The Prime Minister’s Economic Advisory Council has unveiled its economic outlook for the current and the next year. The head of the council C. Rangarajan said India’s economy is expected to grow 6.5% in the current fiscal year and pick up after that, growing at between 7 and 8% in the fiscal year 2010-2011. Rangarajan also said the country’s easy monetary policy would have to change, but that it would depend on both growth prospects and inflationary pressures. On the downside the council also forecast a consolidated fiscal deficit of 10.09% of GDP in the current fiscal year compared to 8.6% last year.
The Supreme Court brought a new dimension to the Reliance gas dispute on Wednesday, when it suggested the Ambani brothers find a compromise. Referring to similar advice from the Bombay High Court, it said RIL and RNRL should look for third party mediation, a move that could lead to an informal solution to the thorny legal dispute. Mukesh Ambani’s RIL and Anil Ambani’s RNRL are arguing over the supply and price of gas from RIL’s KG D6 fields.
Hero Honda beat expectations when it reported its results for the second quarter. Net profits nearly doubled, shooting up 95% to Rs597 crore compared to a year earlier. The company’s net sales rose to Rs4,040 crore from last year’s Rs3,190 crore. Hero Honda is India’s largest manufacturer of two-wheelers and has seen the festive season driving up its sales in recent weeks.
All may not be well in the partnership between Renault and Mahindra & Mahindra. Renault has hinted that if things don’t work out it could look for another partner for its new products. Mahindra & Mahindra sells Renault’s Logan sedan in India, but sales have been unimpressive. Renault also has tied up with Bajaj Auto for a potential small car and with Ashok Leyland for light commercial vehicles.
State Bank of India raised $750 million through a sale of global bonds on Wednesday. European clients accounted to 58% of the sale, Asia 33% and the US the remaining 9%. The last Indian company to sell more than $500 million of bonds was ICICI Bank in 2007.
United Spirits says it has raised $350 million by placing shares at institutions through the QIP process. The money will be used both for capital expansion and to reduce debt from the purchase of Scottish whisky making company Whyte and Mackay.
French nuclear power company Areva is talking to Bharat Forge about manufacturing heavy water reactors. The joint venture will require investments of about Rs 1,000 crore including about 50 acres of land at a port. Bharat Forge already has another joint venture with Areva for making nuclear forgings.
Indian shares plummeted on Wednesday, taking their cue from weak global markets. The Sensex fell 214 points to close and 17,009 and the Nifty went down 51 points to end trade at 5,064.