Other Briefings
Interest Rate Rises to 8.5 Percent
June 25 – The Reserve bank of India raised interest rates for the second time this month and asked lenders to set aside more money as reserves to cool inflation running at a 13- year high.
The repurchase rate was lifted to 8.5 percent from 8 percent, and the cash reserve ratio to 8.75 percent from 8.25 percent, India's central bank said. The increase was the biggest since 2000 and followed a quarter-point rise on June 11.
Governor Yaga Venugopal Reddy is under pressure from the finance ministry to tighten monetary policy after record oil prices drove inflation to 11.05 percent in the week ended June 7. That may further hurt consumer demand and threatens to derail India's record 8.8 percent annual economic growth since 2003, the fastest after China among the world's major economies, Bloomberg reported.
Union Cabinet Approves Women’s Reservation Bill
May 6 – Late last evening, India's Union Cabinet cleared the contentious Women’s Reservation Bill in its original form for introduction in the Rajya Sabha (council for states). The women’s bill seeks to reserve one third seats for women in the Lok Sabha (people's council) and the state assemblies and is one of the last major commitments of the Congress-led UPA’s common minimum program, reported the Hindustan Times. Once introduced, the constitutional amendment bill would be routed to the standing committee to help hammer out a consensus on it.
U.S. recession hits Indian IT companies
Infosys Technologies Ltd. Chief Executive Officer K. Gopalakrishnan, center, flanked by Chief Operating Officer S. D. Shibulal, right, and Chief Financial Officer V. Balakrishnan
April 16 – The U.S. recession might not affect the bouyant Indian economy, but India's IT services industry which sources a majority of its work from the west is showing signs of being hit.
On Tuesday, the Indian IT industrys' bellwether company, Bangalore based Infosys posted a lower than expected forth quarter profit. Net profit rose 9.2 percent to 12.49 billion rupees (315.04 million dollars) in the fourth quarter ended March, from 11.45 billion rupees. The profit missed analyst estimates of 12.6 billion rupees.
Terrorism to Tourism
April. 9 – Kashmir once called Paradise on Earth, is back to promoting itself as a tourist destination after a 20 year hiatus, when tourists flocked to it for its intricately latticed houseboats, lofty Himalayan mountains, green pastures, and fresh clean air.
The Northern Indian state is trying to attract wealthy tourists to play golf in its rolling hills in a bid to earn some revenue and change its image as a terrorist hideout. Certainly, the price is right — just US$20 for a round on the 18-hole course, US$10 for a golf cart rental and US$3 for a caddy
Excerpts from The New York Times say that the state is spending US$6.2 million to build a golf course in the winter capital, Jammu, to be completed later in the year, the fifth course in the region, and an international airport is scheduled to open in the summer.
Revving up India’s auto Industry
Apr. 1 – Two of India's heavy weight auto makers seperately announced on Monday that they would be pumping in Rs 75 billion (US$1.9 billion) into India's already booming auto sector.
While Ratan Tata controlled Tata Motors pledged to invest Rs 60 billion (US$1.5 billion) into ramping up their existing manufactuing unit and building a vehicle testing facility over 4-5 years at Chakan, near Mumbai, Mahindra & Mahindra promised the Maharashtra government they would invest Rs 15 billion (US$375 million) in addition to to the Rs 25 billion (US$625 million) that they have already earmarked to make commercial vehicles at a greenfield site at Chakan. The total sum of Rs. 40 billion (US$1 billion) will be utilized towards the development and production of all vehicles slated to be rolled out from the proposed Greenfield.
The investment by Tata Motors is the single largest investment by the automobile sector in the state.
Battling the global downturn
Mar. 26 – After all we live in a flat world; and the U.S. sub-prime crisis, the plunging dollar, rising oil prices, bankrupt global financial institutions and inflation will take their toll on India too. India’s preparedness at such a time of crisis will impact the extent to which its India shining image gets tarnished.
In a freewheeling interview Chris Devonshire-Ellis, Senior Partner, Dezan Shira & Associates talks to India’s Finance Minister, Mr. P. Chidambaram. The cool, confident captain who led India to 9 percent growth explains mechanisms the India government has adopted to safeguard itself against such global downturns. The finance minister also tackles issues of India’s falling textile trade, foreign investment in energy and corruption. In separate conversations, Chris Devonshire-Ellis also talks to India’s State Secretary for Civil Aviation and Shri M Ramachandran, State secretary, Ministry of Urban Development.
Ministerial meetings with Indian government
Mar. 20 – The Senior Partner of Dezan Shira & Associates, Chris Devonshire-Ellis, who publishes China Briefing, India Briefing and the emerging Asia website 2point6billion.com, will meet next week with Kamal Nath, the Indian Minister of Commerce, and Mr. P. Chidambaram, the Minister of Finance, in New Delhi.
Sliding down the sensex
Mar. 18: The monsoon is still a few months away. But a different kind of deluge—bad news—dampened spirits on Dalal Street. On Tuesday the Times of India said fears of further losses to Indian banks, a slowdown in corporate growth and the fast-spreading contagion of turmoil in global financial markets took their toll on Monday.
The sensex lost 951 points to close at 14,809. This was its second steepest fall, wiping out Rs 3.2 lakh crore in investor wealth. Since January 10, when the sensex touched its peak of 21,206 points, more than Rs 25.1 lakh crore of investor wealth vanished into thin air.
