Twitter takes potshots as Housing.com's Rahul Yadav may or may not have resigned again

Close to the heels of his rather unceremonious resignation letter two months ago, Rahul Yadav, CEO of the online real estate start up Housing.com has reportedly quit again, Economic Times said on Thursday.

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In May, when Yadav had put in his papers, the board had refused to accept his resignation and convinced him to stay on, despite his accusation that the board and the company's investors were not "intellectually capable enough". However, this was meant to be short lived, as it is now rumoured that this time the board has decided to take the fateful step and call it a day on the Yadav episode, ET quoted sources in the know.The Economic Times report has also quoted an email sent by Yadav to his board: "Thanks for the quick resolution. Do let me know wherever you guys need my help. Also, given my zero shareholding and not being CEO, I don't think I need to be on the board as well."

Housing.com has denied the rumour, however Economic Times maintains that it has the aforementioned email. 

Rahul Yadav's earlier resignation letter had caused quite a stir on Twitter, with rather witty tweets filling up the day. While we wait for a confirmation on the matter, Twitterverse is having a field day thanks to Yadav, again!

Source - DNA 

Brokerage cashbacks shouldn't tempt you to trade recklessly

We have all heard how the magic of cashbacks worked for card offerings in the country. It was later adopted by online retailers too. The same magic potion is now being served by stock brokerage  houses in the country to lure investors into the stock markets during the testing times.

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Motilal Oswal Securities is offering a 50% cashback on brokerage and Kotak Securities too is offering a 50% cashback on brokerage to its Pearl Account customers, which is meant for women investors. Axis Securities has been offering a Rs 500 cashback on brokerage to its existing customers for a successful referral.Other firms such as SMC, RK Global, Zerodha too have been running cashback campaigns. The cashback mania is working so strong that a duo who had initially launched forexcashbackrebate.com, also initiated stockcashback.com.

Elaborating on motive behind launching stockcashback.com, Susanta Saren says, "The whole idea was to reduce trading cost and to make substantial savings without affecting the trading conditions. Cashback is mainly helpful for investors/traders who trade on a regular basis. It always increases a trader's bottom line and often even make the difference between profit and loss."

Presently, they offer cashbacks on their platform for seven stock brokers, Saren says.

Arun Choudhry, head – online and retail channel at Motilal Oswal Financial Services, says "If you look at the market cycle, typically investors are apprehensive about seeing the ups and downs in the market. The cashback offer is to entice the customer to try our services. The restriction of offering cashback is hence capped for the initial 30 days and at the max two months in select cases."

Most brokerage houses club the cashback offer with lower or zero demat account opening charges and hence seem to be targeting fresh customers. These cashback are offered for a limited time period of 30-90 days. Some credit the cashback on a monthly basis and few credit the cashback only after four months.

The web aggregator has seen some traction as it also offers cashback to existing customers for referring friends to the platform.

Saren says, cashback coupled with low brokerage is a win-win strategy. But today many push for price and do not think about service and platform connection. "Our aim is to guide investors in choosing the best broker and help them bag savings."

Established brokerage firms too have been seeing invetsors trickle in thanks to cashback campaigns. "We are seeing some kind of interest, when we are running the cashback offers, but not an enormous spurt in account openings that can be pinned to cashback offering," says Choudhry of Motilal Oswal Securities.

Though Motilal Oswal has been offering the cashback on brokerage for limited time period over the past two years, Choudhry says, "For us cashback isn't a business proposition as lower brokerage has never been our strategy."

The advertisements and deal offerings scream "50% cashback". However, the actual cashback amounts are restricted just like the credit card offerings. While Kotak Securities has a ceiling of Rs 2500, SMC Online restricts it at Rs 1500, Axis Securities has a limit of Rs 500 per successful referal. Though Motilal Oswal Securities does not specify any maximum cashback limit, it states, "Cashback will be available only on those accounts where minimum brokerage generated is Rs 1000."

Cashback has the power to fetch you discount initially on the brokerage amount. But you should not ignore other factors in the lure of cashback and free account opening. For instance, a customer who opted for a brokerage account based on cashback said, "The firm doesn't provide services that others brokers do like credit limit to trade, cheque pick up and drop, insights and advisory."

One should zero down on a brokerage house based on several factors. Deven Choksey, MD of KR Choksey Securities recommends, "Instead of looking for cashbacks investor should focus on value added services provided by the brokerage firm. This is because the investment portfolio stays for long-term. Though most investors today know how to invest, they are most confused about where to invest and hence they should be asking for advisory services, which offer better execution and research instead of cheaper brokerage."

He says that often lower brokerage would mean that you would be forced for a higher turnover and you lose your capital. "You gain in equity only if you retain your portfolio for a longer period of time and not if you churn it frequently," Choksey adds.

Keep an eye on the account closure charges and terms before opting for a cashback-offering on demat accounts.

source - DNA

UAE property market set to decline: S&P

The UAE"Stronger capital structures and good revenue mixes should allow issuers to withstand headwinds over the next 12-24 months," the report added.

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The agency said that after reaching a peak last year, the UAE property market will soften in 2015 and early 2016.

"The market is facing a turnaround in operating conditions that is likely to dampen performance," said S$P, adding that the sharp decline in oil prices will markedly impact UAE economic growth.

"We believe real estate companies in the UAE are better armed to deal with the current slowdown and should be able to absorb it with limited ratings impact," said S&P credit analyst Franck Delage.

Prime Minister Sheikh Mohammed bin Rashid al-Maktoum said yesterday that the UAE expects strong growth this year after its oil-rich economy expanded by 4.6% in 2014.

He noted that the non-oil sector grew 8.1% in 2014 and that its contribution to the economy had reached 68.6%.

The fourth largest OPEC supplier was hit hard by the global financial crisis, strongly dampening economic growth which averaged just 1.5% between 2007 and 2011.  property market is set for a soft correction after three years of sharp rises but a crisis is ruled out, Standard & Poor's ratings agency said on Monday.

A report said additional supply and lesser demand on the United Arab Emirates property market his year is likely to result in a 10-20% correction in Dubai residential real estate prices.

The S&P report stressed this would be much less than the 2009 bubble.

"The diversifying economy, positive demographics, and protective measures from local regulators should help prevent a crisis like that of 2009," S&P said.

Source - DNA

Insuring your property with your home loan lender is not mandatory

"I am taking a home loan from XYZ Bank. They are forcing me to buy propertyinsurance from them claiming it is mandatory as per RBI rules. Is that true and should I buy the property insurance from them or can I explore from the market also?"

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These kinds of queries have become very common as banks seek to protect their interests while giving a home loan as well as to earn commissions on the insurance products that they sell. But one thing is very clear. There is no requirement by the Reserve Bank of India (RBI) that any kind of insurance needs to be mandatorily taken at all while taking a home loan from a bank.The use of the regulators' name is clearly mis-selling. At the same time, there is no prohibition on the banks either to make internal guidelines that home loan consumers have to take certain kinds of insurance (including property insurance) before the loan can be disbursed. But this becomes the particular bank's internal requirements. Most, but not all, banks require you to take a term insurance and property insurance while taking a home loan.

Again, these banks cannot officially insist on buying these policies only through them. They have to allow you to buy similar policies from the open market and assign it to them. The prohibition against compulsory linkage of insurance product to be bought from them to loans being granted by them is not really being followed by them due to the high commissions involved in insurance products.

Before we get into what you can do when faced with this arm-twisting situation from your lending bank let's take a quick look at the type of insurance on offer.

First is a term insurance where the insurance companies pay off the loan to the lender should the borrower die while the loan is still outstanding. This is an excellent insurance to have when taking a home loan. Second is property insurance where the loan amount will be paid off by the general insurance company should anything happen to the property due to natural calamities such as earthquake, flood, etc. Again an excellent insurance for you to have.

Less common is critical illness and accidental disability insurance which pays off the loan to the bank should the borrower suffer from a debilitating disease or a permanent disability due to an accident. Once again this is an excellent insurance for you to have.

Thus, it is in your own interest to take such insurance policies when you take a home loan. What makes it an issue is the fact that you are arm-twisted into buying it through the bank itself without being allowed to buy from the open market as well as the fact that the bank's insurance policies tend to be much more expensive than comparable policies bought from the open market. This is particularly true of the term life insurance policy and the disability policies though the property insurance tends to be competitively priced.

There is a certain convenience attached to buying the linked policy offered by the bank and, if after your research from the open market, you find that the price is only marginally higher you can go ahead and accept the insurance policies from the bank. Otherwise just let the lender know that you will complain to the banking ombudsman about the compulsory linkage of the insurance policy. In most cases, this will make the lender drop his insistence on buying the policy through them only. You can also move your business to another lender as there is stiff competition in the home loan market. If you are already at an advanced stage with the lender and do not have the time to go through these negotiations then you can always buy the policy and return it during the free look period of 15 days. The insurance company will have to return the premium to you after a few deductions. Of course, make sure you are adequately insured before you exercise this option.

To summarise, make sure that you are adequately insured when you take a home loan though you can always work out ways of reducing the insurance cost.

Source- DNA India

Rupee bounces back, firms up 10 paise against dollar

Recovering from a 21-month low, therupee strengthened 10 paise to 64.16 against the US dollar in early trade at the Interbank Foreign Exchange on selling of the American currency by exporters and banks.

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Forex dealers said a higher opening in the domestic equity markets and dollar's weakness against other currencies overseas supported the rupee.

The rupee had lost 10 paise to close at 21-month low of 64.26 against the greenback in yesterday's trade on sustained demand for the American currency from banks and exporters amid foreign capital outflows.Meanwhile, the benchmark BSE Sensex rose 170.86 points, or 0.64%, to 26,857.37 in early trade today. 

Source - DNA

India looking to expand industrial presence in South East Asia: NSIC

National Small Industries Corporation Ltd (NSIC) has said it is looking at areas of mutual cooperation between Indian and Singaporean enterprises to expand India's industrial presence in South East Asia.

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"We would like to see if there are areas of mutual cooperation whereby Indian and Singaporean enterprises can have relationships. We would like to build that type of relationships," NSIC chairman and managing director Ravindra Nath said.

As facilitator, NSIC would want to see collaborations between Singapore and Indian enterprises, involving training from either side, sharing of knowledge, expertise and machinery as per requirements of the two parties.He said NSIC has already initiated similar discussions with enterprises in Vietnam and Malaysia.

NSIC, a Government of India Enterprise under the Ministry of Micro, Small and Medium Enterprises (MSME), has been working to fulfill its mission of promoting, aiding and fostering the growth of small industries and industry related micro, small and medium enterprises in the country.

"We are gradually expanding into South East Asia," Nath told PTI at the 'Make In India: Global Business Summit 2015', held yesterday.

For NSIC, it is a role of facilitator in matching MSMEs with those in South East Asia.

The NSIC is adopting its "successful model" applied in building relationships between Indian and African enterprises, which include exports of India-made machineries, expertise, technologies and training for setting new enterprises, mostly in developing economies.

Source - DNA 

Shareholders question Mukesh Ambani on loss-making media business, dividend

RIL chairman Mukesh Ambani had to face a barrage of questions from the shareholders today, mainly on the plunging price of the bellwether stock and on the loss-making media business, among others.

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The shareholders were equally upset with Reliance Industries' increasing focus on non-core areas (media, retail, telecom that have been cash guzzlers for the past three years with no operations) and its reluctance to pay dividends even as it sits over Rs 2.14 trillion in cash reserves, according to one shareholder.

Besides, the company has Rs 84,000 crore in cash piles, which is over 60 times its paid-up equity capital.Meanwhile, the 41st annual general meeting of the country's largest private sector corporate here today also marked the formal presence of Nita Ambani, the wife of Mukesh Ambani and chairperson of Reliance Foundation, as she was recently inducted into the company's board as an independent director to meet the regulatory demand.

The AGM was also conspicuous by the absence of Ambani's mother Kokilaben Ambani.

Most of the nearly 50 shareholders who spoke at the AGM were worried over the steep fall in the price of RIL share, which closed 1.4% up today at Rs 889.15, against the benchmark Sensex gaining 0.21%.

But this is a whopping over 25% down from the 52-week high of Rs 1,112.95 on this day last year.

Even on a day when the Sensex hit the life-time closing high of 30,024.74 points on March 4, 2015, the RIL counter plunged 1.6% to Rs 886.95.

It can be noted that the RIL counter, which for many years had the highest market capitalisation at over Rs 4 trillion, is way below that peak for many years, and is far behind the newbie TCS, which has been maintaining over Rs 5 trillion in m-cap for more than a year now.

As on today, RIL's m-cap stood at Rs 2,87,768 crore which is the second highest, while that of leader TCS was Rs 4,92,042.3 crore as the scrip shed 2.3% today on the BSE. 

Many investors also complained that the company has not been not offering any bonus shares or dividends for many years now, citing large capex.

During his address, Ambani said the board will take a call on share buyback/issuing bonus shares or paying large dividend as the company is nearing its capex cycle of over Rs 3 trillion in the petrochemical and telecom businesses.

Source - DNA 

Reliance to invest Rs 2-lakh crore in oil biz; 4G launch by December: Mukesh Ambani

Reliance Industries will begin commercial operations of its much-awaited 4G telecom services by December, while it plans to complete projects worth over Rs 2 lakh crore in the core oil and petrochemical businesses over the next 12-18 months, Chairman Mukesh Ambanisaid today.

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"This will place Reliance in a select group of most valuable companies in the world," he said, addressing shareholders at the Annual General Meeting of Reliance Industries Ltd (RIL), which also operates the world's largest crude oil refining.

The billionaire industrialist also unveiled a roadmap focused on adding capacity in core businesses and expanding rapidly in new ventures like retail and telecom.

Over a third of Ambani's more-than-one-hour-long speech was focussed on RIL's plans to use the 4G or fourth-generation telecom technology, also known as LTE or Long-Term Evolution, to offer wireless broadband as well as voice services.

Targeting 100 per cent national coverage within the next three years, Ambani said the 4G LTE smartphones will be brought to India at a price less than Rs 4,000 by December.

These phones will beam HD television, video on demand, music, news and magazines, he added.

The group's telecom arm Reliance Jio has applied for a pan-India cable television multi-system operator (MSO) license and plans to enter into broadcast TV distribution, Ambani said. announced. Besides, it has has partnered State Bank of India to apply for a payments bank license. 

Reliance Jio, which had acquired Infotel Broadband Services within hours of that company winning nationwide wireless broadband licenses five years ago, has become the first operator to achieve wireless coverage far in excess the rollout obligation as per its license conditions, Ambani said.

Stating that the company was in the pre-launch testing and stabilization phase of the large and complex network, Ambani said extensive beta launch involving "millions of friendly customers across all markets" will be initiated over the next few months.

"This beta program will be upgraded into commercial operations around December of this year," he said.

"I am glad to announce that financial year 2016-17 will be the first full year of commercial operations for Jio." Ambani said Reliance is investing over Rs two lakh crores in building new facilities and creating new businesses that will come to fruition in the next 12 to 18 months.

"These investments will build new capacities, strengthen our global positions, improve the return on capital and make our existing refinery and petrochemical businesses among the most competitive in the world," he said. Looking to reap full benefits of these investments from the financial year 2016-17 onwards, Ambani said RIL would have a unique portfolio of globally competitive petrochemical and refining business with a new age India-centric consumer business with very high growth potential.

Source - DNA 

Air India loses Rs 5400 crore this year, misses most milestones; Govt clueless on turnaround

The government has asked SBI Capital Markets to review Air India's Turnaround Plan (TAP) and submit a report to it within three months, a move which comes following "drastic changes" in the ground situation in the last three years.

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"The Ministry feels that the situation in the aviation industry has undergone sea change since 2012 when Air India's TAP was put in place for ten years and this requires a revisit of the plan," they said.

The SBI Cap has been mandated for this purpose and would submit it reports in three months to the government on the way forward for the national airline, they said.

Also, an Air India Board member had, in April, pitched for a complete re-look of the plan, citing changing micro-economic situation. "What you actually need is a complete re-look at the airline's revival plan," an Air India Independent Director had told PTI.

The government had come to the rescue of the carrier on the conditions that it would achieve certain targets in absolute numbers like seat factor, number of aircraft in the fleet, on-time performance and revenue among others in each year, the sources said, adding that the carrier has not yet met most of these "milestones."

"Moreover, the plan had not envisaged the Jet-Etihad deal as well the entry of new operators like AirAsia India and Vistara on the horizon as well as the oil prices, which declined by 39% also fiscal," they said.

Besides, the delay in the creation of two separate subsidiaries - one for the engineering and MRO and other for the ground-handling - have also resulted in Air India failing to achieve the desired results, the sources said.

"Even the asset monetisation programme, under which the national carrier was expected to mop up Rs 5,000 crore over a year's horizon has not yet taken off. At the same time, the induction of the narrow body 320 planes in the fleet was also delayed," sources said.SBI Capital Markets, which is the investment banking arm of public sector lender SBI, has been asked by the Civil Aviation Ministry to carry out a thread bare analysis of TAP, which the erstwhile UPA dispensation had approved for the carrier in 2012, entailing a Rs 30,000 crore bailout package with certain riders, sources said today.

Source - DNA

Swiss prosecutor drops money laundering probe at HSBC, bank to shell out $43 million

Swiss authorities have closed an investigation into allegations that HSBC's Geneva branch helped clients for money laundering after the bank paid $43 million for organisational weakness.

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Indian officials are reviewing the development, but denied any major impact on domestic legal proceedings.

"We ended the procedure following a deal with the bank, which will pay 40 millionSwiss francs ($43 million, 38 million euros)," Olivier Jornot, attorney general in the Swiss canton of Geneva, told reporters.HSBC's Swiss private bank is being accused for suspected to have secret accounts of wealthy customers who had evaded tax in India and elsewhere. Indian tax officials have finalised the tax assessment of 628 HSBC cases. As per Indian tax authorities, more than Rs 6,000 crore is allegedly stashed in HSBC.

Six Indians figure among scores of foreign nationals with Swiss bank accounts, whose names have been made public by Swiss authority in its official gazette for being probed in their respective countries.

Legal experts said Swiss laws are weak, which is why the Swiss prosecutor has not been able to press any criminal charges. HSBC has not accepted any wrongdoing in this case.

Four month ago, Swiss authorities had raided various locations of HSBC private bank offices in Geneva and started a major investigation on money laundering charges and suspected tax-dodging scheme which allegedly helped rich customers launder money.

In a statement, the Geneva prosecutor's office said the bank had "rapidly agreed to begin paying an amount aimed at repairing the illegal acts committed in the past."

Geneva authorities opened the probe in February as the so-called Swissleaks scandal exploded following the publication of secret documents claiming the bank assisted many wealthy clients in thwarting the taxman.
The agreed 40-million-franc compensation would mark the largest amount ever paid in Geneva, Jornot said.

Geneva lead prosecutor Yves Bertossa meanwhile explained that "it is difficult to prove acts of money laundering. That is why we preferred to go with a negotiated solution."

HSBC hailed the agreement, saying "the investigation found that neither the bank nor its employees are suspected of any current criminal offences."

"The bank has fully cooperated with the investigation throughout and will not face criminal charges," it said in a statement.

The bank insisted that it had in recent years "undergone a radical transformation," and had "implemented numerous initiatives designed to prevent its banking services being used to evade taxes or launder money."

Bertossa said no current employees at the HSBC Geneva offices would face prosecution, but did not rule out future probes of former employees.

The Swissleaks affair erupted in February following investigations by international newspapers -- led by Le Monde of France -- using stolen documents supplied by former HSBC IT employee Herve Falciani.

That data indicated the bank helped over 120,000 clients to hide 180.6 billion euros from tax authorities.

Those revelations came among growing evidence that pledges by banks to halt illicit or irresponsible activities that led up to the 2008 financial crisis have not been fulfilled.

In February the British bank acknowledged that "we sometimes failed to live up to the standards the societies we serve rightly expected from us."

Source - DNA 

Punjab National Bank, Axis Bank cut fixed deposit rate by 0.25%

Two leading banks Punjab National Bank (PNB) and Axis Bank today slashed interest rate on fixed deposits by 0.25% on select maturities, a move which could be seen as precursor to a cut in lending rates.

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The reduction will be effective from June 8, state-owned PNB said in a statement.

Private sector Axis Bank has slashed term deposit rate on various maturity by up to 0.25% effective June 9.

The decision to cut interest rate on fixed deposits comes a day after RBI reduced key policy rate.

As part of its second bi-monthly monetary policy review, RBI cut the repo rate (short-term lending rate) from 7.5% to 7.25, but left other policy tools like cash reserve ratio unchanged at 4% and Statutory Liquidity Ratio (SLR) at 21.5%.

Following policy action, several banks, including market leader State Bank of India reduced its base rate or minimum lending rate to 9.70% from 9.85% effective June 8.

Another state-owned Allahabad Bank cut base rate 0.30% to 9.95%, while Dena Bank, Punjab & Sind Bank reduced their base rate by and 0.25% each.

Dena Bank and Punjab & Sind Bank lowered their base rate to 10%. With the reduction, all loans linked to the base rate will come down proportionately.

IDBI Bank, however, has reduced bulk deposit rate, a move which is a precursor to a cut in lending rate.

Other banks are likely to follow suit in the next few days.One-year deposit would now attract a lower 0.1% interest rate to 8.3% while interest rate on 11-12 months fixed deposit has been lowered to 8% from 8.25%.

Source - DNA money

RBI sponsored survey expects economy to grow by 7.8% this year

The economy is expected to grow at a rate of 7.8% in the current fiscal, a shade lower than earlier forecast of 7.9%, says a survey sponsored by the Reserve Bank.

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"Forecasters expect real Gross Value Added at basic price (GVA) to increase by 7.8% in 2015-16. 'Agriculture and Allied Activities' and 'Services' are expected to grow by 2.2% and 10%, respectively," the survey of RBI-sponsored Professional Forecasters on Macroeconomic Indicators said.

The professionals in the latest survey viewed that the 'industry' would grow by 6.2% in the current fiscal.

The Gross Value Added (GVA) is a new concept introduced by the Central Statistics Office (CSO) to measure the economic activity. As per the CSO, it rose by 7.2% in 2014-15 compared 6.6% in the previous fiscal.

In 2016-17, the survey said that GVA is expected to increase by 8.2%, led by growth in 'services' by 10.1%.

"In terms of subjective probabilities assigned to growth projections, forecasters ascribed maximum 55 per cent chance that GVA growth in 2015-16 will be in the range of 7.5-7.9%," the findings said.

For the year 2016-17, GVA growth in 8-8.4% range is the most probable outcome, it added.

It further said the private final consumption expenditure at current prices is expected to increase by 12.7% in 2015-16 and further by 13.1% next year.

The gross saving rate is projected at 30.8% of Gross National Disposable Income (GNDI) in 2015-16 and 31% of GNDI in the next fiscal.

As per the survey, the central government's gross fiscal deficit (GFD) is projected at 3.9% of GDP in 2015-16 and is expected to moderate to 3.5% in the following year.

The combined GFD of Central and State Governments is projected at 6.5% of GDP in 2015-16 and is expected to improve to 6.2% of GDP in 2016-17.

It further said that both money supply and bank credit growth expectations declined for 2015-16 in the latest round of survey. While money supply (M3) is expected to increase by 12.5% in 2015-16, bank credit is expected to expand by 13.5%.

Merchandise exports growth is estimated at 1.2% in 2015-16 and to improve to 6.2% in 2016-17.

"Current Account Deficit is projected at 1% and 1.3% (of GDP) in 2015-16 and 2016-17, respectively," the survey added.

Forecasters assigned maximum probability of 70% that retail inflation will be in the range 5-5.9% in March 2016. Based on this probability distribution, the implicit CPI inflation rate for March 2016 is expected at 5.6%.The survey released in April had projected the GVA to increase by 7.9% in 2015-16.

Source - DNA money 

WTO punches holes in India's import framework, calls it complex

India is streamlining its Customs procedures and implementing trade facilitation, but the country's import structure still remains complex, WTO has said.

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India, it said, took to self-assessment for Customs procedures in 2011 to facilitate trade, and around 97.6 per cent of imports were processed through the risk management system.

According to the sixth Trade Policy Review of India, prepared by WTO, the country has taken several initiatives to modernise its intellectual property regime (IPR) administration and continues its efforts to enforce IPRs.

Acknowledging India's support for the multilateral trading system, it said the country has historically been party to a few regional trade pacts.

"However, despite India's reservations, regionalism has increasingly become an element of its overall trade policy objective of enhanced market access for its exports. This is evidenced by the 15 agreements currently in force and its involvement in the negotiation of other agreements," it added.

It said that the simple average MFN (most favoured nation) tariff rate rose to 13% in 2014-15 from 12% in 2010-11.

"This reflects a rise in tariffs in agriculture, particularly for cereals and preparations thereof, oilseeds and fats, and sugars and confectionery," it added.

It also took note of India's WTO-bound tariff levels "much higher than the applied rates", especially for many agricultural products.

It said these gaps allow the government to modify tariff rates in response to domestic and international market conditions, but at the same time, they reduce tariff predictability.

India, the report added, continues to apply import quotas on marble and similar stones and sandalwood.

"State trading applies to certain agricultural goods, urea, and certain petroleum oils as a policy tool to ensure, inter alia, a fair return to farmers, food security, supply of fertiliser to farmers, and functioning of the domestic price support system," it said.

The report also mentioned India's recognition that structural issues act as a barrier to higher growth."Despite the implementation of these measures, India's import regime remains complex, especially its licensing and permit system, and its tariff structure, which has multiple exemptions, with rates varying according to product, user or specific export promotion programme," the Geneva-based multi-lateral organisation said.

Source - DNA money

Reserve Bank of India cuts repo rate by 25 basis points

The Reserve Bank of India (RBI) has cutrepo rate by 25 basis points as it announced its second bi-monthly monetary policy on June 2. 

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Raghuram Rajan, governor, RBI said that on the basis of an assessment of the current and evolving macroeconomic situation, it has been decided to reduce the policy repo rate under the liquidity adjustment facility by 25 basis points from 7.5% to 7.25% with immediate effect. 

The Bank had held on to repo rate during the first bi-monthly policy earlier this year but has already cut rates twice this year. 

This is the third repo rate cut of 25 basis points each since January 2015. 

The repo rate in the beginning of the calendar year stood at 8% and has now been brought down to 7.25% after three cuts. 

Industry bodies like Assocham, too, had asked for a 25 basis points cut from the RBI. 

Minister of State for Finance Jayant Sinha, last week, had said that he hoped RBI would cut key interest rates as the Indian economy is improving and the macroeconomic stability provided by the government asks for a favourable responses from RBI. 

Rajan, in his policy statement, said, "Banks have started passing through some of the past rate cuts into their lending rates, headline inflation has evolved along the projected path, the impact of unseasonal rains has been moderate so far, administered price increases remain muted, and the timing of normalisation of US monetary policy seems to have been pushed back. With low domestic capacity utilization, still mixed indicators of recovery, and subdued investment and credit growth, there is a case for a cut in the policy rate today."He further said that the cash reserve ratio (CRR) remains unchanged at 4%. 

Source - DNA India

PM Modi speeds up capital spending in April to boost economic growth

Prime Minister Modi ramped up spending on roads, railways and ruralinfrastructure in April to boost economic growth, after $19 billion in cuts brought public investment shuddering to a halt at the end of the last fiscal year.

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Modi, who completed one year in power this week, has vowed to raise public spending on infrastructure by $11 billion in the current fiscal year. At the same time, he is targeting a fiscal deficit of 3.9 % of gross domestic product, a shade lower than 4 % achieved in the year that ended in March.The government increased capital spending to 351.6 billion rupees (USD) in April, the first month of fiscal 2015/16. That is up more than 50 % from a year ago, data released by the government on Friday showed.

In the first month of the current fiscal year, the government allocated 32.89 billion rupees for railways, 58.3 billion rupees for roads and 175 billion rupees for rural projects.

Data released earlier on Friday showed the Indian economy grew 7.5 % in the quarter ended in March, faster than China. But a contraction in agriculture and a downward revision for the previous quarter indicated weaknesses in Asia's third- largest economy.

With banks weighed down by bad loans, company profits squeezed, rural demand weak and exports depressed, the government recognises it will have to take the lead to meet its jobs and growth goals.

"Front-loading of spending on infrastructure is a welcome step, though it remains to be seen what happens in the whole year," said NR Bhanumurthy, an economist at the National Institute of Public Finance and Policy (NIPFP), a Delhi-based think tank.

Fiscal deficit figures for the first month of the new fiscal year indicated that Modi's government plans to support domestic demand. Finance Minister Arun Jaitley plans to boost public investment in infrastructure and devolve more spending powers from the centre to India's 29 states.

He has abandoned costly diesel subsidies, helped by lower global crude prices, and promised to reduce corporate tax rates to 25 % in the next four years, besides cutting rates for individual tax payers.

Officials at the finance ministry, however, warned capital spending might be cut in later months if revenue collection does not pick up.

It is also not clear whether the government will reach its target of nearly 700 billion rupees from sales of stakes in state-run companies this fiscal year, a senior finance ministry official said before the release of the data.

SOurce - DNA 

India overtakes China in GDP growth rate; economists say figures may not reflect ground situation

India’s gross domestic product (GDP) grew at 7.5% during the January-March period, faster than China’s 7% in the same period, mainly on account of improvement in services and manufacturing sectors.

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For the full 2014-15 the growth was 7.3%, missing the the Central Statistical Organization (CSO) estimate of 7.4%. The  Chinese GDP expanded 7.5 % in 2014-15.  India celebrated faster growth than China in the December quarter, but on Friday the CSO sharply revised growth down to 6.6% from 7.5%, further distorting the picture.
The growth numbers are under the new GDP series, which is wholly based on profits of companies both private and public and wage increases. Some economists and even the Reserve Bank of India fear that it may not reflect the actual growth and that the higher growth rates are driven more by statistical factors. 

Investment, credit growth, job market — major indicators of a broader growth in the economy — are all still sluggish.

Pranjul Bhandari, chief India economist, HSBC, said in a note, “Is growth picking up? The common answer is: depends. Depends on who you ask, what indicators you look at and, more recently, how much you buy into the new GDP series.” “Here is a quick stab at the question. Relying on the more trusted indicators, 60% of GDP is still in the woods. Agriculture, construction, banking and public administration are not showing signs of improvement. On the other hand, the remaining 40% of GDP, comprising of manufacturing, utilities and trade/transportation, has inched up from depressed levels, though upticks are gradual at best,” Bhandari added.

The GDP growth for the entire FY15 now provisionally stands at 7.3%. The GDP growth rate for first quarter of FY15 was revised upwards to 6.7% versus an earlier estimate of 6.5%. The Q3 GDP growth was revised down to 6.6% versus 7.5% earlier. The Q2 GDP growth was revised to 8.4% versus earlier estimate of 8.2%.

Standard Chartered Bank said in a note, “Strong GDP prints in FY14 and FY15 are driven more by statistical factors after India released a new GDP series...rather than a pick-up on the ground. We revise up our FY16 GDP growth forecast to 7.7% year on year under the new series from 6.3% under the old series. Recent comments by the RBI governor Rajan indicate that the central bank will be cautious in drawing policy inferences from this data.”

Saugata Bhattacharya, economist at Axis Bank told dna, “The new series based on the profits of companies is fine and in FY16 the growth in the Indian economy may take over the Chinese economy.” “The real GDP or GDP at constant (2011-12) prices in the year 2014-15 is now estimated at Rs 106.44 lakh crore (as against Rs 106.57 lakh crore estimated earlier on 9th February, 2015), showing a growth rate of 7.3% (as against 7.4% estimated earlier) over the New Series/First Revised Estimates of GDP for the year 2013-14 of Rs 99.21 lakh crore, released on January 30, 2015,” an official statement said. 

Source - DNA Money 

Reliance Infra net falls 26% to Rs 459.11 crore

Reliance Infrastructure today reported a 26.11% drop in consolidated net profit for the quarter ended March 31, 2015 at Rs 459.11 crore, mainly due to the loss the company has incurred from its cement and Mumbai metro businesses.

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The company had reported a net profit of Rs 621.42 crore in the January-March quarter of the last fiscal.

Its total operating income during the quarter declined marginally to Rs 4,618.21 crore as against Rs 4,707.69 crore in the corresponding period last year.

"Our net profit for the quarter would have been 19 per cent higher if we exclude the loss of Rs 70 crore incurred by Mumbai Metro and Rs 55 crore in cement business during the period as well as one time gain in Mumbai generation of Rs 130 crore," its Chief Executive M S Mehta told reporters here.Its total expenditure during the quarter was almost flat at Rs 4,140.63 crore as against Rs 4,159.66 crore in the corresponding period a year-ago.

For the year, the company recorded a consolidated net profit of Rs 1,800.18 crore as against Rs 1,913.67 crore in FY14.

Its total income for FY 2015 dropped to Rs 17,198.46 crore as against Rs 19,033.68 crore in the previous year.

Total expenses during the year stood at Rs 15,120.65 crore in comparison to Rs 16,736.88 crore in the previous year.

During the year, the company incurred a loss of Rs 191 crore and Rs 115 crore on its Mumbai metro and cement businesses, respectively.

"This year has been quite good...Operations have been stable in all the businesses. Our view is that after the sluggish years in the roads sector, there has been an improvement in traffic which is a reflection of GDP growth and increase in economic activities," he said.

Segment-wise, power business contributed Rs 3,299.25 crore in revenues, followed by Rs 844.76 crore from EPC and contracts business during the quarter.

Infrastructure business garnered a revenue of Rs 201.66 crore while Rs 296.82 crore came from the cement business. 

For the year, the EPC business revenue stood at Rs 2,752 crore while road and Mumbai metro earned Rs 606 crore and Rs 136 crore respectively during the year. Cement business revenue stood at Rs 519 crore during the year.

"There has been a good progress in the power business as we are adding new customers in our Delhi and Mumbai distribution networks. The transmission segment is adding revenues to the power business," Mehta said.

The company, which was earlier conservative about its EPC business, is not keenly looking at opportunities in the segment.

"Though we continue to remain conservative in the EPC segment with a focus on small internal projects, we are now looking at opportunities in the roads sector as BOT road projects are not coming up for bidding and there are a lot of uncertainties. EPC in roads is progressing well," he said.

However, Mehta noted that unless investments kick start on broad scale, the company doesn't see EPC giving good returnsin near future.

"NHAI projects are not looking attractive at the moment. But this will not remain so and there is a need to kick start investments in the sector," he said.

Mehta said the company is also looking at EPC orders in the solar segment.

"Our focus will be on solar EPC projects as we have the expertise in the field as well as the cement business. We already have a 5.8 mtpa cement plant operational in Madhya Pradesh and we plan to add nearly 10 mtpa, with 5 mtpa each in Maharashtra and Uttar Pradesh in the next few years," he said.

Mehta further said the foray into defence manufacturing with the acquisition of Pipavav Defence and Offshore Engineering Co, through acquisition of 18% promoters stake accompanied by open offer for 26% of share capital, gives a good growth opportunity for the company.

"We have entered the defence sector at the right time given the latest announcements made by the government. The Pipavav acquisition gives us a good opportunity in the ship building segment. But we are keen on all fronts in the defence sector," Mehta said.

As on March 31 the consolidated net worth of the company stood at Rs 26,974 crore, while the gross debt is Rs 25000 crore.

Source - DNA Money

Navi Mumbai awaits another boom in real estate

With prime minister Narendra Modilaying the foundation stone for the Rs 4,000 crore special economic zone at Jawarharlal Nehru Port Trust (JNPT) on Saturday, real-estate prices in Navi Mumbai are set to rise.

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Arvind Goel, president of Maharashtra Chamber of Housing Industry (MCHI), Navi Mumbai unit, told dna that the inauguration of government-owned SEZ holds a lot of significance for Navi Mumbai.

By how much will prices rise?
Currently, a 2BHK in Navi Mumbai costs Rs 70-90 lakh. A 20-30% rise is expected. Arvind Goel, president of Maharashtra Chamber of Housing Industry (MCHI), says demand for commercial property will also go up. "There are 250 supplementary industries, directly and indirectly dependent on real-estate sector. A real-estate boom will develop them as well," he said.

When will the SEZ start?
In three years. Since land for the 277-hectare zone is already acquired and in possession of the central government, no delay is feared. Widening existing road network to 6-8 lanes and development of service are also proposed.

Will Navi Mumbai see lot of growth?
Yes. According to Goel, the Thane-Belapur belt, known as an industrial belt, is slowly turning into a service industry belt. "The property market in Pune developed immensely, thanks to the IT industry. Employment is main factor for the growth of the housing industry and cities. Similarly, Navi Mumbai will grow in the next five years," Goel explained.

Any other reasons?
Manohar Shroff, chairman of Shivam Developers, says housing and real-estate will attract lots of investors. "Developers will buy huge tracts of land in Panvel and other locations to develop townships. It's a good sign that Navi Mumbai is developing. It will become another developed city in the near future," he said.

But are there any concerns?
Real-estate expert Atul Nemade says developers should not raise prices in the name of the SEZ now. "They had done so earlier in the name of the international airport. The government should check artificial price rise, so that gullible buyers are not exploited," says Nemade.

Source - DNA India