Invest In India » india

Indian Inc fielding them for Indian cricket team

Ziaulla Namani — Thu, 09 Feb 2012 05:44:17 +0000

After India’s white wash against Australia in a recently concluded test match in Australia, Sahara, the official sponsor of Indina cricket has indicated to BCCI that it is likely to move out of the Team India sponsorship after the tri-series in Australia.

India’s victory on Sri Lanka on Wednesday has brought some relief to the Board of Control for Cricket in India (BCCI). Caught on the back foot by Sahara’s sudden withdrawal, BCCI can take heart from the fact that many of India Inc’s leading lights have shown interest in sponsoring the Indian cricket team.

Sources say Reliance Industries, Hero MotoCorp, Future Group and Bharti Airtel are in the fray for the logo on the Indian Cricket Jersey.

Sahara has been the sponsor of the cricket team since 2001 and its deal with BCCI, at Rs 3.34 crore per match, was to end on December 31, 2013. BCCI and Sahara officials are scheduled to meet on Thursday on the sponsorship issue.

When contacted, Future Group Chairman Kishore Biyani said, “Let’s see when the bid documents come out. It’s too early to say anything now.” A Reliance Industries spokesperson said he would not comment on market speculation, while the Airtel spokesperson termed it market speculation. Hero MotoCorp offcicilas were unavaialble.

Source – Business Standard.

Intnl investment on the rise in infra sector

Ziaulla Namani — Tue, 07 Feb 2012 07:15:18 +0000

According to PHD Chamber, industry body, the international investors have been majorly investing into the Indian infrastructure sector, mainly in the power, oil and gas, telecom and iron and steel segments, due to the high returns prospects.

The flow of external commercial borrowings (ECBs) that consist of bank loans, suppliers’ and buyers’ credits, fixed and floating rate bonds and borrowings from private sector windows of multilateral financial institutions like International Finance Corporation rose 50% to $36 billion during 2011 as against $24 billion in the previous year, according to the Reserve Bank of India data.

A report from PHD Chamber, said, “A closer look at the pattern reveals that the lion’s share in ECB is held by the infrastructure sector, contributing to about 80 percent of the total, which includes the telecom, power, oil and petroleum and iron and steel. The strong external funding can be attributed to high interest differentials available to foreign resources, vis-a-vis India, supported by high unexplored development opportunities in infrastructure within the country.”

Moreover, the external commercial borrowings are used as extra source of funds by private and public sector companies for financing expansion of the current capacity and also for fresh investment. These have become major source of funding for the development of the core sectors in India, mainly in the bad years when India had witnessed tight interest rate regimes due to the rising inflationary situations.

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Indian may bring more services in tax bracket

Ziaulla Namani — Mon, 06 Feb 2012 09:49:33 +0000

In order to raise revenues the government is likely to bring more services in the tax net and may introduce a negative list in the forthcoming Budget.

The government is expected keep 22 services in the negative list and impose 10 per cent tax on the rest, sources said, adding that services for the purpose would be defined as all kinds of economic activities, barring goods, money and immovable property.

At present, the tax is levied on 119 services. For the current fiscal, Centre hopes to mop up Rs 82,000 crore from this levy.

Last month, the Empowered Committee of State Finance Ministers on GST had approved imposition of service tax based on a negative list of services after the Central Board of Excise and Customs (CBEC) came out with a draft report in December.

Sources said the ministry is working hard to introduce the negative list from the next fiscal (2012-13) as that would help it garner more revenue.

The Budget is expected to be announced by mid-March.

In their pre-Budget consultative meeting with the Finance Minister, industry too demanded that government should come out with negative list, while expanding the service tax base.

A negative list based on service tax represents a change in the government’s approach as it is taxes on the principle of the positive list.

The negative list concept is practiced globally and is proposed to be introduced in India as part of the Goods and Services Tax (GST).

Source – Agencies

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Indian Inc with global presence did better in 2011

Ziaulla Namani — Sun, 05 Feb 2012 15:55:10 +0000

A study revealed that Indian firms with overseas presence have performed better in 2011 compared to entities focused on the domestic market alone.

The findings come amidst signs of Indian economy, which was less impacted by the global financial meltdown of 2008, slowing down due to various domestic as well as global factors

The study, conducted by workplace solutions provider Regus among 387 Indian companies, found that 212 companies with overseas operations posted better financials compared to 175 respondents that are focusing on domestic markets. In addition, among companies already operating internationally 89% of respondents intend to expand further and those operating in home markets alone only 75% plan to expand abroad over the next few years. “.

In the current economic climate, Indian firms which have diversified overseas are faring better than those which have stayed with their home markets. This applies to companies both large and small and should act as a wake-up call for those still solely focused on domestic markets to find effective and cost-efficient ways of moving cross-border in order to enhance their earnings and spread their risk,” Regus Regional Vice-President (South Asia) Madhusudan Thakur said. He further said that Indian companies have the US in their sights, with 26% looking to focus on the US for the expansion purpose. In addition, a significant proportion of Indian companies have expressed interest in investing in the Gulf states, particularly the UAE and Saudi Arabia, as well as in the South East Asia, most notably Indonesia and Vietnam. “.

The report further added that that 58% of firms surveyed consider the biggest obstacle to overseas expansion is a challenge of setting up a physical presence in a foreign country.

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Bank to disclose defaulters in newspapers

Malvika — Sat, 04 Feb 2012 14:16:12 +0000

India’s largest lender, State Bank of India, will name and shame ‘wilful’ defaulters and will display their pictures in newspapers to get them to pay up.

“The fresh approach will ruffle a few feathers,” the paper quoted a bank executive as saying.

A ‘wilful defaulter’ is one who does not meet payment obligations even when he or she has the funds.

According to the RBI regulation, ‘a wilful default’ would be charged against the borrowers who fail to pay the dues. Even if they don’t channelise the given fund for the specific purpose for which it was availed and divert for some other purpose, they would be considered as defaulters.

Bad loans in the country could jump to as much as 5.8% of the total within two years in a severe risk scenario, up from 2.8 percent in September, according to an RBI report.

The non-performing loan ratio for Indian banks was 2.3% in the last fiscal year.

Till September 2011, the total bad loans for the bank was at the tune of 33,946 crore, as against 23,205 crore in the corresponding period last year.

Such a strong measure has been contemplated against the defaulters as non-performing assets (NPAs) of various banks have been increasing.

Source – Reuters

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Tax slab in 2012 – 13 budget unlikely to change

Ziaulla Namani — Fri, 03 Feb 2012 05:24:09 +0000

The Budget for 2012-13 is unlikely to tinker with the rates or widen the slabs for both direct as well as indirect taxes, despite chambers seeking more money in the hands of people to prop demand. Economists have also demanded a rise in indirect tax rates to boost government finances.

A finance ministry official said the government needed to boost its revenue collections immediately and it would be difficult to widen personal income tax slabs further. “The last Budget had tried to bring tax slabs closer to those proposed in the Direct Taxes Code (DTC) and there is not much scope for any tinkering this time,” he said.

The DTC Bill, currently with a Parliament standing committee, proposes to tax annual income over Rs 2 lakh up to Rs 5 lakh at 10 per cent, more than Rs 5 lakh up to Rs 10 lakh at 20 per cent and income above Rs 10 lakh at 30 per cent a year. Currently, income over Rs 1.80 lakh up to Rs 5 lakh attracts 10 per cent income tax, over Rs 5 lakh up to Rs 8 lakh is taxed at 20 per cent and income above Rs 8 lakh is taxed at 30 per cent.

Finance ministry officials said there was scope for raising the tax exemption limit, which currently stands at Rs 1.80 lakh for men and Rs 1.90 lakh for women. The DTC Bill seeks to increase this limit to Rs 2 lakh a year for both the categories. Officials said the corporate tax rate may also be kept intact at 30 per cent (exclusive of cess and surcharge).

On the indirect tax front, officials said the excise duty and service tax rates may also be retained at the current level of 10 per cent. The ministry felt any rise in the rate could hurt the industry and raise inflation. The peak customs duty rate is also unlikely to be altered from the current 10 per cent, owing to fears of revenue loss and its impact on the domestic industry. However, specific proposals on tax rates could be altered. For instance, excise duty on diesel cars could be raised, the officials said.

Retaining the current tax rates means the government would have to depend on non-tax revenue and non-debt capital receipts to resume the path of fiscal consolidation, as suggested by the Reserve Bank of India.

Source – Business Standard

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Pvt Sector banks to work as govt agent

Ziaulla Namani — Thu, 02 Feb 2012 07:02:18 +0000

The Apex Bank, Reserve Bank of India maintained that all private sector banks will now be considered eligible to handle any Central or State Government business at par with public sector banks.

Till now, only three private banks, namely ICICI Bank Ltd, HDFC Bank Ltd and Axis Bank Ltd were appointed by RBI as its agents to carry out limited general banking business.
Banks earn a fee while working as an agent of the central bank for collecting revenues as well as disbursing the payments under various schemes.
In a notification issued from Mumbai, RBI said that this move would improve customer convenience by increasing the number of customer service outlets. It will also broadbase the revenue collection and payments mechanism of Central and State governments.

In this connection, all banks intending to handle Government business need to send a proposal to the Controller General of Accounts for examination.

For State Government business, the concerned Department of the State may work out the arrangement and approach the Finance Department of the State which will recommend the proposal to the Regional Director of RBI for the State. These revised guidelines have come into effect immediately.

RBI said those banks interested to handle government business need to be appointed as agents of RBI. For this purpose, it said government may work out the arrangement with the bank and send the proposal to the Controller General of Accounts (CGA) for examination. The CGA, in turn, will forward the recommendation the central bank and then RBI will formally appoint a bank as an agency bank.

Source – PTI

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India’s per capita income grew by 15.6 %

Ziaulla Namani — Wed, 01 Feb 2012 05:33:47 +0000

India’s per capita income grew by 15.6 per cent to Rs 53,331 per annum in 2010-11, crossing the half-a-lakh rupees mark for the first time, according to government data.

“The per capita income at current prices is estimated at Rs 53,331 in 2010-11, as against Rs 46,117 for the previous year, depicting a growth of 15.6 per cent,” said the Quick Estimates of National Income released by the Central Statistical Office (CSO).

The growth in per capita income comes on the back of 8.4 per cent expansion of the Indian economy during the last fiscal.

Per capita income is the earnings of each Indian if the national income is evenly divided among the country’s population of around 120 crore. It is an important indicator of overall prosperity in the country.

However, the increase in per capita income at constant (2004-05) prices, after discounting for inflation, was about 6.4 per cent in 2010-11. It was Rs 35,993 in 2010-11, as against Rs 33,843 in the previous year.

According to the figures, the size of the economy at current prices rose to Rs 71,57,412 crore last fiscal, up 17.5 per cent from Rs 60,91,485 crore in 2009-10.

Based on 2004-05 prices, the Indian economy expanded by 8.4 per cent during the fiscal ended March, 2011.

The GDP at constant (2004-05) prices in 2010-11 has been estimated at Rs 48, 85,954 crore, as against Rs 45, 07,637 crore in 2009-10, as per the Quick Estimates.

Source – Agencies

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Mission to help Indian PSUs to go global

Ziaulla Namani — Tue, 31 Jan 2012 06:03:28 +0000

Indian missions abroad will be actively involved to help the government-owned firms realise their global ambitions to acquire critical raw material assets overseas, the Department of Public Enterprises (DPE) has said.

It has asked the public sector units (PSUs) and their administrative ministries to “undertake a consultation procedure with the Ministry of External Affairs (MEA)/missions to develop possible value addition to the original proposal…”

Also, state-owned units may consult Indian missions for value-addition in terms of infrastructure development in the country of possible acquisitions, the DPE said in a circular to the PSUs and their administrative ministries.

The Energy Security division in the MEA has been designated as the nodal agency for the initiative, it said.

The embassies and the missions have to be kept in loop at all stages of the deal-making, including due diligence, leveraging the lines of credit and government-to-government interactions required to expedite the acquisitions, the DPE said.

The Union Cabinet had approved a new policy on October 14 for acquisition of raw material assets abroad by central PSUs which have a three-year record of profit, vesting more powers with Maharatna and Navratna companies for such buy-outs.

As a follow-up action, the government had formed a panel of secretaries to help PSUs in their global hunt for strategic wealth such as oil, minerals and agricultural resources.

India has to catch up with China which has done some aggressive overseas buy-outs of key raw material assets like coal, iron ore and oil.

Source – PTI

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India Presents galore of opportunities for Investors

Malvika — Tue, 31 Jan 2012 06:00:55 +0000

In a bid to improve the economy the Western world should get into emerging markets including India and China.

Stating that “sky is the limit for investors” in India, conglomerate Hinduja Group’s Co-Chairman G P Hinduja said the investment in the emerging countries would help both sides to improve their economies.

India, Brazil, African countries where the growth is better and it will be two ways. It will help those countries as well as it will help them,” Hinduja said.

He was speaking to British daily Financial Times on the sidelines of the just concluded World Economic Forum (WEF) annual meeting.

His comments come at a time when the escalating European debt turmoil and sluggish prospects in the Western world threaten to derail overall global economic growth.

A diversified group, Hindujas employs over 40,000 people worldwide and has presence in all the continents. The entity has good presence in diverse sectors in India.

On the group’s India business, Hinduja said that he does not see “any of our businesses in India are not going forward”.

“But our plans of investing USD 6 billion in India in infrastructure, we have not been successful. Not that we didn’t want to put in the money, we are still optimistic, I am not worried about India,” he said.

“But I think the authorities in India are not ready yet to welcome an investor and clear up all the barriers if we have to go into green projects.

“But if we have nothing to do with the government and if we are in the private sector and you want to do things where you have less interference of government, I think sky is the limit for any investor,” he noted.

According to him, there is a good demand in India. “If somebody wants to go long term, I would definitely recommend infrastructure. Whether it is airports, whether it is power, whether it is roads. There is lot of potentiality,” he added.

Hinduja pointed out that there is lot of money in the emerging markets.

Source – Agencies

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Intl Airlines cautious of stakes in Indian aviation

Ziaulla Namani — Wed, 25 Jan 2012 17:03:17 +0000

Several major international airlines seem to be wary of picking up stakes in the loss-making Indian carriers at this stage, even as the government plans to take steps to allow them to do so.Even before the government formally notified changes in the aviation policy that currently bars foreign carriers from investing in Indian airlines, officials and spokespersons of major international airlines have said they were not interested in investing in the Indian aviation market.

Airways like Virgin Atlantic, Lufthansa and Emirates said they were not interested. “We are focussed on growing our business out of Delhi to London Heathrow and New York and as such we are not interested in investing in India’s domestic carriers,” Edmond Rose, Director Commercial and Revenue Planning of Virgin Atlantic, said in a statement when asked whether they would like to invest in any Indian carrier.

“Emirates has no plans to acquire a stake in another airline in India or anywhere else. We are busy focusing on many aspects of our own growth including the launch of flights to five new destinations in as many months,” Emirates Senior Vice President, said.

Lufthansa spokesperson said the airline currently has “no plans to take up equity stakes in any Indian airline. Our strategy to achieve a strong presence in India is working”.

A spokesperson of the International Airlines Group (IAG), said, “The process to allow foreign airlines to invest in Indian carriers has not yet been fully approved. So it would be wrong to speculate about IAG’s interest in any Indian airlines at this stage.”

Kuala Lumpur-based Air Asia said it would examine all options, including setting up a subsidiary airline in India, rather than look at investing in an Indian carrier.

Its CEO Tony Fernandes said, “Some Indian companies will require a lot to be recapitalised. However, since the news is new we will examine all options.”

Singapore Airlines Vice-President (Public Affairs) Nick Ionides said the airline keeps all investment options open but added that there were no discussions taking place on the purchase of stake in an Indian carrier. “We aren’t in a position to comment on hypothetical questions.”

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Indian currency most undervalued: Burgernomics

Ziaulla Namani — Wed, 25 Jan 2012 05:25:57 +0000

As per the latest Big Mac index, compiled by the Economist magazine to analyse purchasing-power parity of various global currencies, Indian rupee is most undervalued.

The price of Big Mac burgers of McDonald`s is considered for the index for the reason of the presence of fast-food chain across most of the countries and the magazine calls this theory `burgernomics`.

As per the latest index, prepared on basis of market exchange rate as on January 11, its price is the highest at USD 6.81 in Switzerland, while the same is sold in India for just USD 1.62 — the lowest in the world.

“The cheapest burger is found in India, costing just USD 1.62. Though because Big Macs are not sold in India, we take the price of a Maharaja Mac, which is made with chicken instead of beef,” it added.

Maharaja Mac is the closest Indian equivalent of Big Mac burgers at the Indian outlets of McDonald`s.

“Nonetheless, our index suggests the rupee is 60 percent undercooked. The euro, which recently fell to a 16-month low against the dollar, is now trading at less than euro 1.30 to the greenback,” the Economist noted.

Switzerland is followed by Norway, Sweden, Brazil, Australia, Argentina, Canada, Uruguay and Euro area among the countries with the top most overvalued currencies against the US dollar.

Among the places with most undervalued currencies, India is followed by Ukraine, Hong Kong, Malaysia, China, South Africa, Thailand, Indonesia, Taiwan, Sri Lanka and Russia.

Source – PTI

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India in a better position to tackle slowdown

Malvika — Tue, 24 Jan 2012 13:12:13 +0000

The International Labour Organisation (ILO) think India is expected to withstand the latest global slowdown better than most countries, if it ensures rising income levels for the working class and enough jobs for a growing working-age population.

“The main challenge is not unemployment, but rather the high degree of informality that persists despite strong growth,”said the report.

“The robust growth witnessed in the South Asian region was driven largely by India and was largely due to the rapid rise in labour productivity, rather than an expansion in employment,” the report, titled, ‘Global Employment Trends 2012: Preventing a Deeper Jobs Crisis’, said.

This situation is prominent in India, which accounts for 74 per cent of the South Asia region’s labour force.

In India, total employment grew by only 0.1 per cent over the five years to 2009-10 — from 457.9 million in 2004-05 to 458.4 million in 2009/10 — while labour productivity grew by more than 34 per cent over this period.

A major reason for the slow growth in employment in recent years is the fall in female participation in the labour force. This has been most pronounced in India, where participation of women in labour activities fell from 49.4 per cent in 2004-05 to 37.8 per cent in 2009-10 for rural females and from 24.4 per cent to 19.4 per cent for urban females.

“Overall, the worsening economic conditions will make it more challenging for the South Asia region to promote the creation of productive jobs in the non-farm sector and continue the battle against the persistence of informality, vulnerable employment and specific barriers for women and youth in the labour market,” the report said.

Source – Agencies

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Gold open new market for loans

Ziaulla Namani — Tue, 24 Jan 2012 08:52:33 +0000

With credit demand has been declining because of high interest rates, banks have stepped up lending against the glittering yellow metal. Financing against gold being a secured form of lending, and higher margins are the key reasons why banks are expanding this portfolio.

Gold loans are deemed priority sector advances. This has also made the business lucrative for banks.

HDFC Bank had stepped into this business only three years ago. However, within this short span, it claims to have obtained momentous market share.

“We are well placed in terms of market share among new-age private banks. We have doubled our portfolio this financial year and expect the growth to accelerate, as more branches start offering this product,” a senior HDFC Bank executive said.

Jairam Sridharan, head of consumer lending and payments at Axis Bank, which has lately entered into this business, said, ”So far, we have been watching the market, assessing the risks and evaluating the business model. Most of these have been sorted out. We will start ramping up our business now, and would be more active in the gold loan market from the next financial year.”

George Alexander Muthoot, MD, Muthoot Finance , said “Gold loans up till now had been a monopoly of the South. But today, we have branches in north which have lent huge amounts of gold, even surpassing some of them in the south.”

The company’s assets under management were estimated at Rs 22,000 crore in November, compared to Rs 20,800 crore in September.

Manappuram Finance, another prominent player in this business, reported similar growth with AUMs of Rs 10,500 crore at the end of September, from Rs 9,000 in June.

Experts say the gold loan trend will grow as gold prices remain high. The demand for gold loans has led to a growing number of banks and NBFCs vying for a share of the pie

ICICI Bank too has seen significant growth in its gold loan portfolio. The bank, which currently offers up to 75% of the value of gold as loan, will very soon appraise the limit, an ICICI spokesperson said.

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India among the most innovative country

Malvika — Thu, 19 Jan 2012 14:39:07 +0000

India has been ranked the sixth most “innovative” country in the world in multinational conglomerate GE’s Annual Global Innovation Barometer, driven by financial support from public authorities and long-term support from investors.

The report, based on a survey of 2,800 senior business executives in 22 countries, including 200 respondents in India, identifies the top enablers for innovation in the country as talent (‘creative’ talent and people with technical expertise), financial support from public authorities and long-term support from investors.

When asked to identify the three countries they consider “innovation champions”, 65 per cent of the global respondents identified the US, followed by Germany (48 per cent), Japan (45 per cent), China (38 per cent), Korea (13 per cent) and India (12 per cent).

“Creating conditions for meaningful innovation requires the right blend of internal and external factors that can readily be adapted to meet individual market and customer needs,” GE Senior VP and Chief Marketing Officer Beth Comstock said.

Only 12 per cent of the global respondents identified India as one of the top three innovation champions, compared to 23 per cent of Indian respondents.

The report indicates a ‘balanced’ perception of the environment for innovation in the country, with respondents more satisfied with private investment and government support for innovation.

However, intellectual property protection and research and development partnerships with academic universities were cited as the key challenges to creating an innovation-friendly environment in the country.

In terms of sectors, energy, followed by healthcare, telecommunication and FMCG, were the areas with the most innovation-driven growth potential, according to the survey.

Source – Agencies

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