Oil rout pushes trade shortfall to 10-month low 16/01/2015

Oil rout pushes trade shortfall to 10-month low
16/01/2015 12:13
India’s trade deficit shrank to the lowest level in ten months in December, narrowing 44 per cent from November as a slump in crude oil prices to the lowest level in five and a half years lowered the country’s import bill, overshadowing a contraction in overseas shipments, lifting the outlook for Asia’s third biggest economy.
The country posted a trade deficit of USD 9.43 billion in December, compared to USD 16.86 billion in November, government data showed on Friday.
Exports shrank 3.77 per cent to USD 25.4 billion in December 2014, year on year, reversing a 7.27 per cent uptick in November, a sign that a global slowdown amid Europe stagnation, Japan recession and China woes are sapping the appetite for overseas Indian shipments.
However, imports fell by 4.8 per cent to USD 34.8 billion in December 2014, year on year as the value of oil imports slumped by 28.6 per cent to USD 9.94 billion reflecting a slump in global crude prices.
A dip in oil prices is a boon for the Indian economy, given that the country relies on imported crude to meet 70 per cent of its consumption needs. A lower import bill owing to falling oil prices will cut the country’s current account gap and the fiscal deficit amid a diminished subsidy burden, reducing inflationary pressures, and paving the way for further interest rate cuts.

BJP gives thumps up to RBI rate cut move 16/01/2015

BJP gives thumps up to RBI rate cut move
16/01/2015 12:30
According to media reports, the BJP has hailed the Reserve Bank of India’s (RBI) surprise move on Thursday to cut interest rates as softening inflationary pressures left ample room for the central bank to shift its focus on shoring up growth and reviving the investment cycle in Asia’s third biggest economy.
The BJP stressed that the decision by the apex bank to lower borrowing costs will help bolster economic growth, supporting the aggressive reform measures undertaken by the Modi government in recent months.
“It is a positive and welcome step by RBI. This is the result of the initiatives taken by the NDA government led by Prime Minister Narendra Modi to bring the economy on the path of revival after controlling prices. This is the beginning of the good days that are ahead for India's economy”, BJP’s national secretary Shrikant Sharma said in a statement, the PTI reported.
“The step will not only help provide relief to the common man through reduced EMIs but also help the economy grow and bring in investments," he added.
The RBI cut the repo rate by 25 basis points to 7.75 per cent, signaling the beginning of the rate-cut cycle.
Despite a slight uptick to 5 per cent in December 2014, retail inflation remains within the RBI’s 6 per cent target for January 2016, while wholesale inflation stood at a muted 0.11 per cent in December 2014 after standing at 0 per cent in November 2014, boosting the case for further monetary easing.

"States need to do their bit for India's economic growth" 16/01/2015

"States need to do their bit for India's economic growth"
16/01/2015 00:41
Making a strong pitch for foreign investments, Union Railways Minister Suresh Prabhu said the states should play a major role in the growth of the country's economy and creation of jobs, reported PTI. The Minister said Union government would extend all support to the states and they should focus on specific sectors in which they are strong. "We need partnership between federal government and state governments. The real growth will come from states...All the aggregate number of states finally becomes the growth number of the country. So, we have decided to make all states of India as partners for growth," he said here while inaugurating CII's Partnership Summit. Prabhu said NITI Aaayog has been constituted keeping in mind the importance of states. Speaking at the event, Commerce and Industry Minister Nirmala Sitharaman also sought domestic and foreign investments in states. She said Prime Minister Narendra Modi's 'Make In India' campaign mainly focuses on states. "Emerging economies' strengths lie in the states. We need to identify the steps taken at the state level and also to ensure that action on 'Make in India' is not restricted only to Delhi. 'Make in India' should happen in the states. In Rajasthan, we have identified the intrinsic strength of the state and we are focussing on that," Sitharaman said. As many 51 countries, 25 trade and economic ministers and multilateral bodies like the World Intellectual Property Organization (WIPO) and the World Trade Organization (WTO) are participating in the two-day function. "The major component in this is how to partner with states. It's no longer to give directives and allocate funds on the basis of some central directive but it is going to work with the states to find out not only to hand holding but to become a partners of states and develop the states in a significant way," Prabhu added. Talking about investments in India, he said that India provides huge opportunities for investments in areas such as infrastructure and logistics. Railways, shipping, road and aviation sectors have huge potential for private sector investments. "India needs huge investments in infrastructure sector. We need about 10-11 per cent of GDP in this sector. Private sector investments is very important.... We need partners from other parts of the world and so many are present here," he said. Expressing hope for early implementation of the Goods and Services tax, he reassured the investors that the government would not apply tax laws retrospectively. Sitharaman said 'Rajasthani' diaspora should act as brand ambassadors within the various consulates and missions abroad in certain key sectors where the state has maximum potential.

Non-payment of Dabhol project dues worries banks 16/01/2015

Non-payment of Dabhol project dues worries banks
16/01/2015 12:22
Bankers have expressed concern over the non-payment of dues from Dabhol power project in Maharashtra with the plant being shut since October 2013 on account of severe gas shortage, said the media report.
According to the reports, Banks have an exposure of Rs 8,500 crore in Dabhol power project, also known as Ratnagiri Gas and Power Private Ltd (RGPPL). The project has been facing difficulty due to non-availability of gas and dues to banks are not being paid by the company on time.
According to sources, bankers have raised concerns over non-payment of dues and want Finance Ministry to allow conversion of their debt into equity as a short term measure.
As part of the long term strategy, the government may use LNG and gas pooling. In the proposed gas pooling, state-run GAIL will ensure availability of LNG to RGPPL at USD 10 per unit, starting this month.
According to a report, the government is likely to hold a meeting of all stake-holders to resolve the issue of non-payment of dues from the crippled Dabhol Power Project which has been closed for a long time due to fuel shortage.

Expert reckons textile machinery market to double in 7 years 16/01/2015

Expert reckons textile machinery market to double in 7 years
16/01/2015 11:29
India's textile machinery industry is likely to grow two-fold in the next 7 years, buoyed by new projects and emphasis on setting up textile parks, said the media report. It is expected to rise double to Rs 45,000 crore in the next 7 years from the present Rs 22,000 crore, according to India ITME Society. "The growth in the sector and upcoming new projects along with government's initiative to set up textile parks may boost the textile machinery industry. The market size of the sector is set to double to Rs 45,000 crore in the next 7 years from the present Rs 22,000 crore," India ITME Society Chairman Sanjiv Lathia told media. Textile machines are used in fabrication and processing of fabrics, textiles, and other woven and non-woven materials. The industry witnessed a growth of 8-10 per cent to Rs 22,000 crore in 2014 from Rs 20,000 crore in 2013. The Modi government's Make in India programme is also expected to help the textile sector by way of increase in demand for modern machineries, Lathia said.

Centre plans to invite bids for 4-5 UMPPs this year 16/01/2015

Centre plans to invite bids for 4-5 UMPPs this year
16/01/2015 00:49
A week after scrapping the bidding process for two ultra mega power projects (UMPPs) in Tamil Nadu and Odisha, Union Power and Coal Minister Piyush Goyal said the government will invite tenders for at least 4-5 UMPPs over the next one year, reported PTI. The government cancelled the bids for the two proposed 4,000 mw plants due to tepid private sector response and funding issues raised by bankers. "The Odisha project was scrapped due to problem of the coal company and electricity company being two different entities which is not permitted in the current scheme of things, while the other one received only one bid from state-run NTPC. "Since we believe that there should be competition to ensure that consumers get the benefit of lower tariffs, we scrapped both of them," Goyal told reporters. He said the ministry has set up a new expert committee that will take into consideration all the view points of all stakeholders and only then new biddings process would start. "We are reviewing the entire situation. We are consulting experts. We hope to invite bids for at least 4-5 UMPPs in the next one year," Goyal said. Currently, only two UMPPs are operational -- the 4000-mw Mundra UMPP of Tata Power in Gujarat and the 3,960-mw Sasan UMPP of Reliance Infrastructure in MP. Private companies, including Adani Power, CLP India, Jindal Steel & power, JSW Energy, Sterlite Energy and Tata Power were in the fray for the Tamil Nadu plant. Of these, four bought the request for proposal document but decided not to go ahead further in the process. The Odisha UMPP saw nine bidders, including Adani Power, CLP India, GMR Energy, Jindal Steel & Power, JSW Energy and Sterlite Energy. However, after private companies backed out, only NTPC and National Hydroelectric Power Corporation (NHPC) were left for bidding. Goyal further added the government is also taking steps to increase coal production to 1 billion tonne by 2020. "We will be investing in setting up new rakes for evacuation of coal as well as in technology, equipment modernisation and efficiency measures. Already the production of Coal India has increased 15.8 per cent between June and November 2014 compared to same period in 2013. "Besides, power generation has also increased 50 per cent during the period against June-November 2013," he added.

RBI permits banks to act as insurance brokers 16/01/2015

RBI permits banks to act as insurance brokers
16/01/2015 00:24
Seeking to increase insurance penetration in the country, the Reserve Bank allowed banks to act as brokers for insurers, set up their own subsidiaries and also undertake referral services for multiple companies. "Banks may undertake insurance agency or broking business departmentally and/or through subsidiary,...," RBI said in the guidelines for entry of banks into insurance business. The banks have also been allowed to set up subsidiaries and joint venture companies for undertaking insurance business with risk participation, it said. They can also act as corporate agents without seeking prior approval from the RBI. However, they will have to comply with IRDA guidelines. Under existing bancassurance guidelines, a bank can act as a corporate agent and sell policy of only one life insurer and one non-life insurance company. The new guidelines allow banks to act as brokers permitting them to sell insurance policies of different insurance companies. The guidelines follow an announcement made by the former Finance Minister P Chidambaram in 2013-14 Budget. "Banks will be permitted to act as insurance brokers so that the entire network of banks' branches will be utilised to increase the penetration of insurance," the Budget had said. There are about 87 commercial banks in the country with 1.2 lakh branches across the country. There are 52 insurance companies operating in India; of which 24 are in the life insurance business and 28 are in general insurance business. In addition, GIC is the sole national reinsurer.

Pre Session- Sensex may open flat amid mixed Asia trend 16/01/2015

Pre Session- Sensex may open flat amid mixed Asia trend
16/01/2015 08:47
The key domestic benchmarks are likely to open little changed today tracking a mixed trend in Asian markets and a fifth straight bearish closing at Wall Street overnight as investors digested disappointing bank earnings and the Swiss National Bank’s decision to suddenly scrap its commitment to keep the franc above 1.20 per euro which led a flight from risky assets. China’s Shanghai Composite rose amid hopes of further monetary easing by policymakers to spur growth in the world’s second biggest economy. Hang Seng fell while Japan’s Nikkei 225 was trading lower as a stronger yen dimmed the appeal of exporter stocks. Back home, the Sensex may continue to be supported by the Reserve Bank of India’s (RBI) surprise decision to cut interest rates yesterday amidst softening inflationary pressures to help spur a revival of the investment cycle in Asia’s third biggest economy. Investors will eye December quarter earnings numbers from Wipro and Reliance Industries Limited today.

Top traded Volumes on NSE Nifty – State Bank of India 30729523.00, IDFC Ltd. 20033708.00, DLF Ltd. 17725500.00, ICICI Bank Ltd. 15148172.00 and Hindalco Industries Ltd. 10860317.00.