สรุปข่าวเศรษฐกิจอินเดียประจำวันที่ 1 ตุลาคม 2556

Government will fully finance current account deficit: Arvind Mayaram

The government will finance its current account deficit fully in the fiscal year ending March without drawing down on its reserves, and will also contain the fiscal deficit at 4.8 per cent of GDP, Economic Affairs Secretary Arvind Mayaram said on Tuesday. Mayaram added the government would not have to go beyond the finance ministry's planned market borrowing for the year, and would be able to meet its budgeted revenue target. Economic growth will pick up in the second half of the fiscal year, he said. India's current account deficit grew less than expected in the June quarter and is tipped to ease in coming months as a pick-up in exports and lower gold imports improve the trade balance, offering relief to the battered rupee. The current account deficit (CAD) for the three months through June was $21.8 billion, or 4.9 per cent of gross domestic product, driven by sluggish exports and high gold imports in April and May before the government hiked tariffs on the metal to a record 10 per cent.

(Source: Economic Times)

Corporates free to choose CSR activities: Sachin Pilot

Corporate Affairs Minister Sachin Pilot today said the industry would be free to choose CSR programmes and strategies best suited to their company's philosophy and businesses.Speaking at the 'National Summit on CSR' organised by industry body CII here, Pilot said the government would adopt a "flexible approach" on CSR (Corporate Social Responsibility) which is now part of the new companies law. "Industry would be free to choose programmes and strategies best aligned to their corporate philosophy and businesses," he said. Further he assured the industry that the government would "not apply any rules with retrospective effect". According to Pilot if CSR spending reaches the desired objective one would be able to see tangible results. The new Companies Act makes it mandatory for profit making companies reporting Rs 5 crore ($ 799490) or more profits in the last three years to spend at least 2 per cent of their average profits towards CSR activities.

(Source: Financial Express)

Indian SMEs remain small, says study

A recent study has said that Indian firms that start as small or medium enterprises tend to stay small or become even smaller, in contrast to their counterparts in developed economies like the US, which grow substantially. One of the main reasons for this, the study said, is the country's stringent labour laws and associated inflexibility in the labour market.The study, conducted by the Export-Import Bank of India, which compares various laws in selected countries, stated that across the globe, a majority of firms are born small and tend to grow over the years, in terms of both size and employment. In India, however, the majority of newly-set-up companies tend to stay small.The study gave the example of the US where, in 35 years of existence, a company grows ten times in terms of both operations and employment. In contrast, in India, the productivity of a 35-year-old firm merely doubles, while its headcount actually falls by a fourth. The main reason cited for such a situation has been India's stringent labour laws and inflexibility in the labour market. The report also said that the ceiling on investment of SMEs has been a major factor holding back capacity additions and technology adoption in manufacturing SMEs. These constraints adversely affect the ability of firms to respond to challenges, thereby pulling down the relative competitiveness of Indian manufacturing as compared to other countries, the study said. Another important feature of the Indian manufacturing sector, according to the study, is that only a small share of employment in manufacturing is in organised manufacturing (the unorganised manufacturing sector accounted for almost 70 per cent of total manufacturing employment in 2009-10) and employment is heavily concentrated in small firms.

(Source: Business Standard)

Industry's help sought, to boost MSME growth through clusters

Minister of State for MSMEs K H Muniyappa today said that the government is ready to offer all possible assistance to the SME sector and is actively seeking suggestions from industry to facilitate marketability of SME products on a global scale. Inaugurating the 6th National Cluster Summit organised by the CII-AVANTHA Centre for Competitiveness for SMEs here, the minister said R&D and innovation were key to building capacity and improving marketability. Innovation was a key theme in the Twelfth Plan, he said. Muniyappa added that plans were already in place to add 15 more clusters. H P Kumar, chairman and managing director, National Small Industries Corporation, said that lack of industrial infrastructure, availability and cost of capital, and compliance with labour norms were the main problems hindering SME growth and quality upgradation. MSMEs also face an onslaught from imports, especially from China; as a result their market share has been slipping, he added.

(Source: Business Standard)

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