FDI caps in different sectors could be revisited: Finance Minister
Foreign investment limits in different sectors where ceilings are not serving their intended purpose will be revisited, Finance Minister P Chidambaram yesterday said at a meeting the Parliamentary Consultative Committee of the Ministry of Finance.
Chidambaram said the major reason for India's large CAD is that the country has huge dependence on import of certain items like oil, coal and gold.
India's CAD, which touched record high of 6.7 % of GDP in the December 2012 quarter, is likely to be around 5 % in the 2012-13 fiscal. As per the RBI, India can sustain CAD in the range of 2.5 %.
Economic growth rate slipped to a decade low of 5 % in 2012-13 and FDI inflows during the last fiscal declined by 38 % to USD 22.42 billion in 2012-13.
Chidambaram said that despite recession in major economies, India continues to remain a desired destination for FDI and FII.
(Source: Economic Times, Indiatimes, India Today, the Statesman, NDTV, Hindustan Times)
AirAsia India appoints TCS' S Ramadorai as Chairman
AirAsia on Monday said that the company has appointed Tata Group veteran, S.Ramadorai as the chairman of its India operations, nearly three months after the union government allowed the Malaysia based airline to set up operations in India. The announcement comes a day after Tony Fernandes, Chairman of AirAsia announced that Ratan Tata, chairman emeritus - Tata Sons was appointed as the Chief Advisor to the new airline.
Ramadorai is the fourth person from the Tata group to hold a position in the airline joint venture after Ratan Tata as chief advisor, and R Venkataraman (former executive assistant to Ratan Tata) and Bharat Vasani (chief legal counsel of the Tata Group), who are directors on the board.
AirAsia India is a joint venture of Air Asia, Tata Sons and Arun Bhatia of Telestra Tradeplace with 49:30:21 holding.
(Source: Economic Times, Indiatimes, Livemint, Times of India, NDTV)
Elevated food prices putting pressure on inflation: RBI
Expressing concerns over price situation, the RBI today said expensive food items like cereals and vegetables has continued to put pressure on overall inflation rate.
"Still elevated food inflation, particularly in respect of cereals and vegetables, sustained upside pressures on overall inflation," RBI Governor D Subbarao said in mid-quarter review of the monetary policy.
Given that food inflation remains high, the inflation outlook will be influenced by concerted efforts to break food inflation persistence, he said.
The policy review noted that retail inflation, as measured by the new combined (rural and urban) CPI, edged down from an average of 10.2 % last fiscal year to 9.3 % in May.
Headline wholesale price index (WPI) inflation eased for three months in succession with the May reading at 4.7 %, down from an average of 7.4 % in 2012-13, it said.
(Source: Hindu Business Line, Economic Times, Indiatimes, Indian Express, Business World)
India Inc disappointed over RBI decision not to cut key rates
Expressing disappointment over RBI's decision to keep key rates unchanged, India Inc today said the time was appropriate for cut in interest rates to revive the country's economic growth.
The industry said it hoped RBI would not wait for the next quarterly review on July 30 to intervene and would do so earlier, if required.
The industry urged the central bank to consider a rate even before the next monetary policy review on July 30.
The repo rate at which the RBI lends to the system has been retained at 7.25 %, while the cash reserve ratio will continue to be 4 per cent.
(Source: Economic Times, Indiatimes, Indian Express, Press Trust of India, i4u)
Trade deficit widens to seven-month high in May as gold imports surge
India's trade deficit widened to a seven-month high in May as gold imports surged while exports contracted, posing yet another challenge to the country's troubled economy.
A near-90% jump in annual gold imports was the chief reason for the trade deficit rising to $20.1 billion, from $16.9 billion in May last year. The country's merchandise exports fell 1.1% to $24.5 billion, despite a depreciating rupee, as global demand remained weak and the government banned gold trading in Special Economic Zones (SEZs). Imports climbed 6.99% to $44.64 billion.
The demand for gold has remained high for a long time and rose sharply in April-May despite measures by the government to curb consumption as part of efforts to keep the current account deficit under control. The import duty on gold was recently hiked to 8%, from 6%.
(Source: Reuters India, Times of India, NDTV, Hindu Business Line, Economic Times)
Italian tractor major to invest $ 190 million in India
New Holland Fiat India, part of the Italian automotive major Fiat Industrial Group plans to invest $ 190 million to set up a new greenfield plant in Maharashtra and increase its tractor manufacturing capacity by 50% in the next three years.
The company would take its tractor capacity to 60,000 units at the Greater Noida plant in Uttar Pradesh with a cumulative investment of $ 40 million. Currently it churns our 40,000 tractors per year. Besides, a $ 95 million plant will come up at Chakan in Maharashtra to make sugarcane harvesters, cotton pickers and harvest combiner's for various crop applications in the country.
New Holland has started manufacturing tractors in 1998 in India and enjoys a 6% market share where 525,000 units are sold annually. While the market is lead by Mahindra & Mahindra and Chennai based TAFE, the Italian company is targeting a 10% market share in the next few years from the Indian market.
(Source: Economic Times, Indiatimes)
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