There are mixed signals for India’s economy. Last week saw the release of two crucial numbers-- industrial production for November and inflation for December. Together they paint a picture of falling factory output and rising prices.
It all started on Wednesday, when new data showed the index of industrial production climbed just 2.7% in November. In October it stood at 10.76%. The figure for November was an 18-month low. And analysts expect industrial growth to remain sluggish for the rest of the fiscal, partly because of a high base effect.
But the bad news didn’t end there. On Friday the government released data that showed headline inflation had accelerated to 8.43% in December. That’s compared to 7.48% the previous month. December’s high inflation figure was led by rising food prices. Finance minister Pranab Mukherjee said India’s food inflation was currently at unacceptable levels. He had earlier admitted that if industrial production remained low while inflation was high it would hurt the Indian economy.
And switching to other news, Sebi has clamped down on Anil Ambani and his companies in a big way. In a consent order passed on Friday it banned Anil Ambani from investing in listed shares until the end of the year. It also barred two of his companies, RNRL and Reliance Infrastructure from such transactions until the end of 2012. It all started in June, when Sebi issued show-cause notices to both companies, four of their officials and Anil Ambani himself. It had demanded explanations for alleged violations of debt norms. Friday’s move was part of a settlement of the case, which will also involve a payment of about Rs50 crore to Sebi.
iGate has announced it’s going to pick up a majority stake in Patni Computer Systems. It will buy a total of 63% of Patni for around $1.22 billion. iGate has signed agreements with all the three promoters of Patni as well as private equity firm General Atlantic to acquire their stakes. CEO Phaneesh Murthy said the deal was a strategic move that would give iGate access to much larger deals. He also refuted speculation that Patni’s promoters would be paid non-compete fees.