Invest In India » Economy

Indian Industrial growth slows down

Ziaulla Namani — Mon, 14 Nov 2011 05:06:02 +0000

Continuing its dismal performance, industrial growth fell further to 1.9 per cent in September, mainly due to poor output from the manufacturing sector.

Growth in factory output, as measured in terms of the Index of Industrial Production (IIP), stood at 6.1 per cent in September last year, as per the latest data.

This development may prompt RBI to halt rate hikes in its policy review next month. Prime Minister’s economic advisory panel chief C Rangarajan described the dip in factory output in September as “disappointing”,

RBI has hiked key policy rates 13 times since March 2010 to tame rising prices.

During the April-September period this fiscal, IIP growth stood at 5 per cent, as against 8.2 per cent in the same period last year.

Meanwhile, the output of the manufacturing sector, which constitutes over 75 per cent of the index, grew by only 2.1 per cent in September, compared to 6.9 per cent expansion in the same month last year.

Capital goods production witnessed negative growth of (-)6.8 per cent in September in comparison to a growth of 7.2 per cent in the corresponding month of 2010.

Consumer non-durables output declined by (-)1.3 per cent during the month in comparison to a growth of 5.8 per cent in the corresponding month of the previous year.

Consumer durables output grew by 8.7 per cent in September, compared to a growth of 14.2 per cent in the corresponding month last year.

Growth in industrial output in the first half this fiscal also witnessed a marked slow down to 5 per cent in the April-September period from 8.2 per cent in last fiscal.

India’s economy grew by 7.7 per cent in the April-June period, the slowest in six quarters.

India Inc had attributed the slowdown to rising interest rates, which have led to an increase in the cost of borrowing, thus hindering fresh investment.

Source – rediffmail.com

One in every two Indians looking for job change

Ziaulla Namani — Sun, 28 Aug 2011 09:32:49 +0000

One in two Indian employees is considering changing his present job with young workers most likely to quit, a survey by human resource consulting firm Mercer has found.

The survey, which was conducted among more than 2,000 workers in India, found that 54 per cent are seriously considering leaving their organisation at the present time, a substantial 28 per cent jump from 26 per cent in 2004.

Women are leading the exodus game as 58 per cent are considering leaving, compared to 53 per cent of men. Around 66 per cent of workers of age 24 and below are seriously considering leaving current job, the survey said.

“As the economy improves further and new job opportunities emerge, employers risk losing valued talent and also face productivity and morale issues among workers who continue to be with the organisation,” Mercer Consulting India Managing Director Nishchae Suri said.

Suri added, “The business consequences of this erosion in employee sentiment are significant, and clearly the issue goes far beyond retention”.

Adding to the complexity is emerging generational tension as Millennials — younger workforce — enter the workforce in growing numbers, bringing with them wholly different expectations regarding work, the report said.

As per the survey, the most important reward factor for workers in India is career advancement, followed by base pay.
Training opportunities followed by type of work were rated third and fourth, respectively. Working for a respectable organisation and incentives are fifth and sixth.

©2009 Copyright by Invest In India

Indian Per capita income for 2010-11 jumps to Rs 54,835

Ziaulla Namani — Wed, 01 Jun 2011 05:00:34 +0000

As per the data released by the Indian government, the Per Capita income of the Indians in the year 2010-11, increased by 17.9 percent i.e Rs. 54,835 as against Rs 46,492 in the previous year.

The estimation of the 2010-11 per capita income figure on current market price is over Rs.8, 000 more than the estimated figure 46, 492 done by the Central Statistical Organisation in the previous year.

However, the increase in per capita income was only about 6.5 per cent in 2010-11 if it is calculated on the prices of 2004-05 prices, which is a better way of comparison and broadly factors inflation.

Per capita income (at 2004-05 prices) stood at Rs 35,917 in FY11 as against Rs 33,731 in the previous year, the latest data on national income said.

The size of the economy at current prices rose to Rs 73,06,990 crore in 2010-11, up 19.1 per cent over Rs 61,33,230 crore in FY10.

The India’s population increased to 121 crore at the end of March 2011, from 117 crore in fiscal 2009-10.

Per capita income means earnings of each Indian if the national income is evenly divided among the country’s population.

Per capita income or income per person is the numerical quotient of income divided by population, in monetary terms. It is a measure of all sources of income in an economic aggregate, such as a country or city. It does not measure income distribution or wealth.

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Do’s and Don’ts in the Stock Market

Malvika — Tue, 17 May 2011 14:29:13 +0000

Let’s introduce do’s and don’ts of investing:

Most of us have our own perception of investment based on our experiences, but also tend to be confused with the opinions given by others. Knowing the do’s and don’ts of the stock market would help us turn really as a smart investor.

The do’s and don’ts in the stock market are:

slow, steady, and boring wins the race:

It is best not to panic over information about stocks on the media. Being slow and steady with looking at the activities that your money is to be used for would ensure that you invest in ventures that are good, useful and profitable.

Reading good books on personal finance will help you in taking right financial and investment decision. In addition, finding good financial advisors would help you get advice regarding stocks and mutual funds, along with entrusting the custody and management of your funds to them.

All this may seem too boring and time consuming, but it is better to be cautious than bitten too hard.

Don’t give any weight to market forecasts. All opinion pro and con is already built into the price of equities today:

Market forecasts on the media has got good entertainment value but doesn’t have any investment value. It is just enough for long-term investors to invest in good stocks, and mutual funds that would appreciate in the long run.

It is best to understand that market forecasts only show you the expected direction in which the market is heading based on the available information. This forecast is only a forecast and need not become reality.

In addition, market fluctuations are the very nature of share markets and should mean nothing to long tem investors. Making accurate market forecasts is tough, as they are influenced by various factors like the outcome of political elections, the direction of the economy, interest rates and world events. It is also wise to know that these fluctuations are incorporated in the price of the share, stock or mutual fund.

Do make your own analysis of the stocks, shares and mutual funds:

It is unadvisable to place your full faith on analysis of others regarding stock, shares and mutual funds. No wise man would always tell you all about his market beating strategy. Making ones own analysis keeping your financial goals in view and framing a strategy would help.

This involves studying the performance of top performing stocks and mutual funds over 5 years and existing mutual funds over a period of 3 months to decide on which stock to maintain and which to dispose off. All this would ensure that you are investment smart.

Don’t think you can successfully engage in short-term market timing:

As a long- term investor you should never contemplate taking advantage of short-term market dealings and speculations. Playing with shares and mutual funds in the short-term market may give you a profit in a few transactions but will not give you profits forever. So you can’t have an investment strategy which gives profit inconsistently. We need a strategy which can bring profits consistently so as to be a successful investor in the long run.

It is true that playing in the share market is neither entertainment nor fun. It is also futile to borrow or work on short-term margins to make money.

Don’t assume that if anyone were genius enough to devise a market-beating strategy he would be stupid enough to share it with anyone:

Stock tips are good to learn, but not to act on for speculations. It could prove dangerous to act on speculation tips given by one and all, as they may not be correct. In addition, everyone has his or her own perception of investment, with other not having full knowledge or skills.

You need to take time to think over each tip and analyze if it contributes to your long-term objective of capital appreciation. Similarly it is not advisable to subject your money to risk with investing in investment fads that may or may not earn you huge profits.

The final advice:

You need to make a calculated decision considering the pros and cons whenever you make an investment. In addition abstain from trading often in the stock and mutual funds market. Always think in terms of long term investing.

The author is Ramalingam K, an MBA (Finance) and Certified Financial Planner. He is the Founder and Director of Holistic Investment Planners (www.holisticinvestment.in) a firm that offers Financial Planning and Wealth Management. He can be reached at ramalingam@holisticinvestment.in.

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India’s growth will moderate in the next fiscal year: Poll

Malvika — Mon, 18 Oct 2010 04:01:41 +0000

As per the report by Reuters, as the result of the monsoon India’s economic growth is on track to accelerate in 2010/11, but contrary to this years progress expectations for growth in the following year have moderated slightly, a quarterly Reuters poll shows.

A survey conducted by 21 economists produced a median forecast that 2011, unchanged from a similar poll conducted in July and up from growth in 2009/10 of 7.4 percent.

They projected growth of 8.3 percent in 2011/12, slightly below 8.5 percent forecast in July.

Rupa Rege Nitsure, chief economist of Bank of Baroda, said “Rising cost pressures and global uncertainties are likely to have a sobering impact on India’s growth momentum.”

Wholesale price inflation is forecast at 8.3 percent at the end of 2010/11, similar to current levels, before moderating to 5.7 percent the following year. This compares with 8.6 percent and 5.5 percent, respectively, in the previous poll.

The Reserve Bank expects WPI inflation to ease to 6 percent in March 2011.

The cut in forecasts for inflation at the end of the fiscal year reflect the view that a healthy monsoon will bring down food prices, which have a big influence on the headline index.

However, rising demand for consumer durables, such as cars, will need sterner action from the central bank than previously forecast because of the risk that these price pressures can filter more broadly through the economy.

The rupee is forecast to be around current levels at the end of December, but is seen appreciating by about 1.2 percent between now and the end of March. It is up 4.3 percent so far in 2010 after having climbed 4.7 percent in 2009.

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Jobless Americans climb to 551,000 in September 2009

Tushar Mathur — Thu, 01 Oct 2009 14:10:00 +0000

The count of Americans seeking unemployment benefits for the first time climbed unexpectedly by 17,000 to 551,000 for the week ended September 26, indicating that labour market remains strained despite easing economic conditions.

The figures come a day after official data showed that the US economy contracted less than expected at 0.7 per cent i the June quarter.

According to the US Labor Department, the number of initial claims for jobless benefits rose 17,000 to 551,000 for the week ended September 26.

In the previous week, the figure stood at 534,000. As per the data, the four-week moving average was 548,000.

However, the count of those receiving unemployment benefits dropped as much as 70,000 to 6,090,000 for the week ended September 19.

“The 4-week moving average was 6,154,500, a decrease of 39,250 from the preceding week’s revised average of 6,193,750,” the Labor Department said in a statement today.

Yesterday, payroll-processing firm ADP in its National Employment Report said that 254,000 jobs evaporated in the American private sector in September.

However, the report noted that the decrease was the smallest since July 2008.

Agencies

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Slowing economy forces Tata Motors, M&M to shut plants

Tushar Mathur — Sat, 06 Dec 2008 10:25:00 +0000

Indian auto makers Tata Motors Ltd and Mahindra & Mahindra Ltd are closing plants for up to 6 days in December as demand for vehicles is hit by tight financing in a slowing economy.

The country’s top vehicle maker Tata Motors plans to shut its heavy vehicle plant in east India for six days, a spokesman said. It said earlier this week it would to shut a commercial vehicle plant in west India for three days.

Tata Motors’, India’s top bus and truck maker, November vehicle sales dropped 30 percent to 32,696 units. The country’s biggest utility vehicle and tractor maker Mahindra said most of its automotive plants will be shut for up to 6 days in December due to easing demand.

“Taking into account the slowdown in demand for the company’s products it has been decided to align the company’s production plan with the expected demand for the month of December,” Mahindra said in a statement.

Mahindra, which also makes the Logan sedan in a venture with Renault, earlier this week said vehicle sales in November fell 39 percent to 11,273 units. Carmakers in India have cut prices and are offering freebies to woo back buyers as sales slide after nearly five years of rapid growth.

Source: Agencies

©2009 Copyright by Invest In India

AT&T likely to cut 12,000 jobs

Tushar Mathur — Fri, 05 Dec 2008 06:57:00 +0000

AT&T, the largest US phone company, will cut 12,000 jobs, striving to trim expenses as the US economy falters. The reductions amount to about 4% of the workforce, Dallas-based AT&T said on Thursday in a statement.

The company plans to record $600 million in expenses for severance this quarter. The reductions would bring AT&T’s total job cuts to more than 25,000 this year. The carrier and its smaller competitors are grappling with slowing consumer spending and a jobless rate at its highest level in 14 years.

AT&T fell 18 cents to $28.90 in early trading after closing at $29.08 on Wednesday on the New York Stock Exchange. The carrier also plans to reduce spending next year to cope with the slowdown, with plans to give specific forecasts for 2009 spending plans in late January.

The carrier said its still adding jobs in its wireless and video units. In July, the company said it would eliminate 10,000 jobs to reduce overlap in some departments after its 2006 purchase of BellSouth Corp. Before that, the company announced 4,650 cuts, some in its home-phone business, which has lost customers to cable operators and wireless competitors.

Source: Agencies

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Singapore PM takes a pay cut..!!!

Tushar Mathur — Mon, 24 Nov 2008 18:06:00 +0000

Salaries for Singapore politicians, who are amongst the highest paid in the world, will be cut by up to 19 percent next year due to a weakening economy, media reported on Monday.

Singapore ministers, who are paid millions each year, have a component in their salary that is pegged to economic growth and with Singapore in a recession and the outlook gloomy for next year, this variable will fall, Channel NewsAsia said on its website, quoting the government’s Public Services Division.

Singapore’s Prime Minister Lee Hsien Loong, whose pay was increased to S$3.76 million ($2.46 million) this year — or five times that of U.S. President George W. Bush — will see his salary fall to S$3.04 million ($1.99 million).

State wealth fund Temasek, headed by Ho Ching, the wife of the prime minister, also said on Friday that senior managers had volunteered to take pay cuts of between 15 to 25 per cent.

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Types of Inflation–

Tushar Mathur — Wed, 19 Nov 2008 07:20:00 +0000

Inflation is a situation of sustained and inordinate increase in the prices of goods and services. Read on to understand the various types of inflation.

When there is a rise in general price level for all goods and services it is known as inflation. An inflationary movement could be because of the rise in any single price or a group of prices of related goods and services.

Types of Inflation

There are four main types of inflation. The various types of inflation are briefed below.

Wage Inflation: Wage inflation is also called asdemand-pull or excess demand inflation. This type of inflation occurs when total demand for goods and services in an economy exceeds the supply of the same. When the supply is less, the prices of these goods and services would rise, leading to a situation called as demand-pull inflation.

Cost-push Inflation: As the name suggests, if there is increase in the cost of production of goods and services, there is likely to be a forceful increase in the prices of finished goods and services. This type of inflation may or may not occur in conjunction with demand-pull inflation.

Pricing Power Inflation:Pricing power inflation is more often called as administered price inflation. This type of inflation occurs when the business houses and industries decide to increase the price of their respective goods and services to increase their profit margins. A point noteworthy is pricing power inflation does not occur at the time of financial crises and economic depression, or when there is a downturn in the economy. This type of inflation is also called as oligopolistic inflation because oligopolies have the power of pricing their goods and services.

Sectoral Inflation: This is the fourth major type of inflation. The sectoral inflation takes place when there is an increase in the price of the goods and services produced by a certain sector of industries. For instance, an increase in the cost of crude oil would directly affect all the other sectors, which are directly related to the oil industry. Thus, the ever-increasing price of fuel has become an important issue related to the economy all over the world. Take the example of aviation industry. When the price of oil increases, the ticket fares would also go up. This would lead to a widespread inflation throughout the economy, even though it had originated in one basic sector. If this situation occurs when there is a recession in the economy, there would be layoffs and it would adversely affect the work force and the economy in turn.

Other Types of Inflation

Fiscal Inflation: Fiscal Inflation occurs when there is excess government spending. This occurs when there is a deficit budget.

Hyperinflation:Hyperinflation is also known as runaway inflation or galloping inflation. This type of inflation occurs during or soon after a war. This can usually lead to the complete breakdown of a country’s monetary system. However, this type of inflation is short-lived.

"To sum up, any type of inflation could affect the economy of a country badly."

©2009 Copyright by Invest In India

RBI is helping increase overseas investments

Tushar Mathur — Mon, 03 Mar 2008 06:31:54 +0000

RBI liberalizes overseas investment norms! Isn’t that great!

Liberalization, economic advancement, accelerating GDP, expanding exports of services and the rupee becoming stronger – this changing scenario has lead the Reserve Bank of India (RBI) to take action and how! The inflow of Foreign Direct Investment (FDI) and expectations of large dollar remittances have impelled the RBI to set the Indian dream free, and Indian firms have gained more flexibility in investments.

The changing face of the RBI is a welcome prospect for Indian businesses. The limit for remittances without prior approval has been hiked from $100,000 to $200,000 per fiscal year. Now Indian companies can invest in wholly owned subsidiaries, partnerships or joint ventures up to 400% of the net worth of the company.

This was followed by the ceiling for mutual funds investments overseas rising to $500,000. Another positive change was the relaxation of the rule of reciprocal share, which enjoined an Indian company investing overseas to allow similar investment in its own company.

Varied impact

With mixed responses greeting these liberalization transformations there is confusion whether the changes signify optimism towards India or if a guarded pessimism is indicated.

While the center clarifies that to liberalize the economy there is a need to devise more channels for forex outflow, money keeps pouring into the economy. Efforts have begun to create a demand for dollars, to counteract the FDIs coming in. The rupee – on a decade high and gaining ground every day – needs no protection, but with inflation becoming a concern the RBI is going all out to control the money supply.

The relaxation of certain norms and removal of many restrictions sees the RBI enjoying fuller capital account convertibility, that is, the freedom to convert domestic assets into foreign assets to widen the asset base. This would encourage higher capital outflow that is a requirement for holding domestic savings.

How personal spending is affected

With the limit on investment in immovable property or any asset overseas at $200,000 now, the global Indian has more options. For the individual, the lifting of restrictions and introduction of various relaxations has made overseas travel simpler and more viable. With no liquidity crunch the world is the Indian traveler’s oyster. With more markets opening up, we can also look forward to better goods and quality services.

These measures are just the seed of huge changes expected in the Indian economy. While most people are optimistic about the situation, some are guarded. What is your take on the Indian economy on macro and micro levels? Does the country’s financial future look upbeat, or is there still time to open the champagne?

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Why Should I invest in the Indian Stock Market ?

Tushar Mathur — Tue, 05 Feb 2008 06:28:07 +0000

It’s ruled by unpredictability. But the Indian stock market is the most exciting emerging market, and investors are queuing up. Plan to invest in the Indian stock market? Let’s see what advantage you get over your international investments.

Investing has never been so much fun. Nor have you had so much choice. With several economies opening up, the whole world is at your disposal.

The market boom
The market is on a giddy rise; a 1,000-point leap for the BSE Sensex is now an established fact of life. Though you’ll have occasional dips, your money will wing its way upward most of the time. Most of the stock is correctly valued; returns on investment are excellent and the economy is booming.

Indian companies are showing a new confidence. Takeovers, acquisitions and mergers in the international market are on the rise. And this is now spreading across sectors: iron and steel, spirits, manufacturing, auto parts, not just IT. And as the juggernaut rolls on, so does the equity.

In your favor
Remember this, Indian corporates are growing despite poor infrastructure and seriously tangled red tape. The government is trying to make things better, and when that happens, you’ll rejoice that you invested today.

India Inc is certainly on a high, but you haven’t seen anything yet; in market shares and sheer size, Indian companies are still toddlers. Buy that stock, and you’ll watch it grow for several decades. What this means is that your investing dollar today will return for a long, long time.

Most importantly, investing in India makes sense because the stock market is disciplined and is regulated professionally. Yes, there are those who ask for more freedom (laxity?) in the system. In its present avatar, the market offers you short-term anxiety in the form of volatility; but it also guarantees you long-term happiness in returns.

Investing in India today is the best thing you can do for tomorrow. For the NRI, the Indian stock market offers great investing value, options, and returns.

Have you already invested in the Indian stock market? Were you pleased with your investment? Do you have any opinion to share with prospective investors?

©2009 Copyright by Invest In India

Advantages of Investing in India

Tushar Mathur — Sat, 12 Jan 2008 01:05:21 +0000

India has a 20 million-strong scientific and technical manpower, more than the population of Taiwan. The number of literates in India is more than the combined population of France and Japan. India has a vast domestic market – a 300 million-strong middle class population with substantial purchasing power and another 700 million-strong population whose capacity to purchase is gradually increasing. Being a vibrant democracy with a large democratic set-up supplemented by a broad-based legal framework including arbitration and an independent judicial system, it boasts of a vast network of bank branches, financial institutions and well-organized capital and money markets. These attributes make India a favorable destination for NRI investments.

India also has a huge network of technical and management institutions of the highest international standard for development of excellent human resources. India has an enviable record of honoring its international financial obligations and has never defaulted. The country has a strong English language base for business purposes. The strong and vibrant small-scale sector is good enough for establishing strategic alliances with its foreign counterparts. The strategic location of the country in the context of the third world markets particularly the rapidly growing South and South-East Asian markets together with a supportive infrastructure base help in promoting a healthy environment for NRI inflows into the country.

India has more billionaires than China. This year there are 15 billionaires in China but last year in India, there were 20 billionaires, according to the Forbes magazine. India has emerged as the world’s fastest growing wealth creator, thanks to a buoyant stock market and higher earnings. A number of Indian companies surpassed last year’s net profit in just six months of the current fiscal, reflecting accelerating corporate earnings. 44% percent of the top 100 of the Fortune 500 companies are present in India. With its manufacturing and service sector on a searing growth path, India’s economy may soon touch the coveted 10 percent figure.

The Indian diaspora’s business has turned hot of late. Government has always wooed non-resident Indians assiduously to attract more inflows. Apart from the money transfer business, which compared to money invested in India is smaller; the Centre is trying its best to persuade NRIs to pump money into the country like never before. And, it has seen superlative success in re-cent years. The Prime Minister of India has announced dual citizenship for people of Indian origin. It has given a big boost to the NRI community across the world. With recruitment levels for overseas jobs skyrocketing, there is scope for more money coming into India. According to a recent Business Standard report, in the last three years, 850,000 people went to West Asia alone. And even as the official figure for Indians living in the US is put at 2 million, unofficial estimates put it at 3.5 million. And emigration to Canada and Australia continues to grow.

The ministries concerned have made sure that rules and regulations are simplified to make inflows easier. Where does the government see money being invested? Investment in bank deposits and company deposits may be made by NRIs. They are subject to different rules; investments with and without repatriation facilities are permitted under the schemes. As of now, NRIs are permitted to make direct investment in partnership and proprietorship firms in the country. This, the NRIs can do by way of subscription for shares or debentures of Indian companies. Further, they can also now place funds in company deposits. NRIs who undertake not to seek at any time repatriation of the capital invested in India and the income earned thereon are permitted to invest on non-repatriation basis. NRIs also have the option of investing in mutual funds floated by domestic public sector and private sector mutual funds on non-repatriation basis. All they have to do is to make their applications to the Reserve Bank. They can also now invest in money market mutual funds (MMMFs) floated by commercial banks and financial institutions with authorization from the apex bank or the Securities and Exchange Board of India (Sebi), the market regulator. Yet another option is to invest in the securities of the Central or State governments and the National Plan/Savings Certificates by making remittances from abroad or out of funds held in their NRE/FCNR accounts. In effect, with regulations tapering off, compared with the scene some 7-8 years ago, non-resident Indians today have more choices to invest their hard-earned money in India. And, to make things easier and hassle-free, the government is doing all it can to persuade Indians who make big money away from home to park their funds here. Commendable though is the fact that the Indian diaspora has also begun to believe that it is better to channel their money home, thereby contributing to the development process of the nation they actually belong to.

Home is where the heart is

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