Breaking News & Stocks

IMF revises India`s GDP forecast to 8% in 2008

New Delhi, July 17: Amid various disappointing indicators, India has received some solace with the International Monetary Fund marginally revising its projections for economic growth to 8 per cent in 2008 from its earlier estimates of 7.9 per cent.

IMF in its update of World economic Outlook released today, however, retained its earlier forecast of 8 per cent GDP growth for India during 2009.

Indian economy grew by 9.3 per cent in 2007.

Projections for Indian economy are not too dismal, if one takes IMF views on the world economy. The multi-lateral agency projected the global growth to moderate from five per cent in 2007 to 4.1 per cent in 2008 and 3.9 per cent in 2009.

"The slowdown in global growth is expected to continue through the second half of 2008, with only a gradual recovery during 2009," IMF said.

It said the global growth decelerated to 4.5 per cent in the first quarter of 2008, down from 5 per cent in the third quarter of 2007, with sluggish activities both in advanced and emerging economies.

In advanced economies, business and consumer sentiments have continued to retreat, while industrial production has weakened further. There has also been signs weakening in business activities in emerging economies.

The projections of the multilateral funding agency for India came a few days after Fitch downgraded the country's domestic credit outlook to negative from stable. Fitch also expected Indian economy to grow at 7.7 per cent in 2008-09 against nine per cent in the previous year.

Indian economy is widely expected to witness a moderation this year due to rise in borrowing costs as RBI continued to tighten monetary stance to tame inflation, which is inching towards 12 per cent mark.

The recent industrial production data have also shown that the industry continued to bear the brunt of rising costs as its growth plunged to 3.8 per cent in May compared to 10.6 per cent last year. Both manufacturing and electricity sectors showed a sharp decline in their growth. This may be pointer to the slow down in the Indian economy.

The Finance Ministry also expects moderation in India's growth this fiscal, though not much. It hopes that the economy would grow between 8-8.5 per cent in 2008-09.

Zimbabwe inflation highest in the world

Harare, July 17: Zimbabwe's central bank says inflation has soared to 2.2 million percent, by far the highest in the world.

Worsening shortages of basics and political and economic turmoil surrounding national elections March 29 and a disputed presidential runoff June 27, have contributed to rapidly increasing inflation in recent months.

The official inflation figure was last announced in February, when it was given as 165,000 percent.

Zimbabwe state radio reported Thursday that Reserve Bank Governor Gideon Gono announced the latest figure at the launch of a program to sell subsidized food and necessities through selected shops and a system of coupons issued to the needy.

Biocon among top 25 global biotech cos

Bangalore, July 17: Indian biotech firm Biocon announced on Thursday it has been featured amongst the top 25 global biotechnology companies, according to a report released by pharmaceutical business and marketing magazine Med Ad News.

The report takes into consideration drug-based firms, as these companies provide the best numbers to track the progress of biotech sector, Bangalore-based Biocon said in a statement.

Companies have been ranked by revenue and by income and Biocon Limited is the only Asian company to feature in this ranking at Number 20.

Reacting to the listing, Kiran Mazumdar Shaw, Chairman and Managing Director, Biocon Limited said "This is a validation of our consistent effort at attaining global leadership and also highlights the true potential of this sector in a country like India. This industry will be a key driver in India's progress towards economic development."

Nineteen of the top 25 companies are based in the US, while six companies hail from Europe, India and Australia.

BIO 2008, held in San Diego last month, stated that the global biotechnology industry will be a USD 100 billion annual business by 2010. The actual revenue has reached USD 85 billion in 2007. There are close to 5,000 biotech companies across the globe.

The top 25 biotech companies represent 62 per cent of all biotech sales and probably over 90 per cent of income, according to the statement.

Indian IT majors Wipro, Satyam Q1 beats forecast

Mumbai, July 18: India’s third and fourth largest software firms have come out with their Q1 results on Friday.

IT major Wipro Ltd on Friday announced a net profit of Rs 907.80 crore for the first quarter ended on June 30, 2008, against Rs 725.60 crore in the year-ago period. The consolidated total income rose to Rs 6,087.10 crore in the latest quarter, from Rs 4,303.20 crore in the same period of FY'08. The software major Satyam Computer Services announced a consolidated net profit of Rs 547.70 crore for the quarter ended June 30, a growth of 44.77 percent over the corresponding period last year. The company had a net profit of Rs 378.32 crore in the first quarter of FY'08, Satyam said in a filing to the Bombay Stock Exchange. The June quarter results does not include the effects of the merger between Wipro Infrastructure Engineering, Quantech Global Services, Wipro Healthcare IT, mPower Software Services India, mPact Technology Service and cMango India, which was effective fr om April 1, 2007. The current quarter numbers are not comparable with those of the year-ago period, Wipro added.

Wipro reported a standalone Q1 net profit of Rs 546 crore, against Rs 671.40 crore in the previous year. The total income rose to Rs 4,807.4 crore in the latest quarter, from Rs 3,776.8 crore in the same quarter last year. During the quarter, the company added 31 new customers to their existing USD 100 million customer list. The total income of Satyam rose to Rs 2,653.95 crore, from Rs 1,893.39 crore in the same quarter in FY'08.

Satyam reported a standalone Q1 net profit of Rs 575.91 crore, a 48 percent growth over the previous year. The firm had a net profit of Rs 389.14 crore in the June quarter of FY'08.

The total income rose to Rs 2,556.52 crore in the latest quarter, from Rs 1,820.93 crore in the year-ago period.

"During the first quarter of FY'09, Satyam achieved an annual revenue run rate of Rs 10,000 crore. In Q1, we grew by 8.5 percent," Satyam chairman B Ramalinga Raju said.

While, Wipro expects IT Services revenue to be about USD 1,089 million in the September quarter, the filing stated, Satyam has stated about reaching its consolidated revenue is expected to grow between 32-34.1 percent. Shares of Wipro were trading at Rs 382.50, 0.71 percent up and Satyam’s were at Rs 417, up by 0.40 percent on the BSE.

UPA tastes success: Soren, Ajit Singh hint support to govt

New Delhi, July 18: UPA’s all out efforts to muster ‘enough’ support during the trust vote appears to be bearing fruit as highly placed sources revealed on Friday that the JMM and RLD are apparently, finally, on-board albeit at a high price.

As per the deal, clinched by Congress managers, Shibu Soren and RLD chief Ajit Singh would be inducted into the Union Cabinet after the government wins the trust vote.

But the deal doesn’t end there as Shibu Soren, who gets a cabinet berth, is also angling for the post of Jharkhand Deputy Chief Minister for his son.

On the other hand, RLD chief Ajit Singh has also been offered a Cabinet berth while he is asking for one more berth (minister of state) for his party’s MP Anuradha Singh.

Besides that, the Congress has also promised Ajit Singh that they will support his son in the next elections from the Mathura Lok Sabha constituency.

Congress has also reportedly agreed to form a commission to look into main demand of RLD chief Ajit Singh to form a new state called ‘Harit Pradesh’ to be carved out of western UP.

However, Congress MP from Mathura Manvendra Singh is said to have turn rebellious after hearing about Ajit Singh’s wish for the Mathura seat. And, expectedly, has now started to show inclination towards joining BSP.

Incidentally, the BSP is also going all out to break Congress MPs from their ranks. They have even tasted success with the Congress MP from Haryana Arvind Sharma declaring that he will vote against the UPA.

BJP also hopeful of Soren’s support

JMM chief Shibu Soren on Friday held meetings with various leaders from the NDA camp. The BJP had reportedly offered him the chair of Jharkhand CM in lieu of his party voting against the UPA.

MDMK to vote against UPA in trust vote

Spelling more trouble for the Congress-led UPA government, the MDMK leader on Friday said that his party would vote against the government in the trust vote on July 22.

Concerned about the rebels, MDMK chief Vaiko has even asked Speaker Somnath Chatterjee to disqualify two rebel MPs L Ganeshan and Ramachandran from voting in the trust vote.

OBC hikes PLR by 50 bps to 13.75%

New Delhi, July 18: Oriental Bank of Commerce (OBC) Friday said it has increased its prime lending rate (PLR) by 50 basis points to 13.75 percent to maintain its margin.

The Asset Liability Committee (AlCO) decided to increase the PLR from 13.25 percent to 13.75 percent to maintain its net interest margin, said a senior official of OBC.

Besides, the bank has also revised deposits rates up to 50 basis points for some maturities.

The new rates would be effective from July 15.

In addition, OBC also launched special deposit scheme, which offers to pay 9.55 percent and 10.05 percent for the senior citizens.

The scheme called Oriental Bank Akshay Kiran Deposit Scheme is for 500 days.

The decision to hike PLR comes in the wake of RBI increasing short term lending (Repo) rate by 0.75 percent to 8.5 percent and increased the mandatory cash requirements for banks by 0.50 percent to 8.75 percent, to squeeze money supply for taming inflation.

Major public sector lenders, notably State Bank of India, Punjab National Bank and Canara Bank, has already hiked their benchmark prime lending and deposit rates.

SAIL takes steps to contain steel prices

New Delhi, July 20: The country's flagship public sector undertaking in the steel sector, Steel Authority of India Limited (SAIL), has informed its MoU HR Coil customers in writing that their purchases from the company are only meant for actual consumption and that any resale of the product will attract punitive action.

The MoU customers have also been advised to inform SAIL about their stock position on a regular basis.

These directions are part of a slew of measures taken by the company to ensure that retail prices of its steel products are contained in the market.

SAIL, which has not changed its selling prices since May 2008, in line with its commitment to the government, has also cautioned its dealers about selling SAIL products beyond MRRP limits.

Branch sales offices of SAIL have been alerted to keep a strict vigil on this and instructed to stop supplies to dealers who do not adhere to the direction.

SAIL has already informed the public about operating MRRP of products like TMT Bar and GP/GC sheets through newspaper advertisements and its own website www.sail.co.in.

The company has also advertised in newspapers about the chargeable price of HR Coil in the National Capital Region.

Among other measures taken to contain retail prices of SAIL products in the market, is an advisory to trade MoU customers to limit retail margins to within Rs 1,200 per tonne over the price at which they have procured from SAIL.

Any departure from this limit will invite stern action. These customers have also been advised to inform SAIL about their stockholding of SAIL products on a weekly basis.

To further ensure that steel reaches actual consumers at correct prices, SAIL has introduced a special scheme in Kolkata and Faridabad for supply of HSM Plates and CR Coils/Sheets to consumers who require up to ten tonnes of these items against an affidavit acknowledging self-consumption.

This has also been advertised through the print media.

Not bound by RIL`s alleged RoFR in RCOM: Anil Ambani firm

New Delhi, July 19: A day after the collapse of deal between South Africa's MTN and RCOM, an Anil Ambani company on Saturday charged Mukesh-led RIL with causing substantial harm to it as a majority shareholder in the Indian telecom entity and asserted its rights to claim damages.

AAA Communications, a private company of Anil Ambani that holds 63.38 percent equity in RCOM, today wrote to RIL claiming it was "free to and shall deal with RCOM shares as it deems fit." It claimed that it was not a party to any "alleged non- compete agreement dated January 12, 2006" and hence was not covered by any alleged rights of first refusal to RIL.

An RCOM spokesperson, however, declined to comment when asked about the non-compete agreement, citing which RIL had initiated the arbitration process against RCOM by nominating a former Supreme Court judge Justice B P Jeevan Reddy as an arbitrator on July 17.

A spokesperson of RIL, which had thrown the spanner in negotiations between RCOM and MTN, which could have possibly created a USD 70-billion telecom entity, by asserting its right of first refusal on majority stake in RCOM, declined to comment immediately on the letter from Anil Ambani firm.

The Anil Ambani firm termed RIL's action as "uncalled for, offensive and clearly motivated" and said RIL's "malafide interference caused significant harm to AAA Com as a substantial RCOM shareholder".

"AAA Com reserves right to claim direct and consequential damages from RIL," the spokesperson said.

The Anil Ambani firm's claim that it was free to deal with RCOM shares in whatever way it deemed fit is also seen as a signal that it was ready to start negotiations for any deal with any entity, including MTN.

The statement from the Anil Ambani firm's spokesperson comes close after RCOM and MTN calling off their negotiations citing "legal and regulatory hurdles".

"The two sides were unable to conclude the transaction due to certain regulatory issues," RCOM said in a statement yesterday night, ahead of the July 21 expiry of the extended agreement for exclusive talks with MTN.

Govt expenditure likely to over-shoot by 21%: CMIE

Mumbai, July 20: The Union Government expenditure is expected to over-shoot by a whopping 21 percent this fiscal, a Centre for Monitoring Indian Economy (CMIE) report said.

Firming up of interest rates on Government debt papers, outgo on account of the Sixth Pay Commission's recommendations and farmers' debt relief package besides additional subsidies on petroleum and fertiliser products are likely factors that could push up the expenditure, the report said.

For 2008-09, total expenditure is budgeted at Rs 7,50,884 crore, an increase of 5.2 percent over the actual planned expenditure in 2007-08.

The total Government expenditure, including expenditure on debt relief package and outgo on account of the Sixth Pay Commission's recommendations for 2008-09 stands at Rs 7,81,448 crore, the CMIE report said.

"Additional subsidies for fertilisers and petroleum products add up to Rs 1,30,000 crore. This amount and the impact of the Sixth Pay Commission and debt relief package may push up the total expenditure to Rs 9,11,448 crore during 2008-09," the report said.

Interest payment, which is the largest expenditure head of the Central Government, accounted for 25 percent of total expenditure during April and May, CMIE said.

At Rs 27,229 crore, it was up by 3.8 percent over the payments made in the corresponding months of 2007, the report said.

In the first three months of the current fiscal, the report said, interest rates on treasury bills have gone up by 1.5-1.97 percentage points, adding that, "this would lead to a higher outgo in the form of interest payments."

Also, during the April-May period, Central Government's expenditure was up by 20 percent as against a 1.3 percent decline recorded in the corresponding period of the previous fiscal, CMIE report said.

At Rs 1,09.485 crore, it was 14.6 percent of the budget estimates for the year, the report said, adding, "plan expenditure witnessed a healthy 64 percent increase and non-plan expenditure was up by 5.7 percent."

Increase in plan expenditure reflects a surge in expenditure by Ministry of Health and Family Welfare, Rural Development, and Road Transport and Highways, the report said.

These ministries/departments accounted for Rs 20,219 crore of the total expenditure during April-May as against Rs 8,043 crore in the corresponding months of the previous financial year, CMIE said.

Banks must pay for delay in clearing outstation cheques`

New Delhi, July 20: The National Consumer Commission has ruled that the banks have to pay compensation to consumers for delay in encashment of outstation cheques.

It also directed banks to complete a transaction involving local cheque on the same day or at the most on the next day and specified two weeks' time-limit for outstation cheques.

"If there is any delay in collection of outstation cheques beyond the period of 14 days, interest at the fixed deposit rate, or at a specified rate as per the respective policy of the banks is to be paid to the payee of the cheques," Justice M B Shah, Chairman of the National Consumer Disputes Redressal Commission (NCDRC).

It directed the banks to display in bold letters the salient features of the policy with regard to the collection period of outstation cheques and interest due in case of a delay at every branch.

"The salient features highlighting the rights of the consumers shall also be displayed on the notice board of each branch of the banks," Justice Shah said.

The petitioner, advocate Atul Nanda, have contended that there is deficiency in service by various banks in giving credit to the consumer when the cheque is encashed.

Delay in crediting the cheques to the customer's account by the banks led to gaining crores of rupees from interest, Nanda said.