Dec. 19 – In order to boost the domestic real estate market, the government has asked banks to lower home loan rates for existing borrowers while paring rates for new borrowers. State run Indian banks have already cut home loan rates when the RBI slashed its key lending rate by 250 basis points earlier this year. Private Banks however are yet to cut home loan rates.
Real estate prices in large cities such as Mumbai and the National Capital Region around New Delhi have doubled in the past three years, reducing affordability. Demand for new homes further dropped last October when interest rates rose to a seven-year high as the central bank targeted accelerating inflation. Abating the sliding sector, the central bank subsequently cut home loan rates three times to 6.5 percent from 9 percent to cool the market.
Dec. 18 – For the first time in motor sport history, the scarlet Ferraris of Felippe Massa and Kimi Raikkonen fighting for world championship honors in 2009 will bear the logo of an Indian company. The Tata Group would join such big names as Shell, Alice (an Italian internet company), Acer Computers, AMD microprocessors, drinks giant Martini and Dubai-based finance and investment firm Mubadala as the main backers of the Ferrari F1 team in 2009. The deal comes after Tata bought Jaguar and Land Rover for US$2.3 billion in March this year.
The two companies are however not strangers to each other. While the technology arm of the Tata's – Tata Consultancy Services have supplied major programs and solutions in various technological areas to the design, manufacture and operation of F1 cars, the Tata Group financed Narain Karthikeyan when he drove for Jordan in 2005. A year later the Tata logo adorned the Williams F1 cars driven by Mark Webber and Nico Rosberg, the Times of India reported. Italian Carmaker Fiat which owns Ferrari also has a joint venture with Tata Motors to produce cars and drive trains in the western state of Maharashtra.
Dec. 17 – Following mass public outrage at the bureaucracy, lack of finances and poor national co-ordination Indian security agencies get entwined in post the Mumbai terror attacks, the Indian government passed a bill allowing the formation of a national agency to investigate major militant attacks.
Proposed by the new Home Minister – P. Chidambaram, the Central Industrial Security Force Act if passed into law would establish a National Investigations Agency, styled on the US Federal Bureau of Investigation (FBI) or the UK’s MI5.
The NIA will be governed by the Defence of India Rules, normally used in times of war, giving the agency overriding powers to take over the investigation of terror attacks without direct interference from the states. The agency was earlier opposed by India’s 29 states as they felt it would allow the national government to usurp local law enforcement powers.
Dec. 16 – Owning to the capital markets drying up, a lack of long term financing ability and an expected rise in banks non-performing assets, the world bank has decided to lend India's state-run banks US$14 billion over three years. The biggest loan yet to India, the world bank said a majority of the loan will focus on areas most affected by the global financial crisis, including state-owned and housing banks, small- and medium-sized enterprises and infrastructure. The loan will also increase assistance especially in infrastructure to seven of India's poorest states as well as poorer regions in middle income states.
Dec. 15 – India is aiming to more than double its steel production to 124 million tonnes by 2011-12 and further raise it to 280 million tons by 2020, Steel Minister Ram Vilas Paswan told ministers at the upper house of Parliment the Rajya Sabha. India which currently ranks fifth in steel production globally produced 54 million tons this year.
At the same time, NMDC ltd, India’s largest iron-ore producer, announced that it may need to cut production because of falling demand for steel. NMDC’s iron-ore sales in the domestic market have fallen by as much as 30 percent, while steel consumption in the country fell to 1.75 percent from a high of 13 percent Bloomberg reported. International exports to China and Austrailia are also expected to fall next year as demand slumps. Prices of steel have fallen since June.
Dec. 12 – 3G or the third generation in mobile telephony was officially launched by Prime Minister Manmohan Singh on Thursday. After years of debate on spectrum allocation and price the new technology will offer urban India richer multimedia content with the convenience of better speed and mobility. Some countries in Europe, Japan and South Korea have all deployed 3G. China has developed their own version of 3G which was deployed just prior to the Olympic games. 3G hasn't taken the world by storm yet as its an expensive technology for consumers and operators.
India's State telecom incumbent MTNL will commence services by the end of January in Mumbai, other major private operators have announced they would launch commercial 3G services six months after specturm allocation. The government is expected to auction freed spectrum early next year.
Dec. 11- As the ADB and World bank dropped their estimates of Asia's GDP growth for 2009 to 5.8 percent and 5.3 percent respectively, India's central bank also said its 2008/09 GDP growth estimate of 7.5-8 percent would be lowered. The Indian economy posted a growth of 7.8 percent in the first half of the current fiscal down from 9.3 percent during the same time a year ago.
In a bid to boost the economy, the government slashed key interest rates by 1 percentage point last Saturday and announced an additional US$4billion spending package for battered sectors such as auto, manufacturing and real estate.
Dec. 10 – India’s labor intensive manufacturing sector has slowed down and is expected to cut production by 10-30 percent over the next three months. A Federation of Indian Chambers of Commerce and Industry (FICCI) survey of 200 large and SME manufacturers released yesterday states that the leather, metals and textile industries are to be most affected, with job losses of 10-30 percent expected across the board. Due to cuts in production exports will also be affected by approximately 10-20 percent, with a 60 percent drop in leather exports expected the survey said.