สรุปข่าวเศรษฐกิจอินเดียประจำวันที่ 11 เมษายน 2556
Thailand to verify gold jewellery export to India
Thailand has agreed to undertake due verification of the Certificates of Origin on gold jewellery being exported to India, sources said.
Concerned over the rising current account deficit (CAD), India’s commerce ministry had in February sought suspension of gold jewellery imports from Thailand till the time the Certificate of Origin issued by that country was verified to India’s satisfaction.
The certificates from Thailand showed a value addition of nearly 22 % to take benefit of preferential trade with India under the Early Harvesting Scheme (EHS) but the actual value addition was not more than two to three per cent, in tune with market norms. Import of gold jewellery from Thailand attracts a concessional duty of only 1 % under the EHS, a bilateral agreement. India imposes a 10 % tax on imports from other countries.
(Sources: Financial Express, Business Standard, Smart Investors, EXIM News)
Telecom, defence to lead FDI drive, govt may allow foreign companies to hold at least 49% equity
The government may begin its much-anticipated drive to liberalize foreign investment norms by allowing 100% FDI in telecom and raising the sectoral limit in defence production to 49%, even as it considers a proposal to let foreign companies hold at least 49% equity in any sector.
At present, foreign companies can only invest up to 74% and 26%, respectively, in the equity capital of telecom and defence companies, but a government official said inter-ministerial discussions have begun on raising the caps on these sectors.
FDI inflows have declined a whopping 34% in 2012-13 to $22.78 billion as investor confidence in India has nosedived. The worsening current account deficit situation has, however, imparted a sense of urgency in the government as it is felt that higher foreign investment inflows are necessary to curb the deficit.
(Sources: Economic Times, Indiatimes, Worldnews, the Hindu, Moneycontrol)
Tracking CPI inflation is more important than WPI: Morgan Stanley
Amid a debate over which price index is a better indicator of inflation — consumer price or wholesale price — Morgan Stanley has cast its vote in favour of the retail price one, at least for now.
It predicted the consumer price index (CPI)-based inflation would fall by 3.9 percentage points to around seven per cent by March 2014 from 10.9 % in February 2013. Besides, it noted a substantial reduction in CPI inflation is needed for any sustainable cut in interest rates.
A report by Morgan Stanley Research on India Economics said tracking CPI inflation was more important in the present cycle as WPI was not adequately capturing the underlying inflation pressures in the economy.
(Sources: Business Standard, Smart Investors, Money Life, News Now, Moneycontrol)
GMDC to fetch better valuation over Coal India by FY15: Report
State-run Gujarat Mineral Development Corporation Ltd (GMDC) is set to surpass country’s largest mining player Coal India Ltd on operational, financial and valuation parameters by the fiscal 2015, an analyst report noted.
However, factors such as expansion approvals, cost management and utilization of surplus cash are believed to have implications on the company’s future performance.
According to a latest report by Angel Research, GMDC has fared better over CIL mainly on the on operational and financial parameters over the years.
(Sources: Business Standard, Smart Investors, Money Life, News Now, Moneycontrol)
After worst 12-year drop in FY13, SIAM sees muted car sales in FY14
Passenger car sales, which have already recorded the sharpest drop in the last 12 years in FY13 at 6.69%, are expected to remain subdued for most of the current fiscal on the back of depressed consumer sentiments, uncertain economic growth and rising ownership costs. The growth in car volumes in FY14 is likely to remain at 3-5%, while the overall industry volumes may rise by 6-8%, Society of Indian Automobile Manufacturers (SIAM) said on Wednesday in its annual business forecast.
A continuation of the strong demand for diesel vehicles is expected to push utility vehicle (UV) sales, boosting the total passenger vehicle (PV) segment by 5-7% in FY14.
Two-wheeler growth is expected to be 6-8% in FY14, led by a strong demand for gearless scooters. This is compared to a 2.90% rise in volumes in FY13, where bike sales had been flat but scooter volumes were up 14.24%.
(Sources: Economic Times, Indiatimes, Financial Express, India Everyday)
OECD suggests weakening of growth in India
Paris-based think tank OECD yesterday said that leading indicators point towards weakening growth in India though it forecast rapid recovery in rich nations, including those in euro-zone.
"The CLIs (Composite Leading Indicators) for the United Kingdom, Canada, Brazil and Russia point to growth close to trend rates while the CLI for India indicates weakening growth," the think tank said.
CLIs, which include various parameters, are designed to anticipate turning-points in economic activity relative to trend. They point to growth picking up in major economies.
For India, the CLI slipped to 96.8 in February from 97.1 % in January. The OECD's assessment is contrary to projections of the Indian government which expects growth to improve to over 6 % in 2013-14 from 5 % in the previous financial year.
(Sources: Economic Times, Reuters India, Zeenews, Business Standard, Indian Express)
Uttar Pradesh takes PPP route to fix power woes
The ailing power sector in the state got a major boost on Tuesday with the UP government gearing up to privatize the power distribution system in at least four major cities — Ghaziabad, Kanpur, Meerut and Varanasi.
The privatization will be done under the public-private-partnership (PPP) model. Under the PPP model, the state government will set up the infrastructure and the private firm will take care of power distribution and revenue realization.
(Sources: Financial Express, Infraline, Daily India News, India Everyday, Rediff News)
Economic Section
Royal Thai Embassy