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The Mint Report for 30 June 2011

The Mint Report for 30 June 2011
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First Published: Thu, Jun 30 2011. 11 04 PM IST
Updated: Thu, Jun 30 2011. 11 04 PM IST
Struggling national carrier Air India is planning an ambitious restructuring that it believes will return it to profitability. Its scheme, if approved, would drastically cut down its employee count and rely on investments from the government. Mint has learnt the airline plans to spin-off its engineering and ground handling units into separate businesses. And it wants the government to invest Rs500 cr in each of the units. Air India expects the separation to reduce its employees from 28,500 to 7,000. Air India’s scheme will, of course, require government approval. But critics believe the idea is at best a short-term measure. Instead, they say the airline suffers because of an incomplete merger with Indian Airlines.
There’s good news on India’s current account deficit. New figures from the Reserve Bank show a sharp decline in the three months to March. The current account deficit in the fourth quarter was just $5.4 billion. That’s compared to $12.8 billion in the year-ago period.
Food inflation in mid-June has slowed down to its lowest level in six weeks. The figures are the latest indication that prices of non food items are driving wholesale inflation, which remained at 9% as of May. Meanwhile, the latest food price index figure dropped to just 7.78% in the period to 18 June. The previous week it was at a much higher 9.13%
Indian markets have kept up their nearly week-long rally, ending Thursday in the green. The Sensex leapt up 152.01 to 18845.87 And the Nifty climbed 46.95 to end at 5647.40.
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First Published: Thu, Jun 30 2011. 11 04 PM IST