Inflation slips to 3.36 per cent from 3.92 per cent

Inflation decreased to 3.36 per cent for the week ended 13 February. Measures taken by the government of India and central bank checked the inflation.

Previous week the inflation was recorded at 3.92 per cent. The slide in the rate of inflation brightens the chances of interest rate changes by RBI.

The anti-inflation policies by the RBI during the crucial time were proved effective. On the other hand RBI did balancing measures as the situation also demanded check on the liquidity crisis.

The inflation rate in India was once high with around 12 per cent in August last year. The fall in the inflation rate would give respite to the household economy. However, the impact of the global financial crisis is still there on the economy.

The further fiscal measures by the government of India and RBI are expected to get relief from the impact of the global slowdown.

Satyam probe: HC directive to AP Govt

The Andhra Pradesh High Court on Wednesday pulled up the Andhra Pradesh Government for the delay in providing infrastructure for the Central Bureau of Investigation (CBI) in the Satyam fraud case investigation.

Justice N V Ramana of the High Court summoned the State Home Secretary following a complaint from the CBI counsel that the State Government had not provided any facility to the investigating agency so far.

After the directive from the HC, the State Government on Wednesday assured that it would comply with its orders and provide the required facilities to the CBI by Saturday to enable the agency start its probe into the Satyam scam.

Rupee falls to 50.03 a dollar in opening trade

The fall in the value of rupees was witness in the early trade on Thursday as it traded at 50.03 against US dollar. It is expected that due to the heavy capital outflows by funds. The domestic stocke was seen weak in the early trade.

At the Interbank Foreign Exchange (Forex) market, the local currency, which last touched the 50-level on February 18, fell by nine paise to 50.03 against the greenback. The rupees had ended lower by seven paise at 49.94/95 a dollar on Wednesday.

The benchmark Sensex settled higher by over 80 points or 0.91 per cent yesterday, but dealers said expectations of a weak opening of the bourses put pressure on the domestic unit.

Cement stocks up on excise duty cut

Cement stocks, led by India Cements, on Wednesday surged in morning trade on the Bombay Stock Exchange, a day after the government announced excise duty cut on bulk cement by two per cent, according to media reports.

Cements opened up 3.06 per cent to touch an intra-day high of Rs 101. It was later trading at Rs 100, up 2.04 per cent on the BSE. This would be great sign for realty sector in India. As the service tax cut in the product would boost demand in long-run.

The government measure would have positive impact on the economy and would help companies in maintain their good financial condition in the global financial crisis. The cut in the excise is relief to the companies and the indices related to cement companies shine in India stock market on Wednesday.

India cuts excise duty by 2%

The External Affairs Minister and acting Finance Minister Pranab Mukherjee declares cut in excise duty and service tax by 2%. The cut is a major step by the government to protect the interest of Indian industries and people.

The global financial crisis has huge impact on Indian economy. The duty reductions, seen as costing the exchequer Rs 30,000 crore, come over and above the 4% cut in central value added tax announced in December, which has now been extended beyond March 31 this year.

The government has been taking measures to bail out the economy from the impact of global meltdown. Another major concern for the government is the check on the number of job losses due to the global meltdown. On Tuesday the Lok Sabha approved the cut in the excise and service tax by 2 per cent in India.

Sensex ends at 8,843.21 on weak global cues

The Bombay Stock Exchange (BSE) benchmark Sensex on Friday shed around 200 points and closed below the 9,000 level after nearly a month. The fall recorded in the market is due to the global cues.

Indian stock market and indices were in negative due to the sluggish global market factors. The broader 50-issue Nifty of the National Stock Exchange also closed lower by 52.90 points or 1.90 per cent at 2,736.45.

Analysis over the stock market would point towards the gain in the bullion market. It can be considered that there is swing of the investors from stocks to bullion market. The global financial crisis not only have impact on the companies but also on the stocks.

The loss in the value of stock or the low trading results loss for both the companies and investors. Every investor try to make profit out of their investment but the global financial forces strike their profit speculation ends in loss in the stock market.

Jobs must be protected even if it means salary cut: Pranab

"Jobs must be protected even if it means some reduction in compensation,"said Affairs Pranab Mukherjee on Friday in Delhi. It is clear signal from the minister over the impact of the global slowdown of Indian economy.

The world has been reeling under the pressure of global financial crisis and India is not untouched. The economy has been one of the worse hit alike other major economies of the world. The global financial crisis has been there and companies have been on cost cut measures.

The export sector is one of the worse hit sectors in India and the job cuts are expected more if the situation goes further downwards. Addressing national labour conference, the minister cleared the impact of the economic slowdown on India economy.

Inflation Low at 3.92%

Inflation declined to over 14 months low of 3.92% for the week ended February 7, from 4.39 per cent on the weekended Jan 31. Reserve Bank of India may consider the slide in the inflation figures as proper time for rate cuts.

The inflation rate in India was once high with around 12 per cent in August last year. The fall in the inflation rate would give respite to the household economy. However, the impact of the global financial crisis is still there on the economy.

The further fiscal measures by the government of India and RBI are expected to get relief from the impact of the global slowdown.

Gold reaches record high

Gold prices crossed Rs 15,500-level to an all-time intra-day high of Rs 15,545 but ended at Rs 15,490 on the bullion market here on Wednesday. This is the day for bullion investors.

It seems that investors have lost in the tumbling stock and indices. Only the bullion market is getting attention of the investors. Due to the global financial crisis the stock market across the globe are not in cheer mood.

The fluctuation in the demand for the dollar in the global market and the fluctuating indices of the companies sore the gold price. Following with the glod in price in India reach to new record high of Rs 15, 490 per 10 grams.

Govt moves CLB to sack boards of two Maytas companies

The Government after handing over the Satyam fraud case to CBI, on Tuesday moved Company Law Board (CLB) to supersede the boards of Maytas Infra and Maytas Properties. The two companies are of kins of Raju, the former Chairman of Satyam.

It is believed that there may be more possibility of fraud reportedly in both the companies. The government is also seeking to restrain the present directors from disposing of properties.

Company Affairs Minister Prem Chand Gupta said that CLB had been requested to "nominate government directors on boards of each company".

Central Bank says Rs 49-crore exposure to Maytas

State-owned Central bank of India has exposure of Rs 49 crore to Maytas, which is owned by Raju family, according to media reports.

The bank also expressed interest to lend to Satyam Computers, if the company approaches it for funds. However, Satyam has not appealed any bank fund, the media reports says.

Central Bank of India's Executive Director Ramnath Pradeep told to media that fund was given to an SPV co-promoted by Maytas to execute some infrastructure projects. Bank has a total loan book of Rs 81,000 crore, out of which nearly 27 per cent was contributed by its corporate portfolio.

Satyam Scam: Govt orders CBI probe

Company Affairs Minister Prem Chand Gupta told Parliament on Tuesday that the government has order the Central Bureau of Investigation (CBI) to probe into the Satyam scam.

The investigation by Serious Fraud Investigation Office (SFIO) is going on. While SEBI had interrogated Raju brothers and reportedly claimed of having enough evidences to nail them. The CBI will now look into the Satyam scam.

The government appointed board had named the CEO and CFO to run the company smoothly. The priority of the government would be to protect interest of the employees and investors of the scam hit company.

The Satyam fraud case reflects the reality of the corporate governance in India. The Satyam case is adding insult to IT sectors which has been facing the impact of the global financial crisis.

Pranab presents Interim Budget 2009-10

Minister for External Affairs Pranab Mukherjee in the Lok Sabha has presented the Interim Budget 2009-10 in Lok Sabha today. The annual budget would be presented after the general election.

While presenting the budget the Minister said India remains second-fastest growing economy in the world despite the global meltdown. Pranab presented the 6th Budget of UPA govt on vote of account, which was passed in the Lok Sabha.

The revenue deficit quadrupled due to the impact of the fiscal stimulus to various sectors, as the budget indicated. Mukherjee extended a Rs 40,000 crore relief through tax cuts to counter economic slowdown. India's economy has slipped from a growth rate of about nine per cent in the past three years, but still looks healthy compared with most developed economies, many of which are in recession.

Here are the highlights of the Interim Budget 2009-10:

• Government focused on farms, jobs, fiscal devolution
• Government spent Rs.70,000 (Rs.700 billion) crore on 37 infrastructure projects in 2008-09
• Government may consider additional fiscal measures in budget
• Government will need to return to deficit targets after revival
• Government to expand employment generation schemes
• Economy grew at 9% for three straight years
• Per capital income growth at 7.4% per annum for four years
• Investment as percentage of GDP rose to 39% in 2007-08 from 27.6%
• Gross domestic savings rate at 37.7% during 2007-08
• Foreign trade at 35.5% of GDP during 2007-08
• Forecasts indicate 2009 may be worse than 2008
• Refinance to banks for long term credit to infra projects
• IIFCL to refinance 60% of commercial bank loans for PPP
• FRBM targets relaxed to boost consumption demand
• Mukherjee: Steps to bring back 9% growth needed at earliest
• Mukherjee: Growth rate of exports down to 17.1% in 9 months
• Mukherjee: Need to accelerate pace of policy reforms
• Plan allocation for agriculture increased by 300% in 08-09
• India got record $32.4bn FDI in FY'08
• Defence Allocation hiked to 141,703 crore, linking it to 26/11 Mumbai terror attacks

Lalu presents Interim Railway Budget, 43 new trains

Union Minister for Railways Lalu Prasad presented the Interim Railway Budget for the first four months of the financial year 2009-2010 in Parliament on Friday.

Presenting the interim Railway Budget, Lalu said the Railway had cash surplus of Rs 90,000 crore and the surplus had raised in last five years. Railways has invested Rs 36, 773 crore in 2008-09 and more to invest in next five years, said Lalu. Railway to start 43 new trains next year.

Here are the some of the highlights:

• Railways to start 43 new trains in FY '10
• 2 per cut in all train fares
• Fares of AC and mail express cut by 2 per cent
• 4 call centers to be set up for railway inquiry
• 5 lakh people use railway facilities
• passengers grow is up 14%
• Feasibility study for bullet trains underway (6 bullet trains - Delhip-Patna route)
• Freight earning up 19 % till September last year
• Ludhiana-Kolkata freight corridor functional later this month
• Started work on Delhi-Mumbai freight corridor
• Railways to invest Rs 35,900 cr in '09
• Rs 10,500 cr kept aside to meet pension requirements

Interim Railway Budget Today

Union Railway Minister Lalu Prasad will table the interim Railway Budget 2008-09 today in Parliament. Lalu turned the Railway into profit making organization.

Lalu first presented the Railway Budget in the year 2004. His budgets have been passenger friendly in many times. It is expected from this interim Railway Budget there would not be any hike in the fares.

There are speculations over the Railway budget as there may be cut in the general fares and AC-III tier. After few hours the suspense over the Railway Budget would be unveil when the minister declares the budget in the house today.

Inflation rate dips to 4.39 per cent

India's inflation rate slides to 4.39 per cent for the weekended Jan 31 from 5.07 per cent in previous week.

The inflation rate, based on the official wholesale price index (WIP) stood at 4.74 percent for the corresponding week of the previous fiscal. The cut in the flue price by the government of India helped to down the inflation rate.

This is the second consecutive fall in the inflation. The index for primary articles fell 0.2 percent, that for manufacturing also declined 0.1 percent.

Indian economy will grow by 7 percent: Pranab

Minister for External Affairs Prnab Mukherjee said Indian economy would grow by seven per cent this fiscal.

Mukherjee was addressing 81st annual general meeting of the Federation of Indian Chambers of Commerce and Industry (FICCI) on Thursday.

He referred to the latest projections for growth by IMF that says advanced countries would shrink by 2 percent. Mukherjee also said that "India remains committed to work with its friends including the G20 for devising a new global financial structure."

In order to check in the impact of the global financial crisis the government would be looking at several avenues.

CCEA approves proposal to ease FDI norms

The Cabinet Committee on Economic Affairs (CCEA) on Wednesday adopted new guidelines for computation of foreign equity holding in Indian companies.

CCEA streamlined the methodology for calculating the total foreign investment in Indian companies. With the changes in the methodology would help Indian companies over foreign equity inflow.

Earlier there are foreign investment ceiling had been imposed in the sectors like telecom, media, aviation, banking, defence and insurance. Since, there is impact of the global financial crisis on Indian companies, the investment would be a great respite for those companies.

The easy norm for calculating the FDI in Indian companies would help to generate more investment by companies. The entirety of investment in a company by an entity that is majority owned/controlled by foreign investors would be treated as foreign investment.

Recapitalisation Package of Rs 3,800 crore for UCO Bank, Vijaya Bak and Central Bank

The government will infuse Rs 3,800 crore into three state run banks - UCO Bank, Central Bank and Vijaya Bank, in order to impove their capital adequacy, accoring to media reports.

Under the recapitalisation package UCO Bank and Vijaya Bank will get Rs 1,200 crore each while Rs 1,400 crore. The Home Minister P Chidambaram told to media persons after attending the cabinet meeting.

The capital infusion would be done in two tranches, he said, adding the first tranche would be made available during the current fiscal and the remaining in 2009-10. As part of the first tranche, UCO Bank will get Rs 450 crore, while Central Bank of India and Vijaya Bank will get Rs 700 and Rs 500 crore, respectively, in the current fiscal.

Satyam scam: ICAI submits interim report

The high power committee of the Institute of Chartered Accountants of India (ICAI) on Wednesday submitted its interim report on the financial scam of Satyam Computer Services.

In its interim report ICAI said that the restatement of accounts of Satyam is in the progress and expected it would be completed with in next two months. The other details of the report by ICAI might be disclosed in a scheduled press conference.

Satyam auditors Price Waterhouse, are also being probed for their alleged role in the financial scam. However, the restated accounts will have to be audited by Price Waterhouse, as it continues to be the statutory auditors of Satyam.

Judicial remand of Raju, four others extended till Feb 21

The 6th Additional Chief Metropolitan Magistrate in Hyderabad extended judicial remand of all the five accused in Rs 7,800-crore Satyam fraud case till February 21.

The court has extended the remand of former chairman of Satyam Raju and Satyam's former Managing Director and Raju's brother Rama Raju, former CFO Vadlamani Srinivas, Price Waterhouse's sacked employees S Gopalakrishnan and Talluri Srinivas till February 21.

Interim budget to focus on job creating sectors?

The interim budget of India to be presented in house by the acting finance minister Pranab Mukharjee on February 16. Alike all other economies of the world, Indian economy is also affected by the global turmoil.

The global financial crisis has affected all the sectors of India economy and the result is huge job loss. The loss of jobs may rise if the situation goes further wrong. Giving priority over the job losses in the economy, the government may try to adopt some measures in the interim budget.

Through the interim budget provisions the government would try to tackle the economic obstacles and global financial crisis. Many companies in India and abroad have been adopting the cost cut measures in order to keep them safe during the global financial crisis.

The government may bring a people friendly interim budget as the general election are round the coroner. However, it's a tough time for government to balance the option of popular budget and the measures to check global financial crisis.

Govt to support Labour-intensive sctors: Pranab

External affairs minister Pranab Mukherjee, who is looking after the finance portfolio, informed that the government would take more and more steps to support the labour intensive sectors.

Mukharjee also supported the Gandhian model economy and termed such model with rural focus is the need of the hour. Due to the global financial crisis, there were many job losses. Many suffered loss due to this global turmoil.

The government support is required to protect most the sectors. The export sectors is one of the worse hit among other sectors. The loss of jobs in export sector is said to be more and exporters have been expecting relief from he government in the budget.

It is expected that the government might induct more and more policies in the interim budget the to be present on February 16. Pranab will present the interim budget in the Parliament and he would try to draw a balance between populace policy and required polices in the interim budget.

Kingfisher cuts salaries of pilots by Rs 80,000

Kingfisher Airlines, the private air-carrier has effected a Rs 80,000 cut in the salaries of its pilots. This is the impact of the global financial crisis on the aviation sector.

A spokesperson of the Vijay Mallya-led airline confirmed the pay-cuts but said it was the result of a move "towards a productivity-linked compensation structure, which is the international norm", according the media reports.

Last year there were reports of lay-off and re-induction of Jet Airways employees. While it was expected that due to the global financial crisis, the aviation companies have been badly affected.

Kiran Karnik appointed Satyam chairman

Kiran Karnik has been appointed as the Chairman of scam hit Satyam Computers today. This was disclosed by the Corporate Affairs Minister Prem Chand Gupta. This is a major development in the Satyam Saga.

The appointment of the Chairman of the compnay has been declared just after one day of appointment of its CEO A S Murty. The board members of the company had declared A S Murty as the CEO of the company, who has been with the company for last 15 years.

There were reports that the detention of Raju brothers by SEBI ended today. According to media there were enough evidences about the scam with the officials.

A S Murty appointed as Satyam's CEO and Homi Khusrokhan as advisor

The six-member Satyam Computer Services board has named AS Murty as the Satyam new Chief Executive Officer (CEO) of the scam hit company. AS Murty was formerly, Head, Delivery and Leadership Development of Satyam.

The important decision was taken by the board members after having two day meeting over this in Hyderabad. The board also announced the appointment of Homi Khusrokhan, former managing director of Tata Chemicals, and Partho Datta, Murugappa Group’s former director (finance) as special advisors to the board to assist in management and finance areas, respectively.

The board today confirmed receiving bank sanctions of Rs 600 crores as a planned fund infusion towards working capital requirements.

Inflation drops to 5.07% from 5.67%

Inflation has come down to 5.07 per cent from 5.67 per cent for the weekended January 24. This is the first fall in the inflation rate after up for last two consecutive weeks.

Considering the inflation rate the RBI may take stock of its credit policy for more liquidation in the system. The WPI for all commodities recorded down by 0.2 per cent. The down in the inflation would give relief to the people.

Earlier, the strike by the transporters led the inflation to soar for two consecutive weeks. But the slide in the inflation in the last week shows the lower impact on the bottleneck in the market.

The government had cut the fuel price prices recently and expected that the cut in the fuel prices would lower the inflation further more. It is clear that the economy backs to its track of normalcy again, but the major concern would the global financial crisis.

Nasscom cuts IT growth forecast

The global financial crisis on the economy made Nasscom to cut its growth forecast of India IT and BPOs. It is expected that India’s IT and BPO export revenue would grow only 16-17 per cent during FY09 to $47 billion as against close to $50 billion estimated at the beginning of the fiscal.

Nasscom had stated earlier that total software and service revenue (domestic and exports combined) will grow by 21-24 per cent in FY09. The impact of the global turmoil all most all sectors is very high.

The global turmoil weights on the IT and BPO companies in the world including India. However, Nasscom had denied of any large lay-off in the IT and BPO sectors. Many companies have been adopting cost cutting measures in order to avoid financial crisis.

SC allows SEBI to interrogate Raju Brothers

On Tuesday, the Supreme Court has given permission to the Securities and Exchange Board of India (SEBI) to interrogate Ramalinga Raju and his bother Rama Raju in connection with the fraud in Satyam Computers.

This is the major development so far in the case. The SEBI Genernal Manger A Sunil Kumar to carry out the interrogation on February 4, 5 and 6. It is expected that more and more information over the fraud would be revealed from the expected interrogation.

The employees and investors of the scam hit company suffered huge loss as the stock of the Satyam had recorded low price in wake of the fraud. Once the price of stock fell by around 80 per cent.

However, the appointed six directors of the company by the government of India has been working to bring back the company on track. The board will soon appoint CEO and CFO for the scam hit Satyam Computers.

Mastek asks 425 staff to resign or get trained with nominal salary:ET

Mumbai-based IT firm Mastek has given 425 employees the option to resign or stay with the company and receive training. Alike other companies, Mastek adopted the cost cut measures to keep the company fit during the global financial crisis.

Most of the companies in the world have been affected due to the global financial crisis and adopting protective measures. The 425 employees, who have been given the option of resigning, are in excess of the normal bench strength and represent about 10% of Mastek’s total staff strength.

The company’s announcement came after market hours on Monday and its stock ended flat at Rs 143.75 on the BSE.

Birla Tyres resumes production in Orissa

Birla Tyres, a unit of the BK Birla group company Kesoram Industries, resumes its production from the Orissa unit in Balasore from Monday. This would a big time for the employees those were not paid during the close down.

Birla Tyres had closed down its Orissa plan temporarily till January 31 due the the impact of global financial crisis and the falling in the sales. Over 4,000 people including 2,200 regular employees are working in the Birla Tyre plant, located in Balasore, Orissa.

The company unit in Orissa has capacity of1.50 million tyres, tubes and flaps per year. The unit has been exporting around 30 per cent of its production to 43 countries in the world.

Declare dividend on per share basis: SEBI

The SEBI Board meeting held in Mumbai today and took very important steps to guard the interest of the companies and investors. The stock market and companies have been under the pressure of global financial crisis.

The Satyam Computers controversy made many investors to loose their investment. The meeting of SEBI was said to be very important. SEBI asked listed companies to declare their dividend on a per share basis only.

At present, there is no uniformity in declaring dividend. Some companies declare dividend on per share basis and some as a percentage of face value of the shares. Declaration of dividend as a percentage of face value has the potential to mislead the investors in case face values of the shares of two companies are different.

Other decision taken are:

• Timelines for bonus issues reduced
• Time frame for announcing the price band for Initial Public Offering (IPO) shortened;
• Review of preferential allotment guidelines for warrants;
• Relaxation of pricing norms - Satyam Computer Services Ltd;

Banks adopt protective measures on credit card risks

The Reserve Bank of India (RBI) has been urging the banks to lower the interest rates on their lending. While banks concern over the rise in the debts on credit cards admits the global financial crisis.

According to RBI data the outstanding loans on credit cards have increased by 73 per cent to Rs 29,359 crore at the end of December 2008 from Rs 16,951 crore at the end of November 2007.

The double digit inflation rate in 2008 and the higher interest rates on existing loans may be the major reasons for the rise in credit card outstanding. However, there is a fall in the number of credit card users.

Due to the higher interest rate on credit card outstanding and global financial crisis, credit card user have been surrendering their credit cards. The RBI data shows a that the number of of credit cards of banks rose to 28.3 million in April last year from 23.5 million at the end of March 2007 only but fell to 25.3 million by the end of November 2008.

In order to minimise the risks over the credit card dealing banks have started reducing the cash withdrawal and credit limits on credit cards. In India, ICICI Bank, the largest credit card issuer with 18 million customers. ICICI had increased the interest rate to 3.4 per cent per month (49.3 per cent annually) from 3.15 per cent (45.09 per cent a year) in June on its credit card services.

State Bank of India cuts home loan rate to 8%

The leading bank of India, State Bank of India (SBI) unveiled an offer to provide home loans to all new home buyers at a fixed rate of 8 per cent on Saturday.

This is the lowest rate offered by any bank in India. However, the fixed rate of 8% on home loans will be effective for only one year. SBI’s package comes ahead of Finance Minister Pranab Mukherjee’s meeting with public sector bank chiefs on Monday.

All customers of SBI who have already taken a loan under a special scheme, featuring an interest rate of 8.5% for a Rs 5 lakh loan and 9.25% for a Rs 20 lakh loan, will also benefit under the new offer announced on Saturday.

Gold price soars by 4.6 per cent

The gold price has been increasing in the international market. In the international market the price closed on Friday at $926. In the Indian futures market, the February contract on MCX went up by 4.47% to Rs 14,146 per 10 gram.

Investor feel the gold as safer investment, as the the global financial crisis has tumbled all the sectors. Considering uncertainty in the European market and strong dollar value the demand in the international market investors are switching to gold for investment.

Gold had breached all previous highs in the Indian physical market, with the price hitting a high of Rs 14,280 per 10 gram before closing at Rs 14,715 in Mumbai. In Kolkota, the price was at Rs 14,700 per 10 gram levels.