New Delhi: On Tuesday the RBI signaled that it would start tightening India’s monetary policy. And it started the process by increasing banks’ mandatory investment in government bonds back to 25% from the earlier rate of 24%. But the RBI is still keeping major rates at the same level. The repo rate will hold at 4.75%, while the reverse repo rate is still at 3.25% and the cash reserve ratio stands at 5%.
And a day earlier, the RBI outlined both the good and the bad in India’s economic outlook. The good include the impact of growth encouraging fiscal policy, the recovery in industrial production and core infrastructure, and the upturn in business confidence. The bad signs include the large deceleration in private consumption demand, poor monsoons, and slower credit growth.
The wholesale price index went up 1.51% in the week ending the 17 October compared to a year earlier. This is the most it has risen since May.
NTPC will get subsidized gas for its Gujarat power plants. On Wednesday, an empowered group of ministers approved a gas swap deal that will allow NTPC to get cheaper gas for its Gujarat plants without changing its legal position in its gas supply dispute with RIL. Under the new scheme, gas originally meant for NTPC’s plants near Delhi will be used for its projects in Gujarat. Prior to this the company risked losing out on more than 2 mmscmd of gas.
RIL posted its second quarter results on Thursday. Net profit fell 6.41% to Rs3,852 crore compared to a year earlier while total income rose 5.9% to Rs47,476 crore from Rs44,839 crore in the same quarter last year.
Another energy company ONGC posted a 6% rise in its net profit to Rs5,090 crores in the second quarter. The gains were helped by a reduction in its fuel subsidy burden.
Also on Thursday, a fire at an Indian Oil Corporation depot near Jaipur killed 5 people and injured more than a hundred. The cause of the fire is still not known.
A new report claims methane could be a bigger culprit in global greenhouse gas emissions than previously thought. Writing in Friday’s issue of the magazine Science, researchers say many previous climate modeling studies underestimated the effect of fine particles suspended in the air called aerosols. The new study claims aerosols enhance the potency of methane, a finding that could affect India’s position in climate talks because the country emits large amounts of both aerosol particles and methane.
It’s been a bad week for some airlines. Jet Airway’s second quarter losses widened nearly 6% to Rs407 crore. Also posting losses was Kingfisher, though its net loss reduced 13% to Rs419 crore from Rs483 crore in the same period last year.
Auto companies did much better. Tata Motors beat all expectations with its net profit shooting up 110% to Rs729 crore in the second quarter. Mahindra and Mahindra also soared upwards. Net profit shot up 288% to Rs703 crore from just Rs247 crore last year. The company’s numbers were helped by its sale of part of its stake in Mahindra Holidays and Resorts through an IPO.
Bharti Airtel reported disappointing figures on Friday. Net profit grew 13% to Rs2,321 crore for the second quarter, while revenue went up 9% to Rs9,850 crore compared to the same period last year. India telecom operators are increasingly cutting tariffs as they fight for customers in a crowded market.
Wipro beat expectations with its results. Net profit went up 19% to Rs1,162 crore compared to a year earlier. And total income also went up, though by just under 6% to Rs7,057 crore. Wipro recently added 37 new clients including Nokia Siemens and Delhi International Airport Limited.
The controversy surrounding the 2010 Commonwealth Games were forgotten for a few hours on Thursday when Queen Elizabeth the second handed over the Games’ baton to President Pratibha Patil at a colourful ceremony in London. The baton is now set to travel about 200,000 miles across the Commonwealth before it reaches India.