สรุปข่าวเศรษฐกิจอินเดียประจำวันที่ 28 สิงหาคม 2556
Maruti Suzuki delays its plan in Gujarat
The Indian subsidiary of the Japanese carmaker, Maruti Suzuki, has for the first time acknowledged that it will miss the target of commissioning its Gujarat plant due to the ongoing slowdown in the Indian automobile market.
At the company's 32nd Annual General Meeting (AGM) in Delhi on Tuesday, Maruti Suzuki's chairman RC Bhargava said, "It is unlikely that we would be able to commission the Gujarat plant even by the end of FY16. The slowdown in the auto sector is very acute."
The company has not started any industrial construction work at the site yet. It plans to conduct a detailed study on demand projections for the passenger vehicles in the domestic market over the next two to three years, before taking a final decision on the commencement of Gujarat project.
(Source: the Economic Times, the Financial Express)
Uttarakhand woos investors with Rs.5,000-cr revival plan
Uttarakhand has proposed a major revival and rebuilding plan to pump in about Rs. 5,000 crore in the next three - five years in the infrastructure space, a top government official said. "This offers a plethora of business opportunities to private players to join the government in state-rebuilding," said Dr Umakant Panwar , secretary, tourism department.
Reassuring that Uttarakhand is a safe and secure investment destination despite the recent calamity, Rakesh Sharma , additional chief secretary, said,"Uttarakhand has a unique advantage in terms of readily available land banks for industrial development. With the proposed Amirtsar-Kolkata industrial corridor, this advantage would be further boosted, as this would facilitate seamless connectivity with the northern and eastern corners of the country."
Inviting the industry to the state, Sharma added: "Huge investment opportunities exist in rebuilding, construction and upgradation of infrastructure, including airstrips, ropeways, helipads, heliports and helidomes to enhance and ease connectivity within the state."
(Source: Business Standard)
Bihar gives nod to private industrial parks
A glimmer of hope for investors facing land troubles has begun to appear as the state Government approved setting up of private industrial parks in Bihar.
"In last seven years, several entrepreneurs have shown their interest in investing in the state," said Brajesh Mehrotra, Principal Secretary of the Cabinet Coordination Department, "however, due to scarcity of industrial land not much of the investment proposals came through. Therefore, for the industrial development of the state, the government has approved setting up of private industrial areas in Bihar. These industrial areas will be set up through Special Purpose Vehicles (SPV) and they need to be registered with the state government." The state government has also decided to waive off stamp duty and other duties regarding the conversion of the land.
The official added, "The landowners, who want to give their land for this purpose, have to transfer their title deeds in favour of the SPV. The Articles of Association for these SPVs will be decided by the state government separately. These SPVs will be entitled for a 100% rebate in stamp duty, registration fee and conversion duties."
According to the policy, a minimum of 25 acres land and 10 industrial units will be needed for establishing a private industrial park.
(Source: Business Standard)
Mylan's $1.8 bn deal gets a green signal
Following a recent intervention by Prime Minister Manmohan Singh, the Foreign Investment Promotion Board (FIPB) is learnt to have cleared the long-pending $1.8-billion investment proposal by US generic drug maker Mylan Inc, to acquire Strides Arcolab's injectible unit, Agila Specialities.
FIPB has also approved many other pending proposals for foreign investment (FDI) in existing pharmaceutical projects. These include a major transaction between private equity fund Actis and Indore-based Symbiotec Pharmalab, which plans to sell a 25% stake for around Rs. 330 crore.
The Mylan-Strides transaction, the third largest acquisition in the sector, comes as the government struggles to narrow the current account deficit by making more way for FDI. The deal would bring in much-needed foreign exchange. The Pennsylvania-based company had initially announced the proposed deal on February 28.
(Source: Business Standard, the Financial Express)
Property prices plunge in 22 major cities
Of the 26 cities surveyed by the National Housing Bank (NHB), as many as 22, including Delhi, Mumbai, Pune, Bangalore and Chennai, saw a drop in property prices during the April-June quarter, compared with the first quarter of this calendar year. This is the first time in recent years that residential unit prices have fallen in so many big cities and could be a sign of developers resorting to cuts to spur demand in a slowing market.
According to the NHB Residex, a similar downward trend in prices had last been seen in the July-September quarter of 2011, in 10 of the 15 cities surveyed, including Hyderabad, Lucknow, Patna, Bhopaland Kolkata. But, even then, big cities like Delhi, Mumbai, Bangalore, Chennai and Pune were not among those seeing price cuts.
"We have seen a price decline across cities — it was due for some time. It shows developers are now prepared to take some cuts in their margins, despite a rise in input cost. This will enable them to clear their huge inventory, have liquidity and increase demand," he said. Analysts tracking the sector say price fall was so far restricted to Tier-I and -II cities but this could be the beginning for metros and other major cities.
"NCR (National Capital Region) and Mumbai have started feeling the pinch already. Though official rates may not reflect the downtrend, backroom negotiations are happening in several cases, leading to price cuts," a Gurgaon-based broker said. "The more you bargain, the higher the chance of price cuts, as developers are desperate to sell their stock," he added.
(Source: Business Standard, the Financial Express)
India needs a lot more reforms
On a day when the rupee continued its downhill journey and closed at an all-time low of 66.24 against the dollar, the finance minister P Chidambaram said the solution was not less reforms but "more reforms and less restriction" and averred that all options including a sovereign bond issuance were on the table.
Replying to a debate on the state of the economy in the Lok Sabha on Tuesday, Chidambaram outlined 10 specific steps to invigorate the economy including a strong push to the PSUs' capital expenditure plans, an expeditious resolution to the stagnation in coal production and ending the "impasse" in the iron ore sector.
In what could boost global investors' confidence in India, in the medium-term expenditure framework (MTEF) tabled in Parliament on Tuesday, the government projected to retard the growth in revenue expenditure by achieving a huge savings on the oil subsidy front. As per the MTEF, helped by the progressive decontrol of diesel prices and the cap on subsidized LPG cylinders per household, the oil subsidy is projected to be reduced drastically from an estimated Rs.65,000 crore this fiscal to Rs.35,000 crore in FY15 and further to Rs.20,000 crore in FY16.
While the weak rupee could adversely impact this plan, oil minister Veerappa Moily said that the government was planning to save $25 billion this year on oil imports through some measures including increased imports from Iran where payments are made in rupees.
(Source: the Financial Express)
Monetize Gold to slash CAD: Anand Sharma
An out-of-the-box idea to help contain the widening current account deficit (CAD) is monetizing 500 tonnes of gold at the current price, Commerce and Industry Minister Anand Sharma said Tuesday.
"It is for the banking secretary, bankers and the RBI to see how you can monetize gold, (from) the country with over 31,000 tonnes of declared gold. That is the declared part. So, even if 500 tonnes are monetized, then in today's value, I think it takes care of CAD," he said at a meeting of the Board of Trade.
At current market rates, 500 tonnes of gold is valued at about USD 25 billion. Globally, demand for gold in April-June was 856 tonnes, down 12% from a year earlier, the World Gold Council said in a statement on August 15.
The government has targeted a CAD of 3.7% of GDP, or USD 70 billion, in the current financial year.India's CAD, which indicates the excess of imports of goods, services and transfers over exports, touched a record 4.8% of GDP, or USD 88.2 billion, in 2012-13. The CAD has widened due to increasing imports, especially of commodities such as oil and gold.
(Source: the Financial Express)
Restructuring premium for highway developers soon
The Cabinet Committee on Investment (CCI) has asked the ministry of road transport and highways to submit "quickly" its proposal that allows developers of highways to defer the payment of premium they had promised at the time of bidding for the project.
The ministry, which on Monday had invited comments from other ministries, will now present the note on premium restructuring to the committee next week. The road ministry has included in the note the option to cancel the projects.
The road ministry had also launched an exercise to determine if the toll revenues were exceeding the premium promised in about 20 premium-based projects that are believed to have benefited from the proposal. This was being done to analyze whether the developers were indeed facing financial stress and if the premise for deferring the premium payment was still valid. However, road ministry officials said it is unlikely they will go through with either of the exercises given the urgency of the demand from the CCI.
(Source: the Financial Express)
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