Thursday, February 27, 2014

Rupee slips to 62.11 per dollar ahead of GDP data

Mumbai: The Indian rupee on Friday opened lower ahead of the release of gross domestic product (GDP) growth numbers later in the day.

The domestic currency opened at 62.11 per dollar against its Wednesday’s close of 61.99.

The government will release GDP data for the three months ended December and fiscal deficit data for January later in the day. A Bloomberg poll showed that GDP will grow 4.7% in the December quarter as against 4.8% in September quarter.

The yield on India’s 10-year benchmark bond was trading at 8.912%, almost same as its Wednesday’s close of 8.919%. Bond yields and prices move in opposite directions.

At 9.15am, the rupee was trading at 62.08 per dollar, down 0.16% from its previous close, while India’s benchmark index, BSE Sensex, was trading at 21,035 points, up 0.21% from last close.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 80.272, down 0.01% from the previous close of 80.285.

PRATIMA KUMARI

PGDM 2ND SEM

Sahara chief Subrata Roy arrested in Lucknow

In a dramatic turn of events, Sahara chief Subrata Roy was arrested on Friday morning in Lucknow, after the Supreme Court turned down his plea for house arrest.
Declining to urgently hear Subrata Roy's plea to allow him to be with his "ailing mother, the apex court said it is not possible for the special bench assembled today to hear it.
Senior advocate Ram Jethmalani informed the Supreme Court that Subrata Roy has been taken into police custody.
Jethmalani pleaded to the apex court to consider recalling non-bailable warrant against Subrata Roy.
“Subrata Roy wilfully submitted himself before Lucknow police and he is cooperating with all authorities,” his son Seemanto Roy said while addressing a press conference in Delhi.
“Sahara chief very attached to his mother... her condition remains fragile and he was hoping for a Supreme Court relief,” Seemanto added.
Earlier in the morning, Sahara chief Subrata Roy said he is not absconding from arrest and is ready to "unconditionally follow" whatever direction the Supreme Court gives him today.
A day after the police visited his home in Lucknow to arrest him as per Supreme Court's orders but failed to find him there, Roy said he is still in Lucknow and had gone out for sometime to consult "a panel of doctors".
Roy said he has "already informed police to do their duty".
Through a statement signed by him, Roy also appealed to the Supreme Court to allow him to be with his "ailing mother under house arrest till March 3, 2014", while adding that he was ready to reach Delhi even today, if court wants him to do so.
Issuing a non-bailable warrant against Roy, the Supreme Court on February 26 asked the police to arrest him and present before the court on March 4.
Raising an emotional pitch, Roy said he was a "law abiding citizen" and not the one who will abscond.
"Last evening I had gone out of Sahara Shahar, Lucknow, to consult with a panel of doctors with certain medical reports of my mother and then I had gone to a lawyer's house also," he said.
Armed with Supreme Court's non-bailable warrant,

Tanay Tapas
PGDM 1st
Source :-

Virgin Australia reports $83.7 million loss in

FY2014 half-year resultsfinancial year, compared to a $23 million profit for the same period last year.

Revenue for the group had increased 5.6 per cent to $2.22 billion, from last year’s $2.10 billion.
The result highlights the difficult environment of the aviation industry. Yesterday, chief rival Qantas dominated headlines as it reported a loss of $252 million and job cuts of 5000 people as the beleaguered national airline sought to rein in costs by $2 billion.

Virgin revamped its brand three years ago. Source: News Limited

Virgin increased its domestic yield marginally but its international revenue was down. Its domestic segment made a $25.7 million profit while its international operations recorded a $29.5 million loss.
Virgin said it outperformed Qantas on revenue, yield and revenue load factor.
The airline also grew capacity across its domestic operations (excluding Tiger Airways) by 1.4 per cent.
Its cash position at the end of December was $896.4 million with an unrestricted cash position of $665.4 million. This included the $351.5 million capital raising from Virgin’s foreign backers it completed at the end of last year.

Virgin chief executive John Borghetti said the company faced “tough trading conditions”. Source: News Limited

The particulars of Australian aviation has peaked the wider community’s interest as Qantas and Virgin slug it out the media. Qantas is blaming an “anti-competitive” landscape for its woes as it highlights its ownership constraints imposed by the Qantas Sales Act. Virgin wants any government assistance such as a debt guarantee, which the government has backed away from, to be extended to the rest of the industry.
Virgin Australia chief executive John Borghetti said: “The results reflect the tough trading conditions across the entire industry for the first half of the financial year 2014.
“The Australian aviation market continues to be impacted by the significant capacity growth which occurred during the 2013 financial year, compounded by weak economic conditions and the inability to recover the cost of the carbon tax. Consequently, the Australian domestic aviation industry has made a first half loss for the first time in 20 years.”

Virgin boss John Borghetti with the airline’s staff. Source: News Limited

However, Mr Borghetti said Virgin has increased its proportion of domestic revenue for the corporate and government sector.
“Several major strategic initiatives essential to ensuring a successful and sustainable business model were executed during the first half,” he said. “At the same time, we continued to consolidate our positioning across all key market segments, including further expanding our regional network and enhancing our strong partnerships with leading global airlines, bringing significant benefits to the Australia consumer.”
Virgin, which acquired 60 per cent of Tiger Airways in July, said the performance of the budget airline had improved across metrics such as aircraft utilisation, load factors and revenue per available seat kilometre.
Virgin did not pay a dividend.
raj kishore sharma
pgdm 1st year

Rupee slips to 62.11 per dollar ahead of GDP data

CAG warned Navy was losing edge on procurement delays

Tata Power to sell 30% stake in Indonesian subsidiary for $120 million

Tata Power expects to complete the sale in Mitratama Perkasa in two months, subject to getting requisite approvals

The stake in PT Mitratama Perkasa is held by another Tata Power subsidiary in Indonesia, PT Sumber Energi Andalan Tbk, which signed the deal with Bakrie Group. Photo: Priyanka Parashar/Mint

Mumbai: Tata Power Co. Ltd has agreed to sell a 30% stake in its Indonesian subsidiary, PT Mitratama Perkasa, to Indonesian conglomerate Bakrie Group for $120 million.

The stake in Mitratama Perkasa is held by another Tata Power subsidiary in Indonesia, PT Sumber Energi Andalan Tbk, which signed the deal with Bakrie Group, the company said in a filing to BSE on Thursday.

“Prior to the sale, PT Mitratama Perkasa would be restructured to hold infrastructure assets in relation to PT Arutmin Indonesia and Tata Power, through its subsidiaries, would continue to hold 30% stake in PT Kaltim Prima Coal related infrastructure assets,” Tata Power said in the filing.

This is a part of the $500 million agreement Tata Power announced on 31 January regarding the sale of 30% stake it held in mining company PT Arutmin Indonesia, and its associated infrastructure assets, to the Bakrie Group.

PT Kaltim Prima Coal, a subsidiary of Tata Power, owns one of the largest thermal coal-producing mines in the world.

Tata Power expects to complete the stake sale in Mitratama Perkasa in two months, subject to approvals.

The continuing losses at Mundra Ultra he continuing losses at Mundra Ultra Mega Power Project (UMPP) have created stress on Tata Power’s balance sheet. The waiver on financial covenants relating to this project had expired on 30 June 2013 and the management was negotiating with lenders, according to the notes to accounts of September quarter earnings.

“Keeping the under-recovery challenges in Mundra UMPP operations and cash flow concerns in mind, we have also signed an agreement to exit from PT Arutmin Indonesia to get additional cash flow and to reduce our consolidated debt,” Anil Sardana, managing director, at Tata Power had said early this month while announcing December quarter financial results.

Last week, the Central Electricity Regulatory Commission (CERC) allowed a compensatory tariff of Rs.0.524 for every unit of electricity generated from Mundra plant. This tariff is for the period beyond 1 April 2013.

On Thursday, Press Trust of India reported that the CERC ruling will help in reducing Mundra project’s annual losses by Rs.1,100 crore, citing Tata Power’s Sardana.

NITESH KUMAR SINGH

PGDM 2SEM

SOURCE-MINT LIVE NEWS

Essel Financial Services streamlines realty fund business

Essel’s India Asset Growth Fund-Series I was conceived as the first in a series of real estate funds to be raised. Photo: Mint

Bangalore: Essel Financial Services Ltd, a part of Subhash Chandra’s Essel Group, has appointed its investment banking chief Abhinav Bhushan as the head of its real estate fund business that’s preparing to raise a $200 million offshore fund.

Essel Financial’s real estate fund business, which has been in operation for the past year, proposes to build a corpus of Rs.500 crore in 3-6 months.

“Currently, we have an up-and-running private equity real estate (PERE) fund where we have done investments worth over Rs.135 crore and have another Rs.45 crore deal in the pipeline. We expect to close this deal in the next one to two weeks,” managing director Amitabh Chaturvedi said in an email.

“In parallel, we have also applied for a licence from the Monetary Authority of Singapore for a $200 million offshore fund,” he added.

Essel Financial appointed Chaturvedi as its overall head in December. Amit Goenka, who was overseeing the real estate fund business, resigned in February.

Essel’s India Asset Growth Fund-Series I was conceived as the first in a series of real estate funds to be raised. Capital from this will be offered as last-mile funding to residential projects, largely in the form of debt financing.

Essel Financial has scrapped plans to launch a $100 million Shariah fund that it had announced earlier this year, Chaturvedi said.

Essel Financial Services was set up in 2012 for the media conglomerate to enter the private equity (PE) and investment banking business.

PE firms, while capitalizing on the increasing need for funds by developers, are cautious of the real estate sector and have focused on investing in residential projects as these have proved to be more reliable than office space developments.

Fundraising, however, has been difficult, particularly with global investors being wary of Indian real estate, especially with the sector generating mediocre returns on earlier investments.

“2014 will be another tough year to raise capital apart from established funds with impeccable credentials,” said Ambar Maheshwari, managing director, corporate finance, at property advisory Jones Lang LaSalle. “Offshore capital is difficult to come by and new funds will particularly find it difficult to meet fund-raising targets.”

With Bhushan being made the head of the real estate fund, Essel Financial is now scouting for a person to head Capstar Pvt. Ltd, its investment banking arm, which offers advisory services to companies on cross-border transactions.

“Our offerings would cover the entire range right from equity and debt capital markets, mergers and acquisitions to private equity syndication and debt and mezzanine financing,” Chaturvedi said.

Essel Financial’s non-banking finance company (NBFC) business, headed by chief executive officer Sandeep Wirkhare, focuses on small and medium enterprises (SME) financing with a deal size of up to Rs.75 lakh.

PRASHANT SHARMA

PGDM-IIsem

SOURCE-MINT

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ABHISHEK KUMAR

PGDM 1ST YR

Annual Supplement 2013-14 to Trade Policy

Latest Updates & News

IAS Pre Exam 2013 Paper 1

Answer with explanations.

IAS Pre Exam 2013 Paper 2

Answers with explanations.

Annual Supplement 2013-14 to Trade Policy

The Annual Supplement 2013-14 to Foreign Trade Policy 2009-1014 was announced by the Minister for Commerce, Industry and Textiles Anad Sharma on April 18, 2013.
Special Economic Zone (SEZ)
(i)Minimum Land Area Requirement is reduced by half. For Multi-product SEZ it is reduced from 1000 hectares to 500 hectares and for sector specific SEZ from 100 hectares to 50 hectares.
(ii)For IT/ITES SEZ, there would be no minimum land requirement. Only the minimum built up area criteria would be required to be met by the SEZ developers, which is as follows:
(a)For 7 major cities viz: Mumbai, Delhi (NCR), Chennai, Hyderabad, Bangalore, Pune and Kolkata – One Lakh sqm
(b)For Category B Cities – 50,000 sqm
(c)For remaining cities – 25,000 sqm
(iii)Exit Policy for SEZ units is introduced. Transfer of ownership of SEZ units including sale would be permitted.
Zero Duty Export Promotion Capital Goods (EPCG) Scheme
(i)Zero duty EPCG scheme and 3% EPCG scheme has been harmonized into one scheme which will be Zero duty EPCG scheme covering all sectors. It means that zero duty EPCG scheme which was in operation till 31.3.2013 is now continued and shall be available for all the sectors. Export Obligation of 6 times the duty saved amount needs to be completed in a period of 6 years and the period for import would be 18 month, which was earlier 9 months for zero duty EPCG scheme and 36 months for 3% EPCG scheme.
(ii)Export obligation discharge by export of alternate products as well as accounting of exports of group companies will not be allowed.
(iii)Now exporters who are availing benefits under Technology Up-gradation Fund Scheme (TUFS) will also be eligible for Zero Duty EPCG Scheme.
(iv)The import of motor cars, SUVs, all purpose vehicles for hotels, travel agents, or tour transport operators and companies owning/ operating golf resorts will not be allowed under the new Zero Duty EPCG Scheme, which was earlier allowed with some conditions.
(v)Domestic procurement against EPCG authorization has been promoted by reducing 10% Export Obligation for sourcing of capital goods domestically.
(vi)Jammu and Kashmir has been included in the lists of states for reduced Export Obligation. Units located in Jammu & Kashmir will qualify for 25% of normal specific Export Obligation in addition to states in North East Region and Sikkim. This will encourage manufacturing activity in the state of Jammu and Kashmir.
2% Interest Subvention Scheme
(i)The 2% Interest Subvention Scheme has been extended upto 31.3.2014.
(ii)Scope of 2% interest subvention Scheme is widened to include 134 sub-sectors of engineering sector.
(iii)The Scheme is further widen to include items covered under Chapter 63 of ITC and additional specified tariff lines of engineering sector items under the scheme.
Utilization of Duty Credit Scrip
(i)Duty Credit Scrips issued under Focus Market Schemes, Focus Product Scheme and Vishesh Krishi Gramin Udyog Yojana (VKGUY) can be used for payment of service tax on procurement of services within the legal framework of service tax exemption notifications under the Finance Act, 1994. Holder of the scrip shall be entitled to avail drawback or CENVAT credit of the service tax debited in the scrips as per Department of Revenue rules.
(ii)All duty credit scrips issued under Chapter 3 can be utilized for payment of application fee to DGFT for obtaining any authorization under Foreign Trade Policy. This benefit shall be available only to the original duty credit scrip holders.
Market and Product Diversification
(i)Norway has been added under Focus Market Scheme and Venezuela has been added under Special Focus Market Scheme.
(ii)126 new products have been added under Focus Product Scheme.
(iii)About 47 new products have been added under Market Linked Focus Product Scheme (MLFPS).
(iii)2 new countries i.e., Brunei and Yemen have been added as new markets under MLFPS.
(iv)MLFPS is being extended to 31.03.2014 for exports to USA and EU in respect of items falling in Chapter 61 and Chapter 62 of ITC (HS).
(v)Exports of High Tech products would be incentivized and it would be separately notified by 30th June, 2013.
(vi)Two new Towns of Export Excellence has been added. These are Morbi in Gujarat(Ceramic Tiles) and Gurgaon in Haryana (Apparel)
Incremental Exports Incentivisation Scheme
(i)Incremental Exports Incentivisation Scheme has been extended for the year 2013-14. The calculation of the benefit shall be on annual basis under the extended period.
(ii)In addition to USA, Europe and Asian Countries, 53 countries of Latin America and Africa have been added.
Facility to close cases of default in Export Obligation
A onetime facility is provided to close cases where there is a default in Export Obligation pertaining to Advance Authorizations and EPCG authorizations. Exporter will have to pay duty + interest within a limited period of 6 months from the date of notification of the scheme subject to the condition that the total payment shall not exceed two times the duty saved amount on default in Export Obligation.
Served from India Scheme (SFIS)
(i)The Entitlement of 10% for the scrip shall be calculated on the basis of Net Foreign Exchange (NFE) earned, in place of free foreign exchange earned during a financial year.
(ii)Service exporters who are also engaged in manufacturing activity are permitted to use SFIS duty credit scrip for importing/domestically procuring capital goods as defined in Para 9.12 of FTP including spares related to manufacturing sector business of the service provider.
(iii)Hotels, travel agents, tour operators or tour transport operators and companies owning/operating golf resorts having SFIS scrip can import or domestically procure motor cars, SUVs and all purpose vehicles using SFIS Scrips for payment of duties. Such vehicles need to be registered for “tourist purpose” only.
VKGUY Scheme
(i)The entitlement of VKGUY scrip will be as per the rates prescribed in various appendices irrespective of rates of Drawback, DEPB or availment of Advance Authorization/ DFIA for import of inputs.
(ii)Agri. Infrastructure Incentive Scheme Scrip can now be transferred from status holder to the supporting manufacturer (of the status holder exporter), who is neither a status holder nor having a unit in a food park.
Status Holder Incentive Scheme (SHIS)
(i)SHIS will not be available for 2013-14.
( ii)Limited transferability of SHIS scrip within group-company of the status holder is allowed provided the group company is a manufacturer.
Re-credit of 4% SAD
(i)Utilization of recredited 4% SAD scrips shall be allowed upto 30.9.2013.
(ii)The importers are advised to make the initial payment of 4% SAD in cash in future if they want a refund.
Duty Free Import Authorization Scheme (DFIA)
Exemption from payment of Anti Dumping Duty and Safeguard Duty shall not be available after endorsement of transferability of such authorizations. Exemption is available on original authorization.
Import of Cars
ICD Faridabad and Ennore Port (TN) are added in the list of designated ports for import of cars/ vehicles.
Electronic Data Interchange Initiatives
(i)Exporters can file Export Obligation Discharge Certificate (EODC) applications online, as transmission of two key documents (shipping bill from Customs and e-BRC from Banks) relating to Advance Authorization and EPCG Authorizations in secured electronic format to DGFT has been established. With online EODC, exporter can complete the formalities at DGFT online and may get quick clearances at the Customs on account of e-transmission of EODC from DGFT to Customs.
(ii)System for Online issuance of Registration Certificate for export of Cotton, Cotton Yarn, Non Basmati Rice, Wheat and Sugar has been introduced.
Ease of Documentation and procedural simplification
(i)Submission of physical copies of IEC and Registration-cum-Membership Certificate (RCMC) with individual application has been dispensed with.
(ii)It has been decided to dispense with submission of hard copy of EP copy of shipping bills in case of (a) advance authorization, (b) duty free import authorization for grant of Export Obligation Discharge Certificate (EODC) if exports are made through EDI ports.
(iii)Application fee can be paid either in cash or through demand draft or through EFT. Now exporters/importers would be allowed shortly to utilize their credit card for payment of such application fee.
(iv)Existing procedures contained in Para 2.20A of Handbook of Procedures related to execution of bank guarantee / legal undertaking stands deleted.
Widening of items eligible for import for Handloom/ Made ups and Sports Goods
(i) 5 additional items (embroidery/sewing threads/poly/quilted bedding materials and printed bags) are included in the list of items which are allowed duty free within the existing limits upto 5% FOB value of exports of handloom made ups in preceding year or within the existing limit of upto 1% of FOB value of exports of cotton/man-made ups in preceding year.
(ii)Similarly, 5 additional items have been added pertaining to sports goods exports. These 5 items are (i) PVC Leather Clot (to be used in the manufacture of Inflatable Balls & Sports Gloves), (ii) Latex Foam (to be used in the manufacture of Shin Guard & Goal Keeper Gloves & other Sports Gloves), (iii) Peva / Eva Foil (to be used in the manufacture of Shin Guard & Sports Gloves), (iv) Stitching Thread (to be used in the manufacture of Inflatable balls & Sports Gloves), (v)Printing Ink (to be used in the manufacture of Inflatable balls & Sports Gloves).

ONIKA JAISWAL
PGDM 2ND SEM
2013-15
SOURCE- MAKER.COM

Gold hits four-month high on economic concerns

Gold prices rose above $1,340 on Wednesday, holding onto four-month highs on uncertainty over China's economic policy moves and with weaker data raising questions about the strength of the US recovery.

Investors have poured back into the metal, which has risen 11% since the beginning of the year, on worries about economic conditions in the United States and in China, which is now dealing with unprecedented growth in corporate debt.
Spot gold touched its highest since October 30 at $1,345.35 an ounce and was down 0.1% at $1,339.23 by 1146 GMT.

US gold futures for April delivery fell 0.2% to $1,339.40 an ounce, having earlier hit a four-month high of $1,345.60.
"At the moment the market is reacting to weaker data from China and the US on the assumption that if economic slowdown is confirmed then there may be some scaling back of Fed tapering," Saxo Bank senior manager Ole Hansen said.
"But it is not really a runaway, we are just grinding higher and you could argue that the latest entrants to the market are looking for additional gains and if they don't get that they might be quick to pull the trigger again to get out," he said. "It looks like most people are not seeing the upside going much above $1,350/1,400."
U.S. data on Tuesday showed that home price gains slowed in December, underscoring a loss of momentum in the housing recovery, while February consumer confidence fell short of expectations.
European equities fell on Wednesday, tracking Asia.
NAME RAHUL SINGJH 2
PGDM 2 SEM

RBI reduces foreign investment limit in commercial papers

The latest RBI move follows a similar move by the central bank on 29 January when it had increased the sub-limit of investment in government securities for long-term investors to $10 billion from $5 billion. Photo: Pradeep Gaur/Mint

Mumbai: The Reserve Bank of India (RBI) has reduced the amount of money foreign institutional investors (FIIs) can invest in commercial paper from $3.5 billion to $2 billion, the central bank said on its website.

The decision was taken to “encourage long term investors” in the local debt market, RBI said. Commercial paper refers to short-term instruments maturing within a year.

Foreign investors are currently allowed to invest up to $51 billion in local corporate bonds. The sub-limit of investments in commercial paper was part of this limit.

“This sub-limit is being presently utilize only to the extent of around 58%,” RBI said.

“The balance $1.5 billion shall, however, continue to be part of the total corporate debt limit of $51 billion and will be available to eligible foreign investors for investment in corporate debt,” RBI said.

Ananth Narayan, co-head of wholesale banking for South Asia at Standard Chartered Plc, said the RBI was probably seeking to ensure that foreign inflows in the debt market are “more sticky.”

“The fact that they said they want long-term investors means that they are wary of hot money outflows from the debt market like it happened post 22 May,” Narayan said.

Between June and November 2013, FIIs pulled out $13 billion from the Indian debt market after the US Federal Reserve said in May that it is likely to taper its $85-billion-a-month bond purchase programme. The tapering began only last month.

But Narayan said he does not expect the latest RBI move to have any impact on the market because the amount is too small.

Long-term investors include sovereign wealth funds, multilateral agencies, foreign pension, insurance and endowment funds and foreign central banks, RBI said on its website.

However, the overall foreign investor limit in government securities remained unchanged at $30 billion, RBI said.

VIMAL SINGH

PGDM 1ST

Rupee slips to 62.11 per dollar ahead of GDP data///Airtel, others fined in Nigeria for poor service

1. Rupee slips to 62.11 per dollar ahead of GDP data

Mumbai: The Indian rupee on Friday opened lower ahead of the release of gross domestic product (GDP) growth numbers later in the day.

The domestic currency opened at 62.11 per dollar against its Wednesday’s close of 61.99.

The yield on India’s 10-year benchmark bond was trading at 8.912%, almost same as its Wednesday’s close of 8.919%. Bond yields and prices move in opposite directions.

At 9.15am, the rupee was trading at 62.08 per dollar, down 0.16% from its previous close, while India’s benchmark index, BSE Sensex, was trading at 21,035 points, up 0.21% from last close.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 80.272, down 0.01% from the previous close of 80.285.

Airtel, others fined in Nigeria for poor service

Abuja: Nigeria’s telecom regulator has fined mobile operators Bharti Airtel Ltd, MTN Group Ltd and Globacom Ltd a combined 647.5 million naira ($3.9 million) and banned them from selling SIM cards in March due to poor service, it said on Thursday.

Globacom, which is owned by Nigerian billionaire Mike Adenuga, was fined 277.5 million naira ($1.7 million), while South Africa’s MTN and Airtel were each fined 185 million naira ($1.1 million, or around Rs.6.8 crore), the Nigerian Communications Commission (NCC) said in a statement.

The NCC will charge each company 2.5 million naira for every day the fine is not paid after 7 March, it said. The month-long ban on selling SIM cards in a country of around 170 million people could be the most damaging.

The penalties were imposed because the operators had failed to meet key performance indicators in January, the NCC said. Reuters

md.aquil alam

pgdm 2nd semester

source.. live mint

BSE Sensex surges in morning trade ahead of GDP data

The BSE benchmark BSE Sensex continued to rise for the fifth session and rose over 80 points up to trade above 21,000 level in morning trade on Friday ahead of GDP data for October-December quarter amid a mixed Asian trend.
At 10.59 am, Sensex was up 82.71 points at 21069.70. Similarly, Nifty was up 19.35 points at 6258.15 during the same time.
The 30-share index, which had gained over 450 points in the previous four sessions, rose by 123.82 points, or 0.59 per cent, to 21,110.81 in early trade, with all the sectoral indices, led by healthcare and metal, were trading in positive territory with gains up to one per cent.
Similarly, the wide-based National Stock Exchange index Nifty rose by 26.75 points, or 0.43 per cent, to 6,265.55.
Buying activity by funds as well as retail investors picked up ahead of GDP data for the October-December quarter to be released later in the day, brokers said.
Besides, a mixed trend in the Asian region, following overnight gains on Wall Street after Federal Reserve's broadly positive outlook for the US economy, influenced the sentiment.
In the Asian region, Hong Kong's Hang Seng index was up by 0.50 per cent, while Japan's Nikkei Index shed 0.02 per cent in the morning trade on Friday.
The US Dow Jones Industrial Average ended 0.46 per cent higher in Thursday's trade.
With PTI inputs

anand maurya
pgdm-2sem

Monday, February 24, 2014

RBI’s inflation views aligned with govt’s: Raghuram Rajan

RBI governor Raghuram Rajan. Photo: Ramesh Pathania/Mint

Mumbai: Reserve Bank of India (RBI) governor Raghuram Rajan said government and the central bank shared similar views on inflation management, while reiterating a call for the US Federal Reserve to be more sensitive to emerging economies regarding tapering of its stimulus programme.

Rajan’s comments, in an interview with CNBC, come after finance minister P. Chidambaram last week chided the central bank over its focus on fighting inflation, saying the RBI needed to abide by government policy to promote economic growth.

An RBI panel last month proposed introduction of inflation targeting into monetary policy, with the specific aim of a consumer price index (CPI) of 4%, with a 2% band on either side. The RBI has raised interest rates by three-quarters of a percentage point since September to bring down consumer inflation, which fell to 8.79% last month from double digits in November, even as the government has traditionally preferred to focus on bolstering growth.

“It’s not as if the government is on a different page on what we’ve been doing on inflation thus far. They may have different views on what they would like to see done, but there is a process, there is a conversation,” Rajan said in an interview with CNBC, broadcast by Indian channel CNBC-TV 18 on Monday.

“I think there is fair amount of coordination at the highest level.”

The government and RBI have often been at odds in fighting inflation.

While the central bank has often blamed the government’s expansive fiscal policy and failure to ease infrastructure bottlenecks for high inflation, a growth-obsessed government, at times, has found it hard to digest interest rate increases.

‘No disagreement’

RBI is not technically independent—the governor and his deputies are appointed by the government—although it generally enjoys latitude in policy-making. Rajan said the central bank panel’s report on inflation was consistent with the government’s stance. “We have a committee which has suggested a target, which is also by the way, consistent with the process finance ministry’s committee has suggested, so there is no disagreement about broader need to get a framework in place,” he said.

“I think in terms of how I see the process, is really that the government sets the objective, and the central bank delivers on that objective,” Rajan said.

Rajan also reiterated his call for the Federal Reserve to take into account the impact of its withdrawal of monetary stimulus on emerging economies, despite saying he was comfortable with the current pace of tapering.

“I actually welcome a measured pace of tapering. The only thing I have been calling for is that in the communication there should be some sensitivity to conditions in emerging markets,” Rajan told CNBC.

“And this is not from our perspective, this is broadly emerging markets, some of whom have been in trouble in the last few months. But I am fully prepared for a tapering that continues at this measured pace.”

Ajeet Kumar
PGDM
2nd SEM

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