Apr. 30 – India’s private sector banks may be excluded from the new foreign direct investment guidelines if their status is changed from “resident” to “‘foreign.”
“There is a probability that we will exempt these banks from the guidelines on the lines of the exemptions in the insurance sector,” an official said told The Economic Times.
Under the revised FDI guidelines, several private sector banks will have to change their status would from “resident” to “non-resident.” This is because total FDI will now account for even the stakes held by non-resident Indians, American and global depository receipts, foreign currency convertible bonds and convertible preference shares. Continue reading
Apr. 29 – As countries around the world suffer with the global financial crisis, a little known economic factor has crept into view in India as a means to drive up your GDP, holding national elections.
The 15th General Elections in the country are being perceived as a counter cyclical event that is helping to revive the economy. The reasoning is simple: the money is spent by politicians, the government and candidates in trying to win and maintain power.
The demographics are huge with 650 million voters; all of whom need to be managed and given the right to vote for free, quite apart from the sums spent on trying to get them to vote for a particular candidate or the other. The current elections are expected to inject about US$2 billion into the Indian economy.
Apr. 28 – The Indian government has cleared 22 foreign direct investment proposals, including those of Yamaha and Nokia, worth Rs 541.25 crore.
The proposals were approved by the Foreign Investment Promotion Board (FIPB) and include Nokia’s plan for a joint venture with HCL Infosystems for a single-brand retail to sell handsets and accessories worth Rs 25 lakh. There is also Yamaha’s plan to transfer business operations to a new company in India, India Yamaha Motor Pvt. Ltd.
Broadband company, Tikona Digital Networks garnered the largest FDI amount at Rs 237.26 crore. , was also given the go-ahead by the government. The Kolkata-based Electrosteel Castings, is set to receive Rs 157.47 crore of FDI.
Apr. 27 – Coca-Cola plans to invest more than US$250 million in India in the next three years because it has shown the highest volume growth in its international markets.
Sales during the first three months of the year grew by 31 percent despite the global slowdown. The funding will increase Coca-Cola investment in the country by 20 percent and will be used to expand operations from bottling to buying delivery trucks and refrigerators for small retailers.
“We have had 11 consecutive quarters of growth in India,” Atul Singh, president and chief executive of Coca-Cola India Inc. told the Wall Street Journal. “What we are seeing is that there is still demand not only in the urban centers and big metros but across the different segments of India.”
Apr. 24 – The Delhi High Court has announced that it would abolish service tax on commercial rentals, cutting central government earnings by Rs 8,000 crore annually.
The regulation will help realtors, specially companies like retailers and call centers. Ernst & Young associate director Bipin Sapra told The Economic Times: “The high court order is a welcome one for the business and shall reduce the input costs in these tough times.”
The court says that renting of immovable property for use in the course or expansion of business is not regarded as a service, thus cannot be taxed in the first place.
Apr. 24 – The professional services firm Dezan Shira & Associates, taking advantage of recent regulatory changes, have registered an LLP in Mumbai, increased staff, and confirmed that the founder of the practice, Chris Devonshire-Ellis, will become the firm’s managing partner in India.
Devonshire-Ellis, who resigned from the firm’s China practice in February, will formally commence duties on May 1.
The firm’s India practice has been operational for the past two and a half years, albeit with a small staff presence. However, the liberalization of India’s legal and accounting services industry has opened the doors for foreign firms to participate in the sector. Dezan Shira & Associates response has been to increase the number of staff with the firm’s practice, and to move to larger premises in Mumbai, the country’s commercial and business capital. Continue reading
Apr. 23 – India’s Ministry of Commerce and Industry reported that inflation rate increased by 0.26 percent in the week ended April 11.
A week earlier inflation rate rose by 0.18 percent a week earlier. Based on five analysts asked by Dow Jones Newswires, on the other hand, inflation rate was above the 0.13 percent median estimate.
During the same period, the wholesale price index was 0.3 percent higher at 228.8 from 228.2 in the previous week. The index is a more accurate indicator of inflation because it includes more products in its computation and is released weekly.
Apr. 22 – The Reserve Bank of India (RBI) cut basis points on interest rates by 25 basis points yesterday, with interest loans for homes, cars and consumer goods set to drop further.
Other banks are expected to follow. The RBI also cut it’s repo rate or the rate at which it lends to other banks. The RBI governor, Duwuri Subbarao, commented that due to the country’s low inflation, prime lending rates should be cut by at least two percentage points for public sector banks. The move should further stimulate the Indian economy which has been showing signs of recovery.