Sunday, 31 August 2014

VRITTAM(18 AUG 2014 - 24 AUG 2014)

VRITTAM (18 AUG 2014 - 24 AUG 2014)


India has banned Finmeccanica (SIFI.MI) from future contracts, a defence ministry source said on Tuesday, as it presses on with an investigation into a scrapped helicopter contract with the Italian company.

In January, India cancelled a 560 million euro ($751 million) order with Finmeccanica's AgustaWestland unit for 12 helicopters after Italian prosecutors alleged the defence group had paid bribes to Indian officials to win the contract.

South Africa Avoids Recession as GDP Expands 0.6% in Quarter
South Africa’s economy avoided its second recession in five years, expanding an annualized 0.6 percent in the three months through June. Gross domestic product rose after contracting 0.6 percent in the first quarter, the statistics office said in a report released today in the capital, Pretoria. The median estimate of 23 economists in a Bloomberg survey was 0.9 percent.
Africa’s second-largest economy rebounded from a slump in the first quarter that was caused by a five-month strike at the world’s largest platinum producers. The economy remains under pressure, with Finance Minister Nhlanhla Nene saying yesterday he will probably cut the government’s growth projection for this year to 1.8 percent from 2.7 percent estimated in February.

Burger King Worldwide Inc. (BKW) agreed to acquire Tim Hortons Inc. (THI) for about C$12.5 billion ($11.4 billion) in a deal that creates the third-largest fast-food company and moves its headquarters to Canada.
Tim Hortons investors will receive C$65.50 in cash and 0.8025 a share of the combined entity for each share they own, the companies said in a statement today. The transaction, which is backed in part by Warren Buffet's Berkshire Hathaway Inc. (BRK/B), values each Tim Hortons share at C$94.05, based on Burger King’s closing price yesterday. 

Retirement fund body EPFO today announced 8.75 per cent rate of interest on provident fund deposits for the current fiscal, a move which would benefit its over five crore subscribers across the country. The decision to retain interest rate of 8.75 per cent was taken at a meeting of EPFO's apex decision making body the Central Board of Trustees chaired by Labour Minister Narendra Singh Tomar here in the capital. 

"EPFO will provide 8.75 per cent rate of interest on PF deposits for 2014-15," Tomar told reporters after CBT meeting. As per practice, now the Employees' Provident Fund Organisation's (EPFO) trustees' decision would be implemented after the concurrence of the finance ministry.

(Reuters) - The Reserve Bank of India (RBI) said it would conduct more frequent term repos but retained the overall borrowing limit for lenders, in a bid to make borrowing more flexible without injecting additional liquidity into markets.Bond markets barely moved on the measures, with the 10-year benchmark 2024 bond and the overnight cash rates broadly steady from levels before the announcement.

By issuing more frequent term repos, the RBI addresses a key complaint by banks, which had said irregular auctions of these cash-for-loan transactions had made it difficult to manage near-term cash needs.Term repos are loans the RBI extends to banks, for which government bonds act as collateral for a specified period of time.

ICICI Bank, the country’s largest private sector bank, announced the launch of EMI (Equated Monthly Instalments) facility on debit cards to enable its customers to convert high value transactions into easy instalments.
ICICI Bank is the first in the country to introduce this facility.
”As we approach the festive season, this initiative will empower over 22 million ICICI Bank debit card customers to buy products of their choice and pay in easy EMIs,“ said Rajiv Sabharwal, Executive Director, ICICI Bank.

NEW DELHI--The International Finance Corp., the private financing arm of the World Bank Group, said Wednesday that it will raise $2.5 billion by selling rupee-denominated bonds and swaps in India over the next five years.
IFC said it will use the money to finance infrastructure investments in India and the issue would also help deepen the country's bond markets.
India needs heavy investments to improve infrastructure facilities that have become an impediment to speeding up economic growth. But lack of long-term financing and shallow bond markets have made it difficult for infrastructure projects to arrange the necessary funding.
"Issuance of onshore bonds by IFC, with offer of longer-tenor bonds, will deepen the bond market and also provide much-needed finance to infrastructure projects," India's Finance Secretary Arvind Mayaram said, according to the IFC statement. 

NEW DELHI—The Indian economy will expand close to 5.8% in the current fiscal year, Finance Secretary Arvind Mayaram said Thursday, underscoring hopes that the south Asian country's growth would recover strongly this year.
"There is an uptick in core [industrial] sector," and recent indicators such as sales of passenger vehicles and the Purchasing managers index are also pointing to a recovery, he said.
The projection is close to the higher end of the 5.4% to 5.9% growth forecast that the government gave in a review of the economy last month.
Hopes of a pickup in investments on the back of faster changes in policies by the country's recently elected pro-business government have raised expectations that growth could accelerate to as much as 6.0% this year after going through the worst slowdown in years. 
Look East policy: going beyond rhetoric

Like the proverbial one hand not knowing what the other is doing, India’s Look East policy is in danger of becoming incoherent. Two events describe the state of affairs. External affairs minister Sushma Swaraj paid a visit to Vietnam this week, an event that hardly attracted the attention it merited. But days after that visit, commerce minister Nirmala Sitharaman skipped a planned visit to Myanmar to sign an important bilateral agreement with Asean countries. Her reason: she is needed at home for the launch of Prime Minister Narendra Modi’s Jan Dhan Yojna. 

Click on the slideshow below to have better view of  A guide to Income Tax

Tuesday, 26 August 2014

VRITTAM(10 AUG 2014 - 17 AUG 2014)

VRITTAM (10 AUG 2014 - 17 AUG 2014)


The International Finance Corporation (IFC), private finance arm of the World Bank,
 is set to raise as much as $2 billion in a bumper bond sale, a vote of confidence
 in the Indian economy that's set for a turnaround under the growth-oriented policies
 of the Narendra Modi government.

This will also be the first onshore offer of such magnitude by a blue chip entity and 
will help deepen and internationalize India's corporate bond market, something that 
successive governments and the Reserve Bank of India (RBI) have aspired to over 
the years but haven't quite been able to achieve.
India is now among the 16 top lenders to the United States, with its investments in the
US government bonds hitting a new high in June at $73 billion.Indian investors — 
predominantly the Reserve Bank of India — have increased exposure to US treasury
securities by 19 per cent over the past year, according to data released by the US
treasury department. India has now lent more than developed countries such as Canada, 
Germany or France to the world's most powerful economy.
The transaction will allow News Corporation units to own and operate all of the ESS 
businesses while providing ESPN more independence and flexibility in future support of 
The Walt Disney Company's overall efforts in Asia, a media release said.
"News Corporation's acquisition of the interest of ESS that we did not already own, 
continues the program of simplifying our operating model, consolidating our affiliate 
ownership structures and furthers our commitment to delivering incredible sports 
programming to consumers across the globe and particularly enhancing our position 
in sports programming in emerging markets," said James Murdoch, Deputy Chief
Operating Officer and Chairman and CEO International, News Corporation.

RBI deputy governor says no signs of stress in real estate sector

Reserve Bank of India (RBI) deputy governor S.S. Mundra on Wednesday said that
though the real estate sector is prone to volatility and formation of asset bubbles, 
there are no signs of stress in the sector so far. “Despite complains about the flow of 
credit to the real estate sector, figures show that the loan growth to commercial real
 estate has been strong and robust mirroring other segments,” Mundra said.

The only real worry is inflation: HDFC Bank’s Aditya Puri

Growth in the economy could accelerate to near 5.5% this fiscal year if progress is made 
on unblocking stalled projects, said Aditya Puri , managing director of HDFC Bank Ltd.
Puri said he doesn’t expect interest rates to decline for at least one year as food inflation 
remains a concern. However, rates in the banking system have already started to come 
down for retail and corporate borrowers, he said. On a potential merger between Housing
 Development and Finance Corp. Ltd (HDFC) and HDFC Bank, Puri said that while 
some issues have been resolved by the recent regulatory changes, not all issues have
 been, adding a merger will only be considered if it makes business sense.

Standard Chartered to pay $300 million on unflagged transactions

Standard Chartered Plc agreed to pay $300 million for failing to flag suspicious transactions
after promising to do so as part of a 2012 settlement with New York’s banking regulator.
The London-based bank didn’t fix the anti-money laundering compliance issues as it had 
been required to do in the accord two years ago, according to a statement from the
 New York Department of Financial Services on Tuesday. 

India must adopt pro-market policies

It was not for no reason that Milton Friedman, a Nobel laureate and prominent Chicago 
school economist, considered businessmen to be the biggest threat to free markets.
Businesses like to be shielded from market competition and offered special favors
by the government, and that is exactly what a “pro-business” politician promises to deliver. 
This is far removed from upholding business freedom by allowing free entry and exit 
into markets without barriers raised by the government. The “pro-poor” politician, on the
other hand, likes to pander to populist sentiments, often granting free or subsidized 
goodies and various kinds of protection to the poor.


Click on the slideshow below to have better view of why
 India is better prepared for US monetary tightening

Monday, 11 August 2014

VRITTAM (03 AUG 2014 - 09 AUG 2014)

VRITTAM (03 AUG 2014 - 09 AUG 2014)


The Reserve Bank of India (RBI) has started discussions with the finance ministry on a new monetary policy framework, including measures to reduce retail price inflation. The RBI last Tuesday kept its policy rate unchanged for the third time in a row at 8 percent, and set a target to bring down retail inflation to 6 percent by March 2016. Finance Minister Arun Jaitley, who attended the board meeting of RBI in New Delhi, said the central bank would take a final call on its 6 percent inflation target by March 2016.

Foreign exchange reserves down $573.5 mn

The foreign exchange reserves declined by $573.5 million to $319.99 billion due to a sharp fall in the currency assets for the week ended Aug 1, Reserve Bank of India (RBI) data showed. According to the RBI's weekly statistical supplement, foreign currency assets, the biggest component of the forex reserves, fell by $1.09 billion to $292.69 billion for the week under review. The RBI said that the foreign currency assets, expressed in US dollar terms, include the effect of appreciation or depreciation of non-US currencies held in reserve such as the pound sterling, euro and yen.

Tata Steel shuts Odisha plant due to raw material crunch

Tata Steel Ltd (TISC.NS) has shut down one of its ferro alloys plants in Odisha due to a raw material shortage linked to the suspension of a mining license, the company said in a statement late on Friday. Tata Steel sourced ore for the 50,000 tonne-per-year Bamnipal plant from its captive chromite mine in Sukinda, operations of which were suspended in May. The plant was run with available inventory before being shut on Aug. 4. The suspension of operations at Sukinda and Bamnipal would mean more than 6,000 job cuts, the company said.

China excludes Apple from procurement list

China’s government excluded Apple Inc. (AAPL) iPads and MacBook laptops from a list of products that can be bought with public money because of security concerns, according to government officials familiar with the matter. Apple is the latest U.S. technology company to be excluded from Chinese government purchases amid escalating tensions between the countries over claims of hacking and cyberspying. China’s procurement agency told departments to stop buying antivirus software from Symantec Corp. (SYMC) and Kaspersky Lab, while Microsoft Corp. (MSFT) was shut out of a government purchase of energy-efficient computers.

The Finance Ministry said it cannot lower its guard on the external front and ease gold import curbs as developments in Iraq and other countries can have adverse implications on the country's Current Account Deficit (CAD) situation. CAD, which is the excess of foreign exchange outflows over inflows, touched a historic high of USD 88 billion or 4.7 per cent of GDP in 2012-13, mainly due to rising imports of gold and petroleum products. In order to check rising CAD, the government had raised import duties on the yellow metal to 10 per cent, while RBI imposed curbs on import of gold and also laid down various pre-conditions for inward shipments of the precious metal.
Reserve Bank Governor Raghuram Rajan today said 4.1 per cent fiscal deficit goal set by the government for the current fiscal is an "ambitious target". "4.1 per cent is an ambitious target. The government will achieve it if it does want. It has done before. But how it achieves it is what is important," Rajan said. During 2013-14, the fiscal deficit - the difference between the government's income and expenditure - was 4.5 per cent of the GDP.
He said India has capacity to bring the deficit under control provided there is improvement in revenue collection.

S&P: Wealth gap is slowing US economic growth

By The Associated Press of Standard & Poor's


6 trouble spots of Indian economy