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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.

Indian IT co in the US have contributed $15 billion in taxes

Malvika — Wed, 08 Feb 2012 06:07:27 +0000

The Indian infotech (IT) companies in the US have contributed $ 15 billion in taxes alone in the last five years, Foreign Secretary Ranjan Mathai said, stressing on the need to eliminate discriminatory actions.

Mathai, on his first bilateral visit to the US in his capacity as the Foreign Secretary, expressed hope that the economic challenges in the US would not lead to protectionism and concerns of the Indian IT industry will be addressed.

“We do hope the current economic challenges in the US would not lead to protectionism and that concerns of Indian IT industry will be addressed quickly,” Mathai said in his address to the Centre for Strategic and International Studies.

NASSCOM estimates that Indian industry employs over 100,000 in the US up from 20,000 six years ago, he said adding it supports 200,000 other jobs, including indirect ones, apart from enhancing the competitiveness of some the US industries.

“Most Indian companies are setting up development centres. Indian IT industry contributed USD 15 billion in taxes over the last five years. This success story should not be set back by stringent visa regulations which act as a non-tariff barrier,” he said.

As the two economic ties deepen, India and the US will obviously have a growing range of policy and regulatory concerns with each other, he noted.

India and the United States can and must strengthen their economic partnership Mathai opined.

Source – Agencies

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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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Starbucks coffee in India by September

Malvika — Mon, 30 Jan 2012 14:14:09 +0000

Starbucks Corp, the world’s largest coffee company, signed a deal with Tata Global Beverages to open its first coffee shop in India, a year after it announced its retail foray into the country.

Starbucks, the world’s largest retailer of coffee, announced a strategic, 50:50 joint venture with Tata Global Beverages, parent of Tata Coffee.

The Seattle-based company signed a pact with Tata Global Beverages in January 2011 to buy coffee from India and open retail outlets in the country.

Tata Global Beverages, part of the salt-to-software Tata conglomerate, said it would form an equal joint venture with Starbucks to run cafes and develop business in India.

Howard Schultz, Chairman, president and Chief Executive Officer, Starbucks said, “India is one of the most dynamic markets in the world with a diverse culture and tremendous potential. This will be a long term joint venture, but we will not be looking at raising stake to 100 per cent. Our desire is to leverage Tata properties for setting up cafes.”

R K Krishna Kumar, Vice Chairman, Tata Global Beverages, said that India is the only market where Starbucks is co-branding products. “There are unique features in this arrangement. Initial investment for the deal is Rs 400 crore between the two partners. Tata group is extremely excited about this venture,” he added.

It will open its first retail outlet in Mumbai, Delhi and Bangalore around August or September.
Source – Agencies

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India present opportunity of $ 1 tn consumer market

Ziaulla Namani — Sat, 28 Jan 2012 05:01:51 +0000

PricewaterhouseCoopers (PwC) today said India’s middle class will grow in size to become a USD 1 trillion opportunity to be tapped for various consumer-oriented industries.

The country’s total population will be around 1.36 billion by 2021 of which middle class will account for 570 million. The demographics will result in higher aspirations which will have to be served by companies, the consulting firm’s Executive Director, Shashank Tripathi, told reporters here.

Companies in the retail and consumer goods, telecom, financial services, industrial products, and healthcare and pharmaceuticals space can benefit from this opportunity, he said.

Even though Asia’s third-largest economy will urbanise faster, a majority of the demand for this USD 1 trillion opportunity will come from the rural areas, Tripathi said, adding that aspirational people indulging in vocations beyond agriculture will contribute to the demand.

Companies will have to pull up their socks and incorporate changes in product designs to make more disruptive offerings, work towards creating scalable business models and create a trust around the brand for leveraging on the opportunity, he maintained.

PricewaterhouseCoopers (PwC) is a global service firm, headquartered in London, UK. It is the world’s largest professional services firm measured by revenues.

PwC firms help organisations and individuals create the value they’re looking for. It has network of firms in 158 countries with close to 169,000 people working.

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Indian Inc creating jobs in US, Europe

Ziaulla Namani — Fri, 27 Jan 2012 07:37:34 +0000

With HCL Technologies announcing 10,000 jobs for locals in the US and Europe, India Inc chose the WEF meet to send a strong message that Indian IT firms are creating and not stealing jobs in troubled western economies.

Also, a message emerged from British Prime Minister David Cameron’s advice to the European Union (EU) that instead of being a threat, the emerging economies like India can be of great help to Europe.

Concluding a Free Trade Agreement(FTA) with India by the year-end would be in Europe’s interest, he said.

“We need to have a check-list to tackle the euro crisis… There has to be FTAs, bilateral trade agreements and EU trade agreements with countries like India and Singapore, among others by the end of the year,” he said.

His plain-speak to Brussels (EU headquarters) comes against delay in trade-opening pact with India.

Barely a day after President Barack Obama hit out against outsourcing, HCL Technologies’ Vice Chairman Vineet Nayar made a major announcement here that his company would create 10,000 locals jobs in the US and Europe in the next five years.

“Companies in today’s world of globalisation need to create jobs wherever they go. We have taken a pioneering step,” he said.

Wipro chief Azim Premji, known for his frank talk, said the issue of outsourcing is “getting hyped up since elections are coming up. The US has become over-sensitive on jobs”.

Chairman of Mahindra Satyam Vineet Nayyar hinted at creating jobs in the western economies from where they get bulk of business.

Source – Agencies.

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Reduce interest rates to boost housing demand

Ziaulla Namani — Fri, 27 Jan 2012 07:27:15 +0000

Indian’s apex bank, RBI’s decision to cut cash reserve ratio (CRR) will help improve the liquidity position of various sectors, including realty, but realtors feel that interest rates should be brought down to boost housing demand.

Lalit Kumar Jai, President of Confederation of Real Estate Developers’ Association of India (CREDAI) said, “The CRR cut will bring in liquidity. It will help the real estate market which is cash starved. However, it is important to see the interest rate shall have to come down to facilitate the home seekers to buy homes.

In its third quarterly review of the monetary policy, RBI on Tuesday injected Rs 32,000 crore into the system by lowering the CRR by 50 basis point but kept the short-term lending rate unchanged in view of persisting inflationary concerns.

Echoing the view, Unitech Managing Director Ajay Chandra said: “A reduction in the CRR is a positive move from the RBI as it will increase the credit-supply to different sectors of the economy.”

Chandra noted that an increase in the credit supply would also benefit the realty sector.

CREDAI Chairman Pradeep Jain said the apex bank has given a signal that interest rates would come down.

Credai Chairman said that RBI has attempted to do a delicate balancing act between the need for growth and urgency of containing price line.

CHD Developers Managing Director Gaurav , said “This is just an indication that the sequence of rate rise is now behind us, the signal will serve as a boost for the real estate sector with sentiments of buyers turning favorable. This move is set to help stimulate growth.”

Source – PTI

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