New Delhi: The Reserve Bank of India sounded an optimistic note on Monday. Releasing its macroeconomic review, the bank said higher growth was likely and that business sentiment was reviving. It now forecasts economic growth at 6.5% for the year 2009-10. Earlier, the RBI had forecast a growth of just 5.7%. But the bank also issued a warning. It said inflation could firm up by the end of the year because commodity prices are rising. Other major factors that could push up inflation are lower lending rates and high government spending.
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Finance minister Pranab Mukherjee echoed the RBI’s sentiments. Replying to the debate on the finance bill in the Lok Sabha, he said the economic had begun to recover. Mukherjee said his government was committed to economic reforms and would also create a consensus about the Goods and Services Tax.
Tata Motors has reported a net profit of Rs514 crore for the first quarter. This is a 58% increase over the same period last year, and is well over expectations. Many brokerage firms had estimated the company’s profits would halve. Tata Motors said it was helped by improved sales, cheaper raw materials, and its partial sale of a stake in Tata Steel.
French firm Sanofi-Aventis is taking control of Shantha Biotechnics. Another French company currently controls Shantha. Sanofi has valued Shantha at about seven hundred and eighty million dollars.
A new report says estimates of the mall space that would be available by the end of the year have halved compared to estimates made at the beginning of the year. Real estate consultancy Cushman and Wakefield, which wrote the report, says many upcoming mall projects have been put on hold and that mall rentals have fallen.
The government is still assessing the economic impact of the poor monsoon. New data shows India’s farmland under kharif or summer crops has dipped only 8 per cent compared to last year. But food grain acreage has fallen 15%, mostly because of a rice shortfall of 20%. What has increased is the amount of land being used to grow some oil seed plants like sunflower oil and castor oil. Experts say that while the returns from these crops is less than that on rice, farmers prefer to grow them rather than leave their farms fallow.