สรุปข่าวเศรษฐกิจอินเดียประจำวันที่ 4 กรกฎาคม 2556

Defence Minister opposed new FDI proposal in Defence
Responding to the report that the Indian government was planning to raise FDI cap in defence manufacturing not only 49% but also to allow 100% FDI in units set up in Special Economic Zones (SEZs), defence minister AK Antony opposed the proposal and said that his ministry wants the current 26% to be maintained.

According to the minister, defence ministry even never considers allowing domestic defence production units in SEZs. Therefore, rendering permission to FDI in this area is something out of imagination. Defence minister insists strongly, in a letter sent to the commerce and industry minister Anand Sharma, that to raise FDI in defence sector would adversely impact indigenous design and development capabilities. Most crucially, it would expose the country to the risks involved in depending heavily on foreign countries for modern weapon.

(Source: the Financial Express, the Economic Times, Business Standard)

Food Ordinance for 2/3 Population
Indian cabinet on Wednesday made a decision to give India's two-third population the right to 5 kg of foodgrain monthly at subsidised rate of Rs.1-3 per kg

The cabinet has approved an ordinance to implement the food security bill, which now will go for the president's assent. It is said that the programme could be expected to take off by August and spread throughout the country within months. This food security programme will be the largest in the world. It will provide 5kg of rice, wheat and coarse cereals per person per month at a fixed price.

(Source: the Financial Express, the Economic Times, Business Standard)

Rupee falls, Fuel price rises
While the Indian rupee has fallen further in the past week, there was a $5 increase in the oil.

With such a contrast incident combined with the gas price hike since April, the petrol price also needs to rise-this month itself, if the rupee or global crude price don't change course. According to the sources, Brent crude and the US benchmark WTI rose for the third straight day amid fears the unrest in Egypt may disrupt supply from Middle East even as protestors in Libya have shut down several oilfields.

(Source: the Financial Express, the Economic Times, Business Standard)

June Services falls to 51.7
The service sector which is the largest sector in Indian economy saw its growth falls in the month of June to 51.7 points vis a vis 53.6 in May, according to a widely tracked HSBC purchasing manager's index (PMI). This figure indicates that the recovery of economy is not certain.

The reason behind this slow growth is the lack of business inflow. In accordance with Leif Eskesen, HSBC's chief economist for India and ASEAN, the depreciation of Indian rupee, inflation reading firmed up on the back of higher labor and raw material prices are also the factors too.

(Source: the Financial Express, the Economic Times, Business Standard)

Coffee prices may rise 15% on supply woes
The coffee supply worries because of the drought in growing country like Vietnam (a major producer of robusta) and roya attack (a fungus attacking coffee beans) in South America likely affect the production of coffee, prompting the price hike in coffee.

According to Hammeed Huq, managing director of Tata Coffee, there is expectation that both Arabica and Robusta price will firm up at least in the second half of 2013. Although, fundamentally, Brazil is coming with a very big "off year" crop, there is a problem of roya. This will erode output. Therefore, while low quality Arabica will be available, the high quality beans of Arabica, which come from Central American countries, will be tightened in supply because the roya affects in long term.

(Source: Business Standard)

                                                                                                         Economic Section

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