April -February railway revenue earnings up 8.45%

Mar 08, 2010 at 17:10

The total approximate earnings of Indian Railways on originating basis during 1st April 2009 – 28th February 2010 were Rs. 77890.29 crore compared to Rs. 718.21bn during the same period last year, registering an increase of 8.45 per cent.

The total goods earnings have gone up from Rs488.37bn during 1st April 2008 – 28th February 2009 to Rs. 52584.57 crore during 1st April 2009 – 28th February 2010, an increase of 7.67%.

The total passenger revenue earnings during first eleven months of the financial year 2009-10 were Rs. 214bn compared to Rs. 199.22bn during the same period last year, registering an increase of 7.42%.

The revenue earnings from other coaching amounted to Rs20.87bn during April 2009-February 2010 compared to Rs. 18.02bn during the same period last year, an increase of 15.83%.

The total approximate numbers of passengers booked during April 2009-February 2010 were 6780.87 million compared to 6485.20 million during the same period last year, showing an increase of 4.56 per cent. In the suburban and non-suburban sectors, the numbers of passengers booked during April 2009-February 2010 were 3520.40 million and 3260.47 million compared to 3465.88 million and 3019.32 million during the same period last year, an increase of 1.57% and 7.99% respectively

SEBI to allow physical settlement in equity derivatives

Mar 06, 2010 at 16:05

The Securities and Exchange Board of India (SEBI) has decided in principle to allow the Stock Exchanges to introduce physical settlement of equity derivatives. However, it has not set any specific timeline for launching the same.

"There has been a demand for this for some time now and the Board felt that there was some substance in this," SEBI Chairman, C.B. Bhave, told reporters in Mumbai today.

This issue would now be discussed with the stock exchanges and an appropriate mechanism for physical delivery in derivatives would be evolved, Bhave said. "There will be a need for proper risk-containment systems," he added.

The capital market regulator also permitted the stock exchanges to introduce equity derivatives contracts with tenures up to 5 years. At present, the long-term contracts in derivatives are only for three years.

"The SEBI Board felt that the time is right and we have seen volumes build-up there. Long-term contracts up to five-years will also be possible," Bhave said.

SEBI's Board also allowed the stock exchanges to introduce derivative contracts on volatility indexes which have suitable track record.

Asked about life insurers replying to SEBI's notice to them on the ULIPs issue, Bhave said that insurance companies have sent in their replies and SEBI would go through their replies.

"We will consider their replies. Any action we take will be made public--presently, their replies are under our consideration," he said.

The SEBI chairman also said that the choice remained with issuers whether to adopt the French auction route for their issuances or not. "It (French auction) is not prescribed by SEBI," he said.

China aims for 8% GDP growth in 2010: Wen Jiabao

Mar 05, 2010 at 09:45

China is targeting about 8% growth in gross domestic product (GDP), an inflation rate of about 3% and a basically stable currency, China's Prime Minister Wen Jiabao on Friday. Wen also said that China would maintain an appropriately easy monetary stance and an active fiscal policy.

"We must not interpret the economic turnaround as a fundamental improvement in the economic situation," Wen said in his "State of the Union" speech to nearly 3,000 delegates in the cavernous Great Hall of the People. "There is insufficient internal impetus driving economic growth," he added.

A top official at the People's Bank of China said yesterday that the central bank plans to stick to its moderately loose monetary policy stance while remaining vigilant against overly-fast inflation.

Wen affirmed a target of 7.5 trillion yuan of lending, down from the record last year, after property prices climbed the most in 21 months in January.

Wen indicated no roll-back in the fiscal stimulus that spurred a rebound, targeting a budget deficit of 1.05 trillion yuan (US$153bn), or 2.8% of GDP, similar to last year’s ratio. The projected deficit includes 200 billion yuan of local-government bonds.

The government pledged today to raise health and social security outlays by more than 8% in 2010 and expand pensions.

Wen warned of latent risk in China’s banks and promised to crack down on property speculation. He also cited excess capacity in manufacturing and weak support for rural-income growth. “The domestic economy still faces some prominent problems,” Wen said in his speech.

Apr-Feb direct tax collections up 7.5% YoY

Mar 04, 2010 at 18:55

Net direct tax collections during first eleven months of the present fiscal (up to February 2010) stood at Rs.2,78,373 crore, up from Rs.2,58,902 crore in the same period last fiscal, registering a growth of 7.52%. Growth in Corporate Taxes was 10.89% (Rs.1,80,318 crore as against Rs.1,62,617 crore), while Personal Income Tax (including STT, and residual FBT and BCTT) grew at 1.84% (Rs.97,692 crore as against Rs.95,930 crore).

During the month of February 2010, on a year-to-year basis, growth in direct tax collections was 27.54% (Rs.14,675 crore compared to Rs.11,506 crore), whereas during January 2010 there had been negative growth of 19.84% . During February, while Corporate Tax recorded a growth of 16.87%, PIT growth was 37.58%.

The final instalment of advance tax for both corporate and non-corporate taxpayers is due by 15th March 2010. The Corporate taxpayers are required to pay 25% and non-corporate taxpayers 40% of their advance taxes in March.

During April 2009 to February 2010, growth in Securities Transaction Tax (STT) stood at 17.65% (Rs.5,975 crore as against Rs.5,079 crore), while wealth tax grew by 31.72% (Rs.431 crore as against Rs.327 crore) compared to the corresponding period last fiscal

BOE leaves key rate steady

Mar 04, 2010 at 18:00

The Bank of England (BOE) on Thursday kept its main lending rate at a record low 0.5% besides also leaving its money-printing, quantitative-easing program on hold, at least for now.

The British central bank has made it clear that it expects the spike in consumer prices to prove temporary. The large degree of spare capacity left by the deep recession will bear down on prices over the long run, eventually pulling inflation below the 2% target, the BOE said in its quarterly inflation report in February.

That means the BOE will not raise rates any time soon. If the BOE does act in the near term, it would most likely be to revive the quantitative-easing program, which was placed on hold in February after completing 200 billion pounds (US$301.3bn) of asset purchases.

Minutes of the monthly meeting of the bank's nine-member Monetary Policy Committee will be released March 17.

Meanwhile, the Frankfurt-based European Central Bank (ECB) is widely expected to leave its key lending rate unchanged at a record low 1% when it announces the outcome of its monthly Governing Council meeting.

Food Inflation accelerates to 17.87%

Mar 04, 2010 at 12.10

India’s Food Inflation rose to 17.87% in the week ended February 20, 2010 as compared to 17.58% in the previous week.

Primary Articles inflation declined marginally to 15% in the week ended February 20, 2010 as against 15.84% in the previous week.

Non-Food Articles inflation rose to 13.77% as against 12.78% in the previous week.

Fuel price hike rollback not in the offing: Revenue secy

Mar 03, 2010 at 12:55

Revenue secretary Sunil Mitra today ruled out any rollback of duty hike on petroleum products amid increasing pressure from UPA allies and the opposition.

"No, what roll back?" Mitra said when asked whether there would be any rollback of excise and custom duty on petroleum products.

As part of the Budget proposals of 2010-11,the government hiked customs duty on petrol and diesel to 7.5 per cent from 2.5 per cent while excise duty was raised by Re one on non-branded (normal) petrol and diesel.

Beginning February 27, petrol prices rose by Rs 2.67 a litre and diesel by Rs 2.58 per litre in Delhi.

Petrol, in Delhi currently costs Rs 47.43 a litre and diesel Rs 35.47 per litre.

While acknowledging that the tax proposals would have an impact on prices, Mitra said initially it will "be marginal. We expect this to be absorbed over a period of time."

However, after the Budget, Finance Minister Pranab Mukherjee had said that increase in excise duty would result in inflationary impact of 0.41 per cent on the wholesale price index.

"I do agree that my tax proposals (excise duty increase from 8 per cent to 10 per cent on non-oil products) will have some inflationary ingredient. It will be about 0.41 per cent. But in course of time it will be absorbed," Mukherjee had said.

However, he said the purpose of the duty hike was to raise additional resources and, therefore, he took the "risk of having a little inflationary pressure."

He said wholesale price inflation, currently at 8.56 per cent, is primarily because of the rise in prices of wheat, sugar pulses and rice, which can be tackled only by improving supplies.

Service sector growth fastest in 17 months: survey

Mar 03, 2010 at 12:25

India’s services sector grew at the fastest pace in 17 months in February, climbing for the third straight month as both output and new orders increased, a private survey showed on Wednesday.

HSBC Holdings Plc and Markit Economics’ Purchasing Managers’ Index (PMI) rose to 60.9 last month from 59 in January, according to a report released today. A reading above 50 indicates expansion.

This was the highest level for the services PMI since September 2008.

The index has been above the 50 point level that separates expansion from contraction for 10 months. Before that, it shrank for six months, hitting a trough of 40.3 in February 2009.

Services make up 56% of India’s US$1.2 trillion economy.

"This is another excellent service sector PMI release, complementing the manufacturing PMI for the same month," said Robert Prior-Wandesforde, senior Asian economist at HSBC.

"The key business activity series is up more than 5 points since November, 20 points since the low in Feb. 2009 and above the series average of 57.9," he added.

India's manufacturing industry grew at its fastest pace in 20 months in February, expanding for the third month thanks to expanding output and new orders, another survey by HSBC-Markit combine showed earlier this week.

India’s manufacturing PMI, a key measure which indicates the mood in manufacturing, rose to a 20-month high of 58.5 in February - its strongest reading since June 2008 - up from 57.7 in January 2010.

"It would be surprising if ex-agriculture GDP didn't grow at a double-digit pace in the first quarter of 2010," Prior-Wandesforde said.

India's January exports up 11.5% YoY

Mar 02, 2010 at 13:45

India's merchandise exports rose by 11.5% YoY in January 2010 to touch US$14.34bn, data released by the Government showed on Tuesday. Imports for the month under review were up by a strong 35.5% at US$24.7bn. Trade deficit for January 2010 stood at US$10.36bn versus US$5.34bn, the Commerce & Industry Ministry said today.

Highlights of Union Budget

Feb 26, 2010 at 13.20

• Indian economy has weathered the world economic crisis well, says FM
• Indian economy is in a far better position than a year ago
• But there are challenges that face the Indian economy even today
• First challenge is to return to the high GDP growth path
• FM wishes to attain double digit growth in the next few years
• The second challenge is to make development more inclusive
• The third challenge is to improve the well being of the rural people
• FY10 was a challenging year for India
• FM says that the economic recovery is encouraging
• There is momentum in manufacturing
• Signs of turnaround also visible in merchandise exports
• But inflation has to be contained: FM Government should ensure better management of the food economy
• Government should ensure better management of the food economy
• FM to bring out a status paper on curtailing overall public debt in 6 months
• FM will try to introduce GST and Direct Tax Code in April 2011
• Divestment proceeds budgeted higher in FY11 vs FY10
• NBS will lead to agri productivity
• PSU divestment receipts seen at Rs 25,000cr in FY10
• FM sets aside Rs 16500cr for PSU banks
• FM proposes to extent interest subvention for exports for 1 more year
• India recieved FDI worth $20.9 bn in April to Dec 2009 period
• Gradual phasing out of stimulus: FM
• Explicit reduction in domestic public debt equity ratio: FM
• Implementation of GST and DTC by April 2011
• Govt will implement direct tax code by April 1, 2011
• FM proposes to extent interest subvention for exports for 1 more year
• RBI to give out new licenses to pvt banks and NBFCs
• Will reduce fertilizer subsidy
• Propose to extent interest subvention for export for 1 year
• Govt to set up Financial Stability and Development Council
• FM sets aside Rs4bn to extend green revolution to Eastern India
• FM extends 2% interest subvention on export credit for 1 year
• FM sets aside Rs2bn for a new agricultural initiative
• Govt committed to SEZs to boost exports, employment
• Working towards making FDI regime simple
• India got US$20.9bn FDI during Apr-Dec ''''''''09
• Repayment for farm loans extended by 6 mths to June 30, 2011
• Agri credit flow target raised to Rs375000 cr from Rs325000 cr last year
• To set up coal regulatory authority
• FM allocates Rs1.73 lakh cr for infrastructure
• Road transportation spending up 13% to Rs198.94bn
• Govt doubles allocation to power sector to Rs51.3bn
• IIFCL to double re-finance to banks for infrastructure
• To construct 20km national highways a day
• ECBs to be available for food processing sector
• Govt to provide 2% loan subsidy to farmers
• One-time grant of Rs2bn for Tirupur (TN)
• Govt targets 20000 MW solar power by 2022
• Social sector spending at Rs1.38 Trillion for FY11
• FY11 education plan outlay at Rs310.3bn
• Govt ready with draft Food Security Bill
• Govt allocates Rs2bn to Goa to clean beaches
• FM allocates Rs5bn to set up solar, small hydro power units
• Clean Ganga Mission allocated Rs5bn
• Interest subvention for low-cost housing extended
• IIFCL allocation for FY11 at Rs993bn
• Allocation for Bharat Nirman at Rs480bn
• Allocation for urban development up 75% to Rs54bn
• Govt allocates Rs223bn to healthcare
• Allocation for slum redevelopment increased to Rs12.7bn
• National Social Security fund allocation at Rs 1000 cr
• To create 50 crore skilled workers by 2022
• UID authority given Rs19bn
• Defence spending at Rs1.47 lakh cr
• UID authority to issue 1st ID''''''''s in FY11
• Govt to launch skill development program for textiles
• Fiscal deficit for FY11 seen at 5.5%
• Fiscal deficit for FY12 seen at 4.8%
• Fiscal deficit in FY10 to be at 6.9% of GDP
• Govt targets fiscal deficit of 4.1% in 2012-13
• Net market borrowing for FY11 at Rs345010 cr
• FY11 borrowing to be decided in consultation with RBI
• I-T of 10% for income between Rs1.6 lakhs and Rs5 lakhs
• No I-T for income up to Rs1.6 lakhs
• MAT raised to 18% from 15%
• Corporate surcharge cut to 7.5% from 10%
• Deduction on In-House R&D increased to 200% from 150%
• Saral 2 form to be rolled out for simplification of tax filing
• To continue with practice of oil, fertilizer subsidy in cash
• Sops for real estate, housing projects extended by a year
• Excise duty hiked to 10% from 8%
• To levy excise duty of Re1 per liter on petrol and diesel
• Govt restores 5% customs duty on crude oil
• Excise duty to rise on tobacco products
• Govt to partially roll back central excise duty
• Excise duty on large cars, SUVs raised by 2% to 22%
• Central excise on LED lamps cut to 4%
• FM waives excise on solar panels, photovoltaic products
• Excise duty on CFLs halved to 4%
• FM announces Rs 50/ton Cess on Indian coal
• To raise central excise on non-petro products to 10%
• Partial rollback of excise duty on cement, cement products
• No change in Service Tax...remains at 10%
• Import duty hiked on gold and silver
• Not to levy import tax on some equipment in road projects

13th Finance Commission: cut fiscal deficit to 3% by end-FY14

Feb 25, 2010 at 16:50

The Government must cut its fiscal deficit to 3% of the GDP by the end of fiscal year 2013-14 and eliminate its revenue deficit in 2014-15, according to the key recommendations of the 13th Finance Commission.

The fiscal deficit is estimated at 5.7% in the year ending on March 2011, and will fall further to 4.8% in the year 2011-12, a 13th Finance Commission said.

The report of the 13th Finance Commission, said that the fiscal deficit should drop to 4.2% in 2012-13 and to 3% in 2013-14.

Finance Minister Pranab Mukherjee said today that the Government has accepted all major suggestions of the 13th Finance Commission, which has suggested cutting fiscal and revenue deficits substantially.

The Centre must cap its total debt at 68% of the GDP by the end of financial year 2014-15, the report of the 13th Finance Commission stated.

The report by the 13th Finance Commission was tabled in parliament today.

Food inflation slips slightly

Feb 25, 2010 at 12:30

Food price inflation yet again marginally fell to 17.58% in the week ended February 13, 2010 as against the same period last year.

Primary Articles inflation fell to 15.84% in the week ended February 13, 2010 as against 16.23% in the same period last year.

While, Fuel price inflation remained unchanged at 9.89% on a YoY basis.

FY10 GDP growth seen at 7.2%: Economic Survey

Feb 25, 2010 at 11:25

India's GDP growth is expected at 7.2% in FY10, according to the Economic Survey. This matches the advance estimate of FY10 GDP announced by the CSO recently, but is short of the RBI's 7.5% growth projection for the current fiscal year. Industrial growth is seen at 8.2% in FY10.

The Economic Survey said that GDP growth in FY11 is seen at 8.5% (+/-0.25%). On full recovery, India's GDP growth will exceed 9% in FY12, it added.

Need to watch the progress of the economic recovery before unwinding the fiscal stimulus, the Economic Survey stated, adding that the recovery does provide an opportunity for a gradual withdrawal of the stimulus.

Concerns on high inflation will remain over the next few months, the Economic Survey said. High food prices are a risk for general inflation, it said, adding that any hike in fuel prices will impact headline inflation.

Supply side pressure on inflation will prevail for the near term, the Survey said, adding that India is not immune to global price movements.

Highlights of Railway Budget

Feb 24, 2010 at 12:50

Indian Railway Minister Mamata Banerjee presented the Railway Budget in Parliament today. Banerjee has chalked out a ambitious plan with an aim to raise Rs 10,000-20,000 crore in FY11 and promised to introduce a 10-year a plan "Vision 2020".

A point to note, however, is that the second Railway Budget is being announced amidst accusations that promises made last year have not yet been achieved.

Key highlights:

- To come out with 10-year plan 'Vision 2020'
- Limited funds available constraint for line addition
- Plan to raise Rs 10,000-20,000 crore in FY11
- FY11 freight loading aim at 944 million tonne
- FY11 gross traffic receipts at Rs 94,800 crore
- FY11 plan outlay seen at Rs 41,426 crore
- Non-core business revenue seen at Rs 1,000 crore
- To beat FY10 freight target by 8 million tonne
- Impact of 6th Pay Commission at Rs 55,000 crore

What's in it for:

Business and India Inc

- Not to increase freight tariff
- Time for business partnership with Railways has come
- Not to privatise Railways
- To set up six bottling water plants via PPP model
- RFID technology to be used in freight transport
- To acquire 80,000 new wagons
- To set up more freight corridors
- Cut freight on food grain, kerosene by Rs 100/wagon
- To set up 10 auto ancillary hubs In PPP model
- To start door-to-door service for freight movement
- Premium tatkal service for parcel, freight movement
- Golden Rail Corridor project announced
- 5 new coach factories to be set up
- Diesel plant in Bengal if land available
- Railway research center in Kharagpur
- Design testing unit to be set up in Bangalore

Passengers

- To complete 1,000 km lines in one year
- 117 new trains to be flagged off by March 31
- Rs 1,300 crore for passenger amenities
- To launch double-decker trains on pilot basis
- To construct more underpasses, subways, low-height flyovers
- To raise 12 companies of women RPF
- Women RPF to be raised
- E-ticketing mobile vans at hospitals, universities
- To run 101 new suburban trains in Mumbai
- To introduce 54 new trains in FY11
- Service charge on AC class cut to Rs 20 From Rs 40
- To extend routes of 21 trains
- To launch tourist trains on 16 routes
- To launch 10 more duranto trains
- Golden Rail Corridor project announced

Employees and Employment

- New housing scheme for 14 lakh employees
- Ex-servicemen for railway security
- Rail exams to be held in regional languages

Public service

- Announces Rabindra Museum at Howrah
- Railways to set up 10 eco-parks
- Special trains for Common wealth games
- Sports academies to be set up in 5 cities

Draft National Food Security Bill under process: Govt

Feb 24, 2010 at 09:30

As announced by the President of India, in her address to the joint session of Parliament on June 4, 2009, the Government proposes to enact a National Food Security Act which envisages, among other things, that every Below Poverty Line (BPL) family in the country shall be entitled to 25 kg of wheat or rice per month @ Rs.3 per kg. The law is also proposed to be used to bring about systemic reforms in the Public Distribution System (PDS).

Consultations have been held with, and inputs received from, the states and other stakeholders, based on which the various issues have been placed before an Empowered Group of Ministers (EGoM) constituted for the purpose. Based on the decisions taken / directions given by the EGoM so far, a draft National Food Security Bill is being prepared which will be placed before the EGoM.

This information was given by Prof. K.V. Thomas, Minister of State for Agriculture, Consumer Affairs, Food & Public Distribution, in written reply to a question in the Lok Sabha on Tuesday.

Govt approves 12 FDI proposals worth over Rs 10bn

Feb 23, 2010 AT 09:30

The government has approved 12 foreign direct investment (FDI) proposals worth over Rs 10bn, including that of Walt Disney and Zee Entertainment Ltd. 

Based on the recommendations of the Foreign Investment Promotion Board, the government has approved 12 proposals of FDI amounting to Rs10.45bn. The government deferred 11 proposals, including Essar Capital Holdings, Verizon Communications, Star India Holding, and Etisalat DB Telecom. It, however, rejected seven FDI proposals and referred the proposal of Bharat Oman Refineries to the Cabinet Committee on Economic Affairs (CCEA) for its consideration.

The highest FDI of Rs5.29bn is likely to come from Delhi-based Max India Ltd, followed by Hyderabad-based Soma Highways (Toll) Projects' Rs3.6bn proposal.

SEBI clamps down on circular trading

Feb 22, 2010 at 14:15

The Securities and Exchange Board of India (SEBI) has reportedly busted a price rigging racket, sending the main stock indices down in mid-afternoon trade.

The capital market regulator has restrained 16 individuals from trading in connection with the price manipulation case, according to an order published on its web site.

Among the stocks allegedly rigged up by the accused are: Asian Star, KSL & Industries, Jaybharat Textiles, Allcargo, Lotus Eye Care, Mavens Biotech, Panoramic Universal, Rasi Electronic, Sat Industries and Ushdev International.

The SEBI-backed investigations into the unusual trading patterns of these shares was done for the period between March and September last year.

Fed springs a surprise...hikes discount rate

Feb 19, 2010 at 07:55

The Federal Reserve on Thursday surprised the markets by raising its discount rate in order to encourage banks to borrow from the private market for short-term credit instead of from the central bank.

The discount rate is the rate at which commercial banks in the US borrow from the Fed.

The discount rate will be increased on Friday from 0.5% to 0.75%, moving the spread over the main federal funds rate to a more normal level.

The length of loans will also be shortened to a maximum of overnight.

The Fed said that its move won't impact consumer or corporate borrowing costs.

The more widely used fed funds rate, the overnight rate banks charge each other, is expected to remain at historic lows near zero for the foreseeable future

NSE unveils lot size for new F&O entrants

Feb 18, 2010 at 17:50

NSE had announced in its circular that 11 new stocks would be added from February 19, 2010.

The exchange has unveiled the Lot Sizes of new F&O stocks to be trading from tomorrow;

Symbol	Lot Size
Adani Enterprises	400
Apollo Tyres	3400
Areva T&D India	750
BGR Energy Systems	400
Fortis Healthcare	1300
Godrej Industries	1300
Jain Irrigation Systems	250
Mcleod Russel India	900
Mundra Port & SEZ	300
Onmobile Global	550
Videocon Industries	850

Food Inflation steady near 18%

Feb 18, 2010 at 17:35

There is no respite for the common man from spiraling food prices, even as fuel prices have softened a bit. Food inflation rose for the fourth straight week in early February, climbing to the highest level in six weeks, data released by the Commerce & Industry Ministry showed on Thursday.

Point-to-point inflation for the Food Articles group rose at a 17.97% pace in the week ended February 6 as against the annual rise of 17.94% in the previous week, the Government data revealed today.

Inflation in the Fuel & Power group dropped to 9.89% in the early part of February compared to 10.44% in the previous week, the Commerce Ministry said. Inflation in this group was at (-) 3.03% during the same week last year.

On the other hand, inflation in the Primary Articles group rose to 16.33% from 15.75% in the week ended January 28. It was at 7.05% during the corresponding week (Feb. 7, 2009) of the previous year.

The WPI for the Primary Articles group rose by 0.2% to 285.8 from 285.2 in the previous week.

The relentless spurt in food and fuel prices has driven the headline inflation past the official forecasts, putting more pressure on the Reserve Bank of India (RBI) to raise interest rates ahead of its annual policy meeting in April.

India's monthly WPI-based inflation jumped to 8.56% in January and is likely to touch 10% by the end of March, according to chief statistician Pronab Sen. Inflation has already surpassed the RBI's revised end-March inflation forecast of 8.5%.

Inflation in the manufacturing sector also picked up to 6.55% from about 5% in December, a sign that inflationary pressures were spreading to other sectors of the economy as well, and is not restricted to food group alone.

Govt unveils nutrient based subsidy for fertilizer sector

Feb 18, 2010 at 17:30

The Cabinet approved to implement the Nutrient Based Subsidy (NBS) Policy on decontrolled Phosphatic & Potassic  fertilizer with effect from 1st April, 2010.  It has been decided to fix the subsidy on the nutrients ‘N’  - Nitrogen, ‘P’ - Phosphorus, ‘K’ - Potash and ‘S’ – Sulphur contents for the year 2010-11. In addition to the fixed subsidy on above mentioned nutrients, there will be an additional per tonne subsidy for subsidized fertilizer carrying other secondary nutrients and micro nutrients in formulations approved under FCO 1985.

The intent of the Government to move towards NBS in fertilizer sector was announced in the Budget Speech of 2009-2010 delivered by the Finance Minister.  The NBS regime is expected to promote balanced fertilization and consequently increase agriculture productivity in the country through higher usage of secondary and micro nutrients.  It is also expected that new innovative fertilizer products would be developed subsequently under the NBS regime to meet the different requirements of Indian agriculture.  The NBS regime is expected to depict the actual demand of fertilizers in the country and promote realistic pricing of fertilizer products in the international market.    Unshackling of fertilizer industry is also expected to attract fresh investments in this sector.

It has also been decided to constitute an Inter-Ministerial Committee under the Chairmanship of Secretary (Fertilizers) to examine various scenarios and make recommendations for finalization of per nutrient subsidy to the Government under the proposed Policy.

Under the Nutrient Based Subsidy (NBS) regime, since the subsidy on the subsidised nutrients and consequently subsidized fertilizers will remain fixed, the retail prices of subsidized fertilizers at farmgate level will be decided by the Companies.  The Fertilizer Industry has assured that under NBS regime, the price line around the current level would be maintained during Kharif-2010.  The Government in consultation with the fertilizer industry will make interventions in such a manner that the farmgate prices of non-urea fertilizers are, as far as possible,  near the current prices so that the farmers are not adversely affected.

The provision of additional subsidy for fortified and supplemented fertilizer will encourage production and application of fertilizers carrying secondary and micro nutrients.

Urea which has the maximum tonnage consumed nitrogenous fertilizers in the country will continue to be under the current MRP regime.  However, it has been decided to increase the maximum retail price of urea from Rs.4830/- per MT to Rs.5310/- per MT with effect from 1st April, 2010.

The NBS regime will be implemented with effect from 1st April, 2010.  The subsidy will continue to be disbursed through the Industry during the first phase.  The industry will receive subsidy based on certification of sale by the State Governments / Statutory Auditors of the Company as in the past. The implementation and distribution of the fertilizer will continue to be monitored through the on-line web based “Fertilizer Monitoring System (FMS)”

UK consumer inflation breaches official target

Feb 16, 2010 at 18:00

Its time for the Bank of England (BOE) governor Mervyn King to write a letter to the Chancellor of the Exchequer, Alistair Darling, explaining the jump in consumer price inflation (CPI) beyond the tolerable level, and set out a plan to return to the goal.

Consumer prices in the United Kingdom rose at an annual pace of 3.5% from a year earlier, the most since November 2008, the Office for National Statistics said in London today. The gain, fueled mainly by the increase in sales tax, was below the 3.7% consensus forecast.

On a monthly basis, inflation in Britain fell by 0.2% in January, the smallest drop for the month since records began in 1997.

The BOE had warned that January inflation was likely to rise due in part to the expiration of a temporary cut in the value-added tax at the end of December.

The BOE chief is required to write an open letter to the Treasury when inflation misses the 2% target by more than a full percentage point. The letter will be published at 10:30 a.m. in London, the BOE said.

Today’s letter from King is the sixth since the bank was granted independence in setting interest rates in 1997.

The pound pared gains against the dollar after the report and government bonds stayed higher.

Core inflation, which excludes costs of energy, food, alcohol and tobacco, accelerated to 3.1% in January, the fastest pace on record, the statistics office said. Economists had forecast 3.2%.

Inflation accelerated as prices of alcohol, tobacco, recreation, and bills at restaurants and hotels were pushed higher by Darling’s reversal of a 2.5% cut in sales tax last month. Transport costs also increased, climbing 11% on the year, the most on record.

Inflation has also accelerated as retail discounts unleashed in the height of the recession a year earlier were not repeated and because of the pound’s decline of about 25% on a trade-weighted basis in the past three years.

Inflation will slow to 0.9% later this year and stay below the target as slack in the UK economy suppresses price pressures, the BOE said on Feb. 10.

The retail price index, a cost of living measure used in wage negotiations, showed a 3.7% annual increased, compared with 2.4% in the previous month. Excluding mortgage interest payments, it rose 4.6%, the most since October 2008, the statistics office said.

India's inflation surges to 8.56%

Feb 15, 2010 at 12.05

India's Inflation rose to 8.56% in January as against 7.31% in December 2009.

The government announced that it revised November inflation rate to 5.55% from 4.78%.

India's industrial output growth beats expectations
Feb 13, 2010 at 16:55

India's industrial production grew at its fastest pace in 15 years in December, surpassing all optimistic forecasts, lending credence to a growing view that the economy is out of the woods and ready for an 'exit' from the crisis-fighting stimulus measures.

Industrial output, as measured by the Index of Industrial Production (IIP), expanded by a robust 16.8% in December from the same month a year earlier, data released by the Commerce & Industry Ministry showed on Friday.

The figure was well above consensus estimates of 12-13%. India's industrial output had contracted by 0.2% in December 2008, as credit markets seized up in the wake of the global financial turmoil and industrial demand sank amid weak external environment.

It was the highest reading since April 1995, when the series, which uses 1993-94 as base year, started.

On a month-ago basis (with no seasonal adjustments), however, the December 2009 performance showed an industrial growth rate of 10.81%, the highest since the industrial slowdown began in the third quarter of 2008.

Manufacturing, with an almost 80% weightage in the IIP, grew by 18.5% in December 2009 compared to a 0.6% decline in the same month in 2008.

The Electricity sub-segment grew by 5.4% in the month under review versus 1.6% in December 2008. Mining output grew by 9.5% in the last month of 2009 as against 2.2% growth achieved in December 2008.

Consumer Durables expanded by a whopping 46% in December 2009 after contracting 4.2% in the same period in 2008. Consumer Non-durables grew by 3.7% compared to 3.2% in December 2008. Overall, Consumer Goods recorded a respectable growth rate of 12% over a measly 1.7% in December 2008.

Capital Goods grew by 38.8% in December 2009 compared to 6.6% for the same month of 2008. Intermediate Goods grew by 21.7% in December 2009 after shrinking 8.9% in December 2008. The growth rate in Basic Goods category stood at 7.5% versus 2% in the year-ago period.

Expressing satisfaction at the latest IIP numbers, Finance Minister Pranab Mukherjee said that the third-quarter GDP growth would be strengthened by the strong recovery in the industrial sector.

In fact, if the current momentum in the industrial sector continues at the same pace in the next three months, the GDP growth figure for FY10 could actually surpass the Central Statistical Organisation's (CSO) advance estimate of 7.2%.

Mukherjee expects the economy to grow around 7.75% in FY10 while the RBI sees a growth rate of 7.5%.

For April-December 2009-10, industrial output growth stands at 8.6% against 3.6% during the corresponding period in the previous fiscal year.

For the first nine months of the current fiscal year, Manufacturing recorded a growth rate of 9% (3.6% in April-Dec 2008-09), Mining 8.5% (3.2%) and Electricity 5.8% (2.7%), according to the Commerce Ministry data.

The RBI is widely expected to raise interest rates at its April policy review after it surprised markets with a stronger-than-expected rise in the cash reserve ratio (CRR) in its January meeting.

The Union Budget, to be announced on Feb. 26, would have a major bearing on the central bank's future course of action. Higher-than-expected government borrowings might prevent the RBI from raising interest rates.

Earlier this month, RBI Governor Duvvuri Subbarao said that the Government's gross market borrowings in the fiscal year ending March 2011 might be slightly higher than FY10 because of redemptions.

Bond yields touched a 16-month high of 7.88% on Thursday on uncertainty about government borrowings in the coming fiscal year.

China surprises...raises bank reserve requirement again

Feb 13, 2010 at 14:55

In an unexpected move, China's central bank on Friday once again sought to check the unbridled loan growth in that nation by asking banks to increase their reserves for the second time this year. The move once again rattled markets around the globe.

From Feb. 25 Chinese banks will be required to set aside an additional 0.5% of deposits as reserves, the People's Bank of China said. After the hike major banks will be required to set aside 16.5% of deposits. Smaller banks are currently required to set aside 14% of deposits.

The announcement came after the close of financial markets in Shanghai and on the eve of the week-long Chinese New Year holiday.

On January 12, the Chinese central bank had increased banks’ reserve requirements for the first time since June 2008.

Chinese policy makers are becoming more concerned about containing inflationary expectations and managing the risk of asset price bubbles.

Policy makers are reining in credit growth after banks extended 19% of this year’s 7.5 trillion yuan (US$1.1 trillion) lending target in January and property prices climbed the most in 21 months.

Economic data this week showed property prices across 70 cities surged 9.5% in January, exports climbed and producer-price inflation accelerated. Bank lending of 1.39 trillion yuan topped the total for the previous three months combined.

The central bank said on Feb. 11 that it plans to gradually normalise monetary conditions from a crisis mode after gross domestic product (GDP) grew by 10.7% in the fourth quarter, the fastest pace in two years.

The move doesn’t alter the central bank’s moderately loose monetary policy, local media reports cited an unnamed official as saying.

Concerns about possible asset bubbles in China, and what action the Beijing government may take to prevent or deflate them, have mounted this year. Oil, copper and European stocks fell on concerns that tighter lending in China will hurt the fragile global recovery.

Cabinet to take up FDI proposals worth over Rs12bn
Feb 11, 2010 at 12:45

The Cabinet Committee on Economic Affairs today approved a proposal of the Department of Industrial Policy & Promotion, Ministry of Commerce & Industry to review the policy on cases requiring prior Government approval for foreign investment.

Presently, the recommendations of the Foreign Investment Promotion Board (FIPB) on proposals with total project cost up to Rs.600 crore are approved by the Finance Minister and proposals involving total project cost more than Rs.600 crore are  put up to the Cabinet Committee on Economic Affairs.  Further, presently the total project cost, including the foreign equity inflow, is taken into consideration in deciding whether the proposal is to be put up for consideration of CCEA.  With today’s approval, only proposals involving total foreign equity inflow of more than Rs.1200 crore would be placed for consideration of CCEA.   The recommendations of FIPB on proposals with total foreign equity inflow of and below Rs.1200 crore will be considered by the Finance Minister for approval.

Further, it has been decided that the cases where prior approval of FIPB/CCEA for making the initial foreign investment was taken, then the following types of cases would not require to  approach FIPB/Government for fresh approval:

a.Cases of entities whose activities had earlier required prior approval of FIPB/CCFI/CCEA and who had, accordingly, earlier obtained prior approval of FIPB/CCFI/CCEA for their initial foreign investment but subsequently such activities/sectors have been placed under automatic route;

b.Cases of entities whose activities had sectoral caps earlier and who had, accordingly, earlier obtained prior approval of FIPB/CCFI/CCEA for their initial foreign investment but subsequently such caps were removed or increased and the activity placed under the automatic route;

c.Cases where prior approval of FIPB/CCFI/CCEA had been obtained with reference to activities/sectors requiring such approval and also from the angle of provisions of Press Note 18/1998 or Press Note 1 of 2005.

With the Government’s further liberalization, the approval  is expected to save time and efforts for the FIPB/CCEA and also expedite foreign investment inflow.

Food inflation close to 18%: Govt data

Feb 11, 2010 at 12:00

Inflation, which till recently was largely restricted to essential food items, appears to be slowly but surely getting transmitted to other categories as well. While inflation in the crucial Food group remains in high double digits, that in Minerals and Fuel groups suddenly jumped in the last days of January.

Government data released today showed that inflation, as measured by the Wholesale Price Index (WPI), for the Primary Articles group stood at 15.75% in the week ended January 30, as against 14.56% in the preceding week.

Inflation in this group stood at 8.17% during the corresponding week (Jan. 31, 2009) of the previous year.

The WPI for the Primary Articles group rose by 0.1% to 285.2 in the week ended January 30 from 284.9 in the previous week.

Food inflation rose to 17.94% in the week ended January 30 from 17.56% in the previous week, the Commerce & Industry data revealed today. The index for the Food Articles group increased by 0.3% to 287.3 in the week under review.

Inflation for the Non-food Articles group increased to 11.32% from 10.93% in the week ended January 23 while the same for the Minerals group shot up to 7.72% as opposed to a drop of 5.18%.

Fuel & Power inflation surged to 10.44% in the week ended January 30, as against 5.88% in the week ended January 23. Inflation for this group stood at (-)3.54% during the corresponding week (ended Jan. 31, 2009) of the previous year.

The index for the Fuel & Power group rose by 1.2% to 355.4 from 351.2 in the previous week due to higher prices of non-coking coal (15%), coking coal (11%).

RBI releases guidelines on the Base Rate

Feb 10, 2010 at 20:40

The Reserve Bank of India today released on its website, Draft Circular on the Base Rate system for comments and feedback. It may be recalled that the Reserve Bank had constituted a Working Group on Benchmark Prime Lending Rate (BPLR). The Report of the Group was placed on the Reserve Bank’s website on October 20, 2009 for public comments. After considering the recommendations of the Group and the suggestions received from various stakeholders, it is proposed to bring changes in the present lending rate system, as outlined in the draft circular on the Base Rate system for banks.

Following the announcement in the Annual Policy Statement for the year 2009-10, the Reserve Bank constituted a Working Group on Benchmark Prime Lending Rate to review the present  benchmark prime lending rate (BPLR) system and suggest changes to make credit pricing more transparent. The Working Group submitted its report on October 20, 2009 and it was placed on the Reserve Bank’s website for public comments. After considering the recommendations of the Group and the suggestions from various stakeholders, the Reserve Bank has decided as follows:

The Base Rate system will replace the BPLR system with effect from April 1, 2010. Banks may determine their actual lending rates on loans and advances with reference to the Base Rate. Base Rate shall include all those elements of the lending rates that are common across all categories of borrowers. While each bank may decide its own Base Rate, some of the criteria that could go into the determination of the Base Rate are: (i) cost of deposits; (ii) adjustment for the negative carry in respect of CRR and SLR; (iii) unallocatable overhead cost for banks such as aggregate employee compensation relating to administrative functions in corporate office, directors’ and auditors’ fees, legal and premises expenses, depreciation, cost of printing and stationery, expenses incurred on communication and advertising, IT spending, and cost incurred towards deposit insurance;and (iv) profit  margin. An illustration for computing the Base Rate is set out in the Annex.

The actual lending rates charged to borrowers would be the Base Rate plus borrower-specific charges, which will include product-specific operating costs, credit risk premium and tenor premium.

All categories of loans should henceforth be priced only with reference to the Base Rate. The Base Rate could also serve as the reference benchmark rate for floating rate loan products, apart from the other external market benchmark rates. The floating interest rate based on external benchmarks should, however, be equal to or above the Base Rate at the time of sanction or renewal.

Since the Base Rate will be the minimum rate for all commercial loans, banks are not permitted to resort to any lending below the Base Rate. Accordingly, the current stipulation of BPLR as the ceiling rate for loans up to Rs. 2 lakh stands withdrawn. It is expected that deregulation of lending rates will increase the credit flow to small borrowers at reasonable rate. Thus, direct bank finance will provide effective competition to other forms of high cost credit.

Interest rates on loans under the DRI scheme will continue to be fixed without reference to the Base Rate.

The Reserve Bank will separately announce the stipulation for export credit.

Since transparency in the pricing of lending products has been a key objective, banks are required to exhibit the information on their Base Rate at all branches and also on their websites. Changes in the Base Rate should also be conveyed to the general public from time to time through appropriate channels. Banks are required to provide information on the actual minimum and maximum lending rates charged to major categories of borrowers to the Reserve Bank on a quarterly basis. Apart from transparency, banks should ensure that interest rates charged to customers in the above arrangement are non-discriminatory in nature.

The Base Rate system would be applicable for all new loans and for those old loans that come up for renewal. However, if the existing borrowers want to switch to the new system before the expiry of the existing contracts, in such cases the new/revised rate structure should be mutually agreed upon by the bank and the borrower.

In line with the above Guidelines, banks may announce their Base Rates after seeking approval from their respective Boards.

April-January railway freight carriage up 7.3% yoy
Feb 10, 2010 at 13:00

Indian Railways have carried 730.96 million tonnes of revenue earning freight traffic during April 2009-January 2010. The freight carried shows an increase of 49.68 million tonnes over the freight traffic of 681.28 million tonnes actually carried during the corresponding period last year, registering an increase of 7.29%.

During the month of January 2010, the revenue earning freight traffic carried by Indian Railways was 78.33 million tonnes. There is an increase of 3.78 million tonnes over the actual freight traffic of 74.55 million tonnes carried by the Indian Railways during the same period last year, showing an increase of 5.07%.

China's trade surplus narrows as imports surge

Feb 10, 2010 at 11:15

China's imports surged in January 2010 while exports too gained sharply, but easy comparisons with January 2009 data coupled with distortions owing to the Lunar New Year holidays made it tough to make future predictions or to figure out any particular trend.

China's trade surplus - the difference between net exports over net imports - shrunk by more than expected in January, as import growth outpaced gains in exports, data released on Wednesday by the General Administration of Customs on its Web site revealed.

China's trade surplus for the month under review stood at US$14.17bn as against US$18.44bn in December 2009. Median estimates were for a trade surplus of US$19.7bn.

China's January exports totaled US$109.48bn, a rise of 21% from January 2009 after rising 17.7% in December. Imports were at US$95.31bn, an increase of 85.5% from a year earlier, and following a 55.9% gain in December.

On a seasonally adjusted basis, exports for the month were down 0.9% from December while imports contracted 5.5%, the customs bureau said today.

In month-on-month terms, imports and exports tumbled 15.1% and 16.3%, respectively.

Year-on-year trade data comparison were almost meaningless because of distortions created by the Chinese New Year holiday, which fell in January last year, but will take place in February this year. China also worked one extra week this January than it did last year.

Bank of America Merrill Lynch said that Chinese shoppers usually turn out in force during the holiday, which is likely to be reflected in higher retail sales and inflation figures, while trade and production should be a little weaker.

But, JP Morgan said that the latest trade figures point to an underlying rebound in the Chinese economy. "The worst appears to be over for the export sector, and strong demand underpinned extremely robust import figures," JP Morgan wrote in a note today.

Momentum in Chinese exports could add pressure on Beijing to let the yuan appreciate, having checked its gains since mid-July 2008. US President Barack Obama said recently that Washington would take a tougher stance on trade and currency issues with Beijing.

Beijing has in effect re-pegged the yuan around 6.83 per dollar since mid-2008 to help its exporters and ward off any potential threat from the global financial turmoil.

Greece rescue talk gains currency...but Europe stocks end flat

Feb 10, 2010 at 09:10

European shares finished almost unchanged on Tuesday after a volatile session amid growing speculation that European Union (EU) members are working toward helping fiscally stressed Greece.

Hopes of a bailout for Greece were offset by declines for Swiss bank UBS and property giant Unibail-Rodamco on downbeat results.

The pan-European Dow Jones Stoxx 600 index finished 0.1% higher to 239.19. On Monday, the index advanced for the first time in four sessions. As European markets closed for the day, FT Deutschland reported Germany would aid Greece.

Greek banks were notably higher boosting the Greek ASE Composite which jumped 5% to 1,895.96, recouping all of Monday's 3.9% loss.

The UK's FTSE 100 index rose 0.4% to 5,111.84, while Germany DAX index climbed 0.2% to 5,498.26 and the French CAC-40 index added 0.2% to 3,612.76.

Metal futures were up and miners advanced for a second day in Europe.

The euro posted its biggest gain against the dollar in more than two months and the Dow Jones Industrial Average had its biggest one-day percentage gain in three months.

Reports suggest that euro zone countries have decided, in principle, to come to the aid of debt-laden Greece. News that EU leaders will meet on Thursday to discuss how to manage a growing debt crisis also reassured investors.

Additionally, Greece said it is raising the retirement age and asking civil servants to accept bonus cuts. Reports that European Central Bank (ECB) president Jean-Claude Trichet is leaving a conference in Australia early to join the Thursday meeting also helped bolster investor confidence.

The Wall Street Journal (WSJ) reported that Germany, the biggest economy in the eurozone, is considering a plan to work with other EU members to offer loan guarantees to Greece and other troubled euro zone countries.

However, a spokesman for the German government later denied as unfounded reports that various options were being considered to help Greece regain its fiscal discipline and limit financial contagion, trimming the euro's gains against the dollar.

The threat of a default in Greece has sparked fears that a broader debt crisis could be on the cards in Europe amid mounting fiscal worries for countries such as Portugal, Spain, Ireland and Italy.

India's car sales up 32% YoY in Jan

Feb 09, 2010 at 10:20

India’s car sales rose 32% in January 2010 to 145,905 units from 110,300 units sold in the same month a year ago, data released by the Society of Indian Automobile Manufacturers (SIAM) showed.

Sales of trucks and buses jumped 131% to 53,447 units from 23,154 units in January 2009, according to the SIAM data.

Two wheeler sales grew by 43% to 834,383 units in January this year from to 581,729 units in the year-ago period.

Apr-Jan steel consumption rises 7.9% yoy

Feb 08, 2010 at 17:30

Steel consumption jumped 7.9% to 45.93mn tons during April-January in the current financial year over the same period a year ago due to the steady rise in demand from sectors including automobile, white goods and construction, according to reports. Steel consumption during the corresponding period a year earlier stood at 42.59mn tons.

Domestic steel production rose only 3.3% during the 10 months ended January 2010 and crossed the consumption pattern at 48.81mn tons over 47.27mn tons in the comparable period last year, the report stated.

Imports also surged 18.5% to 5.9mn tons during the period, thereby increasing the availability of the commodity in the market and putting pressure on domestic prices.

Exports continued to slide and fell 34.1% to 2.39mn tons during the 10 months ended January 2010.

Tata Steel and Rashtriya Ispat Nigam reported 12.4% growth to 4.17mn tons and 7.6% increase to 2.4mn tons, respectively, during April-January over the same period previous fiscal. 

Union Budget FY11 to be unveiled on February 26^th

Feb 08, 2010 at 15:50

The Railway Budget 2010-11is scheduled to be presented to the Lok Sabha on February 24 after theBudget session of Parliament begins on February 22. Railway MinisterMamata Banerjee will present the Rail Budget.

The Finance Minister, Pranab Mukherjee will announce Union Budget 2010 – 2011 on 26 February 2010.

Stimulus to prevail till full recovery is secured: G7

Feb 08, 2010 at 09:55

The world's top industrialised nations will maintain a status quo on crisis-fighting measures till the ongoing global economic recovery gains strength even as markets and policymakers grapple with mounting debt problems in the eurozone.

The Group of Seven (G7) finance ministers tried to play down the anxiety about the global economic recovery, with European leaders pledging to address public debt problems in parts of the eurozone. European leaders said they are aggressively monitoring the situation.

"We are committed to maintaining support to the economy," UK Chancellor of the Exchequer Alistair Darling said. "We are confident that we are going in the right direction although we remain cautious."

“The position for most countries is to support the economies now and get the budget deficit down as the economy recovers,” Darling said.

G7, which represents the major European and North American economies and Japan, said the global economy has improved but the financial recovery remains tentative.

Canadian finance minister Jim Flaherty said that G7 countries would continue to deliver the stimulus to which they are mutually committed and begin looking at exit strategies to move to a more sustainable fiscal track.

US treasury secretary Timothy Geithner said that the US was in no danger of losing its AAA debt rating, even though the Obama administration has predicted a US$1.6 trillion budget deficit in 2010. “Absolutely not,” Geithner said, when asked whether a downgrade is a concern. “That will never happen to this country.”

Geithner also said that investors turn to US treasury securities and dollar-denominated assets whenever they are worried about global stability. That reflects basic confidence in the US and its ability to bounce back from the global recession, he said.

Geithner's European counterpart and European Central Bank (ECB) president Jean-Claude Trichet said he is confident that the Greek government will make all the necessary decisions. European members of the G7 will continue to monitor closely the implementation of these stability measures, he added.

Trichet said he is confident that Greece will cut its gap below the EU’s limit of 3% of gross domestic product (GDP) in 2012 from 12.7%.

Flaherty endorsed Trichet's view, saying that the Greek economy was of relatively small size. "So, in global terms it is not of intense concern," he said.

Greece is struggling to persuade financial markets that it can restrain the EU’s largest budget shortfall without any bailout, while borrowing costs are also rising for Portugal, Ireland and Spain. Even bonds of relatively better placed economies like Belgium and Austria came under pressure last week.

It may be recalled that global stock markets tumbled last week amid fears that some European countries could default on their debt, which may lead to a fresh credit crisis across the globe.

The cost of insuring against a default of the most vulnerable countries' bonds rose to new highs, and the Euro fell to an eight-month low as investors turned risk averse amid growing market volatility.

G7 also discussed financial sector regulation and how to have the banking sector help pay costs stemming from the financial crisis, but disagreement remained on exactly how. Geithner said G7 leaders are committed to overhauling financial regulation in ways that don't undermine prospects for recovery.

Jean-Claude Juncker, chairman of the group of euro-zone finance ministers, said that G7 agreed to leave unchanged their assessment of world currency markets. French Finance Minister Christine Lagarde said that the strengthening US dollar could be a positive development for the European economy.

Food prices will ease in coming days: PM

Feb 06, 2010 at 16:20

The worst is over as far as food prices are concerned, Prime Minister Dr. Manmohan Singh said on Saturday amid growing worries that a spiraling inflation would hurt the strong economic recovery.

"Food prices have softened in recent weeks and I expect this to continue,” Dr. Singh told a gathering of the chief ministers in New Delhi today.

India has adequate stocks of rice and wheat to maintain food security, the Prime Minister said. Food inflation could soften as the country's agriculture output in 2009-10 will be higher than initial estimates, he added.

The conference of Chief Ministers and State Ministers of Food and Civil Supplies was called to discuss issues related to the recent rise in the prices of food articles and what can be done collectively to control it.

"We are all very concerned about the distress that the sharp rise in food prices has caused to the common man," Dr. Singh said.

The Prime Minister also said that state governments should improve data collection. "This year the initial data made available by states showed much less production than what the states' latest estimates show," Dr. Singh said.

"As expectations play a very big role in determining food prices, the initial low expectation, therefore, also contributed to the price increase," the Prime Minister said.

He said that the prospects of winter crops were also bright, which would further improve the supply situation. "Post-monsoon rains have been good. All this augurs well for our ability to stabilise food prices at a reasonable level," he said.

A government report showed on Feb. 4 that food inflation accelerated for a second week. An index measuring wholesale prices of essential food articles compiled by the Commerce Ministry increased to 17.56% in the week ended January 23 following a 17.4% gain the previous week.

The pace of gains reached 19.95% in the week ended Dec. 5, the most since 1998.

US unemployment rate falls below 10%

Feb 06, 2010 at 14:30

The much-anticipated US employment report for January 2010 was better than expected. Still, the jobs data did not point unequivocally to a strengthening labor market as the number workers on nonfarm payrolls continued to edge lower.

So, the overall economic picture is still muddy following the release of a conflicting report on employment. The US unemployment rate fell to 9.7% in January from 10% in December. Economists expected unemployment rate to hold steady at 10%.

But the drop in jobless rate coincided with nonfarm payrolls shedding 20,000 jobs on the month. Employers had been expected to add about 15,000 jobs. Employers cut a bigger-than-initially reported 150,000 jobs from their payrolls in December.

In its latest report on employment, the Barack Obama government said that job losses in 2009 were worse than previously reported. Though the government's survey of households found a drop in the unemployment rate the new figures raised concern that the recovering economy may be slow to bring relief for workers.

The January report had some positive signs, including an increase in the work week and an increase in temp agency employment - both of which are seen as leading indicators. But the report also showed that the impact of the recession on the labor market was far worse than initially reported.

Food Inflation rises to 17.56%

Feb 04, 2010 at 12:35

The annual rate of food inflation rose to 17.56% for the week ended January 23, 2010 as compared to 17.4% in the previous week.

However, on a week-on-week basis, the index for food articles group declined marginally by 0.1% to 286.5 from 286.7 for the previous week.

Annual wholesale inflation picked up to 7.31% in December 2009 as compared with 4.78% in November, 2009.

Stock markets to hold special trading on Sat

Feb 04, 2010 at 10.55

India's top two stock markets will have a special 90-minute trading session on Saturday, to enable the National Stock Exchange test an upgraded trading system, the NSE and the Bombay Stock Exchange said on their websites.

The trading in the cash and futures market will open at 11 am (0530 GMT) and close at 12:30 pm (0700 GMT), both exchanges said in separate notices.