The week started on a positive note with RBI deputy governor Subir Gokarn indicating that there’s now more room to bring down interest rates. According to Gokarn, easing inflation combined with falling crude oil prices will help the situation. On the other hand, he said high food prices, a battered rupee and a large fiscal deficit continued to stoke inflation. Gokarn’s comments come before RBI’s next monetary policy review due this month. Last Govt figures show, growth in India had fallen to just 5.3% of GDP in the quarter ending March 2012.
With the global economy in the doldrums leading to sluggish exports, the govt announced some initiatives to give the sector a boost. On Tuesday commerce minister Anand Sharma unveiled new measures as part of the govt’s foreign trade policy. For one, it extended two key schemes until March end 2013. These are the interest subsidy scheme and the export promotion capital goods scheme.
The other set of measures aim to encourage import substitution- a move the government hopes will narrow the country’s trade deficit. Exporters can use scrips to pay for excise on domestic procurements. India’s exports grew about 21% in the last fiscal, but the country’s trade deficit for that period stands at about $ 185 billion
Construction firm L and T Infrastructure Development Projects bagged a major contract in Western India. On Wednesday the company won the bids to develop two road projects that will pass through Maharashtra and Gujarat. The projects will cost Rs 4,800 crores. Special purpose vehicles belonging to L& TIDPL have signed contracts with the National Highways Authority of India. The projects will be on a build-operate-transfer model.
Your executive summary of the top business stories from the week that was, from the fall in GDP growth to the latest corporate earnings
RIL chief MukeshAmbani made some key announcements in the company’s AGM on Thursday. Ambani announced that his company is looking at investing Rs 1 trillion over the next 10 yrs. He also said the company aims at doubling operating margins in this period. Interestingly, MukeshAmbani hinted at forming more partnerships, a strategy which the petrochem major has only employed in recent years. RIL plans to set up a gas cracker in Jamnagar that will be among the largest in the world.
India’s battered currency showed signs of improvement during the week, but couldn’t sustain the recovery. The currency dropped 61 paise to close at 55.55. During the week, the currency ended trade at 55.36 to the US dollar, with a gain of 28 paise. On Thursday, it strengthened further with a gain of 34 paise, at 55.17 against the dollar.
Auto major, Maruti Suzuki announced that it would be adding around 1,900 employees to its workforce this year. These would be mainly Engineers & members for the management team. The company plans to invest about Rs25 lacs on a web-based training academy. That would link the company with its dealers, suppliers and Suzuki group entities in the country
Ahead of RBI’s mid-quarter review later this month, the country’s largest lender State Bank of India slashed its fixed deposit rates by 0.25%.The bank last revised its fixed deposit rates in April. The decision came following RBI’s decision to cut key interest rate between 0. 5 to 0.8% in its annual credit policy.The new rates would be effective from Friday.
The country’s biggest two-wheeler firm announced its expansion plans for the next two years. Hero MotoCorp’s CEO Pawan Munjal unveiled Rs2,575 crores worth of investments. The money will pay for two new manufacturing plants- one in Rajasthan, the other in Gujarat. It will also fund a new R&D centre. The expansion is expected to bring total capacity to 9 million units from the current 6.4 million.
Despite the Met department forecasting a normal monsoon this year, rains have already fallen short by 36% in the first week ending June 6th. Monsoons that are expected to hit Indian mainland by 1st of June, were delayed by almost a week.The four-month long rainy season is in the initial stages and crops are not greatly affected by the quantity of rains now, but distribution of rainfall in mid-July covers the entire country which is more important for the crops .