debt from its head and to improve the cash flow of the company.

The company is also taking the way of selling its personal assets. Recently it has raised the funds of Rs.1,000 crore through the sale of its office building in Saket and two hotels in Gurgaon.

Mayawati comes under fire for statues

Wed, 01 Jul 2009 02:06:14 UTC

Uttar Pradesh CM, Mayawati has been questioned by the Supreme Court over the spending of $425 million on the erection of statues of herself and her fellow politicians. The court has given Mayawati four weeks to respond. It is to be noted that the human development index is very low in the state and a lawyer named Ravi Kant has brought the petition against the politician. With Mayawati winning only 21 seats in the last elections and recent questions raised over her lavish birthday parties and personal assets, things are looking grim for her.

A number of voters have complained about the non-availability of basic things such as water and roads in the state and criticized the state useless strategies for the situation. Even India's Home Minister Palaniappan Chidambaram criticized such moves by Mayawati and advised to spend the money for the development of the state. It is to be noted that in the year 2007, Mayawati won the state election.

Koutons Retail posts Rs.35.82 crore profit in Q4

Wed, 01 Jul 2009 12:15:46 UTC

Koutons Retail India has registered the net profit of Rs.35.82 crore during the fourth quarter of the fiscal 2008-09, which shows the growth in its profit, if compared to the last year's profit for the same period. In a filing to Bombay Stock exchange, Koutons Retail India said that its net profit for the same quarter in the previous fiscal stood as Rs.35.55 crore. The company has recorded the rise in the total income with the estimation of Rs.378.90 crore against the last year's value of Rs.371.90 crore. The consolidated net profit of the company for the FY'09 stood with the value of Rs.79.53 crore with the growth of 15.01% against the last year's net profit of Rs.69.15 crore.

Maruti posts 23 per cent rise in sales

Wed, 01 Jul 2009 12:07:01 UTC

India's largest car maker, Maruti Suzuki India Ltd., has reported a 22.63 per cent rise in its sales which stood at 75,109 units in June as compared to 61,247 units in the corresponding period a year ago. Its sales in the domestic market went up by 9.51 per cent to 61,773 units during the month under review as compared to 56,411 units in the year ago period. Exports increased by nearly three-fold to 13,336 units from 4,836 units in the corresponding period a year ago.

However, its oldest model M800 registered a 54.52 per cent drop in sales and stood at 2,438 units from 5,361 units in the year ago period. The auto major's A2 segment (which includes Alto, Wagon R, Zen Estillo, Swift, Ritz and A-Star) rose by 22.21 per cent at 46,156 units against 37,767 units in the same month previous year, while A3 segment (includes SX4 and DZiRE) witnessed a growth of 5.03 per cent and stood at 6,099 units from 5,807 units in the year ago period. During the month, passenger car sales went up by 10.17 per cent at 61,583 units as compared to 55,899 units in the corresponding month a year ago. It is to be noted that sales crossed 70,000-units mark for the sixth month in a row which is a strong sign of recovery for the auto major.

IT/ITeS, banks emerging as top employers

Wed, 01 Jul 2009 11:46:13 UTC

As per the study conducted by ASSOCHAM Placement Pattern (APP), most of the population of India has got employed in the IT/ITeS and banking sector. The analysis shows that out of the total employed multitude in the first quarter of the fiscal, 74% of the total has been hired by banks and IT companies.

The APP surveyed on the basis of 'Headcount Expansion Activities' taking the consideration of 8 different sectors which included IT, banking , telecom and along with other sectors in it.

State Bank of India stands on the top slot of the list which carries the names of top banks involved in the hiring of fresh staff, with the total hiring of 13,000 employees in the first quarter.

The second position in the list is captured by the Kerala based Dhanalakshmi Bank which hired the staff of total 1,300 employees with the goal of doubling its headcount. The third position in the list is captured by Andhra Bank which is ready to fill the positions in clerical and supervisory department has made the announcement for the recruitment of additional 1,000 employees during the first quarter.

Yes Bank also stood close to the third position with the announcement of hiring the fresh staff of 500 at the managerial level and 400 retail services and sales department.

According to the ASSOCHAM analysis, the IT/ITeS stood as the second largest job producing sector in the span of April-June 2009 by giving employment to 32% of total newly employed population.

In the IT sector Wipro Technologies stood on the top with the announcement of making fresh recruitment of total 8,000 staff in the Q1 FY'10.

Along with this the other IT firms like CPA Global, NetEnrich Inc and iGate Global Solutions announced the hiring of 1,450, 500 and 400 personnels in India, in the first quarter of FY'10.

Telecom sector in India marked at the third position announcing the recruitment of total 5,460 employees, out of which 4,500 people would be hired by Sistema Shyam Teleservices Ltd (SSTL) and Aricent will also hire the staff of 960 in FY'10.

The major hirings were also seen in the sectors like pharmaceuticals, aviation and steel sectors during the first quarter of the fiscal.

Airlines lost $3 bn in Q1

Wed, 01 Jul 2009 11:27:07 UTC

As per a recent report by the International Air Transport Association (IATA), airlines companies, all over the globe, suffered a loss of over $3 billion in the first three months of 2009 due to the on-going economic slowdown which led to a sharp fall in travel demand and lower freight volumes. The Geneva based lobby has also warned the airlines for a further cut in the revenues due to a recent 30 per cent rise in the oil and jet fuel prices which have touched the figure of $20 a barrel and currently are 75 per cent higher as compared to the low point at the end of the year 2008.

In a bid to tide over the economic slowdown and reduce costs, air carriers are trying to fly fewer flights and seeking mergers and acquisitions. Last year, Delta Air Lines joined hands with Northwest Airlines and emerged as the world's largest airline. Similarly, European carriers consolidated with Deutsche Lufthansa while British Airways is also planning for a possible merger with Iberia. Singapore Airlines is also planning for possible acquisitions in India and China in the near future.

Indices shows gain in morning session but at a slow pace

Wed, 01 Jul 2009 11:06:34 UTC

Wednesday's morning session started in the positive light but the indices are moving with a slow pace, prompting the investors expecting more loss ahead in the day. Buying interest has been seen in the stocks of infrastructure and metal companies.

The Sensex is trading at 14,515 up by 21 points. The Nifty was up by 43 points, trading at 4334. In the second-rung stock segment, both the CNX Midcap and the BSE Smallcap were down by 2.6% and 0.2%, respectively.

In the Asian markets, the Nikkei was up by 0.09% while the Straits Times down by 0.47%.