สรุปข่าวเศรษฐกิจอินเดียประจำวันที่ 2 สิงหาคม 2556

Govt took a step ahead for NCR's rapid transport system
On Wednesday, all National Capital Region (NCR) states and the Centre entered into an agreement to form the National Capital Region Transport Corporation (CRTC).

To fund the ambitious regional rapid transport system to be built by the NCR transport corporation, authorities would focus on financing mechanisms such as enhancing circle rates and property taxes near the areas through which the rapid corridor will pass. Levying of impact fee, borrowings from HUDCO and banks and raising money through bonds will also be considered.

The government has planned three separate corridors connecting Delhi with Alwar, Meerut and Panipat at an estimated cost of Rs. 72,000 crore. Urban development secretary Sudhir Krishna said, "Regional Rapid Transit System (RRTS) corridors cannot be funded through Gross Budgetary support as the requirement is huge. Various innovative funding mechanisms have to be adapted. RRTS corridors are expected to be built in five years."

(Source: the Financial Express, Business Standard)

Govt plans 7 industrial hubs along 2,000 km Amritsar-Kolkata Corridor
The government proposes to develop seven large industrial hubs on the entire stretch of the proposed 2,000-km Amritsar-Kolkata industrial corridor project. An inter-ministerial group (IMG), constituted to begin preparatory work on the ambitious project, has decided that each of these industrial hubs be located in the seven states through which the corridor will pass. Each of these clusters would be developed as islands of excellence, especially in manufacturing.

According to a government official, the work on the project will gather steam now as the initial report examining the feasibility of the project is almost ready. This will also give way for the finalization of the financing structure for the project. Two meetings of the IMG have already been held; one at the ministerial level and the other with states who have also submitted their concept papers. The concept paper highlights the potential of junctions along the corridor for being developed into industrial/investment zones and trans-shipment hub.

To begin with, all seven states will have one industrial hub each. The size of the hubs would be determined on the basis of availability of land, but sources said it would not be less than 1,000 acre. Though the hub will promote a variety of industrial activities, the focus will be on manufacturing. The Amritsar-Delhi-Kolkata Industrial Corridor will cover Punjab, Haryana, Uttar Pradesh, Uttarakhand, Bihar, Jharkhand and West Bengal. This is one of the most densely populated regions in the world and houses about 40% of India's population. Also, this region needs a major push for industrialization and job creation.

(Source: Business Standard, the Financial Express)

Foreign Telcos can now buy out Indian Partners
The decision to allow 100% FDI in telecom will offer foreign telecoms such as British telecom giant Vodafone Group, Norway-based Telenor and Russia's Sistema the option to buy out their Indian partners.

It will also enable Indian telecoms that are sitting on a cumulative debt of about Rs. 2.5 lakh crore -more than 50% of which is foreign debt - to reduce exposure by bringing in cash and retiring debt through equity infusion. While FDI up to 49% can come via the automatic route, companies would have to get the approval of Foreign Investment Promotion Board (FIPB) for foreign investments beyond that level. At present, India permits up to 74% FDI in the sector – 49% through the automatic route and the rest after FIPB approval.

There may be further consolidation and buyouts in the telecom space, as cash-rich foreign telecoms are likely to seek to buy out Indian partners' stakes, but new companies are unlikely to look at the market in the near future, said an analyst with a management consulting firm. "Telenor Group has already expressed interest in raising its stake in the Indian operations to 74%. We are fully committed as a long term investor in India," Telenor spokesperson said.

(Source: the Economic Times, Business Standard)

Multi-brand retail: Govt in seek to make investment easier
The government on Thursday approved the much-awaited relaxation of the foreign direct investment (FDI) policy on multi-brand retail trading (MBRT), by easing the three main contentious riders on such money.

These three, added as conditions to last year's decision to open FDI in this segment, were on a mandatory 30% sourcing from small domestic industries, 50% of the investment to be in back-end infrastructure and outlets to be opened only in cities with population of more than a million.

FDI up to 51% in multi-brand retail was allowed in September last year after a protracted and heated debate in Parliament, but potential investors including global retail biggies like Walmart, Tesco and Carrefour have remained wary of taking the plunge owing to some strings attached to the policy. However, leading global and domestic retail chains welcomed the Cabinet decision and expressed the hope that investments would now begin to flow in.

(Source: Business Standard, the Financial Express)

Factory activity slowdown to 50.1 in July
The slowdown in Indian manufacturing got worse in July as order books shrank by the most in over four years, suggesting a broad stagnation in the manufacturing sector, a survey showed on Thursday.

The HSBC Manufacturing Purchasing Managers' Index (PMI), compiled by Markit, edged down to 50.1 in July from 50.3 in May. The index, which gauges business activity in Indian factories but not its utilities, has been running close to the 50 mark that separates growth from contraction since May, but has held above it for over four years.

"Activity in the manufacturing sector was broadly flat in July. Output fell by less, but order flows weakened, led by slower growth in export orders," said Leif Eskesen, a chief economist at HSBC.

(Source: the Financial Express)

Higher Import duty likely
The finance ministry has compiled a list of non-essential goods which could be subjected to higher customs duty, to reduce the country's import bill and bring down the current account deficit. The axe might fall on electronic goods and other consumer durables but the worry is that it might just be a drop in the ocean of India's current account woes.

An internal committee of the ministry has prepared a list of the top 400 goods in India's imports by value. Of these, it is short-listing goods not used for any productive purposes and meant for final consumption. LCD/LED televisions, refrigerators, air conditioners, washing machines, watches, mobile phones, laptops, computers, tablets, cars, pearls, precious and semi-precious stones could be some of these. A duty rise would deal a double blow to importers, as these products have already become expensive due to rupee depreciation.

(Source: Business Standard)

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