ONE MORE good news before the Lok Sabha election. The rate of diesel may be reduced by Rs 2 soon. The latest effort by the Union government would certainly help it get more votes in the coming Lok Sabha election.
A cut in diesel prices would also reduce the prices of essential commodities like rice, edible oil, fruits, vegetables, eggs, milk, etc.
While speaking to the media, a government official on condition of anonymity said, “Political pressure is mounting on the government to reduce the auto fuel price in the next couple of days before the model code of conduct gets effective. There is a margin to reduce diesel price further but till now there is no such move by the petroleum ministry.
The final authority lies with the Cabinet, which is expected to meet anytime this week.”
The public sector oil companies are presently making a profit of Rs 4.44 a litre on diesel. The Union government reduced fuel prices twice in less than two months. The retail rate of petrol was reduced by Rs 5 a litre, diesel by Rs 2 a litre and cooking gas by Rs 25 for a 14.2 kg cylinder on January 28, 2009. The prices of petrol and diesel were cut off by Rs 5 a litre and Rs 2 a litre, respectively, in December, 2008.
While speaking to the media, a government spokesperson said, “In December last year, the Cabinet had in-principle favoured deregulating petrol and diesel prices and that proposal has not been abandoned.”
Oil prices may get reduced further
ONE MORE good news before the Lok Sabha election. The rate of diesel may be reduced by Rs 2 soon. The latest effort by the Union government would certainly help it get more votes in the coming Lok Sabha election.
A cut in diesel prices would also reduce the prices of essential commodities like rice, edible oil, fruits, vegetables, eggs, milk, etc.
While speaking to the media, a government official on condition of anonymity said, “Political pressure is mounting on the government to reduce the auto fuel price in the next couple of days before the model code of conduct gets effective. There is a margin to reduce diesel price further but till now there is no such move by the petroleum ministry.
The final authority lies with the Cabinet, which is expected to meet anytime this week.”
The public sector oil companies are presently making a profit of Rs 4.44 a litre on diesel. The Union government reduced fuel prices twice in less than two months. The retail rate of petrol was reduced by Rs 5 a litre, diesel by Rs 2 a litre and cooking gas by Rs 25 for a 14.2 kg cylinder on January 28, 2009. The prices of petrol and diesel were cut off by Rs 5 a litre and Rs 2 a litre, respectively, in December, 2008.
While speaking to the media, a government spokesperson said, “In December last year, the Cabinet had in-principle favoured deregulating petrol and diesel prices and that proposal has not been abandoned.”
A cut in diesel prices would also reduce the prices of essential commodities like rice, edible oil, fruits, vegetables, eggs, milk, etc.
While speaking to the media, a government official on condition of anonymity said, “Political pressure is mounting on the government to reduce the auto fuel price in the next couple of days before the model code of conduct gets effective. There is a margin to reduce diesel price further but till now there is no such move by the petroleum ministry.
The final authority lies with the Cabinet, which is expected to meet anytime this week.”
The public sector oil companies are presently making a profit of Rs 4.44 a litre on diesel. The Union government reduced fuel prices twice in less than two months. The retail rate of petrol was reduced by Rs 5 a litre, diesel by Rs 2 a litre and cooking gas by Rs 25 for a 14.2 kg cylinder on January 28, 2009. The prices of petrol and diesel were cut off by Rs 5 a litre and Rs 2 a litre, respectively, in December, 2008.
While speaking to the media, a government spokesperson said, “In December last year, the Cabinet had in-principle favoured deregulating petrol and diesel prices and that proposal has not been abandoned.”
Global outsourcing benefited US firms: Nasscom
Bangalore (IANS): Indian IT industry body Nasscom has reacted cautiously to US President Barack Obama’s remarks on outsourcing, saying global outsourcing had benefited US firms that generate over 50 per cent of their business overseas.
“American companies generate more than 50 per cent of their business outside the US. Their workforce is global. To be globally competitive, they also depend on globally shared services,” Nasscom president Som Mittal told IANS on phone from the US.
Welcoming Obama’s observations on protectionism, Mittal said late Wednesday that the US president’s statement would have a positive effect on his country’s economy that is going through a recession after a long time.
“Obama has, in fact, supported the need to avoid protectionism. We have to see how he would prevent job losses without resorting to protectionist measures,” Mittal pointed out.
Citing the latest US state department data on employment, Mittal said job losses in construction, retail and manufacturing were more than in services, especially in the IT space.
“Compared to other sectors, job losses in the US tech sector were 2.2 per cent as against the overall unemployment rate of 7.2 percent. The US administration will not do anything that would harm its industry or economy, which is driven by the technology leadership its companies enjoy,” Mittal noted.
Asked what impact Obama’s statement on outsourcing would have on the Indian IT and BPO (business process outsourcing) industry, which has been reeling under global recession and financial meltdown in the US, Mittal said he had not seen any specific proposal to the contrary.
“We have not seen any specific proposals to the contrary. The people here (in the US) are more concerned about healthcare, energy, saving jobs and economic recovery than outsourcing, on which Obama used only nine words,” said Mittal.
Admitting that the economic downturn had created turmoil worldwide impacting businesses and job creation, Mittal said global sourcing had helped (US) companies gain the vital competitive edge — time-to-market, transformation of businesses, integration of processes, reduce costs and enhance efficiency, which were key drivers for economic revival, worldwide.
In his first address to the joint session of the US Congress in Washington Tuesday, Obama said there would be no tax breaks to US companies that outsource their jobs abroad.
Earlier, in a statement from New Delhi, Nasscom said it was heartening to note that Obama had supported the need to "avoid protectionism" in his speech.
“This is not the time for protectionism but for global collaboration, if the world is to come out of this economic downturn quickly. We hope that all other countries would support this and continue to be proponents of free trade,” Nasscom said.
Countries the world over have been promoting local investment through tax incentives for job creation while supporting international trade.
Quoting reports by leading analysts, Nasscom said job losses in the tech sector was the lowest in the US, as compared to unemployment in the manufacturing, retail and construction sectors.
“The technology sector is a part of the global value chain and while affected by the downturn, is still expected to grow,” Nasscom added.
“American companies generate more than 50 per cent of their business outside the US. Their workforce is global. To be globally competitive, they also depend on globally shared services,” Nasscom president Som Mittal told IANS on phone from the US.
Welcoming Obama’s observations on protectionism, Mittal said late Wednesday that the US president’s statement would have a positive effect on his country’s economy that is going through a recession after a long time.
“Obama has, in fact, supported the need to avoid protectionism. We have to see how he would prevent job losses without resorting to protectionist measures,” Mittal pointed out.
Citing the latest US state department data on employment, Mittal said job losses in construction, retail and manufacturing were more than in services, especially in the IT space.
“Compared to other sectors, job losses in the US tech sector were 2.2 per cent as against the overall unemployment rate of 7.2 percent. The US administration will not do anything that would harm its industry or economy, which is driven by the technology leadership its companies enjoy,” Mittal noted.
Asked what impact Obama’s statement on outsourcing would have on the Indian IT and BPO (business process outsourcing) industry, which has been reeling under global recession and financial meltdown in the US, Mittal said he had not seen any specific proposal to the contrary.
“We have not seen any specific proposals to the contrary. The people here (in the US) are more concerned about healthcare, energy, saving jobs and economic recovery than outsourcing, on which Obama used only nine words,” said Mittal.
Admitting that the economic downturn had created turmoil worldwide impacting businesses and job creation, Mittal said global sourcing had helped (US) companies gain the vital competitive edge — time-to-market, transformation of businesses, integration of processes, reduce costs and enhance efficiency, which were key drivers for economic revival, worldwide.
In his first address to the joint session of the US Congress in Washington Tuesday, Obama said there would be no tax breaks to US companies that outsource their jobs abroad.
Earlier, in a statement from New Delhi, Nasscom said it was heartening to note that Obama had supported the need to "avoid protectionism" in his speech.
“This is not the time for protectionism but for global collaboration, if the world is to come out of this economic downturn quickly. We hope that all other countries would support this and continue to be proponents of free trade,” Nasscom said.
Countries the world over have been promoting local investment through tax incentives for job creation while supporting international trade.
Quoting reports by leading analysts, Nasscom said job losses in the tech sector was the lowest in the US, as compared to unemployment in the manufacturing, retail and construction sectors.
“The technology sector is a part of the global value chain and while affected by the downturn, is still expected to grow,” Nasscom added.
IIM-A placements: Dull start
It seems the global meltdown will have an impact on placements at the Indian Institute of Management, Ahmedabad (IIM-A) this year, too. There was a general air of disappointment at the institute on Wednesday - Day Zero of final placements for 2009 - as only 9 companies had turned up for recruitment.
Sources said this was 16 companies less than the number that had turned up for recruitment at IIMA on the first day of placements last year. Placement officials at the institute, however, declined to confirm or deny the figures.
Last year, 25 companies had arrived on Day Zero and 65% (i.e., 161 students) of the graduating batch had either received job offers or opted out by the end of the day.
More importantly, this year no investment bank turned up on the first day and the main recruiters were consultancies and marketing companies. The total number of jobs offered to IIMA students on Wednesday was 20.
The mood on the campus was sullen. Sources said that not only were there very few new offers, those made earlier were also now being withdrawn. Moreover, the companies which had arrived on Wednesday did not have more than one job to offer. Talking about the placements, a student said that the situation could not be worse than this.
Dayananda Meitei/ DNA-Daily News & Analysis Source: 3D Syndication
Sources said this was 16 companies less than the number that had turned up for recruitment at IIMA on the first day of placements last year. Placement officials at the institute, however, declined to confirm or deny the figures.
Last year, 25 companies had arrived on Day Zero and 65% (i.e., 161 students) of the graduating batch had either received job offers or opted out by the end of the day.
More importantly, this year no investment bank turned up on the first day and the main recruiters were consultancies and marketing companies. The total number of jobs offered to IIMA students on Wednesday was 20.
The mood on the campus was sullen. Sources said that not only were there very few new offers, those made earlier were also now being withdrawn. Moreover, the companies which had arrived on Wednesday did not have more than one job to offer. Talking about the placements, a student said that the situation could not be worse than this.
Dayananda Meitei/ DNA-Daily News & Analysis Source: 3D Syndication
India's inflation rate falls further to 3.36 pc
India's annual rate of inflation fell further in the week ended February 14 to 3.36 per cent from 3.92 per cent the week before, official data showed Thursday.
The inflation rate, based on the official wholesale price index (WPI), stood at 5.66 per cent in the corresponding week of the previous fiscal, statistics released by the industry ministry here showed.
The WPI for all commodities declined 0.1 per cent to 227.8 (provisional) from 228 (provisional) the week before.
The index for primary articles rose 0.1 per cent to 248.1 (provisional) from 248 (provisional) for the previous week, while that for manufactured products declined 0.1 per cent to 199.5 (provisional) from 199.7 (provisional) the week before.
The index for fuel, power, light and lubricants, however, remained unchanged at its previous week's level of 323.5 (provisional).
The inflation rate, based on the official wholesale price index (WPI), stood at 5.66 per cent in the corresponding week of the previous fiscal, statistics released by the industry ministry here showed.
The WPI for all commodities declined 0.1 per cent to 227.8 (provisional) from 228 (provisional) the week before.
The index for primary articles rose 0.1 per cent to 248.1 (provisional) from 248 (provisional) for the previous week, while that for manufactured products declined 0.1 per cent to 199.5 (provisional) from 199.7 (provisional) the week before.
The index for fuel, power, light and lubricants, however, remained unchanged at its previous week's level of 323.5 (provisional).
Inflation at fifteen months low of 3.36 percent, policy rates may ease
Feb 26 (ANI): Inflation declined to a fifteen month low of 3.36 percent during the week ended February 14 against 3.92 percent in the previous week.The 0.56 low was caused mainly due to fall in the prices of food articles like fruit and vegetables, pulses, and some manufactured items, raising hopes of cuts in the key policy rates by the RBI.During the week, prices of food articles like maize fell by five percent, barley by three percent, and fruit and vegetables by two percent while eggs and spices declined by one percent each.Among manufactured products, prices of mustard oil reduced by two percent, and sooji and coconut oil by one percent each.Similarly, aluminium ingots got cheaper by 6 percent, and liquid chlorine by three percent.Meanwhile, the government has assured that the RBI may ease money supply further.Replying to the debate on the interim Budget
in the Rajya Sabha on Wednesday, stand-in Finance Minister Pranab Mukherjee said, "I am fully concerned that increased public spending may put pressure on the government's borrowing programme and overall credit off take in the economy."Mukherjee said: "There is, however, scope for appropriate compensatory monetary policy options, (which) I am sure will be exercised by the RBI at the right time." (ANI)
in the Rajya Sabha on Wednesday, stand-in Finance Minister Pranab Mukherjee said, "I am fully concerned that increased public spending may put pressure on the government's borrowing programme and overall credit off take in the economy."Mukherjee said: "There is, however, scope for appropriate compensatory monetary policy options, (which) I am sure will be exercised by the RBI at the right time." (ANI)
Upturn in Indian economy by Oct: PC
New Delhi: Complimenting the resilience displayed by Indian industry in dealing with the slowdown, Home Minister P Chidamabaram said the country's economy is likely to find an upturn by October this year.
"By the beginning of the third quarter of 2009-10, by October, we will find an upturn in the economy," Chidamabaram, who was Finance Minister till November last year, said while presenting the National Tourism Awards here.
"The present downturn is temporary. Our growth rate is expected to be well over seven per cent," he said noting that despite a downturn in global scenario, India has managed to achieve seven per cent growth. He attributed this to domestic consumption and demand.
Commending the performance of Indian businesses and industry during the global downturn, the Minister said India stood out as a "shining example" of a resilient economy when the world was engulfed by economic gloom.
"We owe this resilience of Indian business and economy to its ability to quickly adjust to changing times. But in no other country, I have seen businessmen adjusting so rapidly (to the situation). That is why we were able to hold our head high," he said.
During difficult times, Chidambaram advised that one should take "hard decisions" like cutting prices as a "natural response" to the downturn.
"By the beginning of the third quarter of 2009-10, by October, we will find an upturn in the economy," Chidamabaram, who was Finance Minister till November last year, said while presenting the National Tourism Awards here.
"The present downturn is temporary. Our growth rate is expected to be well over seven per cent," he said noting that despite a downturn in global scenario, India has managed to achieve seven per cent growth. He attributed this to domestic consumption and demand.
Commending the performance of Indian businesses and industry during the global downturn, the Minister said India stood out as a "shining example" of a resilient economy when the world was engulfed by economic gloom.
"We owe this resilience of Indian business and economy to its ability to quickly adjust to changing times. But in no other country, I have seen businessmen adjusting so rapidly (to the situation). That is why we were able to hold our head high," he said.
During difficult times, Chidambaram advised that one should take "hard decisions" like cutting prices as a "natural response" to the downturn.
2010 will be the year of recovery: Bernanke
Federal Reserve Chairman Ben Bernanke told Congress on Tuesday the economy is suffering through a "severe contraction" and pledgedBen Bernanke to use all available tools to lift the country out of the recession that already has cost millions of Americans their jobs.
In testimony to the Senate Banking Committee, Bernanke said the economy is likely to keep shrinking in the first six months of this year. Housing, credit and financial crises - the worst since the 1930s - plunged the economy into its worst slide in a quarter-century at the end of last year.
Bernanke hoped that the current recession will end this year, but said there were significant risks to that forecast. Any economic turnaround will hinge on the success of the Fed and the Obama administration in getting credit and financial markets to operate more normally again.
"Only if that is the case, in my view there is a reasonable prospect that the current recession will end in 2009 and that 2010 will be a year of recovery," Bernanke said.
Among the risks to any recovery are if economic and financial troublesin other countries turn out to be worse than anticipated, which would hurt U.S. exports and further aggravate already shaky financial conditions in the United States.
Another concern is that the Fed and other Washington policymakers won't be able to break a vicious cycle where disappearing jobs, tanking home values and shrinking nest eggs are forcing consumers to cut back sharply, worsening the economy's tailspin. In turn, battered companies lay off more people and cut back in other ways.
"To break that adverse feedback loop, it is essential that we continue to complement fiscal stimulus with strong government action to stabilize financial institutions and financial markets," Bernanke said.
In an effort to revive the economy, the Fed has slashed a key interest rate to an all-time low and Obama recently signed a $787 billion stimulus package of increased government spending and tax cuts.
In addition, Treasury Secretary Timothy Geithner has revamped a controversial $700 billion bank bailout program to include steps to partner with the private sector to buy rotten assets held by banks as well as expand government ownership stakes in them - all with the hopes of freeing up lending. The Obama administration also will spend $75 billion to stem home foreclosures.
Those and other bold steps - including a soon-to-be-operational program to boost the availability of consumer loans - for autos, education, credit cards and other things - should over time provide relief and promote an economic recovery, Bernanke said. That program is "about to open," he told lawmakers, without providing an exact date.
Sen. Christopher Dodd, D-Conn., chairman of the panel, and other senators suggested expanding that program overseen by the Fed and Treasury, to help squeezed local governments.
Radical actions by the government since last fall when the financial crisis intensified have relieved some credit and financial strains, Bernanke said
In testimony to the Senate Banking Committee, Bernanke said the economy is likely to keep shrinking in the first six months of this year. Housing, credit and financial crises - the worst since the 1930s - plunged the economy into its worst slide in a quarter-century at the end of last year.
Bernanke hoped that the current recession will end this year, but said there were significant risks to that forecast. Any economic turnaround will hinge on the success of the Fed and the Obama administration in getting credit and financial markets to operate more normally again.
"Only if that is the case, in my view there is a reasonable prospect that the current recession will end in 2009 and that 2010 will be a year of recovery," Bernanke said.
Among the risks to any recovery are if economic and financial troublesin other countries turn out to be worse than anticipated, which would hurt U.S. exports and further aggravate already shaky financial conditions in the United States.
Another concern is that the Fed and other Washington policymakers won't be able to break a vicious cycle where disappearing jobs, tanking home values and shrinking nest eggs are forcing consumers to cut back sharply, worsening the economy's tailspin. In turn, battered companies lay off more people and cut back in other ways.
"To break that adverse feedback loop, it is essential that we continue to complement fiscal stimulus with strong government action to stabilize financial institutions and financial markets," Bernanke said.
In an effort to revive the economy, the Fed has slashed a key interest rate to an all-time low and Obama recently signed a $787 billion stimulus package of increased government spending and tax cuts.
In addition, Treasury Secretary Timothy Geithner has revamped a controversial $700 billion bank bailout program to include steps to partner with the private sector to buy rotten assets held by banks as well as expand government ownership stakes in them - all with the hopes of freeing up lending. The Obama administration also will spend $75 billion to stem home foreclosures.
Those and other bold steps - including a soon-to-be-operational program to boost the availability of consumer loans - for autos, education, credit cards and other things - should over time provide relief and promote an economic recovery, Bernanke said. That program is "about to open," he told lawmakers, without providing an exact date.
Sen. Christopher Dodd, D-Conn., chairman of the panel, and other senators suggested expanding that program overseen by the Fed and Treasury, to help squeezed local governments.
Radical actions by the government since last fall when the financial crisis intensified have relieved some credit and financial strains, Bernanke said
"Slumdog Millionaire" sweeps the 2009 Oscars with 8 Awards
Breaking News! Slumdog Millionaire has swept the 81st Annual Academy Awards, most popularly known as the Oscars, by winning 8 awards. The movie was nominated in 10 (read 9, as it was nominated twice in "Best Song") categories.
The only category in which it lost to "The Dark Knight" was the "Best Sound Editing". Slumdog Millionaire won the "Best Motion Picture", "Best Director", "Best Adapted Screenplay", "Best Cinematography", "Best Sound Mixing", "Best Film Editing", "Best Original Music Score" and "Best Song".
AR Rhaman made history by winning two Oscar Awards for "Slumdog Millionaire". Another Indian Resul Pookutty won the "Best Sound Mixing" award along with his teammates. Rahman won the "Best Original Music Score" and then "Best Song" along with Gulzar for the song "Jai Ho".
Actor Sean Penn won the "Best Actor Award" for "Milk", while the "Best Actress" award went to Kate Winslet for her performance in "The Reader". "Departures" (Japan) won the "Best Foreign Film" award. Another Indian documentary, "Smile Pinki" won the "Best Documentary Short Subject" award at the Oscars.
Here's the complete list of 81st Annual Academy Awards (Oscars) Winners:
Best Motion Picture - Slumdog Millionaire
Best Director - Danny Boyle (Slumdog Millionaire)
Best Actor - Sean Penn (Milk)
Best Actress - Kate Winslet (The Reader)
Best Supporting Actress - Penelope Cruz (Vicky Cristina Barcelona)
Best Supporting Actor - Heath Ledger (The Dark Knight)
Best Adapted Screenplay - Simon Beaufoy (Slumdog Millionaire)
Best Original Screenplay - Dustin Lance Black (Milk)
Best Cinematography - Anthony Dod Mantle (Slumdog Millionaire)
Best Costume Design - The Duchess
Best Art Direction - Curious Case of Benjamin Button
Best Makeup - Curious Case of Benjamin Button
Best Visual Effects - Curious Case of Benjamin Button
Best Sound Editing - The Dark Knight
Best Sound Mixing - Resul Pookutty & Team (Slumdog Millionaire)
Best Film Editing - Chris Dickens (Slumdog Millionaire)
Best Original Score - AR Rehman (Slumdog Millionaire)
Best Original Song - AR Rehman & Gulzar (Jai Ho) - Slumdog Millionaire
Best Foreign Language Film - Departures (Japan)
Best Animated Film - WALL-E
Best Animated Short Film - La Maison en Petits Cubes
Best Live Action Short Film - SPIELZEUGLAND (TOYLAND)
Best Documentary Feature - Man on Wire
The only category in which it lost to "The Dark Knight" was the "Best Sound Editing". Slumdog Millionaire won the "Best Motion Picture", "Best Director", "Best Adapted Screenplay", "Best Cinematography", "Best Sound Mixing", "Best Film Editing", "Best Original Music Score" and "Best Song".
AR Rhaman made history by winning two Oscar Awards for "Slumdog Millionaire". Another Indian Resul Pookutty won the "Best Sound Mixing" award along with his teammates. Rahman won the "Best Original Music Score" and then "Best Song" along with Gulzar for the song "Jai Ho".
Actor Sean Penn won the "Best Actor Award" for "Milk", while the "Best Actress" award went to Kate Winslet for her performance in "The Reader". "Departures" (Japan) won the "Best Foreign Film" award. Another Indian documentary, "Smile Pinki" won the "Best Documentary Short Subject" award at the Oscars.
Here's the complete list of 81st Annual Academy Awards (Oscars) Winners:
Best Motion Picture - Slumdog Millionaire
Best Director - Danny Boyle (Slumdog Millionaire)
Best Actor - Sean Penn (Milk)
Best Actress - Kate Winslet (The Reader)
Best Supporting Actress - Penelope Cruz (Vicky Cristina Barcelona)
Best Supporting Actor - Heath Ledger (The Dark Knight)
Best Adapted Screenplay - Simon Beaufoy (Slumdog Millionaire)
Best Original Screenplay - Dustin Lance Black (Milk)
Best Cinematography - Anthony Dod Mantle (Slumdog Millionaire)
Best Costume Design - The Duchess
Best Art Direction - Curious Case of Benjamin Button
Best Makeup - Curious Case of Benjamin Button
Best Visual Effects - Curious Case of Benjamin Button
Best Sound Editing - The Dark Knight
Best Sound Mixing - Resul Pookutty & Team (Slumdog Millionaire)
Best Film Editing - Chris Dickens (Slumdog Millionaire)
Best Original Score - AR Rehman (Slumdog Millionaire)
Best Original Song - AR Rehman & Gulzar (Jai Ho) - Slumdog Millionaire
Best Foreign Language Film - Departures (Japan)
Best Animated Film - WALL-E
Best Animated Short Film - La Maison en Petits Cubes
Best Live Action Short Film - SPIELZEUGLAND (TOYLAND)
Best Documentary Feature - Man on Wire
India is still the best bet for FDI even in downturn
New Delhi: Even in the midst of a global downturn India is attracting one billion dollar foreign direct investment in a month, which is "encouraging", Secretary in the Department of Industrial Policy and Promotion Ajay Shankar said.
Though the overseas inflows have sharply dropped after September this fiscal, the trend has to be seen in the context the credit freeze in major economies of the world, he said. "We are still one billion dollar plus every month... that is when there is huge financial difficulties in the world. That is very encouraging," the DIPP Secretary told PTI. FDI inflows till September averaged between $2.5 and $3 billion a month. Shankar said India has come a long way in the last five years in terms of winning the confidence of foreign investors. "This (drop in FDI) has to be seen in the context of 2003-04," he said. The country received $3.13 billion in 2003-04 while in 2008-09, the monthly inflows averaged above $2 billion.
The government has recently changed the guidelines governing the FDI giving more leeway to overseas investors in sectors where there are ceilings. These include telecom, aviation, defence production and media.
"With this view, the government has been proposed to take up construction and road maintenance activities in urban areas during the annual labour conference," Pandhe said. "This is a good time to improve the condition of our cities and roads and I am quite positive that the government will take up this recommendation. During the conference several State governments also expressed interest in initiating such a scheme," Pillai said. Earlier, Minister of State for Labour and Employment Oscar Fernandes also said the government is considering coming up with a scheme "similar to the NREGS". Asked for a time frame by when the announcement could be expected, Fernandes had said that views are being taken from other ministries as well for checking the viability for such a scheme.
The UPA government had introduced the NREG scheme and made it a priority for reducing poverty in rural areas. The scheme is being administered by the Ministry of Rural Development. A recent sample survey by the Labour Ministry suggested that at least five lakh jobs were lost during October to December last, while trade unions estimate that more than 20 lakh job losses had occurred in the unorganised sector and mostly in the construction field. A ILO report on global trend of employment had predicted 18 million job losses and had called for suitable "labour intensive" measures to check poverty alleviation caused by these job losses.
Though the overseas inflows have sharply dropped after September this fiscal, the trend has to be seen in the context the credit freeze in major economies of the world, he said. "We are still one billion dollar plus every month... that is when there is huge financial difficulties in the world. That is very encouraging," the DIPP Secretary told PTI. FDI inflows till September averaged between $2.5 and $3 billion a month. Shankar said India has come a long way in the last five years in terms of winning the confidence of foreign investors. "This (drop in FDI) has to be seen in the context of 2003-04," he said. The country received $3.13 billion in 2003-04 while in 2008-09, the monthly inflows averaged above $2 billion.
The government has recently changed the guidelines governing the FDI giving more leeway to overseas investors in sectors where there are ceilings. These include telecom, aviation, defence production and media.
"With this view, the government has been proposed to take up construction and road maintenance activities in urban areas during the annual labour conference," Pandhe said. "This is a good time to improve the condition of our cities and roads and I am quite positive that the government will take up this recommendation. During the conference several State governments also expressed interest in initiating such a scheme," Pillai said. Earlier, Minister of State for Labour and Employment Oscar Fernandes also said the government is considering coming up with a scheme "similar to the NREGS". Asked for a time frame by when the announcement could be expected, Fernandes had said that views are being taken from other ministries as well for checking the viability for such a scheme.
The UPA government had introduced the NREG scheme and made it a priority for reducing poverty in rural areas. The scheme is being administered by the Ministry of Rural Development. A recent sample survey by the Labour Ministry suggested that at least five lakh jobs were lost during October to December last, while trade unions estimate that more than 20 lakh job losses had occurred in the unorganised sector and mostly in the construction field. A ILO report on global trend of employment had predicted 18 million job losses and had called for suitable "labour intensive" measures to check poverty alleviation caused by these job losses.
India remains fastest growing economies in the world, says Kamal Nath
Union Minister of Commerce and Industry Kamal Nath today said that from a national perspective, India will remain one of the fastest growing economies in the world over 2008-09 to 2010-11.
Addressing at the Hero Mindmine Summit, here, on the theme of "Challenges of troubled times: Opportunities and Threats", he further added that along with the BRIC and GCC economies, India will contribute about 35 to 37 per cent of incremental global GDP growth through the calendar years 2008 to 2012.
"We are certainly more integrated to the world economy today. The ratio of total external transactions (gross current account flows plus gross capital flows) to GDP has increased from 46.8 per cent in 1997-98 to 117.4 per cent in 2007-08. These numbers are clear evidence of India's increasing integration into the world economy", Nath said.
Speaking at the Summit, the Minister said the participants that the current global situation may well be an opportunity for India and its captains of industry to innovate, prove their business acumen and move in to fill the space being vacated.
He further added that India is better positioned than most other markets to attract pools of global capital like sovereign wealth funds, long-term insurance and pension assets and infrastructure funds.
During his address, Nath underlined the measures taken by the Government to stimulate the economy viz., additional plan expenditure in the current year for critical rural, infrastructure and social security schemes, reduction of cenvat by four per cent, authorisation to the India Infrastructure Finance Company Ltd. to refinance bank lending for infrastructure projects, pre-shipment and post shipment export credit, government back up guarantee to ECGC, and refinance facility for the National Housing Bank. (ANI)
Addressing at the Hero Mindmine Summit, here, on the theme of "Challenges of troubled times: Opportunities and Threats", he further added that along with the BRIC and GCC economies, India will contribute about 35 to 37 per cent of incremental global GDP growth through the calendar years 2008 to 2012.
"We are certainly more integrated to the world economy today. The ratio of total external transactions (gross current account flows plus gross capital flows) to GDP has increased from 46.8 per cent in 1997-98 to 117.4 per cent in 2007-08. These numbers are clear evidence of India's increasing integration into the world economy", Nath said.
Speaking at the Summit, the Minister said the participants that the current global situation may well be an opportunity for India and its captains of industry to innovate, prove their business acumen and move in to fill the space being vacated.
He further added that India is better positioned than most other markets to attract pools of global capital like sovereign wealth funds, long-term insurance and pension assets and infrastructure funds.
During his address, Nath underlined the measures taken by the Government to stimulate the economy viz., additional plan expenditure in the current year for critical rural, infrastructure and social security schemes, reduction of cenvat by four per cent, authorisation to the India Infrastructure Finance Company Ltd. to refinance bank lending for infrastructure projects, pre-shipment and post shipment export credit, government back up guarantee to ECGC, and refinance facility for the National Housing Bank. (ANI)
Indian economy expected to expand by 7.1%
New Delhi, Feb 09: India's economy is expected to expand by 7.1 per cent in 2008-09, slower than last year's 9 per cent, as the global financial crisis hammered manufacturing, financial services and farm sector output.
Mining and other services may, however, act as a prop to the economy, say the estimates released today by the Central Statistical Organisation. Whether or not growth will slow down further next year would depend on continuation of fiscal stimulus, Planning Commission Deputy Chairman Montek Singh Ahluwalia said. "We can continue the fiscal stimulus in the next year. It can be done as part of the full budget...In my view there would be a continuing need for fiscal stimulus and I hope we can do that," he said. Farm sector output is projected to grow by 2.6 per cent in FY'09, slower than last year's 4.9 per cent, manufacturing by 4.1 per cent, down from 8.2 per cent, construction by 6.5 per cent against last year's 10.1 per cent and financing, insurance, real estate, business services by 8.6 per cent against 11.7 per cent. Commenting on the outlook for the Indian economy, Ahluwalia said, "The Indian economy should not be slowing down like the rest of the world." The estimates match the one projected by the Prime Minister's Economic Advisory Council and are a tad higher than what the Reserve Bank has estimated. Manufacturing sector growth is likely to drop by half in percentage terms this fiscal. The sector comprises 80 per cent of the country's industrial output, which in turn contributes 25 per cent to the GDP. However, mining and quarrying would grow 4.7 per cent, up from 3.3 per cent; trade, hotels, transport and communication by 10.3 per cent from 12.4 per cent; and community, social and personal services by 8.6 per cent from 11.7 per cent. Electricity, gas and water supply is likely to grow by 4.3 per cent from 5.3 per cent a year ago. Enthused by the numbers, Finance Secretary Arun Ramanathan said, "There is room for optimism. That is what (GDP) numbers indicate." Ahluwalia expects growth to be the same next fiscal. "I think it should be similar to this year -- seven per cent or more would be a reasonable outlook for next year." The final growth figures may not be exactly as projected by advance estimates of the CSO. "The possibility of agriculture figures revising is there. There will be some upward revision in the agriculture figures. There is possibility that there will be some downward revision in services... Net net even with the revision, the GDP would be between 6.8 and 7.1 per cent," HDFC Bank Chief Economist Abheek Barua said. If the national income is evenly distributed among the people, each person will get Rs 38,084 during 2008-09. In other words, per capita income during the current fiscal grew by 14.4 per cent from Rs 33,283 in 2007-08. The CSO numbers present a gloomy picture for steel, which is projected to grow by 2.7 per cent in the April-December period of the current fiscal against 6.4 per cent a year ago. Cement production is also slated to expand by seven per cent in the first nine months of this fiscal against 7.7 per cent in the corresponding period of 2007-08. Also, the production of commercial vehicles witnessed a fall of 15.5 per cent against the growth of 4.8 per cent in April-December 2007-08. Passengers handled in civil aviation decreased by 6.3 per cent against the growth of 20.4 per cent over the period. The farm sector growth is based on anticipated growth of six per cent in horticulture crops, 5.5 per cent in livestock products and six per cent in fisheries. Crisil Chief Economist D K Joshi described the farm growth as on the lines of trend growth rate. "The trend growth rate has been 3 per cent... last year we achieved exceptional growth, now we are back to trend... and then base is also much...Our expectation was 2.5 per cent," he said. Many economists attributed the good numbers for community, social and personal services to increase in government expenditure. Crisil's chief economist said, "The private consumption has gone down and the government consumption has gone up. Lots of government spending, subsidies, oil bonds... so increased government expenditure is what is responsible for this." Private final consumption expenditure at current and constant prices are estimated to grow by 55.1 per cent and 57 per cent, respectively, in FY09 against 55 per cent and 57.2 per cent last fiscal, while government final consumption expenditure may grow by 11.1 per cent and 10.6 per cent, respectively, against 10.1 per cent and 9.8 per cent in FY08. Part of the growth maintained by this category reflects the implementation of pay revision for government employees as well. "The growth in community, social and personal services partly reflects the pay hike which have been implemented and also it constitutes largely of the government services," Abheek Barua said. The country's total national income is likely to be Rs 29,61,249 crore in the current fiscal, showing a rise of 7.1 per cent against 9.1 per cent a year ago. Gross fixed capital formation, which represents fixed assets bought by the government, businesses and households on net basis, is estimated to grow by 34.6 and 32.1 per cent this fiscal against 34 per cent and 31.6 per cent last year. Good GFCF numbers indicate that future business activity will remain strong.
Chambers seek further rate cuts Industry chambers today said Indian economic growth rate of 7 per cent for 2008-09 is a good performance but the government should further slash the interest rates to accelerate the growth momentum which has slowed down due to the global financial turmoil. Given the impact of the global financial meltdown, the government today projected the GDP to decline to 7.1 per cent in the current fiscal, against 9 per cent in 2007-08. "Indian economy was growing much faster even a year earlier. It is important to recover the growth momentum and lower interest rates are a must for that," industry body FICCI said. "While the RBI had lowered its policy rates, banks have started lowering lending rates, we need far more drastic cuts in interest rates," it said. Demanding a third stimulus package to boost the economy, Assocham said despite the negativity in the manufacturing sector and continued liquidity squeeze, the current fiscal is expected to record a growth of close to 7 per cent. "The government should unveil the third stimulus package so that credit access to manufacturing is available between 7-7.5 per cent," Assocham President Sajjan Jindal said. Manufacturing output dips to 7-year low Hit hard by global financial meltdown, the manufacturing sector's growth rate will plummet to a seven year low of 4.1 per cent during the current financial year ending March 31. The official advance estimates of the national income released today reveals that manufacturing sector growth rate will be halved to 4.1 per cent, compared with 8.2 per cent recorded in the previous fiscal. This will be the lowest manufacturing sector growth since 2001-02 when the factory output grew by a marginal 2.5 per cent. The manufacturing sector, since September, has been hit by the financial meltdown, slowdown in domestic demand and declining exports, leading to job loss in various sectors, especially textiles and other labour-intensive industries. The index of industrial production for the first time in 15 years entered the negative zone in October 2008, though it recorded thereafter showing positive growth. Exports, which have a bearing on the manufacturing sector, have been declining since October and the growth rate has remained in the negative zone. In order to boost industry, the government and the RBI have together taken a slew of measures, which include four per cent reduction in excise duty, raising public expenditure and releasing about Rs 3.8 lakh crore into the system, to overcome liquidity shortage.
Mining and other services may, however, act as a prop to the economy, say the estimates released today by the Central Statistical Organisation. Whether or not growth will slow down further next year would depend on continuation of fiscal stimulus, Planning Commission Deputy Chairman Montek Singh Ahluwalia said. "We can continue the fiscal stimulus in the next year. It can be done as part of the full budget...In my view there would be a continuing need for fiscal stimulus and I hope we can do that," he said. Farm sector output is projected to grow by 2.6 per cent in FY'09, slower than last year's 4.9 per cent, manufacturing by 4.1 per cent, down from 8.2 per cent, construction by 6.5 per cent against last year's 10.1 per cent and financing, insurance, real estate, business services by 8.6 per cent against 11.7 per cent. Commenting on the outlook for the Indian economy, Ahluwalia said, "The Indian economy should not be slowing down like the rest of the world." The estimates match the one projected by the Prime Minister's Economic Advisory Council and are a tad higher than what the Reserve Bank has estimated. Manufacturing sector growth is likely to drop by half in percentage terms this fiscal. The sector comprises 80 per cent of the country's industrial output, which in turn contributes 25 per cent to the GDP. However, mining and quarrying would grow 4.7 per cent, up from 3.3 per cent; trade, hotels, transport and communication by 10.3 per cent from 12.4 per cent; and community, social and personal services by 8.6 per cent from 11.7 per cent. Electricity, gas and water supply is likely to grow by 4.3 per cent from 5.3 per cent a year ago. Enthused by the numbers, Finance Secretary Arun Ramanathan said, "There is room for optimism. That is what (GDP) numbers indicate." Ahluwalia expects growth to be the same next fiscal. "I think it should be similar to this year -- seven per cent or more would be a reasonable outlook for next year." The final growth figures may not be exactly as projected by advance estimates of the CSO. "The possibility of agriculture figures revising is there. There will be some upward revision in the agriculture figures. There is possibility that there will be some downward revision in services... Net net even with the revision, the GDP would be between 6.8 and 7.1 per cent," HDFC Bank Chief Economist Abheek Barua said. If the national income is evenly distributed among the people, each person will get Rs 38,084 during 2008-09. In other words, per capita income during the current fiscal grew by 14.4 per cent from Rs 33,283 in 2007-08. The CSO numbers present a gloomy picture for steel, which is projected to grow by 2.7 per cent in the April-December period of the current fiscal against 6.4 per cent a year ago. Cement production is also slated to expand by seven per cent in the first nine months of this fiscal against 7.7 per cent in the corresponding period of 2007-08. Also, the production of commercial vehicles witnessed a fall of 15.5 per cent against the growth of 4.8 per cent in April-December 2007-08. Passengers handled in civil aviation decreased by 6.3 per cent against the growth of 20.4 per cent over the period. The farm sector growth is based on anticipated growth of six per cent in horticulture crops, 5.5 per cent in livestock products and six per cent in fisheries. Crisil Chief Economist D K Joshi described the farm growth as on the lines of trend growth rate. "The trend growth rate has been 3 per cent... last year we achieved exceptional growth, now we are back to trend... and then base is also much...Our expectation was 2.5 per cent," he said. Many economists attributed the good numbers for community, social and personal services to increase in government expenditure. Crisil's chief economist said, "The private consumption has gone down and the government consumption has gone up. Lots of government spending, subsidies, oil bonds... so increased government expenditure is what is responsible for this." Private final consumption expenditure at current and constant prices are estimated to grow by 55.1 per cent and 57 per cent, respectively, in FY09 against 55 per cent and 57.2 per cent last fiscal, while government final consumption expenditure may grow by 11.1 per cent and 10.6 per cent, respectively, against 10.1 per cent and 9.8 per cent in FY08. Part of the growth maintained by this category reflects the implementation of pay revision for government employees as well. "The growth in community, social and personal services partly reflects the pay hike which have been implemented and also it constitutes largely of the government services," Abheek Barua said. The country's total national income is likely to be Rs 29,61,249 crore in the current fiscal, showing a rise of 7.1 per cent against 9.1 per cent a year ago. Gross fixed capital formation, which represents fixed assets bought by the government, businesses and households on net basis, is estimated to grow by 34.6 and 32.1 per cent this fiscal against 34 per cent and 31.6 per cent last year. Good GFCF numbers indicate that future business activity will remain strong.
Chambers seek further rate cuts Industry chambers today said Indian economic growth rate of 7 per cent for 2008-09 is a good performance but the government should further slash the interest rates to accelerate the growth momentum which has slowed down due to the global financial turmoil. Given the impact of the global financial meltdown, the government today projected the GDP to decline to 7.1 per cent in the current fiscal, against 9 per cent in 2007-08. "Indian economy was growing much faster even a year earlier. It is important to recover the growth momentum and lower interest rates are a must for that," industry body FICCI said. "While the RBI had lowered its policy rates, banks have started lowering lending rates, we need far more drastic cuts in interest rates," it said. Demanding a third stimulus package to boost the economy, Assocham said despite the negativity in the manufacturing sector and continued liquidity squeeze, the current fiscal is expected to record a growth of close to 7 per cent. "The government should unveil the third stimulus package so that credit access to manufacturing is available between 7-7.5 per cent," Assocham President Sajjan Jindal said. Manufacturing output dips to 7-year low Hit hard by global financial meltdown, the manufacturing sector's growth rate will plummet to a seven year low of 4.1 per cent during the current financial year ending March 31. The official advance estimates of the national income released today reveals that manufacturing sector growth rate will be halved to 4.1 per cent, compared with 8.2 per cent recorded in the previous fiscal. This will be the lowest manufacturing sector growth since 2001-02 when the factory output grew by a marginal 2.5 per cent. The manufacturing sector, since September, has been hit by the financial meltdown, slowdown in domestic demand and declining exports, leading to job loss in various sectors, especially textiles and other labour-intensive industries. The index of industrial production for the first time in 15 years entered the negative zone in October 2008, though it recorded thereafter showing positive growth. Exports, which have a bearing on the manufacturing sector, have been declining since October and the growth rate has remained in the negative zone. In order to boost industry, the government and the RBI have together taken a slew of measures, which include four per cent reduction in excise duty, raising public expenditure and releasing about Rs 3.8 lakh crore into the system, to overcome liquidity shortage.
US jobless claims surge to highest in 26 years
The number of Americans filing for first-time unemployment benefits last week topped 600,000, a level not seen since October 1982, according to a government report released Thursday.
The number of initial jobless claims jumped to a much-higher-than-expected 626,000 in the week ended Jan 31, according to the US Labour Department. That's up from a revised 591,000 in the previous week and the highest level since the last week of October 1982, when jobless claims reached 637,000.
Economists polled by Briefing.com were expecting the number to come in at 580,000 for the most recent week. The four-week moving average for weekly claims totalled 582,250, up from the previous week's revised figure of 543,250.
One economist said that as bad as the report is for the labour markets, the sharp spike in the initial claims could be a peak.
That would indicate the recession is closer to the end than it is to the start, according to Robert Brusca, chief economist at Fact and Opinion Economics, cited by CNNMoney.com.
The number of workers receiving unemployment cheques for one week or more rose to a record 4,788,000 in the week ended Jan 24, the most recent data available. That tops the previous week's record of 4,768,000.
Brusca, the website said, does not think that continuing claims can stay at record levels for much longer, either. The economy fell quickly, and that should lead to a sharper recovery.
Brusca said a sharp recovery would also be facilitated by the government stimulus plan and aggressive monetary policy. The economy has 'extremely low interest rates to help foster a turn around and a lot of fiscal help coming from the government,' he said.
The four-week moving average for continuing claims was 4,672,000, up from the previous week's revised moving average of 4,628,000.
The number came ahead of the government's January unemployment report, due out Friday. The unemployment rate is expected to jump to 7.5 percent in January, up from 7.2 percent the previous month, according to a consensus estimate from Briefing.com. Employers are expected to have slashed 500,000 jobs in the month.
The number of initial jobless claims jumped to a much-higher-than-expected 626,000 in the week ended Jan 31, according to the US Labour Department. That's up from a revised 591,000 in the previous week and the highest level since the last week of October 1982, when jobless claims reached 637,000.
Economists polled by Briefing.com were expecting the number to come in at 580,000 for the most recent week. The four-week moving average for weekly claims totalled 582,250, up from the previous week's revised figure of 543,250.
One economist said that as bad as the report is for the labour markets, the sharp spike in the initial claims could be a peak.
That would indicate the recession is closer to the end than it is to the start, according to Robert Brusca, chief economist at Fact and Opinion Economics, cited by CNNMoney.com.
The number of workers receiving unemployment cheques for one week or more rose to a record 4,788,000 in the week ended Jan 24, the most recent data available. That tops the previous week's record of 4,768,000.
Brusca, the website said, does not think that continuing claims can stay at record levels for much longer, either. The economy fell quickly, and that should lead to a sharper recovery.
Brusca said a sharp recovery would also be facilitated by the government stimulus plan and aggressive monetary policy. The economy has 'extremely low interest rates to help foster a turn around and a lot of fiscal help coming from the government,' he said.
The four-week moving average for continuing claims was 4,672,000, up from the previous week's revised moving average of 4,628,000.
The number came ahead of the government's January unemployment report, due out Friday. The unemployment rate is expected to jump to 7.5 percent in January, up from 7.2 percent the previous month, according to a consensus estimate from Briefing.com. Employers are expected to have slashed 500,000 jobs in the month.
RBI eases rules on access of forex loans by exporters
Exporters facing tough situation due to slump in overseas demand have a reason to cheer. The Reserve Bank of India has relaxed norms pertaining to export credit in the global market, enabling exporters to avail funds from overseas market.
Banks are allowed to raise export credit in foreign currency at 350 basis points (bps), from 100 bps offered by the London Interbank earlier, with immediate effect. However, the banks are not allowed to levy any charges like service tax on the credit availed from global market. The revised rules will be applicable to where Euro- Libor is used as a benchmark.
The Union Government is also weighing other options to help the slowdown hit export industry, directing banks to lend exporters without any reluctance. Exporters have been complaining that banks are not lending despite having sufficient liquidity, fearing grimmer situation ahead due to global meltdown.
Fund's cost had also been increased in the international market, in recent times, in the wake of global financial crisis aroused after failure of leading financial institutions of the world.
Banks are allowed to raise export credit in foreign currency at 350 basis points (bps), from 100 bps offered by the London Interbank earlier, with immediate effect. However, the banks are not allowed to levy any charges like service tax on the credit availed from global market. The revised rules will be applicable to where Euro- Libor is used as a benchmark.
The Union Government is also weighing other options to help the slowdown hit export industry, directing banks to lend exporters without any reluctance. Exporters have been complaining that banks are not lending despite having sufficient liquidity, fearing grimmer situation ahead due to global meltdown.
Fund's cost had also been increased in the international market, in recent times, in the wake of global financial crisis aroused after failure of leading financial institutions of the world.
Economists: rising unemployment becomes China's top challenge
BEIJING, Feb. 7 (Xinhua) -- A survey conducted by China Economic Monitoring and Analysis Center predicted that rising unemployment would be the biggest challenge for China's economy this year.
The survey showed, more than 90 percent of the 100 economists surveyed expressed their worries over the country's increasing unemployment rate, which had added woes to a world economic downturn.
Chairman and chief executive officer of TX Investment Consulting Co., Lin Yixiang was quoted by China Daily as saying that the survey indicated the government policies should be directed at addressing unemployment.
The government estimates about 20 million rural migrants, or 15.3 percent of all rural workers employed outside their hometowns, have returned home without jobs.
Meanwhile. urban unemployment rate, which excludes migrant workers, was estimated to hit 4.6 percent in 2009, up from 4.2 percent in the fourth quarter of 2008.
The number reflects a harder-than-expected blow from the global financial crisis, Tang Min, deputy secretary of the China Development Research Foundation, was quoted by China Daily as saying.
Worldwide global financial crisis has put the country's economic growth under great pressure. China's economy cooled to its slowest pace in seven years in 2008, expanding 9 percent year-on-year, according to data released by NBS.
The 9-percent rate was the lowest since 2001, when an annual rate of 8.3 percent was recorded, and it was the first time China's GDP growth fell into the single-digit range since 2003.
To cope with this, the government has launched a 4 trillion economic stimulus package last November, in a bid to expend investment in infrastructure and prevent economy from cooling too fast.
As for this, 86 percent of economists said the government should focus its fiscal policy on social spending, including education, medical care and improving the social security system.
The survey showed, more than 90 percent of the 100 economists surveyed expressed their worries over the country's increasing unemployment rate, which had added woes to a world economic downturn.
Chairman and chief executive officer of TX Investment Consulting Co., Lin Yixiang was quoted by China Daily as saying that the survey indicated the government policies should be directed at addressing unemployment.
The government estimates about 20 million rural migrants, or 15.3 percent of all rural workers employed outside their hometowns, have returned home without jobs.
Meanwhile. urban unemployment rate, which excludes migrant workers, was estimated to hit 4.6 percent in 2009, up from 4.2 percent in the fourth quarter of 2008.
The number reflects a harder-than-expected blow from the global financial crisis, Tang Min, deputy secretary of the China Development Research Foundation, was quoted by China Daily as saying.
Worldwide global financial crisis has put the country's economic growth under great pressure. China's economy cooled to its slowest pace in seven years in 2008, expanding 9 percent year-on-year, according to data released by NBS.
The 9-percent rate was the lowest since 2001, when an annual rate of 8.3 percent was recorded, and it was the first time China's GDP growth fell into the single-digit range since 2003.
To cope with this, the government has launched a 4 trillion economic stimulus package last November, in a bid to expend investment in infrastructure and prevent economy from cooling too fast.
As for this, 86 percent of economists said the government should focus its fiscal policy on social spending, including education, medical care and improving the social security system.
BC's Economytoday
Currency:1 Indian Rupee (INR) (₨) = 100 Paise
Fiscal year: April 1–March 31
Trade organisations: WTO, SAFTA
GDP (PPP): $3.305 trillion (2008 est.)
GDP growth: 7.1% (2008-2009)
GDP per capita: $2,600 (PPP)
GDP by sector
agriculture: 17.8%, industry: 29.4%, services: 52.8% (2007 est.)
Inflation (CPI): 0.7% (CPI) (feb 2009)
Populationbelow poverty line:: 27.5% (2008 est.)
Labour force: 516.4 million (2007 est.)
Labour forceby occupation
agriculture: 60%, industry: 12%, services: 28% (2003)
Unemployment: 7.2% (2007 est.)
Main industries:
textiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, machinery, software, services
Exports:
$163 billion (Financial Year 2007-2008)
Export goods:
petroleum products, textile goods, gems and jewelry, engineering goods, chemicals, leather manufactures
Main export partners
US 15%, the People's Republic of China 8.7%, UAE 8.7%, UK 4.4% (2007)
Imports
$230.5 billion f.o.b. (2007 est.)
Import goods
crude oil, machinery, gems, fertilizer, chemicals
Main import partners
the People's Republic of China 10.6%, US 7.8%, Germany 4.4%, Singapore 4.4%
Public Debt: $149.2 billion (2007)
Revenues: $141.2 billion (2007 est.)
Expenses: $172.6 billion (2007 est.)
Fiscal year: April 1–March 31
Trade organisations: WTO, SAFTA
GDP (PPP): $3.305 trillion (2008 est.)
GDP growth: 7.1% (2008-2009)
GDP per capita: $2,600 (PPP)
GDP by sector
agriculture: 17.8%, industry: 29.4%, services: 52.8% (2007 est.)
Inflation (CPI): 0.7% (CPI) (feb 2009)
Populationbelow poverty line:: 27.5% (2008 est.)
Labour force: 516.4 million (2007 est.)
Labour forceby occupation
agriculture: 60%, industry: 12%, services: 28% (2003)
Unemployment: 7.2% (2007 est.)
Main industries:
textiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, machinery, software, services
Exports:
$163 billion (Financial Year 2007-2008)
Export goods:
petroleum products, textile goods, gems and jewelry, engineering goods, chemicals, leather manufactures
Main export partners
US 15%, the People's Republic of China 8.7%, UAE 8.7%, UK 4.4% (2007)
Imports
$230.5 billion f.o.b. (2007 est.)
Import goods
crude oil, machinery, gems, fertilizer, chemicals
Main import partners
the People's Republic of China 10.6%, US 7.8%, Germany 4.4%, Singapore 4.4%
Public Debt: $149.2 billion (2007)
Revenues: $141.2 billion (2007 est.)
Expenses: $172.6 billion (2007 est.)
Concept of this month: Corporate Governance
Corporate governance is the set of processes, customs, policies, laws, and institutions affecting the way a corporation is directed, administered or controlled. Corporate governance also includes the relationships among the many stakeholders involved and the goals for which the corporation is governed. The principal stakeholders are the shareholders, management, and the board of directors. Other stakeholders include labor(employees), customers, creditors (e.g., banks, bond holders), suppliers, regulators, and the community at large.
Corporate governance is a multi-faceted subject.[1] An important theme of corporate governance is to ensure the accountability of certain individuals in an organization through mechanisms that try to reduce or eliminate the principal-agent problem. A related but separate thread of discussions focuses on the impact of a corporate governance system in economic efficiency, with a strong emphasis shareholders' welfare. There are yet other aspects to the corporate governance subject, such as the stakeholder view and the corporate governance models around the world (see section 9 below).
There has been renewed interest in the corporate governance practices of modern corporations since 2001, particularly due to the high-profile collapses of a number of large U.S. firms such as Enron Corporation and Worldcom. In 2002, the U.S. federal government passed the Sarbanes-Oxley Act, intending to restore public confidence in corporate governance.
In A Board Culture of Corporate Governance business author Gabrielle O'Donovan defines corporate governance as 'an internal system encompassing policies, processes and people, which serves the needs of shareholders and other stakeholders, by directing and controlling management activities with good business savvy, objectivity, accountability and integrity. Sound corporate governance is reliant on external marketplace commitment and legislation, plus a healthy board culture which safeguards policies and processes'.
O'Donovan goes on to say that 'the perceived quality of a company's corporate governance can influence its share price as well as the cost of raising capital. Quality is determined by the financial markets, legislation and other external market forces plus how policies and processes are implemented and how people are led. External forces are, to a large extent, outside the circle of control of any board. The internal environment is quite a different matter, and offers companies the opportunity to differentiate from competitors through their board culture. To date, too much of corporate governance debate has centred on legislative policy, to deter fraudulent activities and transparency policy which misleads executives to treat the symptoms and not the cause.'[2]
It is a system of structuring, operating and controlling a company with a view to achieve long term strategic goals to satisfy shareholders, creditors, employees, customers and suppliers, and complying with the legal and regulatory requirements, apart from meeting environmental and local community needs.
Report of SEBI committee (India) on Corporate Governance defines corporate governance as the acceptance by management of the inalienable rights of shareholders as the true owners of the corporation and of their own role as trustees on behalf of the shareholders. It is about commitment to values, about ethical business conduct and about making a distinction between personal & corporate funds in the management of a company.” The definition is drawn from the Gandhian principle of trusteeship and the Directive Principles of the Indian Constitution. Corporate Governance is viewed as ethics and a moral duty.
In the 19th century, state corporation laws enhanced the rights of corporate boards to govern without unanimous consent of shareholders in exchange for statutory benefits like appraisal rights, to make corporate governance more efficient. Since that time, and because most large publicly traded corporations in the US are incorporated under corporate administration friendly Delaware law, and because the US's wealth has been increasingly securitized into various corporate entities and institutions, the rights of individual owners and shareholders have become increasingly derivative and dissipated. The concerns of shareholders over administration pay and stock losses periodically has led to more frequent calls for corporate governance reforms.
In the 20th century in the immediate aftermath of the Wall Street Crash of 1929 legal scholars such as Adolf Augustus Berle, Edwin Dodd, and Gardiner C. Means pondered on the changing role of the modern corporation in society. Berle and Means' monograph "The Modern Corporation and Private Property" (1932, Macmillan) continues to have a profound influence on the conception of corporate governance in scholarly debates today.
From the Chicago school of economics, Ronald Coase's "The Nature of the Firm" (1937) introduced the notion of transaction costs into the understanding of why firms are founded and how they continue to behave. Fifty years later, Eugene Fama and Michael Jensen's "The Separation of Ownership and Control" (1983, Journal of Law and Economics) firmly established agency theory as a way of understanding corporate governance: the firm is seen as a series of contracts. Agency theory's dominance was highlighted in a 1989 article by Kathleen Eisenhardt (Academy of Management Review).
US expansion after World War II through the emergence of multinational corporations saw the establishment of the managerial class. Accordingly, the following Harvard Business School management professors published influential monographs studying their prominence: Myles Mace (entrepreneurship), Alfred D. Chandler, Jr. (business history), Jay Lorsch (organizational behavior) and Elizabeth MacIver (organizational behavior). According to Lorsch and MacIver "many large corporations have dominant control over business affairs without sufficient accountability or monitoring by their board of directors."
Since the late 1970’s, corporate governance has been the subject of significant debate in the U.S. and around the globe. Bold, broad efforts to reform corporate governance have been driven, in part, by the needs and desires of shareowners to exercise their rights of corporate ownership and to increase the value of their shares and, therefore, wealth. Over the past three decades, corporate directors’ duties have expanded greatly beyond their traditional legal responsibility of duty of loyalty to the corporation and its shareowners.[3]
In the first half of the 1990s, the issue of corporate governance in the U.S. received considerable press attention due to the wave of CEO dismissals (e.g.: IBM, Kodak, Honeywell) by their boards. The California Public Employees' Retirement System (CalPERS) led a wave of institutional shareholder activism (something only very rarely seen before), as a way of ensuring that corporate value would not be destroyed by the now traditionally cozy relationships between the CEO and the board of directors (e.g., by the unrestrained issuance of stock options, not infrequently back dated).
In 1997, the East Asian Financial Crisis saw the economies of Thailand, Indonesia, South Korea, Malaysia and The Philippines severely affected by the exit of foreign capital after property assets collapsed. The lack of corporate governance mechanisms in these countries highlighted the weaknesses of the institutions in their economies.
In the early 2000s, the massive bankruptcies (and criminal malfeasance) of Enron and Worldcom, as well as lesser corporate debacles, such as Adelphia Communications, AOL, Arthur Andersen, Global Crossing, Tyco, and, more recently, Fannie Mae and Freddie Mac, led to increased shareholder and governmental interest in corporate governance. This is reflected in the passage of the Sarbanes-Oxley Act of 2002
Impact of Corporate GovernanceThe positive effect of good corporate governance on different stakeholders ultimately is a strengthened economy, and hence good corporate governance is a tool for socio-economic development
Corporate governance is a multi-faceted subject.[1] An important theme of corporate governance is to ensure the accountability of certain individuals in an organization through mechanisms that try to reduce or eliminate the principal-agent problem. A related but separate thread of discussions focuses on the impact of a corporate governance system in economic efficiency, with a strong emphasis shareholders' welfare. There are yet other aspects to the corporate governance subject, such as the stakeholder view and the corporate governance models around the world (see section 9 below).
There has been renewed interest in the corporate governance practices of modern corporations since 2001, particularly due to the high-profile collapses of a number of large U.S. firms such as Enron Corporation and Worldcom. In 2002, the U.S. federal government passed the Sarbanes-Oxley Act, intending to restore public confidence in corporate governance.
In A Board Culture of Corporate Governance business author Gabrielle O'Donovan defines corporate governance as 'an internal system encompassing policies, processes and people, which serves the needs of shareholders and other stakeholders, by directing and controlling management activities with good business savvy, objectivity, accountability and integrity. Sound corporate governance is reliant on external marketplace commitment and legislation, plus a healthy board culture which safeguards policies and processes'.
O'Donovan goes on to say that 'the perceived quality of a company's corporate governance can influence its share price as well as the cost of raising capital. Quality is determined by the financial markets, legislation and other external market forces plus how policies and processes are implemented and how people are led. External forces are, to a large extent, outside the circle of control of any board. The internal environment is quite a different matter, and offers companies the opportunity to differentiate from competitors through their board culture. To date, too much of corporate governance debate has centred on legislative policy, to deter fraudulent activities and transparency policy which misleads executives to treat the symptoms and not the cause.'[2]
It is a system of structuring, operating and controlling a company with a view to achieve long term strategic goals to satisfy shareholders, creditors, employees, customers and suppliers, and complying with the legal and regulatory requirements, apart from meeting environmental and local community needs.
Report of SEBI committee (India) on Corporate Governance defines corporate governance as the acceptance by management of the inalienable rights of shareholders as the true owners of the corporation and of their own role as trustees on behalf of the shareholders. It is about commitment to values, about ethical business conduct and about making a distinction between personal & corporate funds in the management of a company.” The definition is drawn from the Gandhian principle of trusteeship and the Directive Principles of the Indian Constitution. Corporate Governance is viewed as ethics and a moral duty.
In the 19th century, state corporation laws enhanced the rights of corporate boards to govern without unanimous consent of shareholders in exchange for statutory benefits like appraisal rights, to make corporate governance more efficient. Since that time, and because most large publicly traded corporations in the US are incorporated under corporate administration friendly Delaware law, and because the US's wealth has been increasingly securitized into various corporate entities and institutions, the rights of individual owners and shareholders have become increasingly derivative and dissipated. The concerns of shareholders over administration pay and stock losses periodically has led to more frequent calls for corporate governance reforms.
In the 20th century in the immediate aftermath of the Wall Street Crash of 1929 legal scholars such as Adolf Augustus Berle, Edwin Dodd, and Gardiner C. Means pondered on the changing role of the modern corporation in society. Berle and Means' monograph "The Modern Corporation and Private Property" (1932, Macmillan) continues to have a profound influence on the conception of corporate governance in scholarly debates today.
From the Chicago school of economics, Ronald Coase's "The Nature of the Firm" (1937) introduced the notion of transaction costs into the understanding of why firms are founded and how they continue to behave. Fifty years later, Eugene Fama and Michael Jensen's "The Separation of Ownership and Control" (1983, Journal of Law and Economics) firmly established agency theory as a way of understanding corporate governance: the firm is seen as a series of contracts. Agency theory's dominance was highlighted in a 1989 article by Kathleen Eisenhardt (Academy of Management Review).
US expansion after World War II through the emergence of multinational corporations saw the establishment of the managerial class. Accordingly, the following Harvard Business School management professors published influential monographs studying their prominence: Myles Mace (entrepreneurship), Alfred D. Chandler, Jr. (business history), Jay Lorsch (organizational behavior) and Elizabeth MacIver (organizational behavior). According to Lorsch and MacIver "many large corporations have dominant control over business affairs without sufficient accountability or monitoring by their board of directors."
Since the late 1970’s, corporate governance has been the subject of significant debate in the U.S. and around the globe. Bold, broad efforts to reform corporate governance have been driven, in part, by the needs and desires of shareowners to exercise their rights of corporate ownership and to increase the value of their shares and, therefore, wealth. Over the past three decades, corporate directors’ duties have expanded greatly beyond their traditional legal responsibility of duty of loyalty to the corporation and its shareowners.[3]
In the first half of the 1990s, the issue of corporate governance in the U.S. received considerable press attention due to the wave of CEO dismissals (e.g.: IBM, Kodak, Honeywell) by their boards. The California Public Employees' Retirement System (CalPERS) led a wave of institutional shareholder activism (something only very rarely seen before), as a way of ensuring that corporate value would not be destroyed by the now traditionally cozy relationships between the CEO and the board of directors (e.g., by the unrestrained issuance of stock options, not infrequently back dated).
In 1997, the East Asian Financial Crisis saw the economies of Thailand, Indonesia, South Korea, Malaysia and The Philippines severely affected by the exit of foreign capital after property assets collapsed. The lack of corporate governance mechanisms in these countries highlighted the weaknesses of the institutions in their economies.
In the early 2000s, the massive bankruptcies (and criminal malfeasance) of Enron and Worldcom, as well as lesser corporate debacles, such as Adelphia Communications, AOL, Arthur Andersen, Global Crossing, Tyco, and, more recently, Fannie Mae and Freddie Mac, led to increased shareholder and governmental interest in corporate governance. This is reflected in the passage of the Sarbanes-Oxley Act of 2002
Impact of Corporate GovernanceThe positive effect of good corporate governance on different stakeholders ultimately is a strengthened economy, and hence good corporate governance is a tool for socio-economic development
Quote of this month
" The auditors will have to be independent. Thats why they are called independent directors. They should not be under the thumb of the management"
- N.R.Narayanamurthy, Chief Mentor, Infosys technologies.
"One bad apple does not mean the whole barrel is bad"
- David milliband, British foreign secretary(about satyam crisis)
- N.R.Narayanamurthy, Chief Mentor, Infosys technologies.
"One bad apple does not mean the whole barrel is bad"
- David milliband, British foreign secretary(about satyam crisis)
"We can continue the fiscal stimulus in the next year. It can be done as part of the full budget...In my view there would be a continuing need for fiscal stimulus and I hope we can do that"
-Montek sigh ahluwalia, Planning commisionner
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